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As filed with the Securities and Exchange Commission
on July 15, 1996 Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_______________________
NATURE'S SUNSHINE PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0327982
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
75 East 1700 South
Provo, Utah 84605-9005
(Address of Principal Executive Offices)
_______________________
NATURE'S SUNSHINE PRODUCTS, INC
1995 STOCK OPTION PLAN
(Full title of the plan)
BRENT F. ASHWORTH
Nature's Sunshine Products, Inc.
75 East 1700 South
Provo, Utah 84605-9005
(Name and address of agent for service)
(801) 342-4300
(Telephone number, including area code, of agent for service)
Copies to: BRENT CHRISTENSEN, ESQ.
Van Cott, Bagley, Cornwall & McCarthy
50 South Main Street, Suite 1600
Salt Lake City, Utah 84144
(801) 532-3333
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Proposed
Title of Proposed Maximum
Securities Maximum Aggregate
to be Amount to be Offering Price Offering Amount of
Registered Registered Per Share(1) Price(1) Registration Fee(1)
- -------------------------------------------------------------------------------
Common Stock 1,650,000 Shares $21.50 $35,475,000 $12,232.76
(no par value)
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration
fee. Pursuant to Rules 457(c) and (h) of the Securities Act of 1933, as
amended, the registration fee has been calculated based upon a price of
$21.50 per share, the average of the high and low sales prices as reported in
the consolidated reporting system (NASDAQ) for the registrant's Common Stock
on July 11, 1996.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The documents containing the information specified in Part I of Form S-8
(plan information and registrant information) will be sent or given to
employees as specified by Securities and Exchange Commission Rule 428(b)(1).
Such documents need not be filed with the Securities and Exchange Commission
either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424. These documents and the
documents incorporated by reference in this Registration Statement pursuant
to Item 3 of Part II hereof, taken together, constitute a prospectus that
meets the requirements of Section 10(a) of the Securities Act of 1933.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
See response to Item 1. above.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
are incorporated herein by reference:
(a) Registrant's latest Annual Report filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 ("Exchange Act");
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the registrant's
document referred to in subparagraph (a), above;
(c) Description of the registrant's Common Stock contained in the
registration statement filed under the Exchange Act, including any amendment
or report filed for the purpose of updating such information; and
(d) All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered
have been sold or which deregistered all securities then remaining unsold,
shall be deemed to be incorporated by reference in this registration
statement and to be part hereof from the date of filing of such documents.
Any statement contained herein or in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
amended, to constitute a part of this Registration Statement.
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ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable as the registrant's stock is registered under Section 12
of the Exchange Act.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock registered
pursuant to this registration statement have been passed upon for the
registrant by Brent F. Ashworth, Esq. Mr. Ashworth serves as Vice
President-Legal, Secretary and General Counsel to the registrant. He
directly owns 4,315 shares of the registrant's Common Stock and by virtue of
his participation in the registrant's 401(k) Plan indirectly owns
approximately 69,006 shares of Common Stock. He also holds options to
purchase 108,925 shares of Common Stock that have been granted to him by the
registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 16-10a-841 of the Utah Revised Business Corporation Act (UTAH
CODE Section 16-10a-901 et seq.) (the "Utah Corporations Law") allows a Utah
corporation to provide in its articles of incorporation or by shareholder
resolution or in its bylaws for the elimination or limitation of personal
liability of a director to the corporation or to its shareholders for
monetary damages for any action or omission, as a director, except (i)
liability for and financial benefit received by a director to which he was
not entitled, (ii) intentional infliction of harm on the corporation or the
shareholders, (iii) an unlawful distribution to shareholders in violation of
Utah Corporations Law, and (iv) intentional violation of criminal law.
Part 9 of the Utah Corporations Law provides for discretionary and
mandatory indemnification of directors in certain circumstances. Section
16-10a-902 empowers a corporation to indemnify a director, against liability
if his conduct was in good faith, he reasonably believed that his conduct was
not opposed to the corporation's best interest and in the case of any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. A corporation may not indemnify a director under Section
16-10a-902 if the director was adjudged liable to the corporation for
deriving an improper personal benefit. A director may apply to a court of
competent jurisdiction to compel mandatory indemnification by the corporation
and the court may also order the corporation to pay the director's reasonable
expenses incurred to obtain the court ordered indemnification. All
indemnification is limited to reasonable expenses only.
Section 16-10a-903 requires that, unless limited by the articles of
incorporation, a corporation must indemnify a director who was successful in
the defense of any proceeding, claim, issue or matter in a proceeding, to
which he was a party because he is or was a director. Such indemnification
is limited to reasonable expenses incurred and limited to the extent of his
success in the proceeding or claim.
Under Section 16-10a-904 a corporation may pay for or reimburse the
reasonable expenses incurred by a director in advance of final disposition of
the proceeding if the director furnishes the corporation a written
affirmation of his good faith belief that he has met the applicable standard
of conduct, provides a written undertaking personally binding him to pay the
advance if it is ultimately determined that he did not meet the standard of
conduct, and a determination is made that the facts then known to those
making a determination would not preclude indemnification. The director's
undertaking need not be secured and may be accepted without reference to
financial ability to make repayment.
Section 16-10a-906 prohibits a corporation from making any discretionary
indemnification, payment or reimbursement of expenses in advance of a
determination of a director's liability unless a determination has been made
that the director has met the applicable standard of conduct. Such
determination must be made as follows: (1) by a majority vote of a quorum of
the board of directors who are not parties to the proceeding; (2) if a quorum
cannot be obtained as contemplated by (1), above, by a majority vote of a
committee of two or more members of the board of directors who are not
parties to the proceeding and are designated by the board of directors; (3)
by special legal counsel selected by a quorum of the board of directors or
its committee composed of persons determined in the manner prescribed in (1)
or (2), above, or if a disinterested quorum of the board of directors or
committee
3
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is not possible, then selected by a majority vote of the full board of
directors, or (4) by a majority of the shareholders entitled to vote by
person or proxy at a meeting.
