Table of Contents

Change in control.The Compensation Committee.  The plan administrator will haveCompensation Committee reviews compensation policies applicable to executive officers and board members, establishes the discretioncompensation to determinebe paid to our Chief Executive Officer and Chairman and determines the treatmentcompensation and benefits of awards granted underall Directors on the 2012 Stock Incentive Plan in the event we should experience a change in control.

Changes in Capitalization.    In the event of any dividend or other distribution (whether in the form of cash, shares ofBoard. The Chief Executive Officer makes recommendations to our common stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of our Common Stock or other securities, issuance of warrants or other rights to purchase shares of our Common Stock or other securities or other similar corporate transaction or event affecting the shares of our common stock, then the plan administrator will make equitable adjustments to (i) the number and type of shares of Common Stock (or other securities or other property) that may thereafter be made the subject of awards under the 2012 Stock Incentive Plan, (ii) the number and type of shares of Common Stock (or other securities or other property) available for granting incentive stock options, (iii) the number and type of shares of Common Stock (or other securities or other property) available for granting restricted stock and restricted stock units, (iv) the maximum number of shares of Common Stock (or other securities or other property) subject to awards under the 2009 and 2012 Stock Incentive Plans that are not purchased or are forfeited or reacquired by the Company or are otherwise not delivered due to termination or cancellation of the award that may be added to the share reserve under the 2012 Stock Incentive Plan, (v) the number and type of shares of Common Stock (or other securities or other property) subject to outstanding awards under the 2012 Stock Incentive Plan, (vi) the purchase price or exercise price with respect to any award under the Plan, (vii) the maximum number of shares for which any one person may be granted stock options, stock appreciation rights or any other award under the 2012 Stock Incentive Plan, the value of which is based solely on an increase in the value of the shares after the date of grant of such award, per taxable year, and (viii) the maximum number of shares for which any one person may be granted performance awards denominated in shares of Common Stock (including restricted stock or restricted stock units), and which are intended to represent “qualified performance-based compensation” under Section 162(m) under the 2012 Stock Incentive Plan per taxable year. Such adjustments will be made in such manner as the plan administrator deems appropriate in order to preclude any dilution or enlargement of benefits under the 2012 Stock Incentive Plan or the outstanding awards thereunder and will be final, binding and conclusive.

Shareholder Rights.    Except with respect to shares of restricted stock and stock awards granted under the 2012 Stock Incentive Plan, a participant will not have any of the rights and privileges of a shareholderCompensation Committee with respect to the sharescompensation of Common Stock underlying any award untilour other executive officers, and the shares subjectCompensation Committee considers such recommendations in establishing the officers’ compensation. The Compensation Committee establishes the compensation to that award have been issued.

Special Tax Election.    The plan administrator may provide one or more holders of awards underbe paid to our Chief Executive Officer without input from the 2012 Stock Incentive Plan withChief Executive Officer. At the right to have us withhold a portiondiscretion of the shares otherwise issuableCommittee, compensation packages for the Chief Executive Officer, when appropriate, are submitted to such individuals in satisfaction of the withholding taxes to which they become subject in connection with the issuance, exercise or settlement of those awards. Alternatively, the plan administrator may allow such individuals to deliver previously acquired shares of our Common Stock in payment of such withholding tax liability.

Amendment and Termination.    Our Board of Directors may amend, alter, suspend, discontinuefor final approval. In addition, the Compensation Committee evaluates the performance of our executive officers versus agreed upon objectives and administers or terminatemakes recommendations to the 2012 Stock Incentive Plan at any time; provided, however, that shareholder approval will be required for any amendment which increases the number of shares of Common Stock authorized for issuance under the 2012 Stock Incentive Plan (other than in connection with certain changes to our capital structure as explained above), increases the limitation on the maximum number of shares for which any one person may be granted stock options, stock appreciation rights or any other award under the 2012 Stock Incentive Plan, the value of which is based solely on an increase in the value of the shares after the date of grant of such award, under the 2012 Stock Incentive Plan per taxable year, increases the limitation on the maximum number of shares for which any one person may be granted performance-based awards denominated in shares of Common Stock under the 2012 Stock Incentive Plan per taxable year, increases the maximum aggregate dollar amount for which any one participant may be granted performance-based awards denominated in cash under the 2012 Stock Incentive Plan per taxable year, would cause Section 162(m) to become unavailableBoard with respect to the 2012 Stock Incentive Plan or permits a repricing that is prohibited as described in the “Repricing Prohibition” section above, permits the award of stock options or stock appreciation rights at an exercise price less than 100 percentadministration of the fair market valueCompany’s equity-based and other incentive compensation plans.  All members of the underlying sharesCompensation Committee shall meet the independence and experience requirements of Commonthe NASDAQ Stock Market, Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the SEC, as affirmatively determined by the Company’s Board.  In addition, at least two Committee members shall qualify as “non-employee directors” within the meaning of SEC Rule 16b-3 and as “outside dicretors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, or such successor provisions.  Effective March 1, 2015, Mr. Mercer was replaced on the grant date (other than as described above) or to the extent such shareholder approval may otherwise be required under applicable law or regulation or pursuant to the listing standards of the stock exchange on which our Common Stock is at the time primarily traded.

Additional Equity Compensation Plan InformationCommittee by Mr. Dowden.

The following table gives informationCompensation Committee is authorized to engage independent compensation consultants and other professionals to assist in the design, formulation, analysis and implementation of compensation programs for the Company’s executive officers and other key employees. The Compensation Committee retained the services of F.W. Cook, a leading compensation consulting firm, to provide advice and recommendations regarding the Company’s executive compensation programs, including equity compensation practices and cash compensation structure for executive officers. F.W. Cook also provides advice to the Compensation Committee with respect to the compensation and benefits of Directors of the Board.

The Governance Committee.  The Governance Committee makes recommendations to the Board of Directors about the Company’s common stock thatsize and composition of the Board or any of its committees, evaluates nominations received from shareholders, and develops and recommends to the Board corporate governance principles applicable to our Company. In selecting or recommending candidates, the Governance Committee takes into consideration any criteria approved by the Board, which may be issued uponset forth in any corporate governance guidelines adopted by the exerciseBoard and such other factors as it deems appropriate. These factors may include judgment, skill, diversity, experience with businesses and other organizations of options, warrantscomparable size, the interplay of the candidate’s experience with the experience of other Board members, and rightsthe extent to which the candidate would be a desirable addition to the Board and any of its committees.

The Governance Committee may also consider director candidates proposed by management and by shareholders of the Company. Recommendations for consideration by the Governance Committee, including recommendations from shareholders of the Company, should be sent in writing, together with appropriate biographical information concerning each proposed nominee, to our Corporate Secretary at our principal executive offices at 2500 West Executive Parkway, Suite 100, Lehi, Utah 84043. The Governance Committee will consider a properly submitted shareholder nomination that meets the requirements under allour Bylaws. Our Bylaws require, among other things, an advance written notice of the nomination in writing of not later than the sixtieth (60th), nor earlier than the ninetieth (90th) day, from the date of the annual meeting. This notice must also include certain information relating to the nominee and the nominating shareholders as described more fully in our Bylaws.

