UNITED STATES | ||||||||||||||
SECURITIES AND EXCHANGE COMMISSION | ||||||||||||||
Washington, D.C. 20549 | ||||||||||||||
SCHEDULE 14A | ||||||||||||||
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) | ||||||||||||||
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Check the appropriate box: | ||||||||||||||
o | Preliminary Proxy Statement | |||||||||||||
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||||||||||
ý | Definitive Proxy Statement | |||||||||||||
o | Definitive Additional Materials | |||||||||||||
o | Soliciting Material under §240.14a-12 | |||||||||||||
Nature's Sunshine Products, Inc. | ||||||||||||||
(Name of Registrant as Specified In Its Charter) | ||||||||||||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||||||||||||
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NATURE’S SUNSHINE PRODUCTS, INC. 2901 West Bluegrass Blvd., Suite 100 Lehi, UT 84043 | |||||
nature with everyone. | |||||
March Dear Fellow Shareholder: In 2021, we achieved records every quarter and saw continued success from our five global growth strategies. Last year was the first full year of our revitalized model and we believe this is just the beginning of Nature’s Sunshine’s growth journey. As we look to 2022, we expect the momentum from our five global growth strategies to continue. This year marks our 50th anniversary as a company. In this notable year, we are not looking back, but forward to the next 50 years. We thank you for your continued support and cooperation as we continue to share the healing power of nature with more people around the globe. I invite you to attend the The matters to be acted upon at the Annual Meeting are described in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement. A copy of our annual report is also enclosed. We Whether or not you plan to attend the Annual Meeting, and regardless of the number of shares you hold, it is important that your shares be represented and voted. Therefore, I urge you to vote as promptly as possible. You may vote your shares by visiting the website http://www.proxyvote.com. Timely voting will ensure your representation at the Annual Meeting. If you decide to attend the Annual Meeting in person, you will be able to vote at the meeting, even if you have previously submitted your proxy. Thank you for your continued support of Nature’s Sunshine Products, Inc. /s/ Terrence O. Moorehead Terrence O. Moorehead President and Chief Executive Officer |
NATURE'S SUNSHINE PRODUCTS, INC. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY | ||
To the Shareholders of Nature’s Sunshine Products, Inc.: The 1.To elect 2.To vote on an advisory, non-binding resolution to approve the compensation of our named executive officers; 3.To The Board of Directors set the close of business on February We Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted. You may vote your shares by visiting the website http://www.proxyvote.com. For detailed information regarding voting instructions, please refer to the Notice Regarding the Availability of Proxy Materials you received in the mail and the section of the accompanying Proxy Statement entitled “Questions and Answers about the March By Order of the Board of Directors /s/ Nathan G. Brower Nathan G. Brower Executive Vice President, General Counsel and Secretary | ||
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE The Proxy Statement, Proxy Card and Annual Report to Shareholders are available at https:// |
Table of Contents | |||||||||||
Page | |||||||||||
Proxy Statement Summary | ||
This summary highlights information contained in this Proxy Statement. It does not contain all information you should consider, and you should read the entire Proxy Statement carefully before voting. | ||
ANNUAL MEETING OF SHAREHOLDERS |
Time and Date | Place | Record Date | Voting | ||||||||
10:00 a.m. Mountain Daylight Time | 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043 | February | Shareholders of record as of the Record Date are entitled to vote | ||||||||
May |
AGENDA AND VOTING RECOMMENDATIONS |
Proposal No. | Description | Board Recommendation | Page | ||||||||
1 | Election of Directors | ü For each nominee | |||||||||
2 | Advisory Resolution to Approve Named Executive Officer Compensation | ü For | |||||||||
3 | Ratification of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for the year ending December 31, 2022 | ü For |
Proposal No. | Description | Board Recommendation | Page | ||||||||
1 | Election of Directors | ü For each nominee | |||||||||
2 | Advisory Resolution to Approve Named Executive Officer Compensation | ü For | |||||||||
3 | Approve the Amended and Restated 2012 Stock Incentive Plan | ü For | |||||||||
4 | Ratification of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for the year ending December 31, 2021 | ü For |
CORPORATE GOVERNANCE HIGHLIGHTS | |||||
ü | Independent Board Chairman | ||||
ü | |||||
ü | Recently | ||||
ü | Majority voting policy for director elections | ||||
ü | Regularly scheduled executive sessions of independent directors | ||||
ü | 100% Independent Audit, Compensation, and Governance Committees | ||||
ü | Enterprise Risk Management program with | ||||
ü | |||||
ü | Updated and robust stock ownership guidelines for Directors and executive officers | ||||
ü | Policies prohibiting short sales, hedging, and pledging of Nature's Sunshine Products, Inc. stock |
The proxy solicitation materials are being sent on or about March Pursuant to rules of the United States Securities and Exchange Commission (the “SEC”), we are providing our shareholders with access to our Notice of Annual Meeting of Shareholders, Proxy Statement and proxy card (referred to collectively as the “proxy materials”), and Annual Report for the year ended December 31, |
Questions and Answers about the | ||
WHAT IS THE PURPOSE OF THE ANNUAL MEETING? At the Annual Meeting, shareholders will vote on the following proposals, which are summarized in the preceding notice and described in more detail in this Proxy Statement: •To elect the •To vote on an advisory, non-binding resolution to approve the compensation of the Company’s named executive officers (Proposal Two); •To •To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. | ||
WHAT ARE THE BOARD'S VOTING RECOMMENDATIONS? Our Board recommends that you vote your shares: •FOR each of the •FOR the advisory, non-binding resolution to approve the compensation of the Company’s named executive officers (Proposal Two) •FOR the appointment of Deloitte & Touche LLP, as the Company’s independent registered public accounting firm for the year ending December 31, | ||
WHERE ARE THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES LOCATED, AND WHAT IS THE MAIN TELEPHONE NUMBER? The Company’s principal executive offices are currently located at 2901 West Bluegrass Blvd., Suite 100, Lehi, UT 84043. The Company’s main telephone number is (801) 341-7900. | ||
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING? The record date for the Annual Meeting is February A list of shareholders entitled to vote at the Annual Meeting will be available for inspection at our principal executive offices upon request. |
HOW MANY VOTES DO I HAVE? All shareholders of record as of the Record Date are entitled to one vote per share of Common Stock held on the Record Date for each matter presented for a vote at the Annual Meeting. |
WHAT IS THE DIFFERENCE BETWEEN A SHAREHOLDER OF RECORD AND A BENEFICIAL OWNER OF SHARES HELD IN STREET NAME? Shareholder of Record. If your shares are registered directly in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, you are considered the shareholder of record with respect to those shares. Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the beneficial owner of shares held in “street name.” The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account. | ||
IF I AM A SHAREHOLDER OF RECORD, HOW DO I VOTE? If you are a shareholder of record, you may vote using the internet, by telephone, or (if you received printed proxy materials) by mailing a completed proxy card. To vote by mailing a proxy card, please sign and return the enclosed proxy card in the enclosed prepaid envelope and your shares will be voted at the Annual Meeting in the manner you directed. The instructions for voting using the internet or telephone are set forth in the Notice. You may also vote your shares in person at the Annual Meeting. If you are a shareholder of record, you may request a ballot at the Annual Meeting. For direction to attend the meeting and vote in person, please contact the Corporate Secretary. | ||
IF I AM A BENEFICIAL OWNER OF SHARES HELD IN STREET NAME, HOW DO I VOTE? If you are the beneficial owner of shares held in street name, you will receive instructions from the brokerage firm, bank, broker-dealer or other similar organization (the “record holder”), that must be followed for the record holder to vote your shares per your instructions. If your shares are held in street name and you wish to vote in person at the Annual Meeting, you must obtain a proxy issued in your name from the record holder and bring it with you to the meeting. We recommend that you vote your shares in advance as described above so that your vote will be counted if you later decide not to attend the Annual Meeting. | ||
WHAT IS A QUORUM? A quorum must be present at the Annual Meeting for any business to be conducted. The presence at the Annual Meeting, either in person or by proxy, of holders of a majority of the shares of Common Stock outstanding on the Record Date will constitute a quorum. There were If a quorum is not present, the Annual Meeting will be adjourned until a quorum is obtained. | ||
WHAT IS A BROKER NON-VOTE? If you are a beneficial owner of shares held in street name and do not respond to a request for voting instructions from the record holder of your shares (typically a bank or broker), the record holder may generally vote on specified routine matters but cannot vote on non-routine matters. If the record holder does not receive instructions from you on how to vote your shares on a non-routine matter, the record holder will inform the inspector of election that it does not have the authority to vote on that matter with respect to your shares. This is generally referred to as a “broker non-vote.” In the Annual Meeting, Proposal One (election of directors) |
WHAT VOTE IS REQUIRED FOR EACH PROPOSAL? With regards to Proposal One, directors are elected for a full term if, and only if, the nominee receives the affirmative vote of the majority of the votes cast with respect to that nominee (meaning the number of shares validly voted “for” the nominee exceeds the number of shares voted “against” that nominee). If a nominee receives a plurality of votes in favor of election but fails to receive a majority of votes, he or she will be elected to a term of office ending on the earlier of 90 days after the date on which results of the election are certified and the day on which a person is selected by the Board to fill the office held by such director. This 90-day transitional period is required by Utah law and provides the Board time to identify an appropriate replacement, decide to leave the directorship vacant or otherwise respond to such a failed election. Shares not represented in person or by proxy at the Annual Meeting, abstentions and broker non-votes are not considered as votes cast and will have no effect on the outcome of the election of directors. Should any nominee become unavailable to serve before the Annual Meeting, the proxies will be voted by the proxy holders for such other person as may be designated by our Board of Directors. |
Approval of Proposal Two requires the votes cast in favor of the proposal to exceed the votes cast against such proposal. Proposal Two is only advisory and the outcome of the vote is not binding on the Company and the Board of Directors. The Company and the Board of Directors will consider the outcome of this vote when setting compensation for the named executive officers. Abstentions and broker non-votes will have no effect on the outcome of Proposal Two. Approval of Proposal Three Three. | ||
WHAT HAPPENS IF I DO NOT GIVE SPECIFIC VOTING INSTRUCTIONS? If you are a shareholder of record and you submit an executed proxy, but do not specify in your proxy instructions how the shares represented thereby are to be voted, your shares will be voted in the manner recommended by the Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting. If you are a beneficial owner of shares held in street name and you submit an executed voting instruction form, but do not specify in your voting instruction form how the shares represented thereby are to be voted, your shares will be voted in the manner recommended by the Board on all matters presented in this Proxy Statement. If you are a beneficial owner of shares held in street name and you do not respond to a request for voting instructions, your bank or broker may generally exercise its discretionary authority to vote your shares on routine matters (Proposal Although we do not know of any business to be considered at the Annual Meeting other than the proposals described in this Proxy Statement, if any other business is properly presented at the Annual Meeting, your signed proxy will give authority to the Board to vote on such matters at their discretion. | ||
