Document:

Exhibit 4.10

 

VISX, INCORPORATED

 

1995 STOCK PLAN

 

(as amended November 9, 2004)

 

1. Purposes
of the Plan. The purposes of this Stock Plan are:

 

·              to
attract and retain the best available personnel for positions of substantial
responsibility,

 

·              to
provide additional incentive to Employees and Consultants, and

 

·              to
promote the success of the Company’s business.

 

Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock Rights
may also be granted under the Plan.

 

2. Definitions.
As used herein, the following definitions shall apply:

 

(a) “Administrator” means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

 

(b) “Applicable Laws” means the legal requirements relating to the
administration of stock option plans under state corporate and securities laws
and the Code.

 

(c) “Board” means the Board of Directors of the Company.

 

(d) “Code” means the Internal Revenue Code of 1986, as amended.

 

(e) “Committee” means a Committee appointed by the Board in
accordance with Section 4 of the Plan.

 

(f) “Common Stock” means the Common Stock of the Company.

 

(g) “Company” means VISX, Incorporated, a Delaware corporation.

 

(h) “Consultant” means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services and who is compensated
for such services. The term “Consultant” shall not include Directors who are
paid only a director’s fee by the Company or who are not compensated by the
Company for their services as Directors.

 

(i) “Continuous Status as an Employee or Consultant” means that the
employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any
leave of absence approved by the Company or (ii)

 

 

transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. A leave of absence approved by the Company shall
include sick leave, military leave, or any other personal leave approved by an
authorized representative of the Company. For purposes of Incentive Stock
Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option.

 

(j) “Director”
means a member of the Board.

 

(k) “Disability”
means total and permanent disability as defined in Section 22(e)(3) of
the Code.

 

(l) “Employee” means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director’s fee by the Company shall be
sufficient to constitute “employment” by the Company.

 

(m) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(n) “Fair
Market Value” means, as of any date, the value of Common Stock determined as
follows:

 

(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market of the National Association of Securities Dealers, Inc.
Automated Quotation (“NASDAQ”) System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last
market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;

 

(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the Nasdaq National Market thereof) or is regularly quoted
by a recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

 

(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.

 

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(o) “Incentive Stock Option” means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code
and the regulations promulgated thereunder.

 

(p) “Nonstatutory Stock Option” means an Option not intended to
qualify as an Incentive Stock Option.

 

(q) “Notice of Grant” means a written notice evidencing certain
terms and conditions of an individual Option or Stock Right grant. In the case
of Options, the Notice of Grant is part of the Option Agreement.

 

(r) “Officer” means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated.

 

(s) “Option” means a stock option granted pursuant to the Plan.

 

(t) “Option Agreement” means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

 

(u) “Optioned Stock” means the Common Stock subject to an Option or
Stock Right.

 

(v) “Optionee” means an Employee or Consultant who holds an
outstanding Option or Stock Right.

 

(w) “Parent” means a “parent corporation”, whether now or hereafter
existing, as defined in Section 424(e) of the Code.

 

(x) “Plan” means this 1995 Stock Plan.

 

(y) “Restricted Stock” means shares of Common Stock acquired
pursuant to a grant of Stock Rights under Section 11 below.

 

(z) “Restricted Stock Award Agreement” means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock awarded under a Stock Right. The Restricted Stock Award
Agreement is subject to the terms and conditions of the Plan and the Notice of
Grant.

 

(aa) “Restricted Stock Purchase Agreement” means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Right. The Restricted Stock Purchase
Agreement is subject to the terms and conditions of the Plan and the Notice of
Grant.

 

(bb) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or
any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.

 

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(cc) “Section 16(b)” means Section 16(b) of the
Securities Exchange Act of 1934, as amended.

 

(dd) “Share” means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

 

(ee) “Stock Right” means the right to purchase or receive as an
award Common Stock pursuant to Section 11 of the Plan, as evidenced by a
Notice of Grant.

 

(ff) “Subsidiary” means a “subsidiary corporation”, whether now or
hereafter existing, as defined in Section 424(f) of the Code.

 

3. Stock Subject to the Plan. Subject
to the provisions to Section 11 of the Plan, the total number of Shares
reserved and available for issuance under the Plan is 10% of the Shares issued
and outstanding on the date of adoption of the Plan, less the number of Shares
issued under the VISX. Incorporated 1996 Supplemental Stock Option Plan prior
to the date the Plan is approved by the Company’s shareholders, which number
shall be increased on the first day of each new fiscal year of the Company from
and including the 1996 fiscal year by a number of Shares equal to 3% of the
number of Shares outstanding as of the last business day preceding each such
first day of each new fiscal year. However, notwithstanding the preceding
sentence, the maximum number of Shares available for issuance pursuant to
Incentive Stock Options is 10% of the Shares issued and outstanding on the date
of adoption of the Plan, less the number of Shares issued under the VISX.
Incorporated 1996 Supplemental Stock Option Plan prior to the date the Plan is
approved by the Company’s shareholders, which number shall be increased on the
first day of each new fiscal year of the Company from and including the 1996
fiscal year by a number of Shares equal to 3% of the number of Shares
outstanding as of the date of adoption of the Plan.

 

If an
Option or Stock Right expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased or
reacquired by the Company at their original purchase price, and the original
purchaser of such Shares did not receive any benefits of ownership of such
Shares, such Shares shall become available for future grant under the Plan. For
purposes of the preceding sentence, voting rights shall not be considered a
benefit of Share ownership.

 

4. Administration
of the Plan.

 

(a) Procedure.

 

(i) Multiple Administrative Bodies. If
permitted by Rule 16b-3, the Plan may be administered by different bodies
with respect to Directors, Officers who are not Directors, and Employees who
are neither Directors nor Officers.

 

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(ii) Administration With Respect to Directors and Officers
Subject to Section 16(b). With respect to
Option or Stock Right grants made to Employees who are also Officers or
Directors subject to Section 16(b) of the Exchange Act, the Plan
shall be administered by (A) the Board, if the Board may administer the
Plan in a manner complying with the rules under Rule 16b-3 relating
to the disinterested administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made, or (B) a
committee designated by the Board to administer the Plan, which committee shall
be constituted to comply with the rules under Rule 16b-3 relating to
the disinterested administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members, remove members (with
or without cause) and substitute new members, fill vacancies (however caused),
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans under
which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made.