The Compliance Committee. To further mitigate any compliance risk, a Compliance Committee of the Board of Directors was created in 2014. The purpose of the committee of the Board of Directors of the Company shall be to oversee the Company’s efforts with respect to operational compliance.  “Operational Compliance” shall be defined to include: distributor compliance and direct selling best practices; employee compliance, including code of conduct and other mandated trainings; product and product distribution regulatory compliance, including adherence to FTC, FDA and other similar regulatory bodies’ mandates; and non-financial whistleblower reports. The committee shall consist of at least three directors, one of whom shall be the Chair of the Company’s equity compensation plansAudit Committee. A majority of the members of the compliance committee shall meet the independence and experience requirements of the NASDAQ Stock Market, Section 10A(m)(3) of the Exchange Act and the rules and regulations of the SEC, as of December 8, 2014. The table includesaffirmatively determined by the 2009 and 2012 Stock Incentive Plans.Company’s Board.

9

Table of Contents

Board Structure and Risk Oversight

Leadership Structure of the Board

Under our bylaws, the Board is not required to appoint our Chief Executive Officer as the Chairman of the Board, and the Board does not have a policy on whether the roles of Chief Executive Officer and Chairman of the Board should be separate. On April 1, 2013, we appointed Mr. Probert as the Interim Chief Executive Officer. Mr. Probert was subsequently appointed as the Chief Executive Officer, effective October 1, 2013. The Board believes that Mr. Probert’s role as the Chief Executive Officer will provide stability and continuity to the day-to-day operations of the Company in a time of transition, given his in-depth understanding of our business operations.

As our Chairman, Mr. Probert is responsible for chairing Board meetings and meetings of shareholders, setting the agendas for Board meetings and providing information to the Board members in advance of meetings and between meetings. All of our directors are independent under applicable NASDAQ corporate governance rules, except for Mr. Probert and Ms. Hughes. The Board believes that the independent directors provide effective oversight of management. In addition to feedback provided during the course of Board meetings, the independent directors have regular executive sessions without any members of management present. Furthermore, the independent directors have selected Willem Mesdag as the “Lead Independent Director” to coordinate and manage the activities of independent directors. The specific responsibilities of the Lead Independent Director include to:

·call, set agenda and preside over meetings of independent directors;

·consult with the Chairman on the content of the agenda for board and shareholder meetings;

·coordinate and lead the relevant activities of the Board on matters in which the Chairman has a conflict of interest;

·review the performance of the Chairman, following consultation with independent directors;

·recommend to the Chairman or approve, if appropriate, the retention of outside advisers and consultants to the Board; and

·perform such other duties as the Board may delegate to the Lead Independent Director.

        We believe that our leadership structure of the Board, including the combination of the Chairman and Chief Executive Officer positions, is appropriate because it provides both unified and consistent leadership and, combined with the Lead Independent Director, effective independent oversight and expertise in the management of our complex operations as a consumer product and direct-selling business.

Board’s Role in the Oversight of Risk Management

The Board of Directors is primarily responsible for assessing risks associated with the Company’s business. However, the Board delegates certain of such responsibilities to other groups. The Audit Committee is responsible for reviewing with management the Company’s policies and procedures with respect to risk assessment and risk management, including reviewing certain risks associated with our financial and accounting systems, accounting policies, investment strategies, regulatory compliance, insurance programs, and other matters. Under the direction of the Audit Committee, the Company’s internal audit department assists the Company in the evaluation and improvement of the effectiveness of risk management. In addition, under the direction of the Board and certain of its committees, the Company’s legal department assists in the oversight of corporate compliance activities. As discussed under “Risk Assessment of Compensation Programs,” the Compensation Committee also reviews certain risks associated with our overall compensation program for employees to help ensure that the program does not encourage employees to take excessive risks. In addition, the Governance Committee monitors the effectiveness of our corporate governance guidelines and policies and manages risks associated with the independence of the Board of Directors and potential conflicts of interest. On a regular basis and from time to time as necessary or appropriate, updates are provided by these groups to the Board of Directors regarding their risk assessment and risk management activities and other risk-related matters. To further mitigate any compliance risk, a Compliance Committee of the Board of Directors was created in 2014. The purpose of the committee shall be to oversee the Company’s efforts with respect to operational compliance.

10

(1)Consists of retainer fees for service as a member of the Board paid on a monthly basis. The aggregate payments include the following categories of payments:

(2)On May 7, 2014, the Board approved restricted stock unit grants (RSUs) of 3,729 shares of our Common Stock for each non-executive Director.  The RSUs vest in 12 monthly installments over a one-year period from the grant date subject to accelerated vesting upon a change in control. The shares that vest under each award will be delivered to the director upon the earlier of the director’s separation from the Board or the expiration of the 2-year restriction period subsequent to the vesting of the entire RSU grant. The amount reflected in column (c) above represents the grant date fair value of the RSUs calculated in accordance with FASB ASC Topic 718.

On September 19, 2014, the Company paid a special one-time cash dividend of $1.50 per common share. In accordance with the provisions of the Company’s stock incentive plans, additional RSUs were awarded based on the closing share price on the ex-dividend date in order to prevent a dilution of benefits or potential benefits intended to be made available to the RSU holders. Therefore, an additional 1,009 shares of RSUs were issued to compensate the Directors for the previously made RSU grants and no additional share-based compensation expense was recorded. See Note 11 to the Notes to Consolidated Financial Statements set forth in Item 1 of the 2014 Annual Report filed with the SEC on Form 10-K filed on March 13, 2015 for a description of the assumptions used in calculating such fair value. For this purpose, the estimate of forfeitures relating to vesting conditions is disregarded.

(3)“All Other Compensation” includes the following amounts paid by the Company for the fiscal year ended December 31, 2014:

*Represents credits to purchase the Company’s products.

On May 3, 2012, the Board adopted a new non-employee director compensation plan that became effective on May 4, 2012.  Under the revised program, each non-employee director receives an annual grant of a restricted stock unit award with a grant date value equal to $50,000 (based on the closing selling price of our common stock on the grant date).  Each such award vests in 12 equal successive monthly installments over the 1-year period measured from the grant date subject to continued Board service and accelerates in full upon a change in control. The shares that vest under each award are delivered to the director upon the earlier of the director’s separation from the Board or the expiration of the 3-year period measured from the grant date.

Each non-employee Board member receives an annual retainer of $50,000 (pro-rated for any partial year of service).  In addition, each member of the Audit Committee receives a retainer of $10,000, with the Chairperson receiving an additional $10,000; each member of the Compensation Committee receives an additional retainer of $7,500, with the Chairperson receiving an additional $7,500; each member of the Governance Committee receives an additional retainer of $3,000, with the Chairperson receiving an additional $5,000; and each member of the Compliance Committee receives an additional retainer of $3,000, with the Chairperson receiving an additional $5,000.