WHAT IF I RECEIVE MORE THAN ONE SET OF PROXY MATERIALS, PROXY CARD OR VOTING INSTRUCTION FORM? If you receive more than one set of proxy materials, proxy card or voting instruction form because your shares are held in multiple accounts or registered in different names or addresses, please vote your shares held in each account to ensure that all of your shares will be voted. | ||
WHO WILL COUNT THE VOTES AND HOW WILL MY VOTE(S) BE COUNTED? All votes will be tabulated by the inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. If your proxy is properly submitted, the shares represented thereby will be voted at the Annual Meeting in accordance with your instructions. |
CAN I CHANGE MY VOTE AFTER I HAVE VOTED? If you are a shareholder of record, you may revoke or change your vote at any time before the Annual Meeting by filing a notice of revocation or another proxy card with a later date with the Corporate Secretary at Nature’s Sunshine Products, Inc., 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043, or by submitting a new vote via internet or telephone. All voting revocations or changes must be received by the Corporate Secretary prior to the Annual Meeting to be valid. If you are a shareholder of record and attend the Annual Meeting and vote by ballot, any proxy that you submitted previously to vote the same shares will be revoked automatically and only your vote at the Annual Meeting will be counted. If you are a beneficial owner of shares held in street name, you should contact your record holder to obtain instructions if you wish to revoke or change your vote before the Annual Meeting. Please note, however, that if your shares are held in street name, your vote in person at the Annual Meeting will not be effective unless you have obtained and present a legal proxy issued in your name from your record holder. | ||
WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING? The preliminary voting results will be announced at the Annual Meeting. The final voting results will be tallied by the inspector of election and disclosed by the Company in a Current Report on Form 8-K following the Annual Meeting. |
HOW AND WHEN MAY I SUBMIT A SHAREHOLDER PROPOSAL FOR THE ANNUAL MEETING? The deadline to submit a shareholder proposal for the If a shareholder wishes to submit a proposal to be considered for presentation at the If a shareholder wishes to present a proposal at our To forward any shareholder proposals or notices of proposals or to receive a copy of our Bylaws, you can write to the Corporate Secretary at Nature’s Sunshine Products, Inc., 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043. | ||
WHO WILL BEAR THE COST OF SOLICITING PROXIES? The Company will bear the entire cost of the solicitation of proxies for the Annual Meeting, including the preparation, assembly, printing, and mailing of this Proxy Statement, the proxy card and any additional solicitation materials furnished to shareholders. Copies of solicitation materials will be furnished to brokerage firms, banks, broker-dealers or other similar organizations holding shares in their names that are beneficially owned by others so that they may forward the solicitation materials to the beneficial owners. We may reimburse such persons for their reasonable expenses in forwarding solicitation materials to beneficial owners. The original solicitation of proxies may be supplemented by solicitation by personal contact, telephone, facsimile, email or any other means by our Directors, officers or employees, and we will reimburse any reasonable expenses incurred for that purpose. No additional compensation will be paid to those individuals for any such services. | ||
Proposal One: Election of Directors | ||
GENERAL Directors are elected by shareholders at the Company’s annual meetings of shareholders. Our Articles of Incorporation provide for the election of Directors for one-year terms expiring at the next annual meeting of shareholders. A Director appointed by the Board of Directors to fill a vacancy will serve until the next annual meeting. Cumulative voting is not permitted in the election of directors. Directors are elected for a full term if, and only if, the nominee receives the affirmative vote of the majority of the votes cast with respect to that nominee, meaning the number of shares validly voted “for” the nominee exceeds the number of shares voted “against” that nominee. If a nominee receives a plurality of the votes in favor of his or her election but fails to receive a majority of votes, he or she will be elected to a term of office ending on the earlier of 90 days after the date on which results of the election are certified and the day on which a person is selected by the Board to fill the office held by such DIRECTOR QUALIFICATIONS The RECOMMENDATION OF THE BOARD OF DIRECTORS The Board of Directors unanimously recommends a vote FOR the election of the nominees to the Board of Directors. |
Nominees to Serve as Directors | ||
The following table sets for the nominees for election to the Board. |
Name | Age | Position | Director Since | |||||||||||||||||
Curtis Kopf* | 56 | Director | 2022 | |||||||||||||||||
Terrence O. Moorehead | 59 | Director, Chief Executive Officer | 2018 | |||||||||||||||||
Richard D. Moss | 64 | Director | 2018 | |||||||||||||||||
Tess Roering* | 53 | Director | 2022 | |||||||||||||||||
Mary Beth Springer | 57 | Director | 2013 | |||||||||||||||||
Robert D. Straus | 51 | Director | 2017 | |||||||||||||||||
J. Christopher Teets | 49 | Director, Chairman | 2015 | |||||||||||||||||
Heidi Wissmiller | 57 | Director | 2020 | |||||||||||||||||
Shirley Wu** | 42 | Director | 2021 |
Name | Age | Position | Director Since | |||||||||||||||||
Robert B. Mercer | 69 | Director | 2010 | |||||||||||||||||
Terrence O. Moorehead | 58 | Director, Chief Executive Officer | 2018 | |||||||||||||||||
Richard D. Moss | 63 | Director | 2018 | |||||||||||||||||
Mary Beth Springer | 56 | Director | 2013 | |||||||||||||||||
Robert D. Straus | 49 | Director | 2017 | |||||||||||||||||
J. Christopher Teets | 48 | Director, Chairman | 2015 | |||||||||||||||||
Heidi Wissmiller* | 55 | Director | 2020 | |||||||||||||||||
Lily Zou | 51 | Director | 2019 |
* Mr. Kopf and Ms. Roering were appointed members of the Board effective January 1, 2022. The Governance Committee recommended Mr. Kopf and Ms. Roering to the Board. ** Ms. No family relationship exists among any of our director nominees or executive officers. To our knowledge, there are no pending material legal proceedings in which any of our Directors or nominees for Director, or any of their associates, is a party adverse to us or any of our affiliates, or has a material interest adverse to us or any of our affiliates. Except as described below, to our knowledge, there have been no events under any bankruptcy act, no criminal proceedings and no judgments, sanctions, or injunctions that are material to the evaluation of the ability or integrity of any of our Directors or nominees for Director during the past 10 years. Mr. Robert B. Mercer will not stand for reelection to the Board in accordance with our Board refreshment guidelines adopted in 2021, which provide that any Director who will reach the age of 70 or 10 years of service on our Board prior to the next Annual Meeting will not be nominated for election to the Board. The principal occupations and business experience, for at least the past five years, of each nominee for election to the Board | |||||
Mr. | |||||
Terrence O. Moorehead Mr. Moorehead was appointed to the Board and to serve as Chief Executive Officer in 2018. Mr. Moorehead brings more than 25 years of experience in the retail consumer products | |||||
Richard D. Mr. Moss has served on the Board since May 2018, and currently serves on the | |||||
Tess Roering Ms. Roering has served on the board since 2022, and currently serves on the Audit and Compensation Committees. Ms. Roering held various leadership positions at CorePower Yoga, including as Chief Commercial Officer from 2019 to 2020 and Chief Marketing Officer from 2014 to 2018. Prior to joining CorePower Yoga, Ms. Roering held director and vice president level positions at several companies including Gap Inc, Visa International, Hotwire.com, and Addis. Ms. Roering earned a Bachelor’s degree in psychology from Stanford University and an MBA from the Fuqua School of Business at Duke University. The Governance Committee nominated Ms. Roering to the Board because of its belief that she brings significant consumer and marketing experience to the Board, which supplements the Board’s skills in these key areas. | |||||
Mary Beth Springer Ms. Springer has served on the Board since 2013, and currently serves on the Compensation, Governance, |
Robert D. Mr. Straus has served on the Board since June 2017, and currently serves on the Governance committee and as the Chairperson of both the Compensation and Strategy Committees. Mr. Straus is a Portfolio Manager at Wynnefield Capital Management, LLC, an investment management firm, since April 2015. Prior to joining Wynnefield Capital, Mr. Straus served as Managing Director or Senior Analyst at several investment banks over nearly 20 years. Mr. Straus currently serves as a director of S&W Seed Company (NASDAQ: SANW) since January 2018, a global agriculture company with its primary activities in alfalfa seed, hybrid sorghum and sunflower germplasm and stevia. Mr. Straus is a member of the Board of Directors of one private company, MK Acquisition LLC - an authentic mountain lifestyle apparel brand founded in Jackson Hole Wyoming - since May 2015; he also served on the Board of Directors of Hollender Sustainable Brands LLC - a female sexual wellness consumer brand with its headquarters in Burlington, VT and an office in New York, NY and B Lane, Inc. dba Fashion to Figure - a women’s apparel plus-size omnichannel retailer based in New York, NY. Mr. Straus received his B.S.B.A. from the University of Hartford and M.B.A. from Bentley College. The Governance Committee nominated Mr. Straus to the Board because of his extensive experience assessing capital allocation programs, evaluating business strategy and conducting in-depth due diligence, which the Governance Committee believes strengthens the Board's collective qualifications, skills and experience. | |||||
J. Christopher Mr. Teets has served on the Board since 2015, and as Chairman of the Board since January 2019. Mr. Teets currently serves on the | |||||
Heidi Wissmiller Ms. Wissmiller has served on the Board since July 2020, and serves on the | |||||
Ms. | |||||
DIRECTOR INDEPENDENCE The Board of Directors has determined that all of its current directors and nominees for election at the Annual Meeting, except Mr. Moorehead, are independent directors under the current standards for “independence” established by NASDAQ. In making this determination, our Board considered |
BOARD LEADERSHIP AND DIVERSITY The Board of Directors and Governance Committee are committed to building and maintaining a Board comprised of capable individuals who collectively provide the experience, ability and expertise to drive shareholder value while reflecting our values of quality, integrity, service, community, and innovation. We strive to have a mixture of experience and tenure in order to ensure continuity of institutional knowledge while welcoming fresh perspectives. |
Board Diversity Matrix | ||||||||||||||
Total Number of Directors | 10 | |||||||||||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||
Part I: Gender Identity | ||||||||||||||
Directors | 4 | 6 | — | — | ||||||||||
Part II: Demographic Background | ||||||||||||||
African American or Black | — | 1 | — | — | ||||||||||
Alaskan Native or Native American | — | — | — | — | ||||||||||
Asian | 1 | — | — | — | ||||||||||
Hispanic or Latinx | — | — | — | — | ||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
White | 3 | 5 | — | — | ||||||||||
Two or More Races or Ethnicities | — | — | — | — | ||||||||||
LGBTQ+ | — | |||||||||||||
Did Not Disclose Demographic Background | — |
BOARD COMMITTEES The Board of Directors has five standing committees: Audit Committee, Compensation Committee, Governance Committee, Risk Management Committee and Strategy Committee. Each standing committee operates under a written charter adopted by the Board. You can access the current committee charters on our website at The Board has determined that the committee chairs and members are independent under the current standards for “independence” established by NASDAQ. The current members of the committees are identified in the table below. |
Director Name | Audit Committee | Compensation Committee | Governance Committee | Risk Management Committee | Strategy Committee | |||||||||||||||||||||||||||
Curtis Kopf | a | a | ||||||||||||||||||||||||||||||
Robert B. Mercer | a | Chair | ||||||||||||||||||||||||||||||
Richard D. Moss | Chair | |||||||||||||||||||||||||||||||
Tess Roering | a | a | ||||||||||||||||||||||||||||||
Mary Beth Springer | a | a | a | a | ||||||||||||||||||||||||||||
Robert D. Straus | Chair | a | Chair | |||||||||||||||||||||||||||||
J. Christopher Teets | a | a | a | |||||||||||||||||||||||||||||
Heidi Wissmiller | a | Chair | a | |||||||||||||||||||||||||||||
Shirley Wu |
*On March 2, 2022, the Board of Directors approved additional changes to committee assignments, which will take effect May 1, 2022. Those changes include: Mr. Teets will replace Mr. Moss as Chair of the Audit Committee; Ms. Springer will replace Mr. Mercer as Chair of the Governance Committee; and Mr. Mercer will be removed from the Audit and Governance Committees. | ||
