EXHIBIT 10.9
NATURE'S SUNSHINE PRODUCTS, INC.
1995 STOCK OPTION PLAN
TABLE OF CONTENTS
I. THE PLAN
1.1 PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE. . . . . . . . . 1
1.3 PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 SHARES AVAILABLE FOR OPTIONS . . . . . . . . . . . . . . . . . . . . . 3
1.5 GRANT OF OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6 TERM OF OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 LIMITATIONS ON EXERCISE OF OPTIONS . . . . . . . . . . . . . . . . . . 4
1.8 ACCEPTANCE OF NOTES TO FINANCE EXERCISE. . . . . . . . . . . . . . . . 4
1.9 NO TRANSFERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 5
II. EMPLOYEE OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 GRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 OPTION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS. . . . . . . 6
2.4 LIMITS ON 10% HOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS . . . 7
III. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES . . . . . 8
3.2 ADJUSTMENTS; ACCELERATION. . . . . . . . . . . . . . . . . . . . . . . 8
3.3 EFFECT OF TERMINATION OF EMPLOYMENT. . . . . . . . . . . . . . . . . . 10
3.4 COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 TAX WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION . . . . . . . . . . . . . . 11
3.7 PRIVILEGES OF STOCK OWNERSHIP. . . . . . . . . . . . . . . . . . . . . 12
3.8 EFFECTIVE DATE OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . 12
3.9 TERM OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.10 GOVERNING LAW; CONSTRUCTION; SEVERABILITY. . . . . . . . . . . . . . . 12
3.11 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.12 EFFECT OF CHANGE OF SUBSIDIARY STATUS. . . . . . . . . . . . . . . . . 13
3.13 NON-EXCLUSIVITY OF PLAN. . . . . . . . . . . . . . . . . . . . . . . . 13
IV. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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 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.
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.
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. 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 in the case of Incentive Stock Options
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 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.
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 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.
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.
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.
(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.
(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.
(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.