Expenses.  Board members were reimbursed for travel and other expenses incurred in connection with their duties as directors to the extent such expenses were submitted to the Company for reimbursement.

12

Table of Contents

The table below summarizes the equity-based awards held by the Company’s non-employee directors as of December 31, 2014.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends a vote FOR the election of each of the foregoing nominees to the Board of Directors.

PROPOSAL TWO:

RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

Our Board of Directors has, subject to shareholder approval, retained Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015. Deloitte & Touche LLP also served as our independent registered public accounting firm for fiscal year 2014. A representative of Deloitte & Touche LLP is expected to be present at the Annual Meeting. He or she will have an opportunity to make a statement at the Annual Meeting and will be available to respond to appropriate questions.

Fees Paid to Independent Registered Public Accounting Firm

We engaged Deloitte & Touche LLP as our independent registered public accounting firm on February 2, 2007. The table below presents the aggregate fees incurred by the Company during the fiscal years ended December 31, 2014 and 2013 for professional services rendered by Deloitte & Touche LLP. All of the fees below were approved by the Audit Committee. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the principal accountant’s independence and has concluded that it is.

(1)Reflects aggregate fees billed by Deloitte & Touche LLP for professional services rendered for the audit of the Company’s consolidated financial statements for the fiscal years ended December 31, 2014 and 2013.

(2)During the fiscal years ended December 31, 2014 and 2013, Deloitte & Touche provided services for audit related activities related to statutory audits.

(3)Reflects aggregate fees billed by Deloitte & Touche LLP for tax services for the fiscal years ended December 31, 2014 and 2013 related to tax compliance and international tax guidance.

13

Table of Contents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our Common Stock as of February 1, 2015, except as otherwise stated, by (1) each person who is known by us to beneficially own more than five percent of the outstanding shares of our Common Stock, (2) each of our directors, (3) each of our named executive officers in the Summary Compensation Table, and (4) all directors and executive officers of the Company as a group. As of February 1, 2015, there were 18,574,802 shares of Common Stock issued and outstanding. To our knowledge and except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to community property laws where applicable. Unless we indicate otherwise, each holder’s address is c/o Nature’s Sunshine Products, Inc., 2500 West Executive Parkway, Suite 100, Lehi, Utah 84043

*Less than one percent.

(1)All entries exclude beneficial ownership of shares that are issuable pursuant to awards that have not vested or that are not otherwise exercisable as of the date hereof and which will not become vested or exercisable within 60 days of February 1, 2015.

(2)Calculated based on 18,574,802 shares of our Common Stock outstanding on February 1, 2015, with percentages rounded to the nearest one-tenth of one percent. Shares of Common Stock subject to options that are presently exercisable or exercisable within 60 days are deemed to be beneficially owned by the person holding the option for the purpose of computing the percentage ownership of that person but not treated as outstanding for computing the percentage of any other person.

(3)On August 25, 2014, pursuant to the Stock Purchase Agreement, the Company issued 2,854,607 shares of its common stock (the “Shares”) to Fosun Pharma. The Shares were offered to Fosun Pharma in an offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 4(2) of the Securities Act, and Regulation D thereunder.

16

Table of Contents

(4)Based on Schedule 13F-HR filed with the SEC on February 13, 2015, and Schedule 13D/A filed with the SEC on September 2, 2014, by Red Mountain Capital Partners LLC (“RMCP LLC”), includes 2,407,801 shares held by Red Mountain Partners, L.P. (“RMP”). RMCP GP LLC (“RMCP GP”) is the general partner of RMP and RMCP LLC is the managing member of RMCP GP. Red Mountain Capital Management, Inc. (“RMCM”) is the managing member of RMCP LLC, and Willem Mesdag is the president, sole executive officer, sole director and sole shareholder of RMCM. Each of RMCP GP, RMCP LLC, RMCM and Mr. Mesdag may be deemed to beneficially own, and to have voting and dispositive power over, 2,407,801 shares held by RMP. Each of RMCP GP, RMCP LLC, RMCM and Mr. Mesdag, however, disclaims beneficial ownership of these shares.

(5)Based on Schedule 13F-HR filed with the SEC on February 6, 2015, includes 1,865,383 shares purchased by Prescott Group Aggressive Small Cap, L.P. and Prescott Group Aggressive Small Cap II, L.P. (collectively, the “Small Cap Funds”) through the account of Prescott Group Aggressive Small Cap Master Fund, G.P. (“Prescott Master Fund”), of which the Small Cap Funds are general partners. As general partner of the Small Cap Funds, Prescott Group Capital Management, LLC (“Prescott Capital”) may be deemed to beneficially own 1,865,383 shares. As the principal of Prescott Capital, Phil Frohlich may also be deemed to beneficially own the 1,865,383 shares held by Prescott Master Fund. Each of Prescott Capital and Mr. Frohlich, however, disclaims beneficial ownership of these shares. Prescott Capital and Mr. Frohlich have the sole voting and dispositive power over these shares.

(6)Based on Schedule 13G/A filed with the SEC on February 17, 2015, includes 568,304 shares held by Wynnefield Partners Small Cap Value, L.P., 844,930 shares held by Wynnefield Partners Small Cap Value, L.P. I, 365,094 shares held by Wynnefield Small Cap Value Offshore Fund, Ltd., and 45,311 shares held by Wynnefield Capital, Inc. Profit Sharing Plan. Wynnefield Capital Management, LLC has an indirect beneficial interest in the shares held by Wynnefield Partners Small Cap Value, L.P. and Wynnefield Partners Small Cap Value, L.P. I, and Wynnefield Capital, Inc. have an indirect beneficial interest in the shares held by Wynnefield Small Cap Value Offshore Fund, Ltd. As co-managing member of Wynnefield Capital Management, LLC, principal executive officer of Wynnefield Capital, Inc., general partner of Channel Partnership II, L.P. and portfolio manager of Wynnefield Capital, Inc. Profit Sharing Plan, Mr. Obus may be deemed to have beneficial ownership in, and to have sole voting and dispositive power over, 1,823,639 shares. Mr. Obus, however, disclaims any beneficial ownership of these shares.

(7)Based on Schedule 13G/A filed with the SEC on February 17, 2015, First Wilshire Securities Management, Inc. beneficially owns 1,273,950 shares, of which it has sole voting power over 245,632 shares and sole dispositive power over 1,273,950.

(8)Based on Schedule 13G/A filed with the SEC on February 12, 2015, Paradigm Capital Management, Inc. has sole voting and dispositive power over these shares.

(9)Includes options exercisable for 25,000 shares and vested awards for 7,101 shares of Common Stock within 60 days of February 1, 2015. See Footnote 4 above. Mr. Mesdag’s address is c/o Red Mountain Capital Partners LLC, 10100 Santa Monica Blvd, Suite 925, Los Angeles, CA 90067.