THE AUDIT COMMITTEE. The Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements. The Committee is responsible for the engagement and oversight of our independent registered public accounting firm and reviews the adequacy and effectiveness of our internal control system and procedures. Our Board of Directors has determined that all members of our Audit Committee are independent directors and audit committee financial experts. | ||
COMPENSATION COMMITTEE. The Compensation Committee reviews compensation policies applicable to executive officers, certain key employees, and Board members, approves the compensation to be paid to executive officers and certain key employees (other than the Chief Executive Officer) and makes recommendations to the Board regarding the compensation to be paid to our Chief Executive Officer and all Directors on the Board. The Chief Executive Officer makes recommendations to our Compensation Committee with respect to the compensation of our other executive officers, and the Compensation Committee considers such recommendations in establishing the officers’ compensation. The Compensation Committee makes recommendations to the Board regarding the compensation to be paid to our Chief Executive Officer without input from the Chief Executive Officer. In addition, the Compensation Committee evaluates the performance of our executive officers versus agreed-upon objectives and administers or makes recommendations to the Board with respect to the administration of the Company’s equity-based and other incentive compensation plans. Under its Charter, all members of the Compensation Committee are required to 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 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 directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, or such successor provisions. |
The Compensation 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 has from time to time retained the services of Fredric W. Cook & Co., Inc. ("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 has also provided advice from time to time to the Compensation Committee with respect to the compensation and benefits of the Board. | ||
GOVERNANCE COMMITTEE. The Governance Committee makes recommendations to the Board of Directors about the size 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. The Governance Committee also provides, on behalf of the Board, oversight of the Company’s environmental, social, and governmental initiatives. In selecting or recommending candidates, the Governance Committee takes into consideration the criteria set forth in our •the candidate’s experience in corporate management, such as serving as an officer or former officer of a publicly held company; •the candidate’s experience as a board member of another publicly held company; •the candidate’s professional and academic experience relevant to the Company’s industry; •the strength of the candidate’s leadership skills; •the candidate’s experience in finance and accounting •whether the candidate has the time required for preparation, participation and attendance at Board meetings and committee meetings, if applicable. | ||
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 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043. The Governance Committee will consider a properly submitted shareholder nomination that meets the requirements under our Bylaws. Our Bylaws require, among other things, an advance written notice of the nomination in writing of not later than the ninetieth (90th), nor earlier than the one-hundred-twentieth (120th) day, from the date of the first anniversary 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 Governance Committee did not receive any director nominations from shareholders of the Company for the |
There have not been any material changes to the procedures by which shareholders may recommend nominees to the Board since our last disclosures regarding the Governance Committee's policies for considering shareholder nominees to the Board of Directors. In candidates. Korn Ferry also identified Tariq H. Hassan who was appointed to the Board on June 28, 2021, and resigned on August 19, 2021 to pursue a professional opportunity that precluded his service on the Company's Board. | ||
RISK MANAGEMENT COMMITTEE. The Risk Management Committee assists the Company’s Board of Directors in fulfilling its oversight responsibilities regarding the Company’s risk management by overseeing the Company’s enterprise risk management program. The purpose of the Risk Management Committee includes overseeing and reviewing the identification and assessment of material risks that the Company faces based on the internal and external environment and overseeing and reviewing the Company’s risks related to legal and regulatory requirements, including, but not limited to, distributor compliance and direct selling best practices; employee compliance, such as code of conduct and other mandated trainings (including FCPA trainings); product and product distribution regulatory compliance, including adherence to FTC, FDA and other similar regulatory bodies’ mandates; FCPA compliance and best practices; data protection and privacy, cybersecurity, and IT governance compliance and best practices; and foreign operations compliance. Under its Charter, the Risk Management Committee is required to consist of at least three directors, one of whom shall be a member of the Company’s Audit Committee. Each member of the Risk Management Committee is required to meet the independence requirements of the NASDAQ Stock Market and the rules and regulations of the SEC, as affirmatively determined by the Company’s Board. In addition, at least one member of the Committee shall be an "audit committee financial expert" as that term is defined by the SEC. | ||
STRATEGY COMMITTEE. The Strategy Committee assists the Board of Directors in fulfilling its oversight responsibility relating to the development and implementation of the Company's long-term strategy, including oversight of the risks and opportunities relating to such strategy and of strategic decisions relating to material investments, acquisitions, divestitures, joint ventures and strategic partnerships by the Company. The Strategy Committee consists of at least three directors, each of whom must meet the independence and experience requirements of the NASDAQ Stock Market and the rules and regulations of the SEC. |
Board Structure and Risk Oversight | ||
LEADERSHIP STRUCTURE OF THE BOARD Mr. Teets We believe that the leadership structure of the Board is appropriate because it provides both unified and consistent leadership, 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 relating to the Company's financial and accounting systems, accounting policies, investment strategies, compliance with mandates from the SEC and other government bodies that regulate the financial and securities industry, 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. | ||
The Risk Management Committee oversees and reviews the identification and assessment of risks that the Company faces based on the internal and external environment and overseeing and reviewing the Company’s risks related to legal and regulatory requirements, including, but not limited to, oversight of the Company's enterprise risk management program; distributor compliance and direct selling best practices; employee compliance, such as code of conduct and other mandated trainings; product and product distribution regulatory compliance, including adherence to FTC, FDA and other similar regulatory bodies’ mandates; FCPA compliance and best practices; data protection and privacy, cybersecurity, and IT governance compliance and best practices; and foreign operations compliance. The Company has enabled a cybersecurity committee, which is an executive committee consisting of members from various corporate service groups of the Company, including human resources, operations, IT, finance and legal, which under the direction of the Risk Management Committee oversees the Company’s cybersecurity-related policies and initiatives and reports to the Risk Management Committee regularly. Under its Charter, the Risk Management Committee is required to consist of at least three directors, one of whom shall be a member of the Company’s Audit Committee. 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. |
BOARD MEETINGS IN During |
During |
ANNUAL MEETING ATTENDANCE Although the Company does not have a formal policy regarding attendance by members of the Board of Directors at the Annual Meetings, Directors are encouraged to attend such meetings and all Directors attended the | ||
BOARD REFRESHMENT Our Board of Directors believes that its policy of periodic, rigorous self-evaluations is currently the best way to ensure it is appropriately structured to fit the demands of the Company’s business. |
COMMUNICATIONS WITH DIRECTORS We have not in the past adopted a formal process for shareholder communications with the Board of Directors. Nevertheless, the Directors have endeavored to ensure that the views of shareholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to shareholders in a timely manner. Communications to the Board of Directors may be submitted in writing to our Corporate Secretary at our principal executive offices at 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043. The Board of Directors relies upon the Corporate Secretary to forward written questions or comments to named directors or committees thereof, as appropriate. General comments or inquiries from shareholders are forwarded to the appropriate individual within the Company, including the Chief Executive Officer, as appropriate. | ||
CORPORATE GOVERNANCE GUIDELINES Our Board of Directors adopted Corporate Governance Guidelines, which are available on our The Corporate Governance Guidelines provide that the Governance Committee will oversee periodic evaluations of the Board of Directors and its Committees. Such evaluations are conducted annually and focus on, among things, whether the Board of Directors has the appropriate skills and experience, whether the Board of Directors is appropriately structured and diversified, and whether the Board of Directors is effectively communicating. Generally, such evaluations are conducted as self-evaluations but from time to time the Governance Committee may engage a third party to conduct evaluations. The stock ownership guidelines provide that Directors are to hold shares of the Company’s stock with a minimum value of three times the grant date value of the annual equity grant to Directors. For example, the last equity grant, which was made in May of |
CODE OF ETHICS Our Code of Conduct (the "Code") applies to all of our employees, including our Chief Executive Officer, Chief Financial Officer and senior financial and accounting officers. A copy of the Code is available on our website at https://ir.naturessunshine.com/corporate-governance/governance-documents or by writing to our Corporate Secretary at our principal executive offices at 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043. We intend to post on our internet website all amendments to, or waivers from, the Code that are required to be disclosed by applicable law. | ||
Director Compensation | ||
EQUITY COMPENSATION . Each non-employee director receives an annual grant of a restricted stock unit ("RSU") award with a grant date value equal to $65,000 (based on the closing selling price of our common stock on the grant date). Such awards generally vest in 12 equal successive monthly installments, over a one-year period measured from the grant date until the Company's next annual shareholder meeting, subject to continued Board service, and accelerate in full upon a change in control. CASH COMPENSATION. Each non-employee Board member receives an annual retainer of $50,000. The Chairman receives an additional retainer of $25,000. In addition to the annual retainer, each member of the Audit Committee receives a retainer of $10,000, with the Chairperson of the Audit Committee receiving an additional $10,000; each member of the Compensation Committee receives a retainer of $7,500, with the Chairperson of the Compensation Committee receiving an additional $7,500; each member of the Strategy Committee receives a retainer of $7,500, with the Chairperson of the Strategy Committee receiving an additional $7,500; each member of the Governance Committee receives a retainer of $5,000, with the Chairperson of the Governance Committee receiving an additional $5,000; and each member of the Risk Management Committee receives a retainer of $5,000, with the Chairperson of the Risk Management Committee receiving an additional $5,000. All annual retainers are pro-rated for any partial year of service. The following table sets forth certain information regarding the compensation of each individual who served as a non-employee member of our Board of Directors during |
Director Compensation for 2020 (9) | ||||||||||||||||||||||||||||
Director Compensation for 2021 (9) | Director Compensation for 2021 (9) | |||||||||||||||||||||||||||
Name | Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2), (3) | All other Compensation ($) (4) | Total ($) | Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2), (3) | All other Compensation ($) (4) | Total ($) | ||||||||||||||||||
Kristine F. Hughes (5) | 12,500 | — | — | 12,500 | ||||||||||||||||||||||||
Tariq H. Hassan (5) | Tariq H. Hassan (5) | 5,000 | 54,167 | — | 59,167 | |||||||||||||||||||||||
Curtis Kopf (6) | Curtis Kopf (6) | — | — | — | — | |||||||||||||||||||||||