Section 16-10a-907 entitles an officer of the corporation to both the
mandatory and discretionary indemnification and discretionary payment or
reimbursement of reasonable expenses on the same basis allowed for directors
under the Utah Corporations Law, unless prohibited by a corporation's
articles of incorporation.
The Restated Articles of Incorporation of the registrant do not have any
provisions regarding the limitation of liability of liability or
indemnification of directors, officers or employees.
Article VIII of the registrant's By-laws empowers the Company to
indemnify present and former directors, officers, employees or agents of the
Company against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection
with a threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or
in the right of the Company).
Such indemnification is contingent upon the person acting in good faith
and in a manner he reasonably believe to be in or not opposed to the best
interest of the Company, and for criminal proceedings, the person must have
had no reasonable cause to believe his conduct was unlawful. Indemnification
inures to the benefit of heirs and legal representatives and is extended to
persons who, at the request of the Company, serve as directors, officers,
employees or agents of other entities. No indemnification under the By-laws,
without court approval, is permitted for claims, issues or matters if the
person is adjudged to be liable for negligence or misconduct in performance
of his duty to the Company.
A majority of the Company's Board of Directors may authorize advances of
indemnification funds upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amounts unless it is ultimately determined
that the person is to be indemnified by the Company as authorized by the
By-laws.
The By-laws do not preclude indemnification as may be provided by an
agreement, the vote of the Company's shareholders or disinterested directors,
or otherwise. Indemnification under the By-laws is in addition to any
indemnification permitted by law. The Company is empowered to purchase
insurance against liability of its directors, officers, employees or agents.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that
in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The exhibits listed in the Exhibit Index at page 8 (sequentially
numbered page __) are filed as a part of this registration statement.
4
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ITEM 9. UNDERTAKINGS.
A. RULE 415 UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
B. SUBSEQUENT EXCHANGE ACT FILINGS UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
any employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
C. INCORPORATED ANNUAL AND QUARTERLY REPORTS UNDERTAKINGS.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent
or given, the latest annual report to security holders that is incorporated
by reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver,
or cause to be delivered to each person to whom the Prospectus is sent or
given, the latest quarterly report that is specifically incorporated by
reference in the Prospectus to provide such interim financial information.
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D. INDEMNIFICATION UNDERTAKINGS.
Reference is made to UTAH CODE Sections 16-10a-841 and 16-10a-901 et seq.
and to Article VIII of the By-Laws of the registrant (described in Item 6.
hereof), which provide for certain rights of indemnification for officers and
directors of the registrant.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Provo, State of Utah, on June 12,
1996.
(REGISTRANT) NATURE'S SUNSHINE PRODUCTS, INC.
By: \s\ Alan D. Kennedy
----------------------------
Alan D. Kennedy
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE AND TITLE DATE
------------------- ----
\s\ Alan D. Kennedy June 12, 1996
- -------------------------------------
Name: Alan D. Kennedy
Title: President, Director
(Principal Executive Officer)
\s\ Kristine F. Hughes June 12, 1996
- -------------------------------------
Name: Kristine F. Hughes
Title: Chairman of the Board and Director
\s\ Eugene L. Hughes June 12, 1996
- -------------------------------------
Name: Eugene L. Hughes
Title: Executive Vice President and Director
\s\ Merrill Gappmayer June 12, 1996
- -------------------------------------
Name: Merrill Gappmayer
Title: Director
\s\ Pauline T. Hughes June 12, 1996
- -------------------------------------
Name: Pauline T. Hughes
Title: Director
\s\ Douglas Faggioli June 12, 1996
- -------------------------------------
Name: Douglas Faggioli
Title: Chief Financial Officer
(Principal Accounting Officer)
7
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LIST OF EXHIBITS
LOCATED AT
SEQUENTIALLY
ITEM NO. EXHIBIT NUMBERED PAGE
- -------- ------- -------------
4(a) Nature's Sunshine Products, Inc.
1995 Stock Option Plan __
4(b) Form of Non-Qualified Stock
Option Agreement (employees) __
5 Opinion of Brent F. Ashworth
including his consent __
15 Inapplicable --
24(a) Consent of Arthur Andersen LLP __
24(b) Consent of Brent F. Ashworth
(included in Exhibit 5 herewith) __
25 Inapplicable --
28 Inapplicable --
29 Inapplicable --
8
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EXHIBIT 4(a)
NATURE'S SUNSHINE PRODUCTS, INC.
1995 STOCK OPTION PLAN
<PAGE>
TABLE OF CONTENTS
I. THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE. . . . 1
1.3 PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 SHARES AVAILABLE FOR OPTIONS . . . . . . . . . . . . . . . . 2
1.5 GRANT OF OPTIONS . . . . . . . . . . . . . . . . . . . . . . 2
1.6 TERM OF OPTIONS. . . . . . . . . . . . . . . . . . . . . . . 2
1.7 LIMITATIONS ON EXERCISE OF OPTIONS . . . . . . . . . . . . . 3
1.8 ACCEPTANCE OF NOTES TO FINANCE EXERCISE. . . . . . . . . . . 3
1.9 NO TRANSFERABILITY . . . . . . . . . . . . . . . . . . . . . 4
II. EMPLOYEE OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 GRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 OPTION PRICE . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS. . 4
2.4 LIMITS ON 10% HOLDERS. . . . . . . . . . . . . . . . . . . . 5
2.5 OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF
RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . 5
III. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES 5
3.2 ADJUSTMENTS; ACCELERATION. . . . . . . . . . . . . . . . . . 6
3.3 EFFECT OF TERMINATION OF EMPLOYMENT. . . . . . . . . . . . . 6
3.4 COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . 6
3.5 TAX WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . . 7
3.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION . . . . . . . . . 7
3.7 PRIVILEGES OF STOCK OWNERSHIP. . . . . . . . . . . . . . . . 8
3.8 EFFECTIVE DATE OF THE PLAN . . . . . . . . . . . . . . . . . 8
3.9 TERM OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . 8
3.10 GOVERNING LAW; CONSTRUCTION; SEVERABILITY. . . . . . . . . . 8
3.11 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 EFFECT OF CHANGE OF SUBSIDIARY STATUS. . . . . . . . . . . . 8
3.13 NON-EXCLUSIVITY OF PLAN. . . . . . . . . . . . . . . . . . . 8
IV. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 9
i
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NATURE'S SUNSHINE PRODUCTS, INC.
