INTRODUCTION TO PROPOSALS ONE THROUGH THREE:
APPROVAL OF AMENDMENTS TO ARTICLES OF INCORPORATION

General

PROPOSAL ONE:

AMEND THE 2012 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE BY 1,500,000 SHARES

Our Amended and Restated Articles of Incorporation (the "Articles" or "Articles of Incorporation") were filed on November 9, 2009. Our Articles currently provide for a classified Board of Directors consisting of three staggered classes of directors, as equal in number as possible. Additionally, our Articles currently provideis requesting that our directors may only be removed for cause byshareholders approve an amendment to Nature’s Sunshine Products, Inc. 2012 Stock Incentive Plan, to increase the vote of 75% of our shares then entitled to vote at an election of directors. Finally, our Articles currently provide that Article VI of our Articles (which governs the election and removal of our directors and other director related matters) cannot be amended without the affirmative vote of at least 75% of our shares then issued and outstanding and entitled to vote on the amendment. The Board of Directors believes it is in the best interests of our Company and the shareholders to amend the Articles to phase out the classification of the Board of Directors and provide instead for the annual election of directors and also to eliminate the supermajority voting standards related to removal of directors and amendments to Article VI of our Articles.

        Proponents of declassified boards and the elimination of supermajority voting requirements with respect to the removal of directors assert that directors are more accountable to shareholders when directors are elected annually and can be more easily removed by the shareholders. The Board of Directors believes that adopting the proposed changes to our Articles will support our ongoing efforts to adopt certain corporate governance policies that are considered to be "best practices" or shareholder friendly. A classified board structure and a supermajority voting requirement with respect to the removal of directors are also considered "anti-takeover" provisions that may limit the ability of a third party to gain control of a target entity.

Description of the Amendments

        Proposal One is being submitted for shareholder approval to amend our Articles to phase out the classification of the Board of Directors and provide instead for the annual election of directors. Proposal Two is being submitted for shareholder approval to amend our Articles to allow directors to be removed for cause with the affirmative vote of at least a majority, rather than 75%, of the shares then entitled to vote at an election of directors. Proposal Three is being submitted for shareholder approval to amend our Articles to remove the prohibition with respect to amendments to Article VI of our Articles without the affirmative vote of at least 75% of our shares then issued and outstanding and entitled to vote on the amendment and to replace that with a majority voting standard. You will have an opportunity to vote separately on each of the proposed amendments to our Articles. This approach will allow you to consider and vote on each proposal so that any and all amendments approved by the holders of the required number of shares of Common Stock mayreserved for issuance by 1,500,000 shares. The Company’s 2009 Stock Incentive Plan, previously approved by the shareholders, remains effective and the approval by the shareholders of the amendment to the 2012 Stock Incentive Plan will not terminate the 2009 Stock Incentive Plan or any outstanding grants issued thereunder. As of December 8, 2014, 16,433 shares remained available for issuance of new grants under the 2009 and 2012 Stock Incentive Plans. However, to the extent any shares of Common Stock subject to awards under the 2009 Stock Incentive Plan that, after the effective date of the 2009 Stock Incentive Plan, are not purchased or are forfeited or reacquired by the Company or are otherwise not delivered due to termination or cancellation of the award, such shares of Common Stock will be implemented. If these proposalsadded to the share reserve available for award and issuance under the 2012 Stock Incentive Plan, up to a maximum of 400,000 shares.

Our incentive compensation programs play a pivotal role in our efforts to attract and retain key personnel essential to our long-term growth and financial success. For that reason, we are approved,proposing the Boardamendment of Directors intendsthe 2012 Stock Incentive Plan to amend certain correspondingpermit additional grants. We have structured the 2012 Stock Incentive Plan to provide us with flexibility in designing equity incentive programs in an environment where a number of companies have moved from traditional option grants to other stock or stock-based awards such as restricted stock, restricted stock units and performance awards. Accordingly, with the 2012 Stock Incentive Plan, we will have a broad array of equity incentives to utilize for purposes of attracting and retaining the services of key individuals.