Robert B. Mercer | Robert B. Mercer | 70,000 | 65,000 | 750 | 135,750 | Robert B. Mercer | 70,000 | 65,000 | 750 | 135,750 | ||||||||||||||||||
Richard D. Moss | Richard D. Moss | 76,333 | 65,000 | 750 | 142,083 | Richard D. Moss | 78,875 | 65,000 | 750 | 144,625 | ||||||||||||||||||
Tess Roering (6) | Tess Roering (6) | — | — | — | — | |||||||||||||||||||||||
Mary Beth Springer | Mary Beth Springer | 72,500 | 65,000 | 750 | 138,250 | Mary Beth Springer | 72,500 | 65,000 | 750 | 138,250 | ||||||||||||||||||
Robert D. Straus | Robert D. Straus | 85,000 | 65,000 | 750 | 150,750 | Robert D. Straus | 85,000 | 65,000 | 750 | 150,750 | ||||||||||||||||||
J. Christopher Teets | J. Christopher Teets | 90,000 | 65,000 | 750 | 155,750 | J. Christopher Teets | 90,000 | 65,000 | 750 | 155,750 | ||||||||||||||||||
Jeffrey D. Watkins (6) | 57,292 | 27,088 | 750 | 85,130 | ||||||||||||||||||||||||
Heidi Wissmiller (7) | 27,083 | 48,748 | 750 | 76,581 | ||||||||||||||||||||||||
Heidi Wissmiller | Heidi Wissmiller | 71,250 | 65,000 | 750 | 137,000 | |||||||||||||||||||||||
Shirley Wu (7) | Shirley Wu (7) | 16,250 | 43,333 | — | 59,583 | |||||||||||||||||||||||
Lily Zou (8) | Lily Zou (8) | 67,500 | 65,000 | 750 | 133,250 | Lily Zou (8) | 50,625 | 65,000 | 750 | 116,375 |
1) | Consists of retainer fees for service as a member of the Board paid on a monthly basis. The aggregate payments include the following categories of payments: |
Name | Retainer ($) | Chairman Retainer ($) | Committee Member Retainer ($) | Total ($) | ||||||||||
Tariq H. Hassan | 4,167 | — | 833 | 5,000 | ||||||||||
Robert B. Mercer | 50,000 | — | 20,000 | 70,000 | ||||||||||
Richard D. Moss | 50,000 | — | 28,875 | 78,875 | ||||||||||
Mary Beth Springer | 50,000 | — | 22,500 | 72,500 | ||||||||||
Robert D. Straus | 50,000 | — | 35,000 | 85,000 | ||||||||||
J. Christopher Teets | 50,000 | 25,000 | 15,000 | 90,000 | ||||||||||
Heidi Wissmiller | 50,000 | — | 21,250 | 71,250 | ||||||||||
Shirley Wu (7) | 12,500 | — | 3,750 | 16,250 | ||||||||||
Lily Zou (8) | 37,500 | — | 13,125 | 50,625 |
Name | Retainer ($) | Chairman Retainer ($) | Committee Member Retainer ($) | Total ($) | ||||||||||
Kristine F. Hughes | 8,333 | — | 4,167 | 12,500 | ||||||||||
Robert B. Mercer | 50,000 | — | 20,000 | 70,000 | ||||||||||
Richard D. Moss | 50,000 | — | 26,333 | 76,333 | ||||||||||
Mary Beth Springer | 50,000 | — | 22,500 | 72,500 | ||||||||||
Robert D. Straus | 50,000 | — | 35,000 | 85,000 | ||||||||||
J. Christopher Teets | 50,000 | 25,000 | 15,000 | 90,000 | ||||||||||
Jeffrey D. Watkins | 45,833 | — | 11,459 | 57,292 | ||||||||||
Heidi Wissmiller | 20,833 | — | 6,250 | 27,083 | ||||||||||
Lily Zou | 50,000 | — | 17,500 | 67,500 |
2) | On May | ||||
3) | On | ||||
4) | Amounts reported in the “All Other Compensation” column represent $750 worth of credits to purchase the Company’s products. | ||||
5) | |||||
Mr. | |||||
Mr. Kopf and Ms. | |||||
7) | On September 22, 2021, the Board approved a grant of 2,968 RSUs for Shirley Wu upon her appointment to the Board of Directors of the Company. The RSUs granted to Ms. Wu vest in eight equal installments from the grant date until the Company's next annual shareholder meeting, subject to continued service on the Board of Directors, and 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 two-year restriction period subsequent to the vesting of the entire RSU grant. The amount reflected in this column above represents the grant date fair value of the RSUs calculated in accordance with FASB ASC Topic 718. The fees shown as being paid to Ms. Wu were paid directly to Fosun Pharma. | ||||
8) | The fees shown as being paid to Ms. Zou were paid directly to Fosun Pharma. Ms. Zou resigned from the Board of Directors effective September 20, 2021. | ||||
9) | The following table shows the outstanding stock and option awards for the sitting directors, other than Mr. Moorehead, as of December 31, |
Name | Name | Outstanding Stock Awards as of 12/31/2020 | Outstanding Option Awards as of 12/31/2020 | Name | Outstanding Stock Awards as of 12/31/2021 | Outstanding Option Awards as of 12/31/2021 | ||||||||||
Robert B. Mercer | Robert B. Mercer | 18,694 | — | Robert B. Mercer | 17,168 | — | ||||||||||
Richard D. Moss | Richard D. Moss | 13,289 | 25,000 | Richard D. Moss | 17,168 | 25,000 | ||||||||||
Mary Beth Springer | Mary Beth Springer | 18,694 | 25,000 | Mary Beth Springer | 17,168 | 25,000 | ||||||||||
Robert D. Straus | Robert D. Straus | 18,694 | 25,000 | Robert D. Straus | 17,168 | 25,000 | ||||||||||
J. Christopher Teets | J. Christopher Teets | 18,694 | 25,000 | J. Christopher Teets | 17,168 | 25,000 | ||||||||||
Heidi Wissmiller | Heidi Wissmiller | 4,949 | — | Heidi Wissmiller | 8,395 | — | ||||||||||
Lily Zou | 8,075 | 25,000 | ||||||||||||||
Shirley Wu | Shirley Wu | 2,968 | — |
EXPENSES Board members are reimbursed for travel and other expenses incurred in connection with their duties as directors to the extent such expenses are submitted to the Company for reimbursement. |
Executive Officers | ||
The Company’s executive officers, as of the date of this report, are as follows: |
Name | Age | Position | ||||||
Terrence O. Moorehead | President, Chief Executive Officer | |||||||
Joseph W. Baty | Executive Vice President, Chief Financial Officer and Treasurer | |||||||
Nathan G. Brower | Executive Vice President, General Counsel and Secretary | |||||||
Tracee Comstock | Vice President, Human Resources | |||||||
Daniel C. Norman | Executive Vice President & President, Asia | |||||||
Eddie Silcock | Executive Vice President & President, North America | |||||||
Bryant J. Yates | Executive Vice President & President, Europe |
Terrence O. Moorehead. Mr. Moorehead was appointed as the Company’s President, Chief Executive Officer effective October 1, 2018. Mr. Moorehead brings more than 25 years of experience in the retail consumer products | |||||
Joseph W. Baty. Mr. Baty was appointed as the Company's Executive Vice President, Chief Financial Officer and Treasurer on October 31, 2016. Before joining the Company, Mr. Baty served as Executive Vice President and Chief Financial Officer at Schiff Nutrition International Inc. ("Schiff"), a publicly-traded vitamins and nutritional supplements company, from 1999, until Schiff was acquired by Reckitt Benckiser Group PLC in December 2012. From 1997 until 1999, Mr. Baty was Senior Vice President, Finance at Schiff. Prior to 1997, Mr. Baty was a Certified Public Accountant and partner at KPMG, LLP. Mr. Baty received his B.S. in Accounting from the University of Utah in 1981. | |||||
Nathan G. Brower. Mr. Brower was appointed the Company’s Executive Vice President, General Counsel and Secretary in December 2017. |
Tracee Comstock. Ms. Comstock has served as the Company's Vice President, Human Resources since January 2018. From September 2016 to November 2017, Ms. Comstock was Vice President of Human Resources at Younique, LLC, a leading online peer-to-peer social selling platform in makeup and skincare products. From May 2013 to September 2016, Ms. Comstock held senior human resources positions at Young Living Essential Oils, Weave and Sun Edison. She has also served as the President and as a member of the Board of Directors of Salt Lake SHRM, a human resources organization in Utah. Ms. Comstock received a Bachelor of Arts degree from Brigham Young University. | |||||
Daniel C. Norman. Mr. Norman serves as Executive Vice President & President, Asia. Prior to this role, he served as President of Synergy Worldwide since September 2007. Prior to serving as President at Synergy his roles included Vice President of Operations and Vice President of Information Systems. Prior to joining Synergy, Mr. Norman served as a Senior Manager of European Operations at Tahitian Noni International from 1998 through September 2004. | |||||
Eddie Silcock. Mr. Silcock has served as Executive Vice President & President, North America since April 2019. Prior to joining the company, he had served Chief Sales Officer for Perfectly Posh from March 2018 to March 2019 and Vice President, Global Sales at Young Living Essential Oils from April 2015 to October 2017. Eddie also held various positions with Avon Products Inc. from 1992 to April 2015, including Vice President, North American Sales. | |||||
Bryant J. Yates. Mr. Yates currently serves as Executive Vice President | |||||
Proposal Two: Advisory Resolution to Approve Compensation of Named Executive | ||
In accordance with Section 14A of the Exchange Act, we are asking our shareholders to approve the following non-binding, advisory resolution on our named executive officer compensation as disclosed in this Proxy Statement: RESOLVED, the compensation of the Company’s named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Narrative Discussion of Compensation Policies, the various compensation tables and the accompanying narrative discussion, is hereby APPROVED. Shareholders are urged to read the “Narrative Discussion of Compensation Policies” section of this Proxy Statement, as well as the Summary Compensation Table and related compensation tables and narrative in this Proxy Statement, which provide detailed information on the Company's compensation policies and practices and the compensation of our named executive officers. Although the vote is an advisory, non-binding vote, the Board and the Compensation Committee value the opinions of the shareholders and will take into account the outcome of the vote when considering future compensation decisions affecting the Company’s named executive officers. We currently intend to include a shareholder advisory vote on our executive compensation program each year at our annual meeting of shareholders. In May 2017, shareholders voted to hold a "say on pay" vote annually. The next | ||
Recommendation of the Board of Directors The Board of Directors unanimously recommends a vote FOR the approval, on an advisory, non-binding basis, of the compensation of our named executive officers as disclosed in this Proxy Statement pursuant to the SEC’s compensation disclosure rules. |
Narrative Discussion of Compensation Policies | |||||
This Narrative Discussion of Compensation Policies discloses the programs and decisions surrounding the compensation of our named executive officers in |
Name | Position | |||||||
Terrence O. Moorehead | President and Chief Executive Officer | |||||||
Joseph W. Baty | Executive Vice President, Chief Financial Officer and Treasurer | |||||||
Executive Vice President & President, |
In this section, we explain how our Compensation Committee made decisions related to the compensation of our NEOs during | ||||||||
EXECUTIVE SUMMARY Our compensation program is designed to reward our executives in a manner that supports a pay-for-performance philosophy, aligns with shareholder value creation, and maintains a level of compensation that allows us to attract and retain the best available executive team. | ||||||||
OUR In •Our consolidated net sales increased by •Adjusted EBITDA improved to •Total Shareholder Return (TSR) was 30.66%, with a two-year Compounded Annual Growth Rate (CAGR) TSR of 47.90%, and three-year TSR was 33.83%. |
KEY • |
•The •As a result of our financial and overall business performance against the pre-established goals, our NEO bonuses averaged •Restricted Stock Unit (RSU) grants to NEOs are generally made each year and generally consist of 50% performance-based units (PRSUs) and 50% time-based RSUs. • | ||
COMPENSATION POLICY FOR EXECUTIVE OFFICERS We have designed the various compensation elements to achieve the following objectives: |
Compensation Element | Primary Objective | |||||||
Base Salary | To recognize performance of job responsibilities and to attract and retain qualified executives with superior talent to help us with our goals. | |||||||
Annual performance-based compensation | To promote our annual performance and reward individual accomplishments and contributions to our company. | |||||||
Long-term equity incentive awards | To emphasize our long-term performance and align each executive's interests with those of our shareholders. | |||||||
Defined contribution plans | To provide opportunity for tax-efficient savings and long-term financial security. | |||||||
Severance arrangements | To encourage the continued focus and dedication of key individuals. | |||||||
Other elements of compensation and perquisites | To attract and retain talented executives in a cost-efficient manner by providing benefits with high perceived values at relatively low cost to us. |
The Compensation Committee seeks to achieve these objectives by: •Establishing a compensation structure that is market-competitive, internally fair and highly dependent on short-term and long-term performance; |
•Linking a substantial portion of compensation to our financial performance or stock price performance, with consideration given to individual contributions to that performance; •Providing long-term equity-based incentives and encouraging direct share ownership by executive officers, as well as ownership guidelines that provide an incentive for officers to consider long-term value maintenance in addition to growth. |