1995 STOCK OPTION PLAN
I. THE PLAN
1.1 PURPOSE
The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of stock options to attract,
motivate, retain and reward key employees, including officers, whether or not
directors, of the Company with incentives for high levels of individual
performance and improved financial performance of the Company. "Corporation"
means Nature's Sunshine Products, Inc., a Utah corporation, and "Company"
means the Corporation and its Subsidiaries, collectively. These terms and
other capitalized terms are defined in Article IV.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE
(a) COMMITTEE. This Plan shall be administered by and all Options to
Eligible Employees shall be authorized by the Committee. Action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) PLAN OPTIONS; INTERPRETATION; POWERS OF COMMITTEE. Subject to the
express provisions of this Plan, the Committee shall have the authority:
(i) to determine from among those persons eligible the particular
Eligible Employees who will receive any Options;
(ii) to grant Options to Eligible Employees, determine the price at
which the Options may be exercised (equal to at least Fair Market Value),
the amount of securities to be subject to such Options, and determine the
other specific terms and conditions of such Options consistent with the
express limits of this Plan, and establish the installments (if any) in
which such Options shall become exercisable, or determine that no delayed
exercisability is required, and establish the events of termination of such
Options;
(iii) to approve the forms of Option Agreements (which need not be
identical either as to type of option or as among Participants);
(iv) to construe and interpret this Plan and any agreements defining
the rights and obligations of the Company and employee Participants under
this Plan, further define the terms used in this Plan, and prescribe, amend
and rescind rules and regulations relating to the administration of this
Plan;
(v) to cancel, modify, or waive the Corporation's rights with respect
to, or modify, discontinue, suspend, or terminate any or all outstanding
Options held by Eligible Employees, subject to any required consent under
Section 3.6;
(vi) to accelerate or extend the exercisability or extend the term of
any or all such outstanding Options within the maximum ten-year term of
Options under Section 1.6; and
(vii) to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.
(c) BINDING DETERMINATIONS. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or pursuant to
this Plan shall be within the absolute discretion of
<PAGE>
that entity or body and shall be conclusive and binding upon all persons. No
member of the Board or Committee, or officer of the Corporation or any
Subsidiary, shall be liable for any such action or inaction of the entity or
body, of another person or except in circumstances involving bad faith, of
himself or herself. Subject only to compliance with the express provisions
hereof, the Board and Committee may act in their absolute discretion in
matters within their authority related to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in taking or
not taking any action under this Plan, the Committee or the Board, as the
case may be, may obtain and may rely upon the advice of experts, including
professional advisors to the Corporation. No director, officer or agent of
the Company shall be liable for any such action or determination taken or
made or omitted in good faith.
(e) DELEGATION. The Committee may delegate ministerial,
non-discretionary functions to individuals who are officers or employees of
the Company.
1.3 PARTICIPATION
Options may be granted by the Committee only to those persons that the
Committee determines to be Eligible Employees. An Eligible Employee who has
been granted an Option may, if otherwise eligible, be granted additional
Options if the Committee shall so determine. Non-Employee Directors shall
not be eligible to receive any Options through this Plan.
1.4 SHARES AVAILABLE FOR OPTIONS
Subject to the provisions of Section 3.2, the capital stock that may be
delivered under this Plan shall be shares of the Corporation's authorized but
unissued Common Stock and any shares of its Common Stock held as treasury
shares. The shares may be delivered for any lawful consideration.
(a) NUMBER OF SHARES. The maximum number of shares of Common Stock that
may be issued pursuant to Options granted to Eligible Employees under this
Plan is 1,100,000 shares, subject to adjustments contemplated by Section 3.2.
(b) CALCULATION OF AVAILABLE SHARES AND REPLENISHMENT. Shares subject
to outstanding Options that are derivative securities (as defined in Rule
16a-1(c) under the Exchange Act) shall be reserved for issuance. If any
Option shall expire or be canceled or terminated without having been
exercised in full, the unpurchased share subject thereto shall again be
available for the purposes of the Plan, subject to any applicable limitations
under Rule 16b-3. If the Corporation withholds shares of Common Stock
pursuant to Section 3.5, the number of shares that would have been
deliverable with respect to an Option but that are withheld pursuant to the
provisions of Section 3.5 may in effect not be issued, but the aggregate
number of shares issuable with respect to the applicable Option and under the
Plan shall be reduced by the number of shares withheld and such shares shall
not be available for additional Options under this Plan.
1.5 GRANT OF OPTIONS
Subject to the express provisions of this Plan, the Committee shall
determine the number of shares of Common Stock subject to each Option and the
exercise price thereof. Each Option shall be evidenced by an Option
Agreement signed by the Corporation and by the Participant.
1.6 TERM OF OPTIONS
Each Option and all executory rights or obligations under the related
Option Agreement shall expire on such date as shall be determined by the
Committee but not later than ten (10) years after the Grant date.
2
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1.7 LIMITATIONS ON EXERCISE OF OPTIONS
(a) PROVISIONS FOR EXERCISE. No Option shall be exercisable until at
least six months after the later of (i) the initial Grant Date or (ii)
stockholder approval of the Plan, and once exercisable an Option shall remain
exercisable until the expiration or earlier termination of the Option, unless
the Committee otherwise provides. Notwithstanding the foregoing, the
Committee may reduce or eliminate the six month requirement for Participants
who are not subject to Section 16 of the Exchange Act.