 

(iii) Administration With Respect to Other Persons. With
respect to Option or Stock Right grants made to Employees or Consultants who
are neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a committee designated by the
Board, which committee shall be constituted to satisfy Applicable Laws. Once
appointed, such Committee shall serve in its designated capacity until
otherwise directed by the Board. The Board may increase the size of the
Committee and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however caused), and remove
all members of the Committee and thereafter directly administer the Plan, all
to the extent permitted by Applicable Laws.

 

(b) Powers
of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to
such Committee, the Administrator shall have the authority, in its discretion:

 

(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(n) of the Plan;

 

(ii) to select the Consultants
and Employees to whom Options and Stock Rights may be granted hereunder;

 

(iii) to determine whether
and to what extent Options and Stock Rights or any combination thereof, are
granted hereunder;

 

(iv) to determine the number
of shares of Common Stock to be covered by each Option and Stock Right granted
hereunder;

 

(v) to approve forms of
agreement for use under the Plan;

 

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(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Rights may be exercised (which may be based
on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Right or the shares of Common Stock relating thereto, based in each case on
such factors as the Administrator, in its sole discretion, shall determine;

 

(vii) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;

 

(viii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;

 

(ix) to modify or amend each Option or Stock Right
(subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options
longer than is otherwise provided for in the Plan;

 

(x) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or Stock
Right previously granted by the Administrator;

 

(xi) to determine the terms and restrictions
applicable to Options and Stock Rights and any Restricted Stock; and

 

(xii) to make all other determinations deemed
necessary or advisable for administering the Plan.

 

(c) Effect
of Administrator’s Decision. The Administrator’s
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Rights.

 

5. Eligibility.
Nonstatutory Stock Options and Stock Rights may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. If
otherwise eligible, an Employee or Consultant who has been granted an Option or
Stock Right may be granted additional Options or Stock Rights.

 

6. Limitations.

 

(a) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year (under all plans of
the Company and  any Parent or Subsidiary) exceeds S 100.000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a),

 

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Incentive
Stock Options shall be taken into account in the order in which they were
granted. The Fair Market Value of the Shares shall be determined as of the time
the Option with respect to such Shares is granted.

 

(b) Neither the Plan nor any Option or Stock Right shall confer upon
an Optionee any right with respect to continuing the Optionee’s employment or
consulting relationship with the Company, nor shall they interfere in any way
with the Optionee’s right or the Company’s right to terminate such employment
or consulting relationship at any time, with or without cause.

 

(c) The following limitations shall apply to grants of Options and
Stock Rights to Employees:

 

(i) No Employee shall be granted, in any fiscal year of
the Company, Options and Stock Rights to purchase more than 500,000 Shares.

 

(ii) In connection with his or her initial
employment, an Employee may be granted Options and Stock Rights to purchase up
to an additional 500,000 Shares which shall not count against the limit set
forth in subsection (i) above.

 

(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company’s capitalization
as described in Section 13.

 

7. Term
of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon the earlier to occur of its adoption by the Board or its
approval by the stockholders of the Company as described in Section 19 of
the Plan. It shall continue in effect for a term of five (5) years unless
terminated earlier under Section 15 of the Plan.

 

8. Term
of Option. The term of each Option shall be stated in the Notice of Grant;
provided, however, that in the case of an Incentive Stock Option, the term
shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Notice of Grant. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant
or such shorter term as may be provided in the Notice of Grant.

 

9. Option
Exercise Price and Consideration.

 

(a) Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by  the Administrator,
subject to the following:

 

(i) In the case of an Incentive Stock Option

 

(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or

 

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Subsidiary,
the per Share exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.

 

(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.

 

(ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator.

 

(b) Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions which must be satisfied before
the Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.

 

(c) Form of Consideration. The Administrator shall
determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the time
of grant. Such consideration may consist entirely of:

 

(i) cash;

 

(ii) check;

 

(iii) promissory note;

 

(iv) other Shares which (A) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six months on the date of surrender, and (B) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;

 

(v) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;

 

(vi) a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the Optionee’s
participation in any Company-sponsored deferred compensation program or
arrangement;

 

(vii) any combination of the foregoing methods of
payment: or

 

(viii) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

 

8

 

10. Exercise of Option.

 

(a)  Procedure
for Exercise; Rights as a Stockholder. Any Option granted hereunder shall
be exercisable according to the terms of the Plan and at such times and under
such conditions as determined by the Administrator and set forth in the Option
Agreement.

 

An Option may not be exercised for a fraction of a Share.

 

An Option shall be deemed exercised when the Company
receives: (i) written notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the stock certificate evidencing such Shares is issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly after the Option
is exercised. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the stock certificate is issued, except
as provided in Section 13 of the Plan.

 

Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

 

(b)  Termination
of Employment or Consulting Relationship. Upon termination of an Optionee’s
Continuous Status as an Employee or Consultant, other than upon the Optionee’s
death or Disability, the Optionee may exercise his or her Option, but only
within such period of time as is specified in the Notice of Grant, and only to
the extent that the Optionee was entitled to exercise it at the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). In the absence of a specified time
in the Notice of Grant, the Option shall remain exercisable for three (3) months
following the Optionee’s termination. In the case of an Incentive Stock Option,
such period of time for exercise shall not exceed three (3) months from
the date of termination. If, on the date of termination, the Optionee is not
entitled to exercise the Optionee’s entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

 

Notwithstanding the above, in the event of an Optionee’s
change in status from Consultant to Employee or Employee to Consultant, an
Optionee’s Continuous Status as an Employee or Consultant shall not
automatically terminate solely as a result of such change in status. However,
in such event, an Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option three months and one day following such change of
status.

