Document:

Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”),
is made on this 30th day of December, 2008, 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 Greg Halliday (“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 President 
- U.S. Sales and Marketing 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 $190,000.00
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 Internal Revenue Code 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.

 

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.  Each reimbursement must be made no later than
the end of the Company’s fiscal year following the fiscal year in which the
expense was incurred.  All such
reimbursements shall be made no later than the end of the calendar year in
which the Executive separates from service with the Company, or if later, the
following March 15th.  The amount of
reimbursements in any calendar year shall not affect the expenses eligible for
reimbursement in any other taxable year.

 

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”);
and

 

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.  In the event that Executive is required to
include benefits received from the health plan in his or her taxable income,
the 

 

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Company will reimburse
Executive for up to $6,000 of the tax liability.  Such reimbursement will be made no later than
the end of the calendar year following the year in which the amount is
includible in the Executive’s income.

 

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 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.

 

“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; or

 

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 the Executive is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or 

 

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can be expected to last for a continuous period of not less than 12
months, or that the Executive has been determined to be totally disabled by the
Social Security Administration.

 

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.

 

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.

 

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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.

 

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 

 

5

 

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 nondisclosure 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, 

 

6

 

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 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 

 

7

 

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 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 

 

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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
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]

 

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  NATURE’S SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\
  Douglas Faggioli

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  President/CEO

  
	
   

  	
   

  
	
   

  	
  GREG
  HALLIDAY

  
	
   

  	
   

  
	
   

  	
  \s\
  Greg Halliday

  
	
   

  	
  Executive

  
				

 

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

 

	
   

  	
  NATURE’S
  SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GREG
  HALLIDAY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  	
   

  
					

 

4Exhibit 10.2

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made on this 30th
day of December, 2008, 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 Douglas Faggioli (“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 President and Chief Executive
Officer of the Company, reporting directly to the Nature’s Sunshine Products
Board of Directors (“Board”) 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 Board 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 $393,260.00
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 Board. 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 Internal Revenue Code 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.

 

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. 
Each reimbursement must be made no later than the end of the Company’s
fiscal year following the fiscal year in which the expense was incurred.  All such reimbursements shall be made no
later than the end of the calendar year in which the Executive separates from
service with the Company, or if later, the following March 15th.  The amount of reimbursements in any calendar
year shall not affect the expenses eligible for reimbursement in any other
taxable year.

 

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”);
and

 

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.  In the event that Executive is required to
include benefits received from the health plan in his or her taxable income,
the 

 

2

 

Company will
reimburse Executive for up to $6,000 of the tax liability.  Such reimbursement will be made no later than
the end of the calendar year following the year in which the amount is
includible in the Executive’s income.

 

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 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 Board must determine in good
faith that Cause has occurred.

 

“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; or

  
	
   

  	
   

  
	
  e)

  	
  willful
  refusal to perform the lawful and reasonable directives of 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 the
Executive is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected
to result in death or 

 

3

 

can be expected to last for a continuous
period of not less than 12 months, or that the Executive has been determined to
be totally disabled by the Social Security Administration.

 

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.

 

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.

 

4

 

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.

 

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 

 

5

 

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 nondisclosure 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, 

 

6

 

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 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 

 

7

 

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 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 Board.  Such notice 

 

8

 

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 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

 

	
   

  	
  NATURE’S SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\ Kristine Hughes

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
  DOUGLAS FAGGIOLI

  
	
   

  	
   

  
	
   

  	
  \s\ Douglas
  Faggioli

  
	
   

  	
  Executive

  
				

 

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

 

	
   

  	
  NATURE’S SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOUGLAS FAGGIOLI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  
				

 

4

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