We utilize a combination of cash and equity incentive programs under which the compensation of the executive officers varies with our financial performance and the market price of our common stock. The general objective is to balance long-term equity compensation with short-term cash compensation, but there is no target compensation level that applies to all officers. The actual levels at which we may set compensation for a particular executive officer may vary based on our overall financial performance, a particular segment's performance, and an evaluation of each executive officer's individual performance level, experience and his or her potential contribution to our future growth. Also, actual compensation earned at the end of every performance period may be below target if performance is below our annual and multi-year performance goals. The Compensation | ||||||||
SETTING EXECUTIVE COMPENSATION Primary compensation decisions for each year, including base salary adjustments, the determination of target annual cash incentive 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 or the last quarter of the previous year. The principal factors the Compensation Committee considers for ongoing annual decisions when setting the compensation levels for the NEOs are as follows: •Comparison of our performance against certain operating and qualitative goals identified in our operating and strategic plans; •Comparative market data (reviewed from time to time); •Our Chief Executive Officer's recommendations for the other NEOs; •Individual performance as assessed by the Compensation Committee, with input from the Chief Executive Officer as to the NEOs other than himself; and •Tenure, scope of responsibilities, experience and qualifications, future potential and internal pay equity. | ||||||||
IMPACT OF The most recent shareholder advisory vote on executive officer compensation was held on May | ||||||||
ROLE OF EXTERNAL ADVISOR In |
MARKET BENCHMARKING Compensation decisions in 2021 did not utilize market data, though F.W. Cook provided a study in 2019 and another in February 2022 to provide context for 2022 compensation decisions. In 2019, F.W. Cook conducted a study with a peer group consisting of 15 publicly traded U.S. based specialty retail and personal product companies to perform new market comparisons of our executive compensation program and to prepare its 2019 Executive Compensation Report. The companies in the peer group were chosen in consultation with the Compensation Committee on the basis of objective industry classifications, annual revenue and market capitalization at the time of the 2019 Executive Compensation Report. The Compensation Committee believes that all of the companies in the peer group represented reasonable competitors for executive talent and shareholder investment at the time of the study. |
Nature's Sunshine 2019 Peer Group | |||||
Duluth | Medifast | ||||
e.l.f. Beauty | MGP Ingredients | ||||
Farmer Brothers | Nu Skin | ||||
Inter Parfums | NutriSystem | ||||
Landec | PetMed Express | ||||
LifeVantage | USANA Health Sciences | ||||
Lifeway Foods | Vitamin Shoppe | ||||
Mannatech |
In December 2021, the Compensation Committee engaged F.W. Cook to conduct an updated study with a peer group consisting of 15 publicly traded U.S. based specialty retail and personal product companies to perform new market comparisons of our executive compensation program and to prepare its 2022 Executive Compensation Report. The companies in the peer group were chosen in consultation with the Compensation Committee on the basis of objective industry classifications, annual revenue and market capitalization during 2020 (the time at which they made pay decisions disclosed in the compensation section of their 2021 proxy statements). The 2022 peer group companies are listed below: |
Nature's Sunshine 2022 Peer Group | |||||
BellRing Brands | Medifast | ||||
Calavo Growers | Nu Skin | ||||
e.l.f. Beauty | PetMed Express | ||||
Land's End | SpartanNash Company | ||||
Lifetime Brands | Sun Opta | ||||
LifeVantage | Tupperware Brands | ||||
Lifeway Foods | USANA Health Sciences | ||||
Limoneira |
ROLE OF MANAGEMENT Our Chief Executive Officer presents his recommendations for base salaries, annual cash incentive and equity grants for the other NEOs to the Compensation Committee (other than for himself). These recommendations are generally based on an NEO's expected role in our strategic plan, our performance measured in terms of the sales revenue and adjusted EBITDA levels attained by the segment for which the executive was primarily responsible, where applicable, or by the Company as a whole, as well as the NEO's performance against individual performance objectives, and the comparative analysis of our compensation practice to market for each such officer. The Compensation Committee discusses these recommendations with the Chief Executive Officer and makes the final determination on the base salaries, annual cash incentive and equity grants. The Compensation Committee recommends to our Board of Directors the base salary, annual cash incentive target and equity for our Chief Executive Officer. The Board considers such recommendations in setting the Chief Executive Officer's compensation. | ||||||||
EMPLOYMENT AGREEMENTS We have employment agreements in place with each of our NEOs. Among other things, these employment agreements set the initial annual base salaries for each NEO, establish that each NEO is eligible to participate in our executive annual cash incentive program and set forth certain termination benefits in the event his or her employment with the Company is terminated. The termination benefits to which our NEOs would be entitled in the event of termination are described below in the section entitled “Potential Payments Upon Termination or Change in Control.” The employment agreements with our NEOs provide for a period during which he or she is subject to certain non-compete and non-solicitation covenants. |
STOCK OWNERSHIP GUIDELINES Each of our NEOs and Board Members is subject to stock ownership guidelines. Under |
Role | Minimum Stock Ownership | ||||
Chief Executive Officer | 3x annual base salary | ||||
Chief Financial Officer | 2x annual base salary | ||||
All other NEOs | 1x annual base salary | ||||
Board Members | 3x grant date value of annual equity grant |
NEOs and Board Members may obtain or hold capital stock or an equity position above what is stated in the immediate family member. All NEOs currently satisfy the stock ownership guidelines. | ||
HEDGING Our policy prohibits executives, as well as our Board of Directors, 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 their 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. |
ELEMENTS OF COMPENSATION Each NEO's compensation package consists of three elements: (i) a base salary, (ii) annual cash incentive based upon overall Company or segment financial performance, and (iii) participation in long-term, stock-based incentive awards, in the form of RSUs and performance-contingent RSUs (PRSUs). In addition, the NEOs 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 three primary elements comprising the compensation package for NEOs (salary, annual cash incentive and equity) is designed to achieve one or more of our overall objectives in fashioning a competitive level of compensation, tying compensation to individual and company performance and establishing a meaningful and substantial link between each NEO'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 NEOs. Instead, the mix of compensation for each NEO is based on a review of available data and a subjective analysis of that individual's performance and contribution to our 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. The Compensation Committee reviews base salaries for our NEOs in March of each year. Based on the recommendation of the Chief Executive Officer, the 2019 Executive Compensation Report, the competitiveness of their current base salaries and our performance during |
Name | Base Salary ($) | Percentage Increase (%) | ||||||
Terrence O. Moorehead | 689,585 | 3 | % | |||||
Joseph W. Baty | 393,975 | 3 | % | |||||
Daniel C. Norman | 286,443 | 3 | % |
Name | Base Salary ($) | Percentage Increase (%) | ||||||||||||
Terrence O. Moorehead | 669,500 | 3 | % | |||||||||||
Joseph W. Baty | 382,500 | 2 | % | |||||||||||
Bryant J. Yates | 278,100 | 3 | % |
ANNUAL CASH INCENTIVE The annual cash incentive program is designed to reward our NEOs for achieving or exceeding our annual goals. For The |
Name | Target Cash Incentive | |||||||
Terrence O. Moorehead | 100 | % | ||||||
Joseph W. Baty | 60 | % | ||||||
Daniel C. Norman | 55 | % |
The portion of the annual cash incentive award based on corporate financial performance goals required attainment of minimum financial performance thresholds and could range from 50% to |
For all NEOs, 10% of the annual cash incentive award potential was based on each NEO’s individual performance. In determining the cash incentive for each NEO, the Compensation Committee reviewed the NEO’s individual performance, as well as general corporate performance not otherwise captured in the financial performance goals. | ||
For Messrs. Moorehead and Baty, 90% of their cash incentive award potential was based on corporate financial performance goals for | ||
For Mr. | ||
The funding schedules for the portion of the annual cash incentive award based on our corporate financial performance and |
2020 Corporate Financial Performance Goals | |||||||||||||||||||||||||||||||||||||||||
2020 Revenue ($) (000) | 346,750 | 355,875 | 365,000 | 367,400 | 369,800 | 372,200 | 374,600 | 377,000 | 379,800 | 381,333 | 385,666 | 398,666 | 403,000 | ||||||||||||||||||||||||||||
Payout Percentage | 25 | % | 60 | % | 100 | % | 101 | % | 103 | % | 106 | % | 111 | % | 117 | % | 126 | % | 137 | % | 153 | % | 173 | % | 200 | % | |||||||||||||||
2020 Adjusted EBITDA ($) (000) | 31,918 | 35,907 | 39,897 | 40,551 | 41,206 | 41,860 | 42,514 | 43,168 | 43,823 | 44,477 | 45,131 | 45,785 | 46,440 | ||||||||||||||||||||||||||||
Payout Percentage | 25 | % | 60 | % | 100 | % | 101 | % | 103 | % | 106 | % | 111 | % | 117 | % | 126 | % | 137 | % | 153 | % | 173 | % | 200 | % | |||||||||||||||
2020 Europe Financial Performance Goals | |||||||||||||||||||||||||||||||||||||||||
2020 Revenue ($) (000) | 65,551 | 67,276 | 69,001 | 69,901 | 70,801 | 71,701 | 72,601 | 73,501 | 74,400 | 75,300 | 76,200 | 77,100 | 78,000 | ||||||||||||||||||||||||||||
Payout Percentage | 25 | % | 60 | % | 100 | % | 101 | % | 103 | % | 106 | % | 111 | % | 117 | % | 126 | % | 137 | % | 153 | % | 173 | % | 200 | % | |||||||||||||||
2020 Adjusted EBITDA ($) (000) | 7,166 | 8,062 | 8,958 | 9,228 | 9,498 | 9,768 | 10,038 | 10,308 | 10,578 | 10,848 | 11,118 | 11,388 | 11,658 | ||||||||||||||||||||||||||||
Payout Percentage | 25 | % | 60 | % | 100 | % | 101 | % | 103 | % | 106 | % | 111 | % | 117 | % | 126 | % | 137 | % | 153 | % | 173 | % | 200 | % |
2021 Corporate Financial Performance Goals | ||||||||||||||||||||||||||||||||
2021 Revenue ($) (000) | 385,958 | 396,143 | 406,300 | 413,265 | 420,230 | 427,195 | 434,161 | 441,126 | 448,091 | 455,056 | ||||||||||||||||||||||
Payout Percentage | 25% | 60% | 100% | 101% | 104% | 110% | 121% | 139% | 165% | 200% | ||||||||||||||||||||||
2021 Adjusted EBITDA ($) (000) | 36,633 | 39,922 | 43,000 | 44,044 | 45,089 | 46,133 | 47,177 | 48,221 | 49,266 | 50,310 | ||||||||||||||||||||||
Payout Percentage | 25% | 60% | 100% | 101% | 103% | 110% | 126% | 147% | 171% | 200% | ||||||||||||||||||||||
2021 Asia Financial Performance Goals | ||||||||||||||||||||||||||||||||
2021 Revenue ($) (000) | 140,505 | 144,203 | 147,900 | 150,429 | 152,957 | 155,486 | 158,014 | 160,543 | 163,071 | 165,600 | ||||||||||||||||||||||
Payout Percentage | 25% | 60% | 100% | 101% | 104% | 110% | 121% | 139% | 165% | 200% | ||||||||||||||||||||||
2021 Adjusted EBITDA ($) (000) | 22,045 | 24,728 | 27,400 | 28,257 | 29,114 | 29,970 | 30,827 | 31,684 | 32,541 | 33,398 | ||||||||||||||||||||||
Payout Percentage | 25% | 60% | 100% | 101% | 104% | 110% | 126% | 147% | 171% | 200% |
The following chart sets forth for each NEO: the weighting of each performance goal; the target; and the actual performance achieved during |
Name | Name | Metric | Weighting (%) | Target ($) (000) | Achieved ($) (000) | Payout as % of Target | Name | Metric | Weighting (%) | Target ($) (000) | Achieved ($) (000) | Payout as % of Target | ||||||||||||||||||||||
Terrence Moorehead | Terrence Moorehead | Corporate Revenue | 36 | % | 365,000 | 386,465 | 151 | % | Terrence Moorehead | Corporate Revenue | 36 | % | 248,251 | 313,950 | 126 | % | ||||||||||||||||||
Corporate Adjusted EBITDA | 54 | % | 39,897 | 42,100 | 114 | % | Corporate Adjusted EBITDA | 54 | % | 372,376 | 626,064 | 168 | % | |||||||||||||||||||||
Individual Performance | 10 | % | — | — | 100 | % | Individual Performance | 10 | % | 68,958 | 68,958 | 100 | % | |||||||||||||||||||||
100 | % | 126 | % | 100 | % | 689,585 | 1,008,972 | 146 | % | |||||||||||||||||||||||||
Joseph W. Baty | Joseph W. Baty | Corporate Revenue | 36 | % | 365,000 | 386,465 | 151 | % | Joseph W. Baty | Corporate Revenue | 36 | % | 85,099 | 107,620 | 126 | % | ||||||||||||||||||
Corporate Adjusted EBITDA | 54 | % | 39,897 | 42,100 | 114 | % | Corporate Adjusted EBITDA | 54 | % | 127,648 | 214,611 | 168 | % | |||||||||||||||||||||
Individual Performance | 10 | % | — | — | 100 | % | Individual Performance | 10 | % | 23,638 | 23,638 | 100 | % | |||||||||||||||||||||
100 | % | 126 | % | 100 | % | 236,385 | 345,869 | 146 | % | |||||||||||||||||||||||||
Bryant J. Yates | Corporate Revenue | 12 | % | 365,000 | 386,465 | 151 | % | |||||||||||||||||||||||||||
Daniel C. Norman | Daniel C. Norman | Corporate Revenue | 12 | % | 18,905 | 23,909 | 126 | % | ||||||||||||||||||||||||||