(10)Includes 1,865,383 share beneficially owned by Prescott Group Capital Management, LLC. As president of Prescott Group Capital Management, LLC, Mr. Watkins may be deemed to beneficially own, and to have shared voting and dispositive power over, these shares. See also Footnote 5 above. Mr. Watkins’s address is c/o Prescott Group Capital Management, LLC, 1924 South Utica, Suite 1120, Tulsa, OK 74104. In addition, includes options exercisable for 25,000 shares and vested awards for 7,101 shares of Common Stock within 60 days of February 1, 2015.

(11)Includes (i) 79,352 shares that Mr. Hughes holds indirectly and (ii) 799,275 shares held by various family trusts, of which Mr. and Ms. Hughes are co-trustees and beneficiaries. Both Mr. and Ms. Hughes have shared voting and dispositive power over these shares. In addition, includes vested awards for 7,101 shares of Common Stock within 60 days of February 1, 2015.

(12)Includes options exercisable for 303,125 of Common Stock within 60 days of February 1, 2015, and 40,367 shares that Mr. Probert holds directly.

(13)Includes options exercisable for 141,667 shares of Common Stock within 60 days of February 1, 2015, and 2,357 that Mr. Roberts holds directly.

(14)Includes options exercisable for 111,188 shares of Common Stock within 60 days of February 1, 2015 and 1,197 shares that Mr. Bunker holds directly.

17

Table of Contents

(15)Includes options exercisable for 25,000 shares and vested awards for 7,101 shares of Common Stock within 60 days of February 1, 2015.

(16)Includes options exercisable for 25,000 shares and vested awards for 7,101 shares of Common Stock within 60 days of February 1, 2015.

(17)Includes options exercisable for 25,000 shares of Common Stock within 60 days of February 1, 2015.

(18)Includes options exercisable for 26,042 shares of Common Stock within 60 days of February 1, 2015 and 1,179 shares that Mr. Strulson holds directly.

(19)Includes options exercisable for 21,042 shares of Common Stock within 60 days of February 1, 2015 and 1,179 shares that Mr. Tripp holds directly.

(20)Includes options exercisable for 25,000 shares of Common Stock within 60 days of February 1, 2015.

(21)Due to certain legal and regulatory requirements related to the issuance of SEC-registered and NASDAQ-listed securities to Chinese nationals, the Company does not issue any options to Mr. Li.

(22)Includes options exercisable for 728,064 shares and vested awards for 35,505 shares of Common Stock within 60 days of February 1, 2015.

Changes in Control

We are not aware of any other arrangement or event, the occurrence of which would result in a change in control of the Company.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors, officers and persons who beneficially own more than 10 percent of a registered class of the Company’s equity securities, to file initial reports of ownership on Form 3 and changes in ownership on Forms 4 or 5 with the SEC. Such directors, officers and 10 percent shareholders also are required by SEC rules to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its review of the copies of such forms furnished or available to the Company, the Company believes that its directors, officers and 10 percent shareholders complied with all Section 16(a) filing requirements for the fiscal year ended December 31, 2014.

18

Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis provides disclosure about the policies and objectives underlying the compensation programs for our executive officers. Accordingly, we will address and analyze each element of the compensation provided to our current Chief Executive Officer, our Chief Financial Officer and the other executive officers named (named executive officers) in the Summary Compensation Table which follows this discussion. The Compensation Committee of our Board of Directors generally administers the compensation programs for our named executive officers.  However, our Board of Directors approves the base salary and cash bonus of our Chief Executive Officer.

Executive Summary

The Company’s overarching compensation goal is to reward our executives in a manner that supports a pay-for-performance philosophy, while maintaining an overall level of compensation that allows us to attract and retain the executive team.

We are a global company and our compensation decisions for 2014 were affected by geopolitical and international economic events outside of our control, particularly in Russia and Ukraine, which negatively impacted revenue and operating income results for the entire Company.  The Company has tried to score the incentive compensation plans in a manner that recognizes that unplanned world events were outside of the executive team’s control, while also recognizing the importance of ongoing operations to long-term shareholder creation.

·Including results from Venezuela’s discontinued operations, the Company’s consolidated net sales decreased 1.1 percent to $373.9 million in 2014, although the loss was the result of currency fluctuations.  If measured in local currency, net sales increased by 0.7 percent compared to 2013. The fluctuations in foreign exchange rates had an unfavorable $5.4 million impact on 2014 net sales.  The Company excludes the impact of foreign exchange rates when assessing its financial results for compensation purposes because it is viewed as not being within the control of the executive team. Operating income decreased by 33.1 percent compared to 2013, to $16.1 million during the year ended December 31, 2014.

·Overall revenue and operating income results for 2014 were materially harmed by events in Russia, Ukraine, and the surrounding region, as a result of the current political uncertainty in Ukraine and across the region, and the market decline in the value of the Ukrainian hryvnia and Russian ruble against the U.S. dollar. Although changes in exchange rates between the U.S. dollar and Ukrainian hryvnia do not result in currency fluctuations within our financial statements, the Company’s products in Ukraine and Russia are priced in local currencies pegged to current U.S. dollar exchange rates and therefore become more expensive when the local currency declines in value.  Overall, revenue from this region declined from $62.7 million in 2013 to $50.3 million in 2014 and operating income declined by almost $4 million.    Due to the unexpected and unpreventable nature of these events, the Compensation Committee made compensation decisions that adjusted the bonus goals after the first half of 2014.

·Operating income results were also impacted by strategic merger and acquisition (M&A) activity undertaken or considered in the first half of 2014.  The M&A activity was not included in the annual budget set at the start of the year and resulted in a China joint venture agreement with Fosun Pharma, which initiated the Company’s business presence in the rapidly growing and strategically important China market.  The Compensation Committee took these unplanned costs into consideration in determining appropriate 2014 compensation for the executive team.

The Company tries to provide compensation in a manner that is aligned with long-term performance and has tried to improve governance and risk mitigation elements within the compensation structure.

·We continue to structure a substantial portion of the total direct compensation of our named executive officers in the form of annual performance-based cash incentive and long-term stock-based compensation.  This allows us to create a positive relationship between our operational performance and shareholder return.

·Our annual bonus plan is designed to ensure that a significant portion of total cash compensation of our named executive officers is performance-based. In general our target total annual cash compensation is at or below the peer median.  Our CEO’s 2014 salary, equity grant, and total compensation value were all

19

Table of Contents

below the median of a peer group used by our independent compensation consultant, Frederic W. Cook & Co. (F.W. Cook), to benchmark pay and performance.

·        ��                     As a result of our financial and overall business performance, we paid bonuses to our named executive officers for 2014 that averaged 78% of their target bonus amount. This below-target bonus was to reflect the Company’s pay-for-performance philosophy, while also taking into account the unplanned geopolitical events and M&A growth costs.

·No salary increases were made in 2014 to any member of the Company’s senior executive team.

·We granted equity awards in 2014 that vest based on service time considerations.  However, equity awards granted in 2015 have 50% of the restricted stock units (RSUs) based on multi-year EPS and revenue performance goals that are consistent with the newly created five year strategic plan.  These goals represent long-term growth that is above the 75th percentile of our peer group’s historical performance and reinforce the business strategy and impact of the China business opportunity.