(b) PROCEDURE. Any exercisable Option shall be deemed to be exercised
when the Treasurer of the Corporation receives written notice of such
exercise from the Participant, together with the required payment made in
accordance with Section 2.2(b) or 5.3, as the case may be.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests shall
be disregarded, but may be accumulated. The Committee, however, may
determine in the case of Eligible Employees that cash, other securities or
other property will be paid or transferred in lieu of any fractional share
interests. No fewer than 100 shares may be purchased on exercise of any
Option at one time unless the number purchased is the total number at the
time available for purchase under the Option.
1.8 ACCEPTANCE OF NOTES TO FINANCE EXERCISE
The Corporation may, with the Committee's approval, accept one or more
notes from any Eligible Employee in connection with the exercise or receipt
of any outstanding Option, provided that any such note shall be subject to
the following terms and conditions:
(a) The principal of the note shall not exceed the amount required to be
paid to the Corporation upon the exercise or receipt of one or more Options
under the Plan and the note shall be delivered directly to the Corporation in
consideration of such exercise or receipt.
(b) The initial term of the note shall be determined by the Committee;
PROVIDED that the term of the note, including extensions, shall not exceed a
period of 10 years.
(c) The note shall provide for full recourse to the Employee Participant
and shall bear interest at a rate determined by the Committee but not less
than the applicable imputed interest rate specified by the Code.
(d) If the employment of the Employee Participant terminates, the unpaid
principal balance of the note shall become due and payable on the 10th
business day after such termination; provided, however, that if a sale of
such shares would cause such Employee Participant to incur liability under
Section 16(b) of the Exchange Act, the unpaid balance shall become due and
payable on the 10th business day after the first day on which a sale of such
shares could have been made without incurring such liability assuming for
these purposes that there are no other transactions by the Employee
Participant subsequent to such termination.
(e) The note shall be secured by a pledge of any shares or rights
financed thereby in compliance with applicable law.
(f) The terms, repayment provisions, and collateral release provisions
of the note and the pledge securing the note shall conform with applicable
rules and regulations of the Federal Reserve Board as then in effect.
3
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1.9 NO TRANSFERABILITY
Options may be exercised only by, and shares issuable pursuant to an
Option shall be issued only to (or registered only in the name of), the
Participant or, if the Participant has died, the Participant's Beneficiary
or, if the Participant has suffered a Disability, the Participant's Personal
Representative, if any, or if there is none, the Participant, or (to the
extent permitted by applicable law and Rule 16b-3) to a third party pursuant
to such conditions and procedures as the Committee may establish. Other than
by will or the laws of descent and distribution or pursuant to a QDRO or
other exception to transfer restrictions under Rule 16b-3 (except to the
extent not permitted in the case of an Incentive Stock Option), no right or
benefit under this Plan or any Option, shall be transferrable by the
Participant or shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge (other than to the
Corporation) and any such attempted action shall be void. The Corporation
shall disregard any attempt at transfer, assignment or other alienation
prohibited by the preceding sentences and shall deliver such shares of Common
Stock in accordance with the provisions of this Plan. The designation of a
Beneficiary hereunder shall not constitute a transfer for these purposes.
II. EMPLOYEE OPTIONS
2.1 GRANTS
One or more Options may be granted under this Article to any Eligible
Employee. The maximum number of shares of Common Stock subject to Options
granted to any Eligible Employee in any calendar year shall not exceed
100,000. Each Option granted may be either an Option intended to be an
Incentive Stock Option, or an Option not so intended, and such intent shall
be indicated in the applicable Option Agreement.
2.2 OPTION PRICE
(a) PRICING LIMITS. The purchase price per share of the Common Stock
covered by each Option shall be determined by the Committee at the time the
Option is granted, but shall not be less than 100% (110% in the case of a
Participant who owns or is deemed to own under Section 424(d) of the Code
more than 10% of the total combined voting power of all classes of stock of
the Corporation) of the Fair Market Value of the Common Stock on the Grant
Date.
(b) PAYMENT PROVISIONS. The purchase price of any shares purchased on
exercise of an Option granted under this Article shall be paid in full at the
time of each purchase in one or a combination of the following methods: (i)
in cash or by electronic funds transfer; (ii) by check payable to the order
of the Corporation; (iii) if authorized by the Committee or specified in the
applicable Option Agreement, by a promissory note of the Participant
consistent with the requirements of Section 1.8; (iv) by notice and third
party payment in such manner as may be authorized by the Committee; or (v) by
the delivery of shares of Common Stock of the Corporation already owned by
the Participant, PROVIDED, HOWEVER, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an Option by
delivering such shares. Shares of Common Stock used to satisfy the exercise
price of an Option shall be valued at their Fair Market Value on the date of
exercise and any such shares used in payment shall have been owned by the
Participant at least six months prior to the date of exercise.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS
(a) $100,000 LIMIT. To the extent that the aggregate "fair market value"
of stock with respect to which incentive stock options first become exercisable
by a Participant in any calendar year exceeds $100,000, taking into account both
Common Stock subject to Incentive Stock Options under this Plan and stock
subject to incentive stock options under all other plans of the Company, such
options shall be treated as nonqualified stock options. For this purpose, the
"fair market value" of the stock subject to options shall be determined as of
the date the options were optioned. In reducing the number of options treated
as incentive stock options to meet the $100,000 limit, the most recently granted
options shall be reduced first. To the extent a reduction of simultaneously
granted options is necessary to meet the $100,000 limit, the Committee may, in
the manner and to the extent permitted by
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law, designate which shares of Common Stock are to be treated as shares
acquired pursuant to the exercise of an Incentive Stock Option.
(b) OPTION PERIOD. Each Incentive Stock Option and all rights
thereunder shall expire no later than ten years after the Grant Date.
(c) OTHER CODE LIMITS. There shall be imposed in any Option Agreement
relating to Incentive Stock Options such terms and conditions as from time to
time are required in order that the Option be an "incentive stock option" as
that term is defined in Section 422 of the Code.