 

9

 

(c)  Disability
of Optionee. In the event that an Optionee’s Continuous Status as an
Employee or Consultant terminates as a result of the Optionee’s Disability, the
Optionee may exercise his or her Option at any time within twelve (12) months
from the date of such termination, but only to the extent that the Optionee was
entitled to exercise it at the date of such termination (but in no event later
than the expiration of the term of such Option as set forth in the Notice of
Grant). If, at the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

 

(d)  Death
of Optionee. In the event of the death of an Optionee, the Option may
be exercised at any time within twelve (12) months following the date of death
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant), by the Optionee’s estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only
to the extent that the Optionee was entitled to exercise the Option at the date
of death. If, at the time of death, the Optionee was not entitled to exercise
his or her entire Option, the Shares covered by the unexercisable portion of
the Option shall immediately revert to the Plan. If, after death, the Optionee’s
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

 

(e)  Rule 16b-3. Options granted to
individuals subject to Section 16 of the Exchange Act (“Insiders”) must
comply with the applicable provisions of Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect
to Plan transactions.

 

11. Stock Rights.

 

(a)  Rights
to Purchase. Stock Rights may be issued either alone, in addition to,
or in tandem with other awards granted under the Plan and/or cash awards made
outside of the Plan. After the Administrator determines that it will offer
Stock Rights under the Plan, it shall advise the offeree in writing, by means
of a Notice of Grant, of the terms, conditions and restrictions related to the
offer, including the number of Shares that the offeree shall be entitled to
purchase or receive, the price to be paid (if any), and the time within which
the offeree must accept such offer, which shall in no event exceed six (6) months
from the date upon which the Administrator made the determination to grant the
Stock Right. The offer shall be accepted by execution of a Restricted Stock
Award Agreement or a Restricted Stock Purchase Agreement in such form as the
Administrator shall determine and if so required by the Administrator. The
number of Shares subject to grants of Stock Rights shall not exceed five
percent (5%) of the total number of Shares authorized under the Plan.

 

(b)  Repurchase/Reacquisition
Option. Unless the Administrator determines otherwise, the Restricted Stock
Award Agreement or the Restricted Stock Purchase Agreement, as the case may be,
shall grant the Company a repurchase or reacquisition option

 

10

 

exercisable upon the voluntary or involuntary termination
of the purchaser’s employment with the Company for any reason (including death
or Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the Fair Market Value of the
Shares at the date of grant of the Stock Right and may be paid by cancellation
of any indebtedness of the purchaser to the Company. Reacquisition of Shares
pursuant to the Restricted Stock Award Agreement shall require no consideration
to be paid by the Company. The repurchase/reacquisition option shall lapse at a
rate determined by the Administrator.

 

(c)  Rule 16b-3.
Stock Rights granted to Insiders, and Shares purchased or received by Insiders
in connection with Stock Rights, shall be subject to any restrictions
applicable thereto in compliance with Rule 16b-3. An Insider may only
purchase Shares pursuant to the grant of a Stock Right, and may only sell
Shares purchased pursuant to the grant of a Stock Right, during such time or
times as are permitted by Rule 16b-3.

 

(d)  Other
Provisions. The Restricted Stock Award Agreement or the Restricted Stock
Purchase Agreement, as applicable, shall contain such other terms, provisions
and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion. In addition, the provisions of Restricted
Stock Award Agreements and Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

 

(e)  Rights
as a Stockholder. Once the Stock Right is exercised, the purchaser shall
have the rights equivalent to those of a stockholder, and shall be a
stockholder when his or her purchase is entered upon the records of the duly
authorized transfer agent of the Company. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Stock Right is exercised, except as provided in Section 13 of the Plan.

 

12.  Non-Transferability of Options
and Stock Rights. An Option or Stock Right may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

 

13.  Adjustments Upon Changes in
Capitalization, Dissolution, Merger or Asset Sale.

 

(a)  Changes in
Capitalization. Subject to any required action by the stockholders of the
Company, the number of shares of Common Stock covered by each outstanding
Option and Stock Right, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options or Stock
Rights have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option or Stock Right, as well as the price
per share of Common Stock covered by each such outstanding Option or Stock
Right, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration.” Such
adjustment shall be made by the Board, whose determination in that respect
shall be final,

 

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binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Right.

 

(b)  Dissolution or Liquidation. In the
event of the proposed dissolution or liquidation of the Company, to the extent
that an Option or Stock Right has not been previously exercised, it will
terminate immediately prior to the consummation of such proposed action. The
Board may, in the exercise of its sole discretion in such instances, declare
that any Option or Stock Right shall terminate as of a date fixed by the Board
and give each Optionee the right to exercise his or her Option or Stock Right
as to all or any part of the Optioned Stock, including Shares as to which the
Option or Stock Right would not otherwise be exercisable.

 

(c)  Merger or Asset Sale. Subject to
Section 13(d), in the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Stock Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Right, the
Optionee shall have the right to exercise the Option or Stock Right as to all
of the Optioned Stock, including Shares as to which it would not otherwise be
exercisable. If an Option or Stock Right is exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee that the Option or Stock Right shall be fully exercisable
for a period of fifteen (15) days from the date of such notice, and the Option
or Stock Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Right shall be considered
assumed if, following the merger or sale of assets, the option or right confers
the right to purchase or receive, for each Share of Optioned Stock subject to
the Option or Stock Right immediately prior to the merger or sale of assets,
the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets was not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Right, for each Share of
Optioned Stock subject to the Option or Stock Right, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the
per share consideration received by holders of Common Stock in the merger or
sale of assets.

 

(d)  Change of Control. In the
event of a Change of Control (as defined below), the Optionee shall fully vest
in and have the right to exercise the Option or Stock Right as to all of the
Optioned Stock, including Shares as to which it would not otherwise be vested
or exercisable.

 

12

 

A “Change of Control” means the occurrence of any of the
following events:

 

(i)   any
“person” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than
the Company, a subsidiary of the Company or a Company employee benefit plan,
including any trustee of such plan acting as trustee, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company’s then outstanding securities
entitled to vote generally in the election of directors; or

 

(ii)  the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve an agreement for
the sale or disposition by the Company of all or substantially all the Company’s
assets; or

 

(iii)  a
change in the composition of the Board of Directors of the Company, as a result
of which fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” shall mean directors who either (A) are directors of the
Company as of the date this amendment to the Plan is approved by the Board of
Directors, or (B) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors and whose election or nomination was not in connection
with any transaction described in (i) or (ii) above or in connection
with an actual or threatened proxy contest relating to the election of
directors of the Company.

 

14.  Date of Grant. The date of
grant of an Option or Stock Right shall be, for all purposes, the date on which
the Administrator makes the determination granting such Option or Stock Right,
or such other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.