·In 2014, the Compensation Committee retained F.W. Cook, a compensation consulting firm, to conduct a comprehensive benchmark study and advise the committee on structuring executive compensation to ensure that our compensation continues to retain and motivate our executive officers, and at the same time reinforces the Company’s strategic objectives.  F.W. Cook’s study found that base salaries and total target cash compensation for our named executive officers were mostly at or below the median of our peer group.  In some cases equity awards were also below the median and 2014 target total direct compensation was below the median of our peer group for most executive officers including the CEO.

·The Company’s five-year total shareholder annualized rate of return was 17%, which was above the median of the compensation peer group.

·The Company and CEO began discussions in 2014 and entered into an amended and restated employment contract in early 2015, that includes relocation from California to Utah by the end of 2015, which will end the need for the Company to reimburse him for temporary housing and travel expenses once the relocation is complete.

·The aforementioned amended and restated employment agreement also includes a cash compensation claw-back, stock ownership guidelines and 2015 equity awards that include change-of-control vesting acceleration provisions requiring both a (1) a Change-of-Control Event (as defined therein), and (2) termination of Mr. Probert’s employment or his resignation for Good Reason (as defined therein) within 24 months of the Change of Control Event.

Compensation Policy for Executive Officers.

We have designed the various elements comprising the compensation packages of our executive officers to achieve the following objectives:

·attract and retain qualified executives who will help the Company meets its goals;

·reflect individual accomplishments and contributions to the Company as well as overall Company performance; and

·align each executive officer’s interests with those of the Company’s shareholders.

The Compensation Committee seeks to achieve these objectives by:

·Establishing a compensation structure that is both market competitive and internally fair;

·Linking a substantial portion of compensation to the Company’s financial performance and the individual’s contribution to that performance;

·Providing below-target compensation for under-performance and upward leverage for exceptional performance; and

20

Table of Contents

·Providing long-term equity-based incentives and encouraging direct share ownership by executive officers.

For our compensation programs, the Compensation Committee utilizes a combination of cash and equity incentive programs under which the compensation of the executive officers will vary with our performance and the market price of our common stock.  The general objective is to emphasize equity compensation over short-term cash compensation, but there is no target that applies to all officers.  The actual levels at which we may set compensation for a particular executive officer may vary based on the Company’s overall financial performance and an evaluation of each executive officer’s individual performance level, experience and his or her potential contribution to the Company’s future growth. Also, actual pay may be below the levels set as a target if performance is below our annual goals, as was the case in 2014 when bonus was funded below-target, and as will be increasingly true in 2015 as half of executive officer equity awards are subject to multi-year EPS and revenue performance goals that we believe are rigorous and require a high level of growth.

Setting Executive Compensation

Major compensation decisions for each fiscal year, including base salary adjustments, the determination of target annual bonus opportunities and the determination of long-term equity incentive awards, are generally made by the Compensation Committee during the first quarter of the current year. For the 2014 fiscal year, such decisions were made in March 2014.  The principal factors that the Compensation Committee consider when setting the compensation levels for the named executive officers are as follows:

·Comparison of the Company’s performance against certain operational and qualitative goals identified in the Company’s strategic plan;

·Comparative market data;

·Our Chief Executive Officer’s recommendations for the other named executive officers;

·Individual performance as assessed by the Compensation Committee, with input from the Chief Executive Officer as to the named executive officers other than himself; and

·Tenure, scope of responsibilities, experience and qualifications, future potential and internal pay equity.

Impact of 2014 Say-on-Pay Vote:  The most recent shareholder advisory vote on executive officer compensation required under the federal securities laws was held on May 7, 2014, after the Compensation Committee had approved the 2014 compensation of the named executive officers. More than 94 percent of the votes cast on such proposal were in favor of the compensation of the named executive officers, as that compensation was disclosed in the Compensation Discussion and Analysis and the various compensation tables and narrative that appeared in the Company’s proxy statement dated March 28, 2014.  Based on that level of shareholder approval, the Compensation Committee decided not to make any material changes to the Company’s compensation philosophies, policies and practices for the remainder of the 2014 fiscal year.  However, the Compensation Committee will continue to take into account future shareholder advisory votes on executive compensation in order to determine whether any subsequent changes to the Company’s executive compensation programs and policies would be warranted to reflect any shareholder concerns reflected in those advisory votes. Further, the Committee is working to improve the ongoing program in 2015 and beyond in spite of the high level of shareholder support for past practice.  Based on the voting preference of our shareholders, the frequency of future Say-on-Pay votes will be every year.

Role of External Advisor:  In 2014, the Compensation Committee engaged the services of F. W. Cook, a leading consulting firm in the area of executive compensation, to conduct an independent comprehensive benchmark study of executive compensation practices at the Company against other comparable public companies in our industry.

Benchmarking:  In setting executive officer compensation opportunities for 2014, the Compensation Committee referenced the Executive Compensation Report provided by F.W. Cook in early 2012.  A similar study was completed by F.W. Cook in November 2014, which was used for market comparisons and to help set 2015 compensation.

The peer companies utilized for the 2012 study that was used to set 2014 compensation, as well as the 2014 peer companies used for confirmation and benchmarking for 2015 decisions were selected by the Compensation Committee, in accordance with the recommendation of F.W. Cook, on the basis of objective industry classifications and financial size criteria (revenue and market capitalization at the time of the study).  The Compensation Committee believes that all of the peer companies represent primary competitors for executive talent and investment capital.    Competitive comparisons in 2012 were based on a peer group of 18 publicly traded U.S.-based specialty retail and personal products companies

21

Table of Contents

and the late 2014 study was based on 15 such companies.  Nature’s Sunshine’s revenue is slightly below the median of the peers and this was considered in setting pay levels, where most officers have cash compensation that is below the peer median.

The companies in the 2012 peer group are listed below:

In 2014, the peer group was reviewed and Inventure Foods, and LifeVantage were added as peers (both are smaller than us), while Hain Celestial, Mannatech, Prestige Brands, Revlon and Synutra were removed from the 2014 peer for being too large or too small for direct compensation comparison, or because they are a foreign company with a foreign pay model.

Role of Management:  As in prior years, our Chief Executive Officer presented to the Compensation Committee his recommendations for 2014 base salaries, bonuses and equity grants for the named executive officers (other than himself), taking into consideration the expected total cash compensation for such officers for 2014 and the comparative market data for total cash compensation for comparable positions.  These recommendations were based on the Company’s performance measured in terms of the sales revenue and operating income levels attained by the division for which the executive was primarily responsible, where applicable, or by the Company as a whole, as well as the executive’s performance against individual performance objectives, and the comparative analysis of the Company’s compensation practice to market for each such officer.  The Compensation Committee discussed these recommendations with the Chief Executive Officer and made the final determination on the base salaries, bonuses and equity grants for these officers based on these recommendations and its review of the Executive Compensation Report, with such adjustments as it deemed appropriate.