2.4 LIMITS ON 10% HOLDERS
No Incentive Stock Option may be granted to any person who, at the time
the Option is granted, owns (or is deemed to own under Section 424(d) of the
Code) shares of outstanding Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation,
unless the exercise price of such Option is at least 110% of the Fair Market
Value of the stock subject to the Option and such Option by its terms is not
exercisable after the expiration of five years from the date such Option is
granted.
2.5 OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS
Subject to Section 1.4 and Section 3.6 and the specific limitations on
Options contained in this Plan, the Committee from time to time may
authorize, generally or in specific cases only, for the benefit of any
Eligible Employee, any adjustment in the exercise price, the number of shares
subject to or the term of, an Option granted under this Article by
cancellation of an outstanding Option and a subsequent regranting of an
Option, by amendment, by substitution of an outstanding Option, by waiver or
by other legally valid means. Such amendment or other action may result
among other changes in an exercise price which is higher or lower than the
exercise or purchase price of the original or prior Option, provide for a
greater or lesser number of shares subject to the Option, or provide for a
longer or shorter vesting or exercise period.
III. OTHER PROVISIONS
3.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES
(a) EMPLOYMENT STATUS. Status as an Eligible Employee shall not be
construed as a commitment that any Option will be granted under this Plan to
an Eligible Employee or to Eligible Employees generally.
(b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in any
other documents related to this Plan or to any Option) shall confer upon any
Eligible Employee or other Participant any right to continue in the employ or
other service of the Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way with the right of
the Company to change such person's compensation or other benefits or to
terminate the employment of such person, with or without cause, but nothing
contained in this Plan or any document related hereto shall adversely affect
any independent contractual right of such person without his or her consent
thereto.
(c) PLAN NOT FUNDED. No Participant, Beneficiary or other person shall
have any right, title or interest in any fund or in any specific asset
(including shares of Common Stock, except as expressly otherwise provided) of
the Company by reason of any Option hereunder. Neither the provisions of
this Plan (or of any related documents), nor the creation or adoption of this
Plan, nor any action taken pursuant to the provisions of this Plan shall
create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person.
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3.2 ADJUSTMENTS; ACCELERATION
(a) ADJUSTMENTS. If there shall occur any extraordinary dividend or
other extraordinary distribution in respect of the Common Stock (whether in
the form of cash, Common Stock, other securities, or other property), or any
recapitalization, stock split (including a stock split in the form of a stock
dividend), reverse stock split, reorganization, merger, combination,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Common Stock or other securities of the Corporation, or there shall occur any
other like corporate transaction or event in respect of the Common Stock,
then the Committee shall, in such manner and to such extent (if any) as it
deems appropriate and equitable (1) proportionately adjust any or all of (a)
the number and type of shares of Common Stock (or other securities) which
thereafter may be made the subject of Options (including the specific maximum
and numbers of shares set forth elsewhere in this Plan), (b) the number,
amount and type of shares of Common Stock (or other securities or property)
subject to any or all outstanding Options, (c) the grant, purchase, or
exercise price of any or all outstanding Options, (d) the securities issuable
upon exercise of any outstanding Options, or (2) in the case of an
extraordinary dividend or other distribution, merger, reorganization,
consolidation, combination, sale of assets, split up, exchange, or spin off,
make provision for a cash payment or for the substitution or exchange of any
or all outstanding Options or the securities deliverable to the holder of any
or all outstanding Options based upon the distribution or consideration
payable to holders of the Common Stock of the Corporation upon or in respect
of such event; PROVIDED, HOWEVER, in each case, that with respect to
Incentive Stock Options, no such adjustment shall be made which would cause
the Plan to violate Section 424(a) of the Code or any successor provisions
thereto.
(b) ACCELERATION OF OPTIONS UPON CHANGE IN CONTROL. As to any Eligible
Employee Participant, unless prior to a Change in Control Event the Committee
determines that, upon its occurrence, there shall be no acceleration of
benefits under Options or determines that only certain or limited benefits
under Options shall be accelerated and the extent to which they shall be
accelerated, and/or establishes a different time in respect of such Event for
such acceleration, then upon the occurrence of a Change in Control Event each
Option shall become immediately exercisable. The Committee may override the
limitations on acceleration in this Section 3.2(b) by express provision in
the Option Agreement and may accord any Eligible Employee a right to refuse
any acceleration, whether pursuant to the Option Agreement or otherwise, in
such circumstances as the Committee may approve. Any acceleration of Options
shall comply with applicable regulatory requirements, including, without
limitation, Section 422 of the Code.
(c) POSSIBLE EARLY TERMINATION OF ACCELERATED OPTIONS. If any Option or
other right to acquire Common Stock under this Plan has been fully
accelerated as permitted by Section 3.2(b) but is not exercised prior to (i)
a dissolution of the Corporation, or (ii) a reorganization event described in
Section 3.2(a) that the Corporation does not survive, or (iii) the
consummation of reorganization event described in Section 3.2(a) that results
in a Change of Control approved by the Board, and no provision has been made
for the survival, substitution, exchange or other settlement of such Option
or right, such Option or right shall thereupon terminate.
3.3 EFFECT OF TERMINATION OF EMPLOYMENT
The Committee shall establish in respect of each Option granted to an
Eligible Employee the effect of a termination of employment on the rights and
benefits thereunder and in so doing may make distinctions based upon the
cause of termination.
3.4 COMPLIANCE WITH LAWS
This Plan, the granting and vesting of Options under this Plan and the
issuance and delivery of shares of Common Stock under this Plan or under
Options granted hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including, but not limited to,
state and federal securities laws and federal margin requirements) and to
such approvals by any listing, regulatory or governmental authority as may,
in the opinion of counsel for the Corporation, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be
subject to such restrictions, and the person acquiring such securities shall,
if
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requested by the Corporation, provide such assurances and representations to
the Corporation as the Corporation may deem necessary or desirable to assure
compliance with all applicable legal requirements.