 

15.  Amendment and Termination of the
Plan.

 

(a)  Amendment
and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

 

(b)  Stockholder
Approval. The Company shall obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Rule 16b-3
or with Section 422 of the Code (or any successor Rule or statute or
other applicable law, Rule or regulation, including the requirements of
any exchange or quotation system on which the Common Stock is listed or
quoted). Such stockholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, Rule or
regulation.

 

13

 

(c)  Effect of
Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.

 

16. Conditions Upon Issuance of Shares.

 

(a)  Legal
Compliance. Shares shall not be issued pursuant to the exercise of an
Option or Stock Right unless the exercise of such Option or Stock Right and the
issuance and delivery of such Shares shall comply with all relevant provisions
of law, including, without limitation, the Securities Act of 1933, as amended,
the Exchange Act, the rules and regulations promulgated thereunder,
Applicable Laws, and the requirements of any stock exchange or quotation system
upon which the Shares may then be listed or quoted, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

 

(b)  Investment
Representations. As a condition to the exercise of an Option or Stock
Right, the Company may require the person exercising such Option or Stock Right
to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

 

17. Liability of Company.

 

(a)  Inability
to Obtain Authority. The inability of the Company to obtain authority from
any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder. Shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not
have been obtained.

 

(b)  Grants
Exceeding Allotted Shares. If the Optioned Stock covered by an Option or
Stock Right exceeds, as of the date of grant, the number of Shares which may be
issued under the Plan without additional stockholder approval, such Option or
Stock Right shall be void with respect to such excess Optioned Stock, unless
stockholder approval of an amendment sufficiently increasing the number of
Shares subject to the Plan is timely obtained in accordance with Section 15(b) of
the Plan.

 

18. Reservation of Shares. The Company, during the
term of this Plan, will at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.

 

19. Stockholder Approval. Continuance of the Plan
shall be subject to approval by the stockholders of the Company within twelve
(12) months before or after the date the Plan is adopted. Such stockholder
approval shall be obtained in the manner and to the degree required under
applicable federal and state law.

 

* * * * *

 

14Exhibit 10.14

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made on this 21st
day of December, 2007, by and between Nature’s Sunshine Products, Inc.,
a Utah Corporation, having its principal place of business in Provo, Utah (“the
Company” or “NSP”) and Jamon A. Jarvis
(“Executive”).

 

The Company desires to engage Executive to
provide services for NSP and Executive desires to provide such services on the
terms and conditions below.

 

1.             Employment.

 

1.1           Positions
and Duties. Executive will serve as the Vice
President — General Counsel & Chief Compliance Officer of
the Company, reporting directly to the Chief Executive Officer (“CEO”) of the
Company.  In addition, without additional
compensation, if requested by the Company, Executive will serve in other
officer positions of the Company and its subsidiaries. Executive shall devote
his best efforts and substantially all of his business time and services to the
Company to perform such duties as may be customarily incident to such position of
an enterprise of the size and nature of the Company and as may reasonably be
assigned from time to time by the CEO of the Company or the Company, as the
case may be.  Executive will render his
services hereunder to the Company, shall use his best efforts, judgment and
energy in the performance of the duties assigned to him, and shall abide by the
Company’s Code of Conduct and any other applicable Company policies, and shall
comply with any and all applicable laws, including but not limited to insider
trading/reporting requirements and the policies and procedures as may be set
forth in the employee handbook, manuals and other materials provided by the
Company.

 

1.2           Place
of Performance. Executive shall perform his services hereunder at the
Company’s executive offices in Provo, Utah; provided,
however, that Executive will be required to travel from time to time
as reasonably required for business purposes.

 

2.             Compensation and Benefits.

 

2.1           Base
Salary. Executive shall receive an annual salary of $175,360.00
paid in accordance with the Company’s payroll practices, as in effect from time
to time. Base salary shall be subject to review on at least an annual basis by
the CEO. Executive understands that no further compensation will be given for
his/her name being used as on officer or shareholder on any corporation,
subsidiary or branch.

 

2.2           Discretionary
Bonus.  Executive
shall also be eligible to participate in the executive bonus program or any
successor program (the “EBP”).  Payment
of any bonus under the EBP is in NSP’s sole discretion and such payments will
be made in accordance with section 409A.

 

2.3           Employee Benefits.  Executive will be eligible to participate in
retirement/savings, health insurance, term life insurance, long term disability
insurance and other employee benefit plans, policies or arrangements maintained
by the Company for its employees 

 

 

generally and, at the
discretion of the Board, in incentive plans, stock option plans and change in
control severance plans maintained by the Company for its executives, if any,
subject to the terms and conditions of such plans, policies or arrangements,
including but not limited to those benefits outlined in the Offer Letter to
Executive, dated February 15, 2007.

 

2.4           Stock
Options.  The
Company may from time to time grant to Executive options (the “Options”) to
purchase shares of NSP common stock pursuant to the price, terms and conditions
set forth in the then applicable Stock Option Plan, as amended from time to
time, or as otherwise set forth in a Stock Option Agreement.

 

3.             Indemnification; D&O Insurance.
The Company will indemnify Executive for and hold Executive harmless from and
against any and all losses, costs, damages or expenses (including attorneys’
fees) arising out of any claim or legal proceeding brought against Executive,
relating in any way to services performed by Executive for the Company.  This indemnification provision is intended to
be broadly interpreted and to provide for indemnification to the full extent
permitted by law.  The Company will
maintain directors’ and officers’ liability insurance in amounts and on terms
reasonable and customary for similarly situated companies.

 

4.             Expenses.  In accordance with the Company’s normal
policies for expense reimbursement, the Company shall reimburse Executive for
all reasonable travel, entertainment and other expenses incurred or paid by
Executive in connection with, or related to, the performance of Executive’s
duties, responsibilities or services under this Agreement, upon presentation of
documentation, including expense statements, vouchers and/or such other
supporting information as the Company may request.

 

5.             Termination.  Upon cessation of his employment with the
Company, Executive will be entitled only to such compensation and benefits as
described in this Section 5.