Corporate Adjusted EBITDA | 18 | % | 39,897 | 42,100 | 112 | % | Corporate Adjusted EBITDA | 18 | % | 28,358 | 47,676 | 168 | % | |||||||||||||||||||||
Europe Revenue | 24 | % | 69,001 | 78,824 | 200 | % | Asia Revenue | 24 | % | 37,811 | 75,621 | 200 | % | |||||||||||||||||||||
Europe Adjusted EBITDA | 36 | % | 8,958 | 9,252 | 102 | % | Asia Adjusted EBITDA | 36 | % | 56,716 | 113,432 | 200 | % | |||||||||||||||||||||
Individual Performance | 10 | % | — | — | 100 | % | Individual Performance | 10 | % | 15,754 | 15,754 | 100 | % | |||||||||||||||||||||
100 | % | 133 | % | 100 | % | 157,544 | 276,392 | 175 | % |
Applying the factors and methodology described above, the Compensation Committee awarded the following cash incentive awards to our NEOs: |
Name | Payout as % of Target | 2020 Cash Incentive Award ($) | ||||||||||||
Terrence O. Moorehead | 126% | 842,231 | ||||||||||||
Joseph W. Baty | 126% | 288,711 | ||||||||||||
Bryant J. Yates | 133% | 204,042 |
Name | Payout as % of Target | 2021 Cash Incentive Award ($) | ||||||
Terrence O. Moorehead | 146 | % | 1,008,972 | |||||
Joseph W. Baty | 146 | % | 345,869 | |||||
Daniel C. Norman | 175 | % | 276,392 |
LONG-TERM INCENTIVE AWARDS We provide long-term, stock-based incentive awards, in the form of RSUs, performance-contingent RSUs (PRSUs) and, in some cases, stock options pursuant to the Nature’s Sunshine Products, Inc. 2012 Stock Incentive Plan (the “2012 Incentive Plan”) | ||
2021 RSU GRANTS The table below sets forth the grants of RSUs |
Name | RSUs Subject to Time Based Vesting Conditions (1) | |||||||
Terrence O. Moorehead | 28,339 | |||||||
Joseph W. Baty | 12,953 | |||||||
7,848 |
1) | The RSUs set forth in the column entitled "Subject to Time Based Vesting Conditions," vest in three equal annual installments over each year of service measured from the grant date, subject to the executive's continued employment with the Company. |
In March | |||||
In The table below sets forth the grants of PRSUs to the NEOs approved by the Compensation Committee. The Compensation Committee believes that performance-based equity rewards good long-term decision making, value creation and aligns shareholder and management interests. |
Name | Performance Based Restricted Stock Units | |||||||
Terrence O. Moorehead (1) | 90,288 | |||||||
Joseph W. Baty | ||||||||
1) | The PRSUs granted to Mr. Moorehead are split as follows: | ||||
NAMED EXECUTIVE OFFICER BENEFITS AND PERQUISITES Perquisites are not a significant component of our executive compensation program. We provide Mr. Moorehead the following benefits, which are not provided to the other NEOs: (i) a $1,500 per month car allowance; (ii) reimbursement of the cost of an annual executive physical examination; and (iii) $1,000,000 in additional term life insurance coverage above what we provide to similarly-situated employees. | |||||
OTHER PROGRAMS Our executive officers, including our NEOs, are eligible to participate in our 401(k) employee savings plan, medical plans, non-qualified deferred compensation, and other benefit plans on the same basis as all other regular U.S. employees. |
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M) Section 162(m) of the Internal Revenue Code |
COMPENSATION RISK ASSESSMENT Our compensation programs are designed to maintain an appropriate balance between incentives for long-term and short-term performances by utilizing a combination of compensation components, including base salary, annual cash incentive awards and long-term equity awards. Although not all employees in the organization have compensation comprised of all three of these components, our compensation programs are generally structured so that any cash incentive awards based on short-term performances are not likely to constitute the predominant element of an employee's total compensation package and that other components will serve to balance the package. For this reason, we do not believe that our use of any cash incentive awards based upon short-term performance is reasonably likely to encourage excessive risk-taking by the participants in those compensation programs. In addition, we believe the stock ownership guidelines to which our NEOs, including our Chief Executive Officer, are subject, moderate the incentive to take excessive risk. | ||
EXECUTIVE COMPENSATION The following compensation tables, including the summary compensation table, provide compensation information of our NEOs for the years ended December 31, 2021, 2020 |
Summary Compensation Table | |||||||||||||||||||||||
Name & Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards | Non-Equity Incentive Plan ($)(3) | All Other Compensation ($)(4) | Total | ||||||||||||||||
Terrence O. Moorehead | 2020 | 669,500 | 1,300,232 | — | 842,231 | 37,948 | 2,849,911 | ||||||||||||||||
Chief Executive Officer | 2019 | 650,000 | 747,813 | — | 507,954 | 35,001 | 1,940,768 | ||||||||||||||||
2018 | 162,500 | 1,705,591 | — | 167,375 | 473,268 | 2,508,734 | |||||||||||||||||
Joseph W. Baty | 2020 | 382,600 | 460,952 | — | 288,711 | 25,616 | 1,157,879 | ||||||||||||||||
EVP, CFO & Treasurer | 2019 | 375,000 | 168,938 | — | 161,435 | 16,094 | 721,467 | ||||||||||||||||
2018 | 375,000 | 393,560 | — | 212,738 | 11,990 | 993,288 | |||||||||||||||||
Bryant J. Yates | 2020 | 278,100 | 279,287 | — | 204,042 | 14,004 | 775,433 | ||||||||||||||||
EVP, President Europe | 2019 | 266,429 | 107,695 | — | 146,379 | 11,419 | 531,922 | ||||||||||||||||
2018 | — | — | — | — | — | — |
Summary Compensation Table | |||||||||||||||||||||||
Name & Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards | Non-Equity Incentive Plan ($)(3) | All Other Compensation ($)(4) | Total | ||||||||||||||||
Terrence O. Moorehead | 2021 | 689,585 | 1,826,446 | — | 1,008,972 | 20,153 | 3,545,156 | ||||||||||||||||
President and Chief Executive Officer | 2020 | 669,500 | 1,300,232 | — | 842,231 | 37,948 | 2,849,911 | ||||||||||||||||
2019 | 650,000 | 747,813 | — | 507,954 | 35,001 | 1,940,768 | |||||||||||||||||
Joseph W. Baty | 2021 | 393,975 | 472,860 | — | 345,869 | 24,503 | 1,237,207 | ||||||||||||||||
EVP, CFO & Treasurer | 2020 | 382,600 | 460,952 | — | 288,711 | 25,616 | 1,157,879 | ||||||||||||||||
2019 | 375,000 | 168,938 | — | 161,435 | 16,094 | 721,467 | |||||||||||||||||
Daniel C. Norman | 2021 | 286,443 | 286,492 | — | 276,392 | 11,472 | 860,799 | ||||||||||||||||
EVP, President Asia | 2020 | — | — | — | — | — | — | ||||||||||||||||
2019 | — | — | — | — | — | — |
1) | Amounts for | ||||
2) | Amounts reflect the aggregate grant date fair value of the RSU grant made in each applicable year, in each instance calculated in accordance with FASB ASC Topic 718. See Note 12 of the Notes to Consolidated Financial Statements set forth in the 143,266. | ||||
3) | For a detailed discussion of payments made under the Company’s annual cash incentive program, see the section above entitled “Narrative Discussion of Compensation Policies-Annual Cash Incentive.” | ||||
4) | “All Other Compensation” includes the following amounts paid by the Company for the year ended December 31, |
Name | 401(k) Plan Company Contribution ($) | Life Insurance Premium($) | Miscellaneous Other ($) | Total ($) | ||||||||||
Terrence O. Moorehead | 12,600 | 6,598 | 18,750 (A) | 37,948 | ||||||||||
Joseph W. Baty | 19,230 (B) | 5,636 | 750 (C) | 25,616 | ||||||||||
Bryant J. Yates | 12,600 | 904 | 500 (C) | 14,004 |
Name | 401(k) Plan Company Contribution ($) | Life Insurance Premium($) | Product Credit ($) (A) | Miscellaneous Other ($) (B) | Total ($) | ||||||||||||
Terrence O. Moorehead | 12,600 | 6,803 | 750 | 18,000 | 20,153 | ||||||||||||
Joseph W. Baty | 12,600 | 11,153 | 750 | — | 24,503 | ||||||||||||
Daniel C. Norman | 9,789 | 933 | 750 | — | 11,472 |
A) | Includes | ||||
B) | Includes $18,000 automobile allowance for Mr. | ||||
GRANTS OF PLAN-BASED AWARDS IN | ||
The following table provides certain summary information concerning each grant of an award made to an NEO in |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | Grant Date Fair Value of Stock Awards ($) | |||||||||||||||||||||||||||||
Name | Grant Date | Incentive Award Type (1) | Threshold ($)(2) | Target ($)(2) | Maximum ($)(2) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||
Terrence O. Moorehead | — | ACI | 150,638 | 669,500 | 1,171,625 | — | — | — | — | — | ||||||||||||||||||||||
Terrence O. Moorehead | 4/1/2020 | PRSU (3) | — | — | — | 18,368 | 111,832 | — | — | 506,408 | ||||||||||||||||||||||
Terrence O. Moorehead | 4/1/2020 | PRSU (4) | — | — | — | 9,908 | 59,451 | — | — | 291,702 | ||||||||||||||||||||||
Terrence O. Moorehead | 4/1/2020 | RSU (5) | — | — | — | — | — | — | 64,128 | 502,122 | ||||||||||||||||||||||
Joseph W. Baty | — | ACI | 51,651 | 229,560 | 401,730 | — | — | — | — | — | ||||||||||||||||||||||
Joseph W. Baty | 3/30/2020 | PRSU (3) | — | — | — | 8,519 | 51,114 | — | — | 231,455 | ||||||||||||||||||||||
Joseph W. Baty | 3/30/2020 | RSU (5) | — | — | — | — | — | — | 29,310 | 229,497 | ||||||||||||||||||||||
Bryant J. Yates | — | ACI | 34,415 | 146,536 | 267,671 | — | — | — | — | — | ||||||||||||||||||||||
Bryant J. Yates | 3/30/2020 | PRSU (3) | — | — | — | 5,162 | 30,969 | — | — | 140,233 | ||||||||||||||||||||||
Bryant J. Yates | 3/30/2020 | RSU (5) | — | — | — | — | — | — | 17,759 | 139,054 |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | Grant Date Fair Value of Stock Awards ($) | |||||||||||||||||||||||||||||
Name | Grant Date | Incentive Award Type (1) | Threshold ($)(2) | Target ($)(2) | Maximum ($)(2) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||
Terrence O. Moorehead | — | ACI | 155,157 | 689,585 | 1,206,774 | — | — | — | — | — | ||||||||||||||||||||||
Terrence O. Moorehead | 3/29/2021 | PRSU (3) | — | — | — | 6,214 | 37,288 | — | — | 517,362 | ||||||||||||||||||||||
Terrence O. Moorehead | 3/29/2021 | RSU (4) | — | — | — | — | — | — | 28,339 | 526,539 | ||||||||||||||||||||||
Terrence O. Moorehead | 12/17/2021 | PRSU (5) | — | — | — | 26,500 | 53,000 | — | — | 782,545 | ||||||||||||||||||||||
Joseph W. Baty | — | ACI | 53,187 | 236,385 | 413,674 | — | — | — | — | — | ||||||||||||||||||||||
Joseph W. Baty | 3/26/2021 | PRSU (3) | — | — | — | 2,840 | 17,043 | — | — | 236,467 | ||||||||||||||||||||||
Joseph W. Baty | 3/26/2021 | RSU (4) | — | — | — | — | — | — | 12,953 | 236,393 | ||||||||||||||||||||||
Daniel C. Norman | — | ACI | 35,447 | 157,544 | 275,702 | — | — | — | — | — | ||||||||||||||||||||||
Daniel C. Norman | 3/26/2021 | PRSU (3) | — | — | — | 1,720 | 10,326 | — | — | 143,266 | ||||||||||||||||||||||
Daniel C. Norman | 3/26/2021 | RSU (4) | — | — | — | — | — | — | 7,848 | 143,226 |
1) | Award types are as follows: ACI: Annual Cash Incentive Award PRSU: Performance-Based RSUs RSU: Time-Based RSUs | ||||
2) | The amounts reported in these columns reflect potential payouts for | ||||
3) | The PRSU grant vests 50% upon achievement and 50% one year after achievement of pre-determined share price targets for the Company’s stock over a rolling 30-day period commencing after | ||||
4) | The | ||||
OUTSTANDING EQUITY AWARDS AT YEAR-END | ||
The following table provides certain summary information concerning outstanding equity awards held by the NEOs as of December 31, |
Name | Number of Securities Underlying Unearned RSUs (#) | Market Value of Unearned Shares, Units or Other Rights Not Vested ($)(1) | Number of Securities Underlying Options Exercisable (#) | Number of Securities Underlying Options Unexercisable (#) | Number of Securities Underlying Unearned Options(#) | Option Exercise Price ($) | Option Expiration Date | |||||||||||||||||||
Terrence O. Moorehead | 36,832 | 550,638 | — | — | — | — | — | (2) | ||||||||||||||||||
136,741 | 2,044,278 | — | — | — | — | — | (3) | |||||||||||||||||||
36,470 | 545,227 | — | — | — | — | — | (4) | |||||||||||||||||||
95,130 | 1,422,194 | — | — | — | — | — | (5) | |||||||||||||||||||
64,128 | 958,714 | — | — | — | — | — | (6) | |||||||||||||||||||
93,194 | 1,393,250 | — | — | — | — | — | (7) | |||||||||||||||||||
Total | 462,495 | 6,914,300 | — | — | — | — | — | |||||||||||||||||||
Joseph W. Baty | 3,334 | 49,843 | — | — | — | — | — | (8) | ||||||||||||||||||
5,000 | 74,750 | — | — | — | — | — | (9) | |||||||||||||||||||
2,500 | 37,375 | — | — | — | — | — | (10) | |||||||||||||||||||
30,000 | 448,500 | — | — | — | — | — | (11) | |||||||||||||||||||
8,890 | 132,906 | — | — | — | — | — | (12) | |||||||||||||||||||
11,111 | 166,109 | — | — | — | — | — | (13) | |||||||||||||||||||
29,310 | 438,185 | — | — | — | — | — | (14) | |||||||||||||||||||
42,596 | 636,810 | — | — | — | — | — | (15) | |||||||||||||||||||
Total | 132,741 | 1,984,478 | — | — | — | — | — | |||||||||||||||||||
Bryant J. Yates | — | 13,225 | — | — | 11.52 | 3/1/2022 | (16) | |||||||||||||||||||
— | 13,500 | — | — | 11.98 | 3/5/2023 | (17) | ||||||||||||||||||||
— | 15,000 | — | — | 13.88 | 2/11/2024 | (18) | ||||||||||||||||||||
10,000 | 149,500 | — | — | — | — | — | (19) | |||||||||||||||||||
1,667 | 24,922 | — | — | — | — | — | (8) | |||||||||||||||||||
2,500 | 37,375 | — | — | — | — | — | (9) | |||||||||||||||||||
1,250 | 18,688 | — | — | — | — | — | (10) | |||||||||||||||||||
28,334 | 423,593 | — | — | — | — | — | (11) | |||||||||||||||||||
5,667 | 84,722 | — | — | — | — | — | (12) | |||||||||||||||||||
7,084 | 105,906 | — | — | — | — | — | (13) | |||||||||||||||||||
17,759 | 265,497 | — | — | — | — | — | (14) | |||||||||||||||||||
25,808 | 385,830 | — | — | — | — | — | (15) | |||||||||||||||||||
Total | 100,069 | 1,496,032 | 41,725 | — | — | — | — |