3.5 TAX WITHHOLDING
(a) CASH OR SHARES. Upon any exercise or vesting of any Option or upon
the disposition of shares of Common Stock acquired pursuant to the exercise
of an Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Company shall have the right at
its option to (i) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of the amount
of any taxes which the Company may be required to withhold with respect to
such transaction or (ii) deduct from any amount payable in cash the amount of
any taxes which the Company may be required to withhold with respect to such
cash amount. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this Plan, the
Committee may grant (either at the time the Option is granted or thereafter)
to the Participant the right to elect, pursuant to such rules and subject to
such conditions as the Committee may establish, to have the Corporation
reduce the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares valued at their then Fair Market Value, to
satisfy such withholding obligation.
(b) TAX LOANS. The Committee may, in its discretion, authorize a loan
to an Eligible Employee in the amount of any taxes which the Company may be
required to withhold with respect to shares of Common Stock received (or
disposed of, as the case may be) pursuant to a transaction described in
subsection (a) above. Such a loan shall be for a term, at a rate of interest
and pursuant to such other terms and conditions as the Committee, under
applicable law, may establish and such loan must comply with the provisions
of Section 1.8.
3.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION
(a) BOARD AUTHORIZATION. The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan, in whole or in part. No
Options may be granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain jurisdiction as to
Options then outstanding in accordance with the terms of this Plan.
(b) STOCKHOLDER APPROVAL. If any amendment would (i) materially
increase the benefits accruing to Participants under this Plan, (ii)
materially increase the aggregate number of securities that may be issued
under this Plan, or (iii) materially modify the requirements as to
eligibility for participation in this Plan, then to the extent then required
by Rule 16b-3 to secure benefits thereunder or to avoid liability under
Section 16 of the Exchange Act (and Rules thereunder) or required under
Section 425 of the Code or any other applicable law, or deemed necessary or
advisable by the Board, such amendment shall be subject to stockholder
approval.
(c) AMENDMENTS TO OPTIONS. Without limiting any other express authority
of the Committee under but subject to the express limits of this Plan, the
Committee by agreement or resolution may waive conditions of or limitation on
Options to Eligible Employees that the Committee in the prior exercise of its
discretion has imposed, without the consent of a Participant, and may make
other changes to the terms and conditions of Options that do not affect in
any manner materially adverse to the Employee Participant, his or her rights
and benefits under an Option.
(d) LIMITATIONS ON AMENDMENT TO PLAN AND OPTIONS. No amendment,
suspension or termination of the Plan or change of or affecting any
outstanding Option shall, without written consent of the Participant, affect
in any manner materially adverse to the Participant any rights or benefits of
the Participant or obligations of the Corporation under any Option granted
under this Plan prior to the effective date of such change. Changes
contemplated by Section 3.2 shall not be deemed to constitute changes or
amendments for purposes of this Section 3.6.
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3.7 PRIVILEGES OF STOCK OWNERSHIP
Except as otherwise expressly authorized by the Committee or this Plan, a
Participant shall not be entitled to any privilege of stock ownership as to
any shares of Common Stock not actually delivered to and held of record by
him or her. No adjustment will be made for dividends or other rights as a
stockholders for which a record date is prior to such date of delivery.
3.8 EFFECTIVE DATE OF THE PLAN
This Plan shall be effective as of December 20, 1995, the date of Board
approval, subject to stockholder approval within 12 months thereafter.
3.9 TERM OF THE PLAN
No Option shall be granted more than three years after the effective date
of this Plan (the "termination date"). Unless otherwise expressly provided
in this Plan or in an applicable Option Agreement, any Option theretofore
granted may extend beyond such date, and all authority of the Committee with
respect to Options hereunder shall continue during any suspension of this
Plan and in respect of outstanding Options on such termination date.
3.10 GOVERNING LAW; CONSTRUCTION; SEVERABILITY
(a) CHOICE OF LAW. This Plan, the Options, all documents evidencing
Options and all other related documents shall be governed by, and construed
in accordance with the laws of the State of Utah.
(b) SEVERABILITY. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
(c) PLAN CONSTRUCTION. It is the intent of the Corporation that this
Plan and Options hereunder satisfy and be interpreted in a manner that in the
case of Participants who are or may be subject to Section 16 of the Exchange
Act satisfies the applicable requirements of Rule 16b-3 so that such persons
will be entitled to the benefits of Rule 16b-3 or other exemptive rules under
Section 16 of the Exchange Act and will not be subjected to avoidable
liability thereunder. If any provision of this Plan or of any Option would
otherwise frustrate or conflict with the intent expressed above, that
provision to the extent possible shall be interpreted and deemed amended so
as to avoid such conflict, but to the extent of any remaining irreconcilable
conflict with such intent as to such persons in the circumstances, such
provision shall be deemed void.
3.11 CAPTIONS
Captions and headings are given to the sections and subsections of this
Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
3.12 EFFECT OF CHANGE OF SUBSIDIARY STATUS
For purposes of this Plan and any Option hereunder, if an entity ceases
to be a Subsidiary a termination of employment shall be deemed to have
occurred with respect to each employee of such Subsidiary who does not
continue as an employee of another entity within the Company.
3.13 NON-EXCLUSIVITY OF PLAN
Nothing in this Plan shall limit or be deemed to limit the authority of
the Board or the Committee to grant options or authorize any other
compensation, with or without reference to the Common Stock, under any other
plan or authority.
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IV. DEFINITIONS
4.1 DEFINITIONS
(a) "BENEFICIARY" shall mean the person, persons, trust or trusts
entitled by will or the laws of descent and distribution to receive the
benefits specified in the Option Agreement and under this Plan in the event
of a Participant's death, and shall mean the Participant's personal
representative, executor or administrator if no other Beneficiary is
identified and able to act under the circumstances.
(b) "BOARD" shall mean the Board of Directors of the Corporation.