 

5.1           Termination without Cause.  If Executive’s employment by the Company is
terminated by the Company without Cause (as defined below), Executive will be
entitled to:

 

5.1.1.       payment of all accrued and
unpaid base salary through the date of such termination;

 

5.1.2.       monthly severance payments
equal to one-twelfth of Executive’s base salary as of the date of such
termination for a period equal to twelve (12) months (the “Severance Period”).

 

5.1.3.   payment of the cost for continuation of
Executive’s health insurance coverage under COBRA (and for his or her family
members if Executive provided for their coverage during his or her employment)
during the Severance Period and in accord with the NSP plan applicable to NSP
employees currently in effect.

 

5.2           Release.  Notwithstanding any provision of this
Agreement, the payments and benefits described above are conditioned on
Executive’s execution and delivery to the Company of a release substantially
identical to that attached hereto as Exhibit A in a manner consistent with
the requirements of the Older Workers Benefit Protection Act, if applicable,
and 

 

2

 

any applicable
state law (the “Release”).  The severance
benefits described in Section 5.1.2 will be paid after the Release becomes
irrevocable.

 

5.3           Termination for Cause.  If Executive’s employment with the Company is
terminated by the Company for Cause then the Company’s obligation to Executive
will be limited solely to the payment of accrued and unpaid base salary through
the date of such termination.  To
terminate Executive’s employment for Cause, the CEO, in consultation with the
Board of Directors, must determine in good faith that Cause has occurred.

 

5.3.1.       “Cause” means:

 

a)             continuing
performance by Executive deemed unsatisfactory to NSP acting reasonably and in
good faith or conduct by Executive deemed unacceptable by NSP acting reasonably
and in good faith;

 

b)            conviction of, or the
entry of a plea of guilty or no contest to, a felony or any crime that may
materially adversely affect the business, standing or reputation of the
Company;

 

c)             dishonesty, fraud,
embezzlement or other misappropriation of funds;

 

d)            material breach of
this Agreement;

 

e)             willful refusal to
perform the lawful and reasonable directives of the CEO or the Board.

 

5.4           Resignation by Executive. Executive
may resign his/her employment by giving the Company four weeks’ notice of said
resignation; NSP may elect to pay Employee’s base salary in lieu of
notice.  If Executive resigns, then the
Company’s obligation to Executive will be limited solely to the payment of
accrued and unpaid base salary through the date of such termination.

 

5.5           Termination
upon Death or Incapacity of Executive. Executive’s employment with the
Company shall terminate upon the death or incapacity of Executive.  In the event of termination of Executive’s
employment by reason of Executive’s death or incapacity, the provisions
governing termination without cause, above, shall apply. “Incapacity” shall
mean that Executive is, for a period of 90 days or more, unable to perform
Executive’s duties effectively, for reasons such as emotional, mental or
physical illness, deficiency, or disability.

 

5.6.  Foreign
Entities. Without regard to the
circumstances of Executive’s termination from employment, Executive hereby also
covenants that upon termination, if she/he is listed as an officer, director,
partner, secretary or shareholder on any corporation, subsidiary or branch on
behalf of Nature’s Sunshine Products, Inc. or any related entity, he/she
will sign over any and all rights to stock and/or resign as an officer or
director prior to departure from the Company as required by the law applicable
to the entity or by that entity’s procedural requirements.

 

3

 

6.             Restrictive
Covenants.  In recognition of the
compensation and other benefits provided to Executive pursuant to this
Agreement, Executive agrees to be bound by the provisions of this Section (the
“Restrictive Covenants”). These Restrictive Covenants will apply without regard
to whether any termination or cessation of Executive’s employment is initiated
by the Company or Executive, and without regard to the reason for that
termination or cessation.

 

6.1           Covenant Not To Compete.  Executive covenants that, during his
employment by the Company and for a period of twelve (12) months following
immediately thereafter, (the “Restricted
Period”), Executive will not do any of the following, directly or
indirectly:

 

6.1.1.       engage, be employed by, participate in, plan for
or organize any Competing Business of the Company or any subsidiary or joint
venture of the Company; “Competing Business” means any business enterprise that
distributes through a multilevel marketing program or that engages in any
activity that competes anywhere in the world with any activity in which the
Company is then engaged, including sales or distribution of  herbs, vitamins or nutritional supplements or
any product, which the Company sells or distributes at the time of Executive’s
termination;

 

6.1.2.       become interested in (as owner, stockholder,
lender, partner, co-venturer, director, officer, employee, agent or consultant)
any person, firm, corporation, association or other entity engaged in a
Competing Business. Notwithstanding the foregoing, Executive may hold up to 2%
of the outstanding securities of any class of any publicly-traded securities of
any company;

 

6.1.3.       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; or

 

6.1.4.       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. For this purpose, advertisements for employment placed in
newspapers of general circulation will not be considered solicitation.

 

6.1.5        Extension of Restrictive Covenants.  The Company may elect to extend the twelve
(12) month post-termination non-compete and non-solicitation period by up to
twelve (12) additional months by delivering written notice of such extension to
Executive at least thirty (30) days prior to the end of that twelve (12) month
period and by making monthly payments to Executive for the number of months
equal to the length of the extension specified by the Company in its notice to
the Executive.  The amount of each such
additional monthly payment will be equal to one-twelfth of the base salary in
effect at the time of Executive’s termination of employment.

 

4

 

6.2           Confidentiality.  Executive recognizes and acknowledges that
the Proprietary Information (as defined below) is a valuable, special and
unique asset of the business of the Company. 
As a result, both during the Term and thereafter, Executive will not,
without the prior written consent of the Company, for any reason divulge to any
third-party or use for his/her own benefit, or for any purpose other than the
exclusive benefit of the Company, any Proprietary Information.  Notwithstanding the foregoing, if Executive
is compelled to disclose Proprietary Information by court order or other legal
process, to the extent permitted by applicable law, he shall promptly so notify
the Company so that it may seek a protective order or other assurance that
confidential treatment of such Proprietary Information shall be afforded, and
Executive shall reasonably cooperate with the Company in connection therewith.  If Executive is so obligated by court order
or other legal process to disclose Proprietary Information, Executive will
disclose only the minimum amount of such Proprietary Information as is
necessary for Executive to comply with such court order or other legal process.