Summary Description of 2012 Stock Incentive Plan

The following is a summary of the principal features of the 2012 Stock Incentive Plan. All references to the 2012 Stock Incentive Plan in this Section refer to the 2012 Stock Incentive Plan, as amended by Amendment No. 1 to the 2012 Stock Incentive Plan.  This description is intended to be a summary of the material provisions of the Company's Bylaws, which will2012 Stock Incentive Plan. It does not purport to be necessary to effect fullya complete description of all the changes contemplated by the proposals. The complete text of eachprovisions of the proposed amendments to the Articles appears in the proposal related to that amendment. You are urged to read the complete text of each proposed amendment, as the discussion of the proposed amendments2012 Stock Incentive Plan and is qualified in its entirety by reference to the text of each proposed amendment.

Effectiveness of the Amendments

        Each of the proposed amendments requires shareholder approval. Each proposed amendment that is approved by the requisite vote of the shareholders will become effective on the date that we file an

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amendment to the Articles with the Utah Division of Corporations and Commercial Code. We intend to complete these filings immediately following the Annual Meeting. Any proposed amendment which is not approved by the requisite vote of the shareholders will not be enacted.

PROPOSAL ONE:
APPROVAL OF AMENDMENTS TO THE ARTICLES OF INCORPORATION TO PHASE OUT THE
CLASSIFIED BOARD OF DIRECTORS

        Our Board of Directors is requesting that the shareholders approve amendments to the Articles that will phase out the classification of the Board of Directors and provide instead for the annual election of all directors.

Purpose and Effect of the Proposed Amendments

        The Board of Directors took into consideration arguments in favor and against continuation of the classified board and determined that it is in the Company's best interests to declassify its Board of Directors. During its review, the Board considered the advantages of maintaining a classified board in light of our current circumstances, including that a classified board may promote continuity and stability and provide protection against certain abusive takeover tactics. While the Board believes that these are important considerations, the Board also considered potential advantages of declassification in light of our current circumstances, including the ability of shareholders to evaluate our directors annually. Annually elected boards are perceived by many institutional shareholders as increasing the accountability of directors to such shareholders. After carefully weighing all of these considerations, the Board approved the proposal to declassify our board.

        Our current Articles provide for a classified Board of Directors consisting of three staggered classes of directors, as equal in number as possible. Shareholders generally will elect a portion of our Board of Directors each year to serve until the third annual meeting of shareholders following the annual meeting in which they are elected. A director elected by the Board of Directors to fill a vacancy in a class will serve until the completion of the term of the director he or she succeeds.

        The proposed amendments would alter the second paragraph of Article VI of the current Articles as follows:

The Board of Directors shall be divided into three classes as nearly equal in number as may be feasible hereby designated as Class I Class II and Class III with the term of office of one class expiring at each annual meeting. Each director shall be elected to serve a term ending at the third annual meeting of shareholders following the annual meeting of shareholders at which such director was elected or until his or her earlier death, resignation or removal provided, however, that (i) the directors in Class I at the time of the effectiveness of these Restated Articles shall serve for a term ending on the Corporation's first annual meeting of shareholders following the effectiveness of these Restated Articles, (ii) the directors in Class II at the time of the effectiveness of these Restated Articles shall serve for a term ending on the Corporation's second annual meeting of shareholders following the effectiveness of these Restated Articles and (iii) the directors in Class III at the time of the effectiveness of these Restated Articles shall serve for a term ending on the Corporation's third annual meeting of shareholders following the effectiveness of these Restated ArticlesAll directors elected by shareholders at and after the 2013 annual meeting of shareholders shall hold office until the next annual meeting of shareholders. Directors whose terms do not expire at the 2013 annual meeting of shareholders shall hold office until the annual meeting for the year in which the director's term expires. When a vacancy on the Board of Directors is filled, the director chosen to fill that vacancy shallcomplete the term of the director he or she succeeds (or shall complete the term of the class of directors in which the new directorship was created)serve until the next annual meeting of shareholders. Notwithstanding the foregoing, each director

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shall hold office until his or her successor shall have been elected and qualified or until such director's earlier death, resignation or removal. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office.When the number of directors is changed, each director then serving as such shallnevertheless continue as a director of the class of which he or she is a member until the expiration of his or her current term and any newly created directorships or any decrease in directorships shall be so assigned among the classes by a majority of the directors then in office though less than a quorum as to make all classes as nearly equal in number as may be feasible.