Name | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Market Value of Unearned Shares, Units or Other Rights Not Vested ($)(1) | Number of Securities Underlying Options Exercisable (#) | Number of Securities Underlying Options Unexercisable (#) | Number of Securities Underlying Unearned Options(#) | Option Exercise Price ($) | Option Expiration Date | |||||||||||||||||||
Terrence O. Moorehead | 39,231 | 725,774 | — | — | — | — | — | (2) | ||||||||||||||||||
19,183 | 354,886 | — | — | — | — | — | (3) | |||||||||||||||||||
40,032 | 740,592 | — | — | — | — | — | (4) | |||||||||||||||||||
44,974 | 832,019 | — | — | — | — | — | (5) | |||||||||||||||||||
49,023 | 906,926 | — | — | — | — | — | (6) | |||||||||||||||||||
28,339 | 524,272 | — | — | — | — | — | (7) | |||||||||||||||||||
37,288 | 689,828 | — | — | — | — | — | (8) | |||||||||||||||||||
53,000 | 980,500 | — | — | — | — | — | (9) | |||||||||||||||||||
Total | 311,070 | 5,754,797 | — | — | — | — | — | |||||||||||||||||||
Joseph W. Baty | 4,676 | 86,506 | — | — | — | — | — | (10) | ||||||||||||||||||
4,677 | 86,525 | — | — | — | — | — | (11) | |||||||||||||||||||
20,556 | 380,286 | — | — | — | — | — | (12) | |||||||||||||||||||
22,409 | 414,567 | — | — | — | — | — | (13) | |||||||||||||||||||
12,953 | 239,631 | — | — | — | — | — | (14) | |||||||||||||||||||
17,043 | 315,296 | — | — | — | — | — | (15) | |||||||||||||||||||
Total | 82,314 | 1,522,811 | — | — | — | — | — | |||||||||||||||||||
Daniel C. Norman | — | — | 12,236 | — | — | 13.88 | 2/11/2024 | (16) | ||||||||||||||||||
2,982 | 55,167 | — | — | — | — | — | (10) | |||||||||||||||||||
2,982 | 55,167 | — | — | — | — | — | (11) | |||||||||||||||||||
12,456 | 230,436 | — | — | — | — | — | (12) | |||||||||||||||||||
13,580 | 251,230 | — | — | — | — | — | (13) | |||||||||||||||||||
7,848 | 145,188 | — | — | — | — | — | (14) | |||||||||||||||||||
10,326 | 191,031 | — | — | — | — | — | (15) | |||||||||||||||||||
Total | 50,174 | 928,219 | 12,236 | — | — | — | — |
1) | The market value of the restricted stock units reported in this column is based on the closing market price of our stock on December 31, | ||||
2) | RSUs vest | ||||
3) |
RSUs vest in three equal annual installments over each year of service measured from March 29, 2019, subject to the executive’s continued employment with the Company. These RSUs are also subject to accelerated vesting in full upon termination by reason of death or disability or certain terminations following a change in control of the Company. | |||||
RSUs vest based upon the achievement of Company stock price targets of |
5) | RSUs vest in three equal annual installments over each year of service measured from April 1, 2020, subject to the executive’s continued employment with the Company. These RSUs are also subject to accelerated vesting in full upon termination by reason of death or disability or certain terminations following a change in control of the Company. | ||||
RSUs vest 50% upon achievement, and the remaining 50% within one year of achievement, based upon the achievement of Company stock price targets $14.50, $16.78, | |||||
RSUs vest in three equal annual installments over each year of service measured from | |||||
RSUs vest 50% upon achievement, and the remaining 50% within one year of achievement, based upon the achievement of | |||||
RSUs vest 50% upon achievement, and the remaining 50% within one year of achievement, based upon the achievement of | |||||
RSUs vest in three equal annual installments over each year of service measured from January 2, 2019, subject to the executive’s continued employment with the Company. These RSUs are also subject to accelerated vesting in full upon termination by reason of death or disability or certain terminations following a change in control of the Company. | |||||
RSUs vest based upon the achievement of Company stock price targets of | |||||
RSUs vest in three equal annual installments over each year of service measured from March 30, 2020, subject to the executive’s continued employment with the Company. These RSUs are also subject to accelerated vesting in full upon termination by reason of death or disability or certain terminations following a change in control of the Company. | |||||
13) | RSUs vest 50% upon achievement, and the remaining 50% within one year of achievement, based upon the achievement of Company stock price targets $14.50, $16.78, $19.07 and $20.36 price per share over a rolling 30-day period and must be achieved on or before March 30, 2023. These RSUs are also subject to accelerated vesting in full upon termination by reason of death or disability or certain terminations following a change in control of the Company. | ||||
14) | RSUs vest in three equal annual installments over each year of service measured from March 26, 2021, subject to the executive’s continued employment with the Company. These RSUs are also subject to accelerated vesting in full upon termination by reason of death or disability or certain terminations following a change in control of the Company. | ||||
15) | RSUs vest 50% upon achievement, and the remaining 50% within one year of achievement, based upon the achievement of Company stock price targets |
16) | |||||
Option vests in four equal annual installments over each year of service measured from February 11, 2014, subject to the executive’s continued employment with the Company. These options are also subject to accelerated vesting in full upon termination by reason of death or disability or certain terminations following a change in control of the Company. | |||||
OPTION EXERCISES AND STOCK VESTED | ||
The following table sets forth information for the NEOs regarding the exercise of stock options and vesting of RSUs during the year ended December 31, |
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||
Name | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||||||||||||||||||
Terrence O. Moorehead | Terrence O. Moorehead | — | — | 105,162 | 1,213,783 | Terrence O. Moorehead | — | — | 152,631 | 2,705,310 | ||||||||||||||||||||||||||||||
Joseph W. Baty | Joseph W. Baty | — | — | 32,851 | 345,793 | Joseph W. Baty | — | — | 49,284 | 885,941 | ||||||||||||||||||||||||||||||
Bryant J. Yates | 1,775 | 3,574 | 18,993 | 207,447 | ||||||||||||||||||||||||||||||||||||
Daniel C. Norman | Daniel C. Norman | 12,427 | 97,862 | 36,359 | 659,056 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | ||
The benefits and payments that our NEOs could receive under certain hypothetical termination scenarios are described in the narrative below and quantified in the table that follows. | ||
VOLUNTARY TERMINATION AND TERMINATION FOR CAUSE If any of our NEOs voluntarily resigns without good reason or if an NEO's employment is terminated by the Company for cause, then no additional payments or benefits will accrue or be paid to the NEO under his or her employment agreement, other than what has been accrued and vested in the benefit plans discussed above in this proxy statement. A voluntary termination or involuntary termination for cause will not trigger an acceleration of the vesting of any stock options or other long-term incentive awards, and any such awards that had not already vested would be forfeited. | ||
TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON Under our employment agreements with our NEOs, in the event that his or her employment is terminated by the Company without “Cause” or if the NEO resigns for “Good Reason,” as those terms are defined in the employment agreements, the NEO would be entitled to the following benefits and payments: •Payment of all accrued and unpaid base salary through the date of such termination; •Monthly severance payments equal to one-twelfth of the NEO’s base salary as of the date of termination for a period equal to 12 months, except in the case of our Chief Executive Officer who would receive such severance payments for a period of 18 months; •Reimbursement for the cost the NEO incurs for continuation of his or her health insurance coverage under COBRA, and for his family members if he or she provided for their coverage during his or her employment, for a period of 12 months, except in the case of our Chief Executive Officer who would receive such reimbursement for a period of 18 months; and •Payment of a pro-rata bonus, based on the percentage of the year in which the NEO remained employed, for the year in which such termination occurs, which bonus shall be paid at the same time as similar bonuses are paid to the Company’s executive employees for such year. Except for Mr. Moorehead, a termination without cause will not trigger an acceleration of the vesting of any stock options or other long-term incentive awards, and any such awards that had not already vested would be forfeited. In the case of Mr. Moorehead, any unvested awards continue to vest for a period of 18 months after any termination without cause. | ||
TERMINATION DUE TO DEATH OR INCAPACITY If an NEO’s employment terminates due to death or incapacity, the employment agreements provide that such NEO would receive the same benefits and payments as if the employment had terminated without cause. A termination due to death or incapacity triggers an acceleration of the vesting of any stock options or other long-term incentive awards. | ||
POTENTIAL PAYMENTS UPON TERMINATION FOLLOWING A CHANGE IN CONTROL The Company’s employment agreements with its NEOs provide that if an NEO's employment is terminated Except as noted in the following sentence, the equity awards held by the NEOs at the time of a qualifying change in control event will vest in full. Mr. Moorehead's new hire grant of PRSUs only vest upon a qualifying change in control event to the extent that the per share consideration paid for the common shares of the Company exceeds the share price milestone set forth in the equity award agreement. |
The following table shows potential payments to the NEOs, upon death or incapacity, termination of employment without cause and termination of employment following a change in control of the Company. The amounts shown assume that the termination was effective December 31, |
Name | Termination upon death or incapacity ($) | Termination without Cause ($) | Termination Following Change in Control | ||||||||
Terrence O. Moorehead | |||||||||||
Base Salary Continuation | 1,004,250 | 1,004,250 | 1,004,250 | ||||||||
Continuation of Medical Insurance | 21,600 | 21,600 | 21,600 | ||||||||
Value of Accelerated Vesting (1) | 6,914,300 | 1,735,007 | 6,914,300 | ||||||||
Other Benefits (2) | 669,500 | 669,500 | 1,004,250 | ||||||||
Total | 8,609,650 | 3,430,357 | 8,944,400 | ||||||||
Joseph W. Baty | |||||||||||
Base Salary Continuation | 382,600 | 382,600 | 573,900 | ||||||||
Continuation of Medical Insurance | 14,400 | 14,400 | 21,600 | ||||||||
Value of Accelerated Vesting (1) | 1,984,478 | — | 1,984,478 | ||||||||
Other Benefits (2) | 229,560 | 229,560 | 344,340 | ||||||||
Total | 2,611,038 | 626,560 | 2,924,318 | ||||||||
Bryant J. Yates | |||||||||||
Base Salary Continuation | 278,100 | 278,100 | 417,150 | ||||||||
Continuation of Medical Insurance | 14,400 | 14,400 | 21,600 | ||||||||
Value of Accelerated Vesting (1) | 1,496,032 | — | 1,496,032 | ||||||||
Other Benefits (2) | 152,995 | 152,955 | 229,433 | ||||||||
Total | 1,941,527 | 445,455 | 2,164,215 |
Name | Termination upon death or incapacity ($) | Termination without Cause ($) | Termination Following Change in Control | ||||||||
Terrence O. Moorehead | |||||||||||
Base Salary Continuation | 1,034,378 | 1,034,378 | 1,034,378 | ||||||||
Continuation of Medical Insurance | 21,600 | 21,600 | 21,600 | ||||||||
Value of Accelerated Vesting (1) | 5,754,795 | 1,536,407 | 5,754,795 | ||||||||
Other Benefits (2) | 689,585 | 689,585 | 1,034,378 | ||||||||
Total | 7,500,358 | 3,281,970 | 7,845,151 | ||||||||
Joseph W. Baty | |||||||||||
Base Salary Continuation | 393,975 | 393,975 | 590,963 | ||||||||
Continuation of Medical Insurance | 14,400 | 14,400 | 21,600 | ||||||||
Value of Accelerated Vesting (1) | 1,522,809 | — | 1,522,809 | ||||||||
Other Benefits (2) | 229,560 | 229,560 | 344,340 | ||||||||
Total | 2,160,744 | 637,935 | 2,479,712 | ||||||||
Daniel C. Norman | |||||||||||
Base Salary Continuation | 286,443 | 286,443 | 429,665 | ||||||||
Continuation of Medical Insurance | 14,400 | 14,400 | 21,600 | ||||||||
Value of Accelerated Vesting (1) | 928,219 | — | 928,219 | ||||||||
Other Benefits (2) | 157,544 | 157,544 | 236,316 | ||||||||
Total | 1,386,606 | 458,387 | 1,615,800 |
1) | Represents the intrinsic value of accelerated vesting of all outstanding awards based on | ||||
2) | All NEOs would be entitled to a pro-rata bonus based on the number of full or partial calendar months they remained employed during the year in which such termination occurs. Assuming the termination of an NEO's employment was effective on December 31, |
EQUITY COMPENSATION PLANS | ||
The following table contains information regarding the Company’s equity compensation plans as of December 31, |
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights ($) | Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||
(a) | (b) | (c) | |||||||||
Equity compensation plans approved by security holders (1) | 1,003,250 (2) | 12.13 (3) | 2,454,218 (4) | ||||||||
Equity compensation plans not approved by security holders | — | N/A | — | ||||||||
Total | 1,003,250 | 12.13 | 2,454,218 |
1) | |||||
2) | Consists of | ||||
3) | Excludes the impact of restricted stock units, which are exercised for no consideration. | ||||
4) | Represents the number of shares available for future issuance under the 2012 Incentive | ||||