 

6.3           Property of the Company.

 

6.3.1.       Proprietary Information.  All right, title and interest in and to
Proprietary Information will be and remain the sole and exclusive property of
the Company.  Executive will not remove
from the Company’s offices or premises any documents, records, notebooks,
files, correspondence, reports, memoranda or similar materials of or containing
Proprietary Information, or other materials or property of any kind belonging
to the Company unless necessary or appropriate in the performance of his duties
to the Company.  If Executive removes
such materials or property in the performance of his duties, he will return
such materials or property promptly after the removal has served its purpose.  Executive will not make, retain, remove
and/or distribute any copies of any such materials or property, or divulge to
any third person the nature of and/or contents of such materials or property,
except to the extent necessary to perform his/her duties on behalf of the
Company.  Upon termination of Executive’s
employment with the Company, s/he will leave with the Company or promptly
return to the Company all originals and copies of such materials or property
then in his/her possession.

 

6.3.1.1.  “Proprietary
Information”  means
any and all proprietary information developed or acquired by the Company that
has not been specifically authorized to be disclosed.  Such Proprietary Information shall include,
but shall not be limited to, the following items and information relating to
the following items: (a) all trade secrets (including research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, methodologies, technical data, designs, drawings and
specifications) as well as all inventions (whether patentable or unpatentable
and whether or not reduced to practice) and all improvements thereto, (b) computer
codes and instructions, processing systems and techniques, inputs, and outputs
(regardless of the media on which stored or located) and hardware and software configurations,
designs, architecture and interfaces, (c) business research, studies,
procedures and costs, (d) financial data, (e) distributor network
information, the identities of actual and prospective distributors and
distribution methods, (f) marketing data, methods, plans and efforts, (g) the
identities of actual and prospective suppliers, (h) the terms of contracts
and agreements with, the needs and requirements of and the Company’s course of
dealing with, actual or prospective suppliers, (i) personnel information, (j) customer
and vendor credit information, and (k) information received from third
parties subject to obligations of non-disclosure

 

5

 

or non-use. 
Failure by the Company to mark any of the Proprietary Information as
confidential or proprietary shall not affect its status as Proprietary
Information.

 

6.3.2.       Intellectual Property.  Executive agrees that all the Intellectual
Property (as defined below) will be considered “works made for hire” as that
term is defined in Section 101 of the Copyright Act (17 U.S.C. § 101) and that all right, title and
interest in such Intellectual Property will be the sole and exclusive property
of the Company.  To the extent that any
of the Intellectual Property may not by law be considered a work made for hire,
or to the extent that, notwithstanding the foregoing, Executive retains any
interest in the Intellectual Property, Executive hereby irrevocably assigns and
transfers to the Company any and all right, title, or interest that Executive
may now or in the future have in the Intellectual Property under patent,
copyright, trade secret, trademark or other law, in perpetuity or for the
longest period otherwise permitted by law, without the necessity of further consideration.  The Company will be entitled to obtain and
hold in its own name all copyrights, patents, trade secrets, trademarks and
other similar registrations with respect to such Intellectual Property.  Executive further agrees to execute any and
all documents and provide any further cooperation or assistance reasonably
required by the Company to perfect, maintain or otherwise protect its rights in
the Intellectual Property, at no cost to Executive.  If the Company is unable after reasonable
efforts to secure Executive’s signature, cooperation or assistance in
accordance with the preceding sentence, whether because of Executive’s
incapacity or any other reason whatsoever, Executive hereby designates and
appoints the Company or its designee as Executive’s agent and attorney-in-fact
to act on his behalf solely for the purpose of executing and filing documents
and doing all other lawfully permitted acts necessary or desirable to perfect,
maintain or otherwise protect the Company’s rights in the Intellectual Property.
Executive acknowledges and agrees that such appointment is coupled with an
interest and is therefore irrevocable.

 

6.3.2.1. 
“Intellectual Property”  means
(a) all inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents and patent
applications claiming such inventions, (b) all trademarks, service marks,
trade dress, logos, trade names, fictitious names, brand names, brand marks and
corporate names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets
(including research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, methodologies, technical
data, designs, drawings and specifications), (I) all computer software
(including data, source and object codes and related documentation), (g) all
other proprietary rights or (h) all copies and tangible embodiments
thereof (in whatever form or medium) which, in the case of any or all of the
foregoing, have been or are developed or created in whole or in part by
Executive at any time and at any place while Executive is employed by the
Company and have been or are created for the purpose of performing Executive’s
duties on behalf of the Company.

 

6.4           Acknowledgements.  Executive acknowledges that the Restrictive
Covenants are reasonable and necessary to protect the legitimate interests of
the Company, that the duration and geographic scope of the Restrictive
Covenants are reasonable given the nature 

 

6

 

of this Agreement and the position Executive
holds within the Company, and that the Company would not enter into this
Agreement or otherwise employ or continue to employ Executive unless Executive
agrees to be bound by the Restrictive Covenants set forth in this Section 6.

 

6.5           Remedies and Enforcement Upon Breach.

 

6.5.1        Intention.  It is the intention of the parties that the
foregoing restrictive covenant be enforced as written, and, in any other event,
enforced to the greatest extent (but to no greater extent) in time, territory
and degree of participation as permitted by applicable law. Accordingly, in the
event that any court to which a dispute over these restrictions may be referred
shall find any of these restrictions overly broad or unreasonable in any way,
that court must enforce the restrictions to the greatest extent deemed
reasonable.

 

6.5.2        Specific Enforcement.  Executive acknowledges that any breach by
him, willfully or otherwise, of the Restrictive Covenants will cause continuing
and irreparable injury to the Company for which monetary damages would not be
an adequate remedy.  In the event of any
such breach or threatened breach by Executive of any of the Restrictive
Covenants, the Company shall be entitled to injunctive or other similar
equitable relief in any court, without any requirement that a bond or other
security be posted, and this Agreement shall not in any way limit remedies of
law or in equity otherwise available to the Company.

 

6.5.3.       Enforceability.  If any court holds the Restrictive Covenants
unenforceable by reason of their breadth or scope or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the right of the Company to the relief provided above in the courts of
any other jurisdiction within the geographic scope of such Restrictive
Covenants.

 

6.5.4.       Disclosure of  Restrictive Covenants.  Executive agrees to disclose the existence
and terms of the Restrictive Covenants to any employer that Executive may work
for during the Restricted Period.