The Compensation Committee recommended to our Board of Directors the base salary and cash bonus for our Chief Executive Officer.  The Board approved the Chief Executive Officer’s compensation as recommended by the Compensation Committee.  As noted, The Company and the CEO entered into a new employment contract in early 2015. Further discussion of this new agreement is included below.

Elements of Compensation.  Each executive officer’s compensation package consists of three elements: (i) a base salary, (ii) a cash bonus based upon Company financial performance and the individual officer’s personal performance, and (iii) participation in long-term, stock-based incentive awards, in the form of stock options and restricted stock units. In addition, the named executive officers are provided with certain benefits and perquisites and are entitled to certain severance benefits in the event their employment terminates under certain specified circumstances, as more fully described below.

Each of the major elements comprising the compensation package for executive officers (salary, bonus and equity) is designed to achieve one or more of the Company’s overall objectives in fashioning a competitive level of compensation, tying compensation to performance and establishing a meaningful and substantial link between each executive officer’s compensation and our long-term financial success.

There is no pre-established policy for the allocation of compensation between cash and non-cash components or between short-term and long-term components, nor are there any pre-established ratios between the Chief Executive Officer’s compensation and that of the other named executive officers. Instead, the mix of compensation for each named executive officer is based on a review of the market data and a subjective analysis of that individual’s performance and contribution to the Company’s financial performance. Our mix of compensation elements is designed to reward results and motivate long-term performance through a combination of cash and equity incentive awards.

Base Salary.  Base salary is intended to attract and retain qualified executives and to provide a level of security and stability from year to year and is not dependent to any material extent on the Company’s financial performance. The F.W. Cook 2014 review of executive compensation indicated that base salaries for certain of our executive officers were below the 50th percentile of our peer group, including the CEO’s salary.

22

Table of Contents

After reviewing financial performance, the Executive Compensation Report and the CEO’s recommendations, the Compensation Committee did not approve and award salary increases to the executive officers during 2014.

Cash Bonus.  The cash bonus program is designed to advance a pay-for-performance policy by bringing the total cash compensation for our executives to target in a typical year and to exceed target when justified by Company performance.

For 2014, the Compensation Committee adopted a performance-based bonus plan, with 65% of the bonus based on the attainment of corporate financial performance goals and 35% based on the Compensation Committee’s subjective evaluation of performance against individual objectives to take into account accomplishments not directly accounted for by an analysis of the Company’s financial performance.  In addition, the Compensation Committee retained the discretion to increase or decrease the aggregate bonus amount to be paid to any individual under the bonus plan by up to 10% of that person’s aggregate target, based on its subjective evaluation of general corporate and individual performance.

The 2014 target bonuses (as a percentage of base salary) for each named executive officer are as follows:

The portion of the bonus to be based on the attainment of corporate financial performance goals required attainment of minimum financial performance thresholds and could range from 50% to 200% of the targeted dollar amount of the bonus attributable to these financial goals. The maximum bonus payable under the plan to any named executive officer is 175% of his or her target amount.

The corporate performance goals were revenue (30%) and operating income (35%), both excluding foreign currency exchange impact since it is outside the control of the executive team and the goal of the cash bonus program is to reward operating achievement.  Compensation decisions, including the bonus goals were set in March 2014, for the 2014 fiscal year.  However, this was before it became clear the extent to which political uncertainty existed in our second largest market, Russia/Central and Eastern Europe. Net sales decreased primarily as a result of the current political uncertainty in Ukraine and across the region, and the market decline in the value of the Ukrainian hryvnia and Russian ruble against the U.S. dollar. Although changes in exchange rates between the U.S. dollar and Ukrainian hryvnia do not result in currency fluctuations within our financial statements, the Company’s products in Ukraine and Russia are priced local currencies pegged to current U.S. dollar exchange rates and therefore become more expensive when the local currency declines in value. The decline in the value of the Ukrainian hryvnia and Russian ruble against the U.S. dollar that began in early 2014, and the unexpected effect that the insurgency had on the business environment, led the Compensation Committee to determine that it would be fair to adjust the executive bonus goals after the first half of the year for events outside of management’s control. This adjustment included a revision in the corporate performance goals for revenue and operating income in Russia, Central and Eastern Europe. This adjustment amounted to $10.5 million in revenue and $2.8 million in operating income.  The Compensation Committee also made the decision not to include unexpected non-operating costs ($1.944 million) from unplanned M&A activity, including the Fosun deal that allowed us to enter into the China market.  The M&A costs reduced the 1st half operating income results.  All other previously established bonus goals were left unchanged.

23

Table of Contents

Following the Committee’s adjustments, the funding schedule for the corporate portion of the first half bonus was as follows, with the actual payout calculations based on linear interpolations of the funding slopes, rather than by the sample thresholds below:

1st half 2014 bonuses based on corporate performance were based on the following results:

The funding schedule for the corporate portion of the second half bonus was as follows:

2nd half 2014 bonuses based on corporate performance were based on the following results:

On a full year blended basis, 98% of the 30% revenue target was achieved (this is 29.4% of target) and 56% of the 35% operating income target was achieved (this is 19.6% of target).  The remaining 35% of bonus potential was based on each executive’s individual performance.

In determining the bonus for each executive officer, the Compensation Committee reviewed the executive’s individual performance and the date of employment with the Company for the executives employed during 2014, as well as general corporate performance not otherwise captured in the financial performance goals.  The Compensation Committee determined that although a portion of the financial performance goals were not met, the Company’s management made substantial progress on key objectives in support of long-term growth.  These key objectives included the development of a detailed five-year strategic plan, a strategic joint venture in China and the resultant initiation of the Company’s entry into the China market, the recruitment of key additional management team members, the improvement

24

Table of Contents

of corporate leadership throughout the organization, and the restructuring of the Company’s business units and segments to improve efficiencies and to capitalize on the Company’s strengths of product quality and distribution channels.  In addition, the Compensation Committee recognized the challenge of the current global economic environment, particularly in markets that represent a significant portion of the Company’s business, such as Russia and the surrounding region.  The Committee determined that, in accordance with its discretion as established in the bonus plan, it should award bonuses that reflect each executive officer’s individual performance in light of the circumstances described above, to achieve their appropriate levels of compensation.

Applying these factors and methodology, on February 25, 2015, the Board of Directors, based on the recommendation of the Compensation Committee, awarded Mr. Probert a bonus in the amount of $422,625, which was 80.5% of target.  When combining 1st and 2nd half results, this represented a blended 98% of target for net sales revenue (29.4% out of 30%), a blended 56% of target for operating income (19.6% out of 35%), and 31.5% of target for individual performance out of 35%.

The Compensation Committee awarded bonuses for the other named executive officers on February 25, 2015, as follows: Mr. Bunker—$126,232; Mr. Roberts—$214,763; Mr. Strulson—$140,910; and Mr. Tripp—$115,500.   Each of the named executive officer’s bonus represented a blended 98% of target for net sales revenue (29.4% out of 30%), a blended 56% for operating income (19.6 out of 35%), and a range of 20.0% to 35.0% of target for individual performance (out of 35%).  The average bonus payout for the other named executive officers was 76% target.