        If the declassification amendments are approved by the shareholders at the meeting, the current classified Board will be declassified over a two-year period, as follows:

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current Class I directors will be elected for a one-year term, and will stand for re-election at our 2014 annual shareholder meeting,



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current Class II directors previously elected in 2011 will serve out their current three-year terms, and stand for election to a one-year term at our 2014 annual shareholder meeting,



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current Class III directors previously elected in 2012 will serve out their current three-year terms, and stand for election to a one-year term at our 2015 annual shareholder meeting, and



•

any other director appointed by the Board after the annual meeting will be appointed for an initial term expiring at the next annual shareholder meeting.

Accordingly, our Board will be fully declassified commencing with the 2015 annual shareholder meeting.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends a vote FOR the proposal to amend the Articles to phase out the classified Board of Directors.

PROPOSAL TWO:
APPROVAL OF AMENDMENTS TO THE ARTICLES OF INCORPORATION TO ELIMINATE
SUPERMAJORITY VOTING REQUIREMENT WITH RESPECT TO REMOVAL OF DIRECTORS

        Our Board of Directors is requesting that the shareholders approve amendments to the Articles that will eliminate the supermajority voting requirement with respect to removal of directors for cause and replace it with a majority voting standard.

Purpose and Effect of the Proposed Amendments

        Our Articles currently provide that our directors may only be removed for cause by the vote of 75% of the shares then entitled to vote at a meeting of shareholders for an election of directors. This proposal eliminates the 75% requirement and replaces it with a majority voting standard. This change will make it easier for shareholders to remove directors of the Company for cause. This change further coincides with the declassification of our Board of Directors to ensure accountability between directors and shareholders. Moreover, by eliminating the supermajority vote, we ensure that the will of a majority of our shareholders is controlling with respect to director retention.

        The proposed amendments would alter the third paragraph of Article VI of the current Articles as follows:

The shareholders may remove one or more directors at a meeting called for that purpose if notice has been given that a purpose of the meeting is such removal. Notwithstanding the preceding sentence, directors may only be removed for cause and for the affirmative vote of at

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leastthree-fourths (75%)a majority of the shares then entitled to vote at an election of directors.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends a vote FOR the proposal to amend the Articles to eliminate the supermajority voting requirement with respect to removal of directors for cause and replace it with a majority voting standard.

PROPOSAL THREE:
APPROVAL OF AMENDMENTS TO THE ARTICLES OF INCORPORATION TO ELIMINATE
SUPERMAJORITY VOTING REQUIREMENT WITH RESPECT TO AMENDMENTS TO
ARTICLE VI OF THE CURRENT ARTICLES

        Our Board of Directors is requesting that the shareholders approve amendments to the Articles that will eliminate the supermajority voting requirement with respect to amendments to Article VI of the current Articles and adopt a majority voting standard.

Purpose and Effect of the Proposed Amendments

        Our Articles currently provide that Article VI of our Articles cannot be amended without the affirmative vote of at least 75% of our shares then issued and outstanding and entitled to vote on the amendment. This provision of our current Articles was originally intended to, among other things, prevent a simple majority of our shareholders from eliminating the classified board structure, lowering the vote required to remove directors for cause, or make other changes to other matters concerning our directors set forth in Article VI of our Articles. Because we are currently proposing amendments to the Articles to phase out the classified board structure and eliminate the supermajority voting requirement with respect to removal of directors for cause, our Board of Directors has determined it is appropriate to also amend our Articles so that Article VI of our Articles may in the future be amended by the affirmative vote of the holders of at least a majority of our shares then outstanding and entitled to vote on the amendment. Article VI also addresses several other director related matters, including providing the Board with the authority to (i) appoint a director to fill a vacancy and (ii) fix the number of directors on the Board from time to time. As a result of the proposed amendment, any of these provisions could be amended by the affirmative vote of the holders of at least a majority of our shares then outstanding and entitled to vote on the amendment. A full text of Article VI can be found in a copy of our Articles, which was filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q on November 9, 2009.