 

6.5.5.       Extension of  Restricted
Period.  If the Executive breaches Section 6.1
in any respect, the restrictions contained in that section will be extended for
a period equal to the period that the Executive was in breach.

 

7.             Miscellaneous.

 

7.1           Other Agreements.  Executive represents and warrants to the
Company that there are no restrictions, agreements or understandings whatsoever
to which Executive is a party that would prevent or make unlawful his/her
execution of this Agreement, that would be inconsistent or in conflict with
this Agreement or Executive’s obligations hereunder, or that would otherwise
prevent, limit or impair the performance of Executive’s duties under this
Agreement.

 

7.2           Successors and Assigns.  This Agreement shall be binding upon any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, and the Company shall require any such successor to expressly assume
and agree in writing to perform this Agreement in the 

 

7

 

same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place,
or, in the event the Company remains in existence, the Company shall continue
to employ Executive under the terms hereof.  
As used in this Agreement, the “Company” shall mean the Company
and any successor to its business and/or assets, which assumes or is obligated
to perform this Agreement by contract, operation of law or otherwise.  This Agreement shall inure to the benefit of
and be enforceable by Executive and his personal or legal representatives,
executors, estate, trustee, administrators, successors, heirs, distributees,
devisees and legatees.  The duties of
Executive hereunder are personal to Executive and may not be assigned by
him.  If Executive dies and any amounts
become payable under this Agreement, the Company will pay those amounts to his
estate.

 

7.3           Governing Law and Enforcement; Disputes.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah, without regard to
the principles of conflicts of laws.  Any
legal proceeding arising out of or relating to this Agreement will be
instituted in a state or federal court in the State of Utah, and Executive and
the Company hereby consent to the personal and exclusive jurisdiction of such
court(s) and hereby waive any objection(s) that they may have to
personal jurisdiction, the laying of venue of any such proceeding and any claim
or defense of inconvenient forum.

 

7.4           Waivers.  The waiver by either party of any right
hereunder or of any breach by the other party will not be deemed a waiver of
any other right hereunder or of any other breach by the other party.  No waiver will be deemed to have occurred
unless set forth in writing. No waiver will constitute a continuing waiver
unless specifically stated, and any waiver will operate only as to the specific
term or condition waived.

 

7.5           Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law.  However, if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability will not affect
any other provision, and this Agreement will be reformed, construed and
enforced as though the invalid, illegal or unenforceable provision had never
been herein contained.

 

7.6           Survival.  Section 6 of
this Agreement will survive termination of this Agreement and/or the cessation
of Executive’s employment by the Company.

 

7.7           Notices.  Any notice or communication required or
permitted under this Agreement shall be made in writing and shall be sufficient
if personally delivered or sent by registered or certified mail and addressed,
if to Employee, to Employee’s address set forth in NSP’s records, or if to NSP,
to its principal office, to the attention of the CEO.  Such notice shall be deemed given when
delivered if delivered personally, or, if sent by registered or certified mail,
at the earlier of actual receipt or three days after mailing in United States
mail, addressed as aforesaid with postage prepaid.

 

7.8           Entire Agreement: Amendments.  This Agreement, the attached exhibits, the
Plan, and the Award Agreement contain the entire agreement and understanding of
the parties hereto relating to the subject matter hereof; and merge and
supersede all prior and contemporaneous discussions, agreements and
understandings of every nature relating to 

 

8

 

Executive’s employment or engagement with, or
compensation by, the Company and any of its affiliates or subsidiaries or any
of their predecessors, including, without limitation, the Existing
Agreement.  This Agreement may not be changed
or modified, except by an agreement in writing signed by each of the parties
hereto.

 

7.9           Withholding.  All payments to Executive will be subject to
tax withholding in accordance with applicable law.

 

7.10         Section Headings.  The headings of sections and paragraphs of
this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.

 

7.11         Counterparts; Facsimile.  This Agreement may be executed in multiple
counterparts (including by facsimile signature), each of which will be deemed
to be an original, but all of which together will constitute one and the same
instrument.

 

7.12         Third Party Beneficiaries.  Subject to Section 7.2, this
Agreement will be binding on, inure to the benefit of and be enforceable by the
parties and their respective heirs, personal representatives, successors and
assigns.  This Agreement does not confer
any rights, remedies, obligations or liabilities to any entity or person other
than Executive and the Company and Executive’s and the Company’s permitted
successors and assigns, although this
Agreement will inure to the benefit of the Company.

 

[This space
left blank intentionally; signature page follows]

 

9

 

 

	
  Employee:

  	
   

  	
  Employer:

  
	
   

  	
   

  	
   

  
	
  JAMON A. JARVIS

  	
   

  	
  NATURE’S SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  	
   

  
	
  /s/
  Jamon A. Jarvis

  	
   

  	
  By
  

  	
  /s/
  Douglas Faggioli

  
	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
  Name
  

  	
  Douglas
  Faggioli

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title
  

  	
  President/CEO

  
						

 

10

 

EXHIBIT A

 

RELEASE AGREEMENT

 

THIS RELEASE AGREEMENT (this “Release”) is
made as of the day of
           day of
                  ,
                    
by and between
                                      
(the “Executive”) and Nature Sunshine
Products, Inc. (the “Company”).

 

WHEREAS, Executive’s employment as an executive of the Company has
terminated; and

 

WHEREAS, pursuant to Section 5 of the Employment Agreement
by and between the Company and Executive dated
                                          
(the “Agreement”), the Company has agreed to pay Executive certain amounts and
to provide him with certain rights and benefits, subject to the execution of
this Release.

 

NOW THEREFORE, in consideration of these premises and the mutual
promises contained herein, and intending to be legally bound hereby, the
parties agree as follows:

 

1.                                       Consideration. Executive
acknowledges that: (i) the payments, rights and benefits set forth in Section 5
of the Agreement constitute full settlement of all his/her rights under the
Agreement, and (ii) except as otherwise provided specifically in this
Release, the Company does not and will not have any other liability or
obligation to Executive under the Agreement. Executive further acknowledges
that, in the absence of his execution of this Release, the benefits and
payments specified in the Agreement (other than those specified) would not
otherwise be due to him/her.