(c) "CHANGE IN CONTROL EVENT" shall mean any of the following:
(i) Approval by the stockholders of the Corporation of the dissolution
or liquidation of the Corporation;
(ii) Approval by the stockholders of the Corporation of an agreement
to merge or consolidate, or otherwise reorganize, with or into one or more
entities that are not Subsidiaries, as a result of which less than 50% of
the outstanding voting securities of the surviving or resulting entity
immediately after the reorganization are, or will be, owned by stockholders
of the Corporation immediately before such reorganization (assuming for
purposes of such determination that there is no change in the record
ownership of the Corporation's securities from the record date for such
approval until such reorganization and that such record owners hold no
securities of the other parties to such reorganization);
(iii) Approval by the stockholders of the Corporation of the sale of
substantially all of the Corporation's business and/or assets to a person
or entity which is not a Subsidiary;
(iv) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) (other than a person having such ownership at the time of
adoption of this Plan) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing more than 50% of the combined voting power of the
Corporation's then outstanding securities entitled to then vote generally
in the election of directors of the Corporation; or
(v) During any period not longer than two consecutive years,
individuals who at the beginning of such period constituted the Board cease
to constitute at least a majority thereof, unless the election, or the
nomination for election by the Corporation's stockholders, of each new
Board member was approved by a vote of at least three-fourths of the Board
members then still in office who were Board members at the beginning of
such period (including for these purposes, new members whose election or
nomination was so approved).
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(e) "COMMISSION" shall mean the Securities and Exchange Commission.
(f) "COMMITTEE" shall mean a committee appointed by the Board to
administer this Plan, which committee shall be comprised only of two or more
directors or such greater number of directors as may be required under
applicable law, each of whom, during such time as one or more Participants
may be subject to Section 16 of the Exchange Act, shall be Disinterested.
Each member of the Committee shall be an "outside director" as defined in
Code Section 162(m) and the regulations thereunder promulgated by the
Treasury Department.
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(g) "COMMON STOCK" shall mean the Common Stock of the Corporation and
such other securities or property as may become subject to Options, pursuant
to an adjustment made under Section 3.2 of this Plan.
(h) "COMPANY" shall mean, collectively, the Corporation and its
Subsidiaries.
(i) "CORPORATION" shall mean Nature's Sunshine Products, Inc., a Utah
corporation, and its successors.
(j) "DISINTERESTED" shall mean disinterested within the meaning of any
applicable regulatory requirements, including Rule 16b-3.
(k) "ELIGIBLE EMPLOYEE" shall mean an officer (whether or not a director)
or key employee of the Company. For purposes of this Plan, the term key
employee shall also include consultants and advisors to the Company.
(l) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(m) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(n) "FAIR MARKET VALUE" shall mean (i) if the stock is listed or
admitted to trade on a national securities exchange, the closing sales price
of the stock on the Composite Tape, as published in the Western Edition of
The Wall Street Journal, of the principal national securities exchange on
which the stock is so listed or admitted to trade, on such date, or, if there
is no trading of the stock on such date, then the closing price of the stock
as quoted on such Composite Tape on the next preceding date on which there
was trading in such shares; (ii) if the stock is not listed or admitted to
trade on a national securities exchange, the last sales price for the stock
on such date, as furnished by the National Association of Securities Dealers,
Inc. ("NASD") through the NASDAQ National Market Reporting System or a
similar organization if the NASD is no longer reporting such information;
(iii) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported on the National Market Reporting
System, the mean between the bid and asked price for the stock on such date,
as furnished by the NASD or a similar organization; or (iv) if the stock is
not listed or admitted to trade on a national securities exchange, is not
reported on the National Market Reporting System and if bid and asked prices
for the stock are not furnished by the NASD or a similar organization, the
value as established by the Committee at such time for purposes of this Plan.
(o) "GRANT DATE" shall mean the date upon which the Committee took the
action granting an Option or such later date as the Committee designates as
the Grant Date at the time of the Option is granted.
(p) "INCENTIVE STOCK OPTION" shall mean an Option which is designated as
an incentive stock option within the meaning of Section 422A of the Code, the
award of which contains such provisions as are necessary to comply with that
section.
(q) "NONQUALIFIED STOCK OPTION" shall mean an Option that is designated
as a Nonqualified Stock Option and shall include any Option intended as an
Incentive Stock Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated as an Incentive
Stock Option shall be deemed to be designated a Nonqualified Stock Option
under this Plan and not an incentive stock option under the Code.
(r) "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board of
Directors of the Corporation who is not an officer or employee of the Company.
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(s) "OPTION" shall mean an option to purchase Common Stock under this
Plan. The Committee shall designate any Option granted to an Eligible
Employee as a Nonqualified Stock Option or an Incentive Stock Option.
(t) "OPTION AGREEMENT" shall mean any writing setting forth the terms of
an Option that has been authorized by the Committee.
(u) "OPTION PERIOD" shall mean the period beginning on the Grant Date
and ending on the expiration date of such Option.
(v) "PARTICIPANT" shall mean an Eligible Employee who has been granted
an Option under this Plan.
(w) "PERSONAL REPRESENTATIVE" shall mean the person or persons who, upon
the disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and who shall have
become the legal representative of the Participant.
(x) "PLAN" shall mean this 1995 Stock Option Plan.
(y) "QDRO" shall mean a qualified domestic relations order as defined in
Section 414(p) of the Code or Title I, Section 206(d)(3) of ERISA (to the
same extent as if this Plan were subject thereto), or the applicable rules
thereunder.
(aa) "RETIREMENT" shall mean retirement with the consent of the Company.
(bb) "RULE 16B-3" shall mean Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act.
(cc) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.
(dd) "SUBSIDIARY" shall mean any corporation or other entity a majority
of whose outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Corporation.
(ee) "TOTAL DISABILITY" shall mean a "permanent and total disability
within the meaning of Section 22(e)(3) of the Code and such other
disabilities, infirmities, afflictions or conditions as the Committee by rule
may include.
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EXHIBIT 4(b)
NATURE'S SUNSHINE PRODUCTS, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is dated as of the ____th
day of __________, 199__ (the "Award Date"), between NATURE'S SUNSHINE
PRODUCTS, INC., a Utah corporation (the "Corporation"), and _________________
("Employee").