In determining the bonus for each executive officer, the Compensation Committee reviewed the executive’s individual performance and made the following determinations:

Long-Term Incentives.  We provide long-term incentives in the form of stock option and restricted stock unit grants. The Compensation Committee believes that equity grants align the interests of the executive officer with those of the shareholders and provide the officer with a significant incentive to manage the Company from the perspective of an owner with an equity stake in the business. Beginning in 2010, the vesting of a significant portion of stock options has been tied to the attainment by the Company of certain operating metrics. For example, 25% of the stock option grants were tied to operating metrics in both 2012 and 2013. However, for the 2014 equity grants, the vesting was solely based on service conditions due to the appointment of a new CEO in 2013, and the new strategic plan that was in the process of being implemented at the time of the grant. Now that the new strategic plan has been implemented, the 2015 equity grant will consist of a greater portion of equity that is tied to the Company’s operating metrics. The Committee believes that performance-based equity further rewards long-term decision making and value creation, and align shareholders’ and managements’ interests.

25

Table of Contents

2014 Awards.  On February 11, 2014, the Compensation Committee approved the grant of stock options and restricted stock units of Common Stock of the Company under the 2012 Plan to certain named executive officers.  The number of shares subject to each grant is as follows:

The 2014 equity grants vest in equal annual installments over a 4-year period of service measured from the grant date.  The vesting will accelerate in full upon termination by reason of death or disability and certain terminations of employment following a change in control. The awards are designed to act as retention tools and to continue to incentivize the officers and align their interests with those of the shareholders. The exercise price per share of the stock options was originally granted at $15.38, the closing price per share of our common stock on the grant date. On September 19, 2014, the Company paid a special cash dividend of $1.50 per common share. In accordance with the provisions of the Company’s stock incentive plans, the exercise price of all outstanding stock options on the ex-dividend date were decreased by $1.50 per share in order to prevent a dilution of benefits or potential benefits intended to be made available to the stock option holders. This is a required adjustment for a capital event in the plan and was not a repricing, since it followed a special cash dividend.  As such, the current exercise price is $13.88. Each stock option has a term of ten years.

The Company believes the vesting acceleration of equity awards upon a change in control is appropriate as those awards are designed to serve as the primary vehicle for wealth creation and the accumulation of financial resources for their retirement years, and a change in control event is an appropriate liquidation point for awards intended for such purpose. The Company does not provide the executive officers with any defined benefit pension plan or supplemental executive retirement plan, and the only other opportunities for wealth accumulation and retirement funds is through the limited deferral opportunities provided under the Company’s 401(k) savings plan and the non-qualified deferred compensation plan.

Future Grants.  The Compensation Committee expects to make future grants on a discretionary basis. The Compensation Committee does not have any policy or practice of timing awards to the release of the Company’s financial reports.

Executive Officer Perquisites.    In 2014, we provided each of our named executive officers the opportunity to receive up to $2,500 for tuition assistance; however, none of our executive officers elected to receive tuition assistance. These perquisites are not a significant component of our executive compensation program. In addition, Mr. Probert who was hired as full-time CEO in 2013 and had not yet moved to Utah from his California residence was reimbursed for commuting expenses, temporary living accommodations and the associated personal tax liability. However, in connection with an amendment and restatement to Mr. Probert’s employment agreement more fully described below, Mr. Probert will move to Utah from California in 2015, which will end the need to reimburse him for temporary housing and travel, after a lump sum payment to assist in commuting during a relocation transition period.

Other Programs.  Our executive officers are eligible to participate in our 401(k) employee savings plan, medical plans and other benefit plans on the same basis as all other regular U.S. employees.

Deferred Compensation Programs.  The Company has adopted a deferred compensation plan, the SEDP, for its executive officers, certain other selected employees and its non-employee directors to enable them to save for retirement by deferring their income and the associated tax to a future date following termination of employment. Under the SEDP, the named executive officers and other participants have the opportunity to defer compensation to future dates specified by the participant with a return based on investment alternatives selected by the participant. The Company believes that the SEDP is comparable to similar plans offered by its competitors. The amounts deferred under the SEDP for the named executive officers are reported below in the Summary Compensation Table and the Nonqualified Deferred Compensation Table.

Stock Ownership Guideline.  The new CEO employment agreement contains a stock ownership guideline wherein Mr. Probert agrees to maintain ownership of capital stock or an equity position in the Company having an aggregate value in the amount of One Million Dollars ($1,000,000).  The agreement provides that such equity position may be maintained by accumulating such Equity through the vesting of Mr. Probert’s future grants of stock options and RSUs, in addition to shares of the Company’s capital stock that Mr. Probert currently owns, and the vesting of his existing grants of stock options and RSUs.  Mr. Probert currently meets this requirement.

26

Table of Contents

Clawback Policy.  The agreement also includes a global incentive “clawback” provision pursuant to which, in the event that during the agreement, and for a period of two (2) years after termination of the agreement, Company  is required  to restate its financial statements due to a material non-compliance with any applicable financial reporting requirement or securities law as determined by the Company’s Board of Directors, Company shall have the right, exercisable in its sole discretion, to review the amount of cash compensation paid to Mr. Probert and the amount of unvested equity compensation granted to him pursuant to existing grants of stock options and RSUs (collectively, “Compensation”) during the period of time encompassed by the restatement, provided, however, that this look-back period shall be no longer than two (2) years, and recalculate Mr. Probert’s Compensation for the look-back period based upon the restated financial statements.  If, pursuant to this review and recalculation, the amount of Compensation that the Company would have paid under the restated financial statements for the look-back period is less than the actual amount of Compensation that was paid to Mr. Probert during the look-back period, Mr. Probert shall repay the difference to Company in a time and manner mutually agreed to between Company and Mr. Probert.

Hedging.  Company policy prohibits executives from entering into hedging transactions (such as put and call options) that would operate to lock-in value of their equity compensation awards at specified levels. Executive officers are also prohibited from pledging the Company’s stock or holding such stock in margin accounts. Accordingly, similar to any other shareholder, the executive officers bear the full risk of economic loss with respect to their equity holdings.

Employment Agreements.  We have entered into employment agreements with each of our named executive officers. We believe the agreements allow our named executive officers to continue to focus their attention on our business operations and strategic plans without undue concern over their own financial situations during periods when substantial disruptions and distractions might otherwise prevail. Upon the cessation of a named executive officer’s employment due to termination by the Company without cause or by reason of death or incapacity, the named executive officer, with the exception of Mr. Probert, will receive continued payment of his or her base and reimbursement for medical insurance coverage for a period of 12 months.  Mr. Bunker is also entitled to a reimbursement of up to $6,000 of any tax liability incurred by him in the event benefits received pursuant to continued health coverage result in taxable income.