 

2.                                       Release and
Covenant Not to Sue.

 

2.1                                 Executive and
the Company each hereby fully and forever releases and discharges the other,
and all of their respective predecessors and successors, assigns, stockholders,
subsidiaries, parents, affiliates, officers, directors, trustees, employees,
agents and attorneys, past and present and in their respective capacities as such
(the Company and Executive and each such respective person or entity is each
referred to as a “Released Person”)
from any and all claims, demands, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, controversies, debts, costs,
expenses, damages, judgments, orders and liabilities, of whatever kind or
nature, direct or indirect, in law, equity or otherwise, whether known or
unknown, arising through the date of this Release, including those arising out
of Executive’s employment by the Company or the termination thereof, including,
but not limited to, any claims for relief or causes of action under the Age
Discrimination in Employment Act, 29 U.S.C. §  621 et seq., or any other
federal, state or local statute, ordinance or regulation regarding
discrimination in employment and any claims, demands or actions based upon
alleged wrongful or retaliatory discharge or breach of contract under any state
or federal law.

 

2.2                                 Executive and
the Company expressly represent that they have not filed a lawsuit or initiated
any other administrative proceeding against a Released Person and that neither
has assigned any claim against a Released Person. Executive and the Company
each

 

 

further promise not to
initiate a lawsuit or to bring any other claim against the other or any
Released Person arising out of or in any way related to Executive’s employment
by the Company or the termination of that employment.  This Release will not prevent Executive from
filing a charge with the Equal Employment Opportunity Commission (or similar
state agency) or participating in any investigation conducted by the Equal
Employment Opportunity Commission (or similar state agency); provided, however, that any claims by
Executive for personal relief in connection with such a charge or investigation
(such as reinstatement or monetary damages) would be barred.  This Release shall not affect Executive’s
rights under the Age Discrimination in Employment Act or the Older Workers
Benefit Protection Act to have a judicial determination of the validity of this
release and waiver.

 

3.                                       Restrictive
Covenants.  Executive
acknowledges that the restrictive covenants contained in Section 6
of the Agreement will survive the termination of his employment. Executive
affirms that those restrictive covenants are reasonable and necessary to
protect the legitimate interests of the Company, that he received adequate
consideration in exchange for agreeing to those restrictions and that he will
abide by those restrictions.

 

4.                                       Non-Disparagement.  Neither Executive nor the Company will
disparage the other or any of their respective Released Persons or otherwise
take any action which could reasonably be expected to adversely affect the
personal or professional reputation of the other or their respective Released
Persons.

 

5.                                       Cooperation.  Executive further agrees that, subject to
reimbursement of his reasonable expenses, he will cooperate fully with the
Company and its counsel with respect to any matter (including litigation,
investigations, or governmental proceedings) in which Executive was in anyway
involved during his employment with the Company. Executive shall render such
cooperation in a timely manner on reasonable notice from the Company.

 

6.                                       Rescission
Right.  Executive expressly acknowledges
and recites that (a) he has read and understands the terms of this Release
in its entirety, (b) he has entered into this Release knowingly and
voluntarily, without any duress or coercion; (c) he has been advised
orally and is hereby advised in writing to consult with an attorney with
respect to this Release before signing it; (d) he was provided twenty-one
(21) calendar days after receipt of the Release to consider its terms before
signing it; (e) should he nevertheless elect to execute this Agreement
sooner than 21 days after he has received it, he specifically and voluntarily
waives the right to claim or allege that he has not been allowed by the Company
or by any circumstances beyond his control to consider this Agreement for a
full 21 days; and (f) he is provided seven (7) calendar days from the
date of signing to terminate and revoke this Release, in which case this
Release shall be unenforceable, null and void. Executive may revoke this
Release during those seven (7) days by providing written notice of
revocation to the Company at the address specified in Section 7.8
of the Agreement.

 

7.                                       Challenge.  If Executive violates or challenges the
enforceability of any provisions of the Restrictive Covenants or this Release,
no further payments, rights or benefits under Section 5  of
the Agreement will be due to Executive (except where such provision would be
prohibited by applicable law, rule or regulation).

 

2

 

8.                                       Miscellaneous.

 

8.1                                 No Admission of  Liability.  This Release is not to be construed as an
admission of any violation of any federal, state or local statute, ordinance or
regulation or of any duty owed by the Company to Executive. There have been no
such violations, and the Company specifically denies any such violations.

 

8.2                                 No
Reinstatement. Executive agrees that he will not without the
consent of the Company apply for reinstatement with the Company or seek in any
way to be reinstated, re-employed or hired by the Company in the future,

 

8.3                                 Successors and
Assigns. This Release shall inure to the benefit of and be binding upon the
Company and Executive and their respective successors, permitted assigns,
executors, administrators and heirs. Executive shall not may make any
assignment of this Release or any interest herein, by operation of law or
otherwise. The Company may assign this Release to any successor to all or
substantially all of its assets and business by means of liquidation,
dissolution, merger, consolidation, transfer of assets, or otherwise.

 

8.4                                 Severability. Whenever
possible, each provision of this Release will be interpreted in such manner as
to be effective and valid under applicable law. However, if any provision of
this Release is held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability will not affect any other
provision, and this Release will be reformed, construed and enforced as though
the invalid, illegal or unenforceable provision had never been herein
contained.

 

8.5                                 Entire
Agreement: Amendments. Except as otherwise provided herein, this
Release contains the entire agreement and understanding of the parties hereto
relating to the subject matter hereof, and merges and supersedes all prior and
contemporaneous discussions, agreements and understandings of every nature
relating to the subject matter hereof This Release may not be changed or
modified, except by an agreement in writing signed by each of the parties
hereto.

 

8.6                                 Governing Law. This Release
shall be governed by, and enforced in accordance with, the laws of the State of
Utah, without regard to the application of the principles of conflicts of laws.

 

8.7                                 Counterparts
and Facsimiles. This Release may be executed, including execution
by facsimile signature, in multiple counterparts, each of which shall be deemed
an original, and all of which together shall be deemed to be one and the same
instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

	
  Employee:

  	
   

  	
  Employer:

  
	
   

  	
   

  	
   

  
	
  JAMON A. JARVIS

  	
   

  	
  NATURE’S SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
						

 

4

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