Proposal Three: | ||
ANNUAL EQUITY USAGE | ||||||||||||||
2018 | 2019 | 2020 | 3-Year Average | |||||||||||
Options and Performance Options | 50,000 | 25,000 | — | 25,000 | ||||||||||
RSUs and Performance RSUs | 691,121 | 332,521 | 691,410 | 571,684 | ||||||||||
Gross Grants | 741,121 | 357,521 | 691,410 | 596,684 | ||||||||||
Weighted-Average Shares Outstanding | 19,122,932 | 19,313,555 | 19,537,365 | 19,324,617 | ||||||||||
Gross Usage (% of Outstanding) (1) | 3.9% | 1.9% | 3.5% | 3.1% |
FULLY-DILUTED OVERHANG CALCULATION | ||||||||
As of 12/31/2020 | As of 12/31/2020, Giving Effect to Additional Share Reserve | |||||||
Shares Outstanding | 19,696,795 | 19,696,795 | ||||||
Potential Dilution: | ||||||||
Shares Issuable under Outstanding Equity Awards (1) | 1,405,707 | 1,405,707 | ||||||
Shares Available for Future Awards under 2012 Stock Incentive Plan | 682,972 | 682,972 | ||||||
Shares Available for Future Awards under 2009 Stock Incentive Plan | — | — | ||||||
Additional Share Reserve under Proposed Amendments | — | 2,000,000 | ||||||
Fully-Diluted Shares Outstanding | 21,785,474 | 23,785,474 | ||||||
Fully-Diluted Overhang (2) | 9.6 | % | 17.2 | % |
HISTORICAL PLAN BENEFITS (1) | ||||||||
Name of Individual or Identity of Group and Principal Position | Number of RSUs Granted | Number of Options Granted | ||||||
Terrence O. Moorehead President, Chief Executive Officer and Director | 604,490 | — | ||||||
Joseph W. Baty EVP, Chief Financial Officer | 233,091 | — | ||||||
Bryant J. Yates EVP, President Europe | 154,224 | 53,000 | ||||||
All current executive officers as a group | 1,309,849 | 128,000 | ||||||
All current directors who are not executive officers as a group | 161,452 | 125,000 | ||||||
Each nominee for election as a director | ||||||||
Robert B. Mercer | 44,915 | — | ||||||
Richard D. Moss | 13,289 | 25,000 | ||||||
Mary Beth Springer | 37,814 | 25,000 | ||||||
Robert D. Straus | 18,649 | 25,000 | ||||||
J. Christopher Teets | 33,716 | 25,000 | ||||||
Heidi Wissmiller | 4,949 | — |
Lily Zou (1) | 8,075 | 25,000 | ||||||
Each associate of any of such directors, executive officers or nominees | — | — | ||||||
Each other person who received or is to receive 5 percent of such awards | ||||||||
Gregory L. Probert (2) | 355,819 | 410,000 | ||||||
All employees (excluding executive officers) as a group | 495,111 | 189,500 |
Ratification of Appointment of Independent Registered Public Accounting Firm | ||
Our Audit Committee has retained Deloitte & Touche LLP, as our independent registered public accounting firm for the year ending December 31, 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 years ended December 31, |
2020 ($) | 2019 ($) | 2021 ($) | 2020 ($) | |||||||||||||||||||||||||
Audit Fees (1) | Audit Fees (1) | 1,228,565 | 1,060,686 | Audit Fees (1) | 1,181,798 | 1,228,565 | ||||||||||||||||||||||
Tax Fees (2) | Tax Fees (2) | 444,750 | 374,293 | Tax Fees (2) | 791,135 | 444,750 | ||||||||||||||||||||||
All other fees (3) | All other fees (3) | — | — | All other fees (3) | 60,000 | — | ||||||||||||||||||||||
Total Fees | Total Fees | 1,673,315 | 1,434,979 | Total Fees | 2,032,933 | 1,673,315 |
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 years ended December 31, | ||||
2) | Reflects aggregate fees billed by Deloitte & Touche LLP for tax services for the years ended December 31, | ||||
3) | Includes audit-related fees. |
PRE-APPROVAL POLICIES AND PROCEDURES The Company reviews a schedule of audit and non-audit services expected to be performed by the Company’s independent registered public accounting firm in a given year. In addition, the Audit Committee may delegate authority to its Chairperson to pre-approve certain additional audit and non-audit services rendered by the Company’s independent registered public accounting firm (other than services that have been generally pre-approved by the Audit Committee), during the period between meetings of the Audit Committee. The Chairperson must report any such pre-approval decisions to the Audit Committee at its next scheduled meeting. During the year ended December 31, | ||
Recommendation of the Board of Directors The Board of Directors unanimously recommends a vote FOR the ratification of Deloitte & Touche LLP. |
AUDIT COMMITTEE REPORT | ||
In connection with the audited financial statements as of and for the year ended December 31, Submitted by: Richard D. Moss, Chair Curtis Kopf Robert B. Mercer J. Christopher Teets The information contained in the above report shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filings with the Securities and Exchange Commission, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act. | ||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information regarding beneficial ownership of our Common Stock as of February |
Name and Address of Beneficial Owner | Number of Shares (1) | Percent of Class (2) | ||||||||||||
Beneficial Owners of More than 5% | ||||||||||||||
Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (3) | 2,906,857 | 14.7 | % | |||||||||||
No. 268 South Zhongshan Road | ||||||||||||||
Shanghai 200010, P.R. China | ||||||||||||||
Red Mountain Capital Partners LLC (4) | 2,522,983 | 12.7 | % | |||||||||||
10100 Santa Monica Blvd, Suite 925 | ||||||||||||||
Los Angeles, CA 90067 | ||||||||||||||
Wynnefield Capital, Inc. (5) | 2,399,161 | 12.1 | % | |||||||||||
450 Seventh Avenue, Suite 509 | ||||||||||||||
New York, New York 10123 | ||||||||||||||
Prescott Group Capital Management, LLC (6) | 1,513,645 | 7.6 | % | |||||||||||
1924 South Utica, Suite 1120 | ||||||||||||||
Tulsa, OK 74104 | ||||||||||||||
Paradigm Capital Management, Inc. (7) | 1,150,087 | 5.8 | % | |||||||||||
9 Elk Street | ||||||||||||||
Albany, NY 12207 | ||||||||||||||
Directors and Named Executive Officers | ||||||||||||||
Terrence O. Moorehead, President and Chief Executive Officer (8) | 177,302 | * | ||||||||||||
Joseph W. Baty, Executive Vice President, Chief Financial Officer & Treasurer (9) | 85,116 | * | ||||||||||||
Bryant J. Yates, Executive Vice President, President Europe (10) | 70,026 | * | ||||||||||||
Mary Beth Springer, Director (11) | 62,141 | * | ||||||||||||
Robert B. Mercer, Director (12) | 55,855 | * | ||||||||||||
J. Christopher Teets, Chairman of the Board (13) | 54,167 | * | ||||||||||||
Robert D. Straus, Director (14) | 43,021 | * | ||||||||||||
Richard D. Moss, Director (15) | 37,616 | * | ||||||||||||
Lily Zou, Director (16) | 32,402 | * | ||||||||||||
Heidi Wissmiller, Director (17) | 4,399 | * | ||||||||||||
All Directors and Executive Officers as a group (10 persons) (18) | 622,045 | 3.1 | % | |||||||||||
* Less than 1 percent |
Name and Address of Beneficial Owner | Number of Shares (1) | Percent of Class (2) | ||||||||||||
Beneficial Owners of More than 5% | ||||||||||||||
Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (3) | 2,942,126 | 15.1 | % | |||||||||||
No. 268 South Zhongshan Road | ||||||||||||||
Shanghai 200010, P.R. China | ||||||||||||||
Wynnefield Capital, Inc. (4) | 2,399,161 | 12.3 | % | |||||||||||
450 Seventh Avenue, Suite 509 | ||||||||||||||
New York, New York 10123 | ||||||||||||||
Paradigm Capital Management, Inc. (5) | 1,157,296 | 5.9 | % | |||||||||||
9 Elk Street | ||||||||||||||
Albany, NY 12207 | ||||||||||||||
Vanguard Group, Inc. (6) | 1,032,694 | 5.3 | % | |||||||||||
PO Box 2600 V26 | ||||||||||||||
Valley Forge, PA 19482-2600 | ||||||||||||||
Prescott Group Capital Management, LLC (7) | 1,010,091 | 5.2 | % | |||||||||||
1924 South Utica, Suite 1120 | ||||||||||||||
Tulsa, OK 74104 | ||||||||||||||
Directors and Named Executive Officers | ||||||||||||||
Terrence O. Moorehead, President and Chief Executive Officer (8) | 363,678 | 1.9 | % | |||||||||||
Joseph W. Baty, Executive Vice President, Chief Financial Officer & Treasurer (9) | 139,503 | * | ||||||||||||
Mary Beth Springer, Director (10) | 66,909 | * | ||||||||||||
Dan Norman, Executive Vice President, President Asia (11) | 65,055 | * | ||||||||||||
Robert B. Mercer, Director (12) | 60,426 | * | ||||||||||||
J. Christopher Teets, Chairman of the Board (13) | 59,281 | * | ||||||||||||
Robert D. Straus, Director (14) | 47,980 | * | ||||||||||||
Richard D. Moss, Director (15) | 42,595 | * | ||||||||||||
Heidi Wissmiller, Director (16) | 8,113 | * | ||||||||||||
Shirley Wu, Director (17) | 2,640 | * | ||||||||||||
Curtis Koph, Director (18) | 867 | * | ||||||||||||
Tess Roering, Director (19) | 867 | * | ||||||||||||
All Directors and Executive Officers as a group (16 persons) (20) | 1,054,543 | 5.4 | % | |||||||||||
* Less than 1 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 | ||||
2) | Calculated based on | ||||
3) | On August 25, 2014, pursuant to a Stock Purchase Agreement, the Company issued 2,854,607 shares of its common stock to Fosun Pharma. Based on Schedule 13F-HR filed with the SEC on February 2, 2018, Fosun Pharma has sole voting and dispositive power over 2,854,607 shares. On December 11, 2019, the Company issued an additional 52,520 shares directly to Fosun for services of a former Director. On April 12, 2021, the Company issued an additional 711 shares directly to Fosun for services of a former Director On January 7, 2022 , the Company issued an additional 9,558 shares directly to Fosun for services of a former Director. On January 21, 2022, the Company issued an additional 25,000 shares directly to Fosun for options exercised related to the services of a former Director. Total shares outstanding for which Fosun Pharma has sole voting and disposition power is | ||||
4) | Based on Schedule 13F-HR filed with the SEC on | ||||
5) | Based on Schedule 13G/A filed with the SEC on February 7, 2022, Paradigm Capital Management, Inc. has sole voting and dispositive power over 1,157,296 shares. | ||||
6) | Based on Schedule 13G/A filed with the SEC on February 10, 2022, Vanguard Group, Inc. has sole voting and dispositive power over 1,032,694 shares. | ||||
7) | Based on Schedule 13G filed with the SEC on | ||||
8) | Includes vested awards for | ||||
9) | Includes vested awards for | ||||
10) | Includes options exercisable for | ||||
11) | Includes options exercisable for | ||||
12) | Includes vested awards for | ||||
13) | Includes options exercisable for 25,000 shares and vested awards for 16,906 shares of Common Stock within 60 days of February 23, 2022, and 17,375 shares that Mr. Teets holds directly. |
14) | Includes options exercisable for 25,000 shares and vested awards for | ||||
15) | Includes options exercisable for 25,000 shares and vested awards for | ||||
16) | Includes | ||||
17) | Includes vested awards for | ||||
18) | Includes | ||||
19) | Includes vested awards for 867 shares of Common Stock within 60 days of February 23, 2022. | ||||
20) | Includes options exercisable for 136,375 shares and | ||||
owned. |
DELINQUENT SECTION 16(A) REPORTS | ||
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 year ended December 31, |
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS | ||
The Board’s Audit Committee is responsible for review, approval, or ratification of “related-party transactions” as defined under applicable SEC rules that involve the Company or its subsidiaries. We have adopted written policies and procedures that apply to any transaction or series of transactions in which the Company or a subsidiary is a participant, the amount involved exceeds the lesser of (i) $120,000, or (ii) 1% of the average of the Company's total assets at year-end for the last two completed fiscal years (the "Threshold"), and a related party has a direct or indirect material interest. If the Audit Committee determines a related party has a material interest in a transaction, the Audit Committee may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. Since the beginning of fiscal |
HOUSEHOLDING OF PROXY MATERIALS | ||
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies. This year, a number of brokers with account holders who are our shareholders will be “householding” the proxy materials. A single proxy statement will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, you may (i) notify your broker, (ii) direct your written request to our Corporate Secretary at our principal executive offices at 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043, or (3) contact Nature’s Sunshine directly at (801) 341-7900. Shareholders who currently receive multiple copies of the proxy statement at their address and would like to request “householding” of their communications should contact their broker. In addition, we will promptly deliver, upon written or oral request at the address or telephone number above, a separate copy of the proxy statement and annual report to a shareholder at a shared address to which a single copy of these materials was delivered. |
OTHER MATTERS | ||
The Board of Directors knows of no other business that will be presented at the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that the proxies in the enclosed form will be voted in accordance with the judgment of the person voting the proxies. It is important that your shares be represented and voted at the Annual Meeting. I urge you to vote as promptly as possible by visiting the website http://www.proxyvote.com. Timely voting will ensure your representation at the Annual Meeting. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy. |
By Order of the Board of Directors | |||||
/s/ NATHAN G. BROWER | |||||
Lehi, Utah | NATHAN G. BROWER | ||||
March | Executive Vice President, General Counsel and Secretary |