In 2015, we entered into an amended and restated employment agreement with Gregory L. Probert. A summary of the material terms of Mr. Probert’s agreement are described more fully below.

A summary of the material terms of the officer employment agreements, together with a quantification of the severance benefits payable under those agreements to each of the executive officers named in the Summary Compensation Table may be found in the section below entitled “Employment Agreements and Potential Payments upon Termination or Change in Control.”

Compliance with Internal Revenue Code Section 162(m).  Section 162(m) of the Internal Revenue Code disallows a tax deduction to publicly held companies for compensation paid to certain of their named executive officers to the extent such compensation exceeds $1.0 million per covered officer in any year.  The limitation applies only to non-performance-based compensation under the terms of Section 162(m).  We attempt to structure our compensation arrangements to achieve deductibility under Section 162(m), unless the benefit of such deductibility is outweighed by the need for flexibility or the attainment of other corporate objectives.  The compensation paid to our named executive officers for 2014 did not exceed the $1.0 million threshold per officer.  However, as we continue to increase salaries and bonuses for our named executive officers, together with the amounts recognized from equity awards, it is possible that the non-performance-based compensation payable to our named executive officers will exceed the $1.0 million limit in one or more future years.  We believe that in establishing the cash and equity incentive compensation programs for our named executive officers, the potential deductibility of the compensation payable under those programs should be only one of a number of relevant factors taken into consideration, and not the sole governing factor. For that reason, we may deem it appropriate to provide one or more named executive officers with the opportunity to earn incentive compensation, whether through cash bonus programs tied to our financial performance or through equity awards, which together with base salary in the aggregate may be in excess of the amount deductible by reason of Section 162(m) or other provisions of the Internal Revenue Code. We believe it is important to maintain cash and equity incentive compensation at the levels needed to attract and retain the named executive officers essential to our success, even if all or part of that compensation may not be deductible by reason of the Section 162(m) limitation.

27

Table of Contents

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis disclosure with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Submitted by:

Mary Beth Springer, Chair

Robert B. Mercer

Jeffrey D. Watkins

Compensation Committee Interlocks and Insider Participation.  No member of the Compensation Committee, at any time during 2014, was an officer or employee of the Company. None of our executive officers, with the exception of Mr. Probert, as noted above, at any time during 2014, served on the Board of Directors or Compensation Committee of any entity that had one or more executive officers serving as a member of our Board or our Compensation Committee.

Compensation Risk Assessment

The Company’s compensation programs are designed to maintain an appropriate balance between incentives for long-term and short-term performances by utilizing a combination of compensation components, including base salary, annual cash bonus awards and long-term equity awards. Although not all employees in the organization have compensation comprised of all three of these components, our compensation programs are generally structured so that any cash bonus awards based on short-term performances are not likely to constitute the predominant element of an employee’s total compensation package and that other components will serve to balance the package. For this reason, the Company does not believe that its use of any cash bonus awards based upon short-term performance is reasonably likely to encourage excessive risk-taking by the participants in those compensation programs.

In addition, a newly instituted stock ownership guideline for the CEO moderates the incentive to take excessive risk.

28

Table of Contents

Executive Compensation

The following table sets forth a summary, for the years ended December 31, 2014, 2013 and 2012, of the compensation of the principal executive officer, the principal financial officer and the three most highly compensated executive officers of the Company (not including the principal executive officer and the principal financial officer) whose total compensation for the 2014 fiscal year was in excess of $100,000 and who were serving as executive officers at the end of 2014. The listed individuals shall be hereinafter referred to as the “named executive officers.” No other executive officers who would have otherwise been includable in such table on the basis of total compensation for 2014 have been excluded by reason of their termination of employment or change in executive status during that year.

Summary Compensation Table

(A) On March 6, 2013, we announced the appointment of Mr. Probert as the Interim Chief Executive Officer and full-time status, effective April 1, 2013. Mr. Probert had previously been serving as Executive Chairman of the Board with a 50% time commitment.  Subsequently, Mr. Probert was appointed as the Chief Executive Officer, effective October 1, 2013.

(B) On January 30, 2012, we announced the appointment of Mr. Roberts as President and Chief Operating Officer. In December 2014, Mr. Roberts was subsequently appointed as the Chief Executive Officer of Synergy WorldWide.

(C) On October 3, 2013, we announced the appointment of Mr. Strulson as the Executive Vice President, General Counsel, Chief Compliance Officer, and Secretary.

(D) On April 23, 2013, we announced the appointment of Mr. Tripp as the Executive Vice President and Chief Scientific Officer.

(1)Amounts for 2014 include amounts that were deferred from the executive salaries into the 401(k) plan for 2014, as follows: Mr. Probert—$17,500; Mr. Bunker—$23,000; Mr. Roberts—$0; Mr. Strulson—$13,741; and Mr. Tripp—$23,000.  Mr. Probert, Mr. Strulson, and Mr. Tripp were all hired into their current positions in 2013.

(2)For a detailed discussion of bonus payments made in 2014 under the Company’s cash bonus program, see the section above entitled “Compensation Discussion and Analysis—Cash bonus.”

(3)Amounts reflect the aggregate grant date fair value of the stock option grant made in each applicable fiscal year, in each instance calculated in accordance with FASB ASC Topic 718. See Note 11 to the Notes to Consolidated Financial Statements set forth in Item 8 of the 2014 Annual Report filed on Form 10-K filed with the SEC on March 13, 2015 for a description of the assumptions used in calculating such fair value. For this purpose, the estimate of forfeitures relating to vesting conditions is disregarded.  The equity awards are time-based stock options.

29

Table of Contents

(4)Amounts reflect the aggregate grant date fair value of the restricted stock unit grant made in each applicable fiscal year, in each instance calculated in accordance with FASB ASC Topic 718. See Note 11 to the Notes to Consolidated Financial Statements set forth in Item 8 of the 2014 Annual Report filed on Form 10-K filed with the SEC on March 13, 2015 for a description of the assumptions used in calculating such fair value. For this purpose, the estimate of forfeitures relating to vesting conditions is disregarded.  The equity awards are time-based restricted stock units.

(5)“All Other Compensation” includes the following amounts paid by the Company for the fiscal year ended December 31, 2014. The amounts disclosed are the actual costs to the Company of providing these benefits.

(A)Includes the reimbursement of reasonable commuting, temporary housing, automobile and other miscellaneous expenses associated with his travel between Los Angeles, California, and Lehi, Utah of $69,689 and the personal tax liability associated with these benefits of $43,024. In accordance with his amended and restated employment agreement, Mr. Probert will be relocating to Utah, which will end the need to reimburse him for temporary housing and travel once the relocation is complete.

(B)Includes the reimbursement of travel expenses of $1,362.

(C)Includes the reimbursement of relocation expenses of $50,000 and the cost of COBRA coverage of $2,167.

30

Table of Contents

Grants of Plan-Based Awards in Fiscal Year 2014

The following table provides certain summary information concerning each grant of an award made to named executive officers in 2014 under a compensation plan.