A. The Corporation has adopted, subject to the approval of the
shareholders of the Corporation, the Nature's Sunshine Products, Inc. 1995
Stock Option Plan (the "Plan"); and
B. Pursuant to the Plan and as evidenced by this Agreement, the
Corporation has granted to Employee a certain stock option, defined in
Section 1, hereof, which option is not intended as and shall not be deemed to
be an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code, as may be amended.
NOW, THEREFORE, in consideration of services rendered and to be rendered
by Employee for the Corporation, the Corporation and Employee hereby agree to
the provisions set forth herein.
1. OPTION GRANTED. This Agreement evidences the grant to Employee, as
of the Award Date, subject to shareholder approval of the Plan, of an option
to purchase an aggregate of __________________ (______) shares of Common
Stock under the Plan subject to adjustment as provided in the Plan (the
"Option").
2. EXERCISE PRICE. The Option entitles Employee to purchase all or any
portion of the Option shares at a price per share of_______________DOLLARS
AND ______ CENTS ($_____), exercisable from time to time, subject to the
provisions of this Agreement and the Plan. Such price is the Fair Market
Value of the shares on the Award Date.
3. EXERCISABILITY OF OPTION. The Option may be exercised beginning on
_____________________________________. To the extent Employee does not in
any year purchase all or any portion of the shares to which Employee is
entitled to purchase, Employee has the cumulative right thereafter to
purchase any shares not so purchased and such right shall continue until the
Option terminates. When the Option terminates for any reason, no additional
shares may be purchased under this Option.
4. TERMINATION OF OPTION. The Option shall terminate and be of no
further force or effect upon ANY of the following:
(i) the tenth annual anniversary of the Award Date;
(ii) three months (or such later date as the Committee may in its sole
discretion specify) after termination of Employee's employment with the
Corporation for any reason other than for cause (as determined by the
Committee in its sole discretion), or Employee's death or disability (as
determined by the Committee in its sole discretion);
(iii) on the date of termination of Employee's employment with the
Corporation if such termination is for cause (as determined by the Committee
in its sole discretion);
(iv) twelve months after termination of Employee's employment with the
Corporation because of Employee's disability (as determined by the Committee
in its sole discretion); or
(vi) twelve months after Employee's death.
<PAGE>
5. SECURITIES LAWS. The Committee may from time to time impose such
conditions on the exercise of the Option as it deems necessary or advisable
to ensure that rights granted under the Plan satisfy the requirements of
applicable federal and state securities laws. Such conditions may include,
without limitation, the partial or complete suspension of the right to
exercise the Option.
6. NONTRANSFERABILITY OF OPTION. The Option may not be transferred or
assigned by Employee or exercised by anyone other than Employee except
pursuant to (i) Employee's will, (ii) applicable laws of descent and
distribution, or (iii) a QDRO.
7. INTERPRETATION. The Option and this Agreement are subject to, and
the Corporation and Employee hereby agree to be bound by, all of the
provisions of the Plan. Such provisions are incorporated herein and made a
part hereof by this reference. Employee acknowledges receiving a copy of the
Plan. Capitalized terms not otherwise defined in this Agreement shall have
the meaning assigned to such terms in the Plan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Corporation: Nature's Sunshine Products, Inc.
By
---------------------------------------
Title
------------------------------------
Employee: ------------------------------------------
(Signature)
------------------------------------------
(Address)
------------------------------------------
(City, State, Zip Code)
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EXHIBIT 5
NATURE'S SUNSHINE PRODUCTS, INC.
75 E. 1700 S., P. O. BOX 19005 PROVO, UTAH 84605-9005
TEL: (801) 342-4300 FAX: (801) 342-4305
July 14, 1996
Board of Directors
Nature's Sunshine Products, Inc.
75 East 1700 South
Provo, UT 84605
RE: NATURE'S SUNSHINE PRODUCTS, INC.
FORM S-8 REGISTRATION STATEMENT
Gentlemen:
I am Vice President-Legal, Secretary and General Counsel to Nature's Sunshine
Products, Inc. (the "Company"), a Utah Corporation, and have acted as counsel
to the Company in connection with the filing of a Registration Statement on
Form S-8 (the "Registration Statement") for the 1995 Stock Option Plan (the
"Stock Option Plan") under the Securities Act of 1993, as amended, for
1,650,000 shares (the "Shares") of Common Stock, no par value, of the Company.
I have examined an executed copy of the Registration Statement and
photocopies of the Company's Stock Option Plan and the Prospectus to be
delivered to each participant under the Stock Option Plan. I have also
reviewed such matters of law and examined original, certified, conformed or
photocopies of such corporate records and documents of the Company,
certificates of public officials and officers of the Company, and such other
documents as I have deemed relevant for the purposes of this opinion. In
making such examination and stating my opinion, I have assumed (a) the
genuineness of all signatures, (b) the legal capacity of all natural persons,
(c) the authenticity of all documents submitted to me as originals, and (d)
the conformity to authentic original documents of all documents submitted to
me as certified, conformed or photocopies.
As a member of the Bar of the State of Utah, I do not purport to be expert on
the laws of any other jurisdiction. I express no opinion as to the laws of
any jurisdiction other than Utah. I expressly except from the opinions set
forth herein any opinion concerning the need for or compliance by any party,
and in particular by the Company, with the provisions of the securities laws,
regulations, and/or rules of the United States of America, the State of Utah,
or any other jurisdiction.
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Board of Directors
July 14, 1996
Page 2
Based upon and subject to the foregoing, it is my opinion that the Shares
when issued in the manner proposed in the Registration Statement, will be
legally issued, fully paid and non-assessable.
I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name as it appears under the heading "Legal
Matters" in the Prospectus included in the Registration Statement.
Very truly yours,
Brent F. Ashworth
Vice President - Legal
BFA/bk
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EXHIBIT 24(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement of our reports dated
February 12, 1996 included in Nature's Sunshine Products, Inc.'s Form 10-K
for the year ended December 31, 1995 and to all references to our Firm
included in this Registration Statement.
ARTHUR ANDERSEN LLP
Salt Lake City, Utah
July 12, 1996