        The proposed amendments would alter Article IX of the current Articles as follows:

The Corporation reserves the right to amend these Restated Articles in any manner provided herein or permitted by the Revised Act, and all rights and powers, if any, conferred herein on shareholders, directors and officers are subject to the reserved power. Notwithstanding the foregoing, without the affirmative vote of the holders of record of a majority of the Corporation's shares then outstanding and entitled to vote on the amendment, the Corporation shall not alter, amend or repealArticle VI, Article VII, Article VIII or Article IX.Notwithstanding anything to the contrary in these Restated Articles, Article VI shall not be subject to amendment or repeal either directly or through or by amendment of this Article IX without the affirmative vote of the holders of record of at least three-fourths (75%) of the Corporation's shares then issued and outstanding and entitled to vote on the amendment.

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Recommendation of the Board of Directors

The Board of Directors unanimously recommends a vote FOR the proposal to amend the Articles to eliminate the supermajority voting requirement with respect to amendments to Article VI of the current Articles.

PROPOSAL FOUR:
ELECTION OF DIRECTORS

General

        Directors are elected at annual meetings of shareholders. Our Articles of Incorporation currently provide for a classified Board of Directors consisting of three staggered classes of directors, as equal in number as possible. Under our current Articles of Incorporation, shareholders generally will elect a portion of our Board of Directors each year to serve until the third annual meeting of shareholders following the annual meeting in which they are elected. A director elected by the Board of Directors to fill a vacancy in a class will serve until the completion of the term of the director he or she succeeds.

        On March 6, 2013, we announced that Michael D. Dean has resigned as the Chief Executive Officer and Director of the Company, effective March 31, 2013. Also, on March 6, 2013, our Board of Directors appointed Gregory L. Probert, the Executive Chairman of the Board of Directors, as the Interim Chief Executive Officer of the Company, effective April 1, 2013.

Nominees to Serve as Directors

        The current members of the Board of Directors, who are nominees for election to the Board, are as follows:

        If Proposal One, which would phase out the classification of our Board of Directors and provide instead for the annual election of directors, is approved by the requisite vote of shareholders, then the directors elected at the Annual Meeting shall be elected for a one-year term expiring at our next annual meeting of shareholders, which is expected to occur in 2014. If Proposal One is approved by the requisite vote of shareholders, a director elected by the Board of Directors to fill a vacancy will serve until the next annual meeting of shareholders. If Proposal One is not approved by the requisite vote of shareholders, then the directors elected at the Annual Meeting will be elected as Class I Directors for a three-year term expiring at the 2016 annual meeting of shareholders.

        The principal occupations and business experience, for at least the past five years, of each nominee for election to the Board as Directors are as follows:

        Willem Mesdag.    Mr. Mesdag is the Managing Partner of Red Mountain Capital Partners LLC, an investment firm based in Los Angeles, California. Prior to founding Red Mountain in 2002, Mr. Mesdag was a Partner and Managing Director of Goldman, Sachs & Co., which he joined in 1981 from Ballard, Spahr, Andrews & Ingersoll where he was a securities lawyer. He currently serves on the Boards of 3i Group plc, and Encore Capital Group Inc. Mr. Mesdag received his J.D. from the Cornell Law School in 1978 and his B.A. from Northwestern University in 1974. Having had an extensive career in international investment banking and finance and having served on the boards of a number of U.S. and European public companies, Mr. Mesdag brings to the Board significant expertise related to business and financial issues.

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        Jeffrey D. Watkins.    Mr. Watkins is currently the President of Prescott Group Capital Management, LLC, a registered investment advisor, and serves as the co-manager of the Prescott Mid Cap, L.P. Mr. Watkins formerly served as a Director of Annuity and Life Re, Ltd., from 2003 until October 2009, and as a Director of Carreker Corporation, a bank consulting company, from March 2006 until April 2007. Prior to joining Prescott in July 2001, Mr. Watkins served for 18 years as a portfolio manager for Capital Advisors, Inc., a registered investment advisor. Mr. Watkins received his B.S.B.A. from the University of Tulsa in 1983. As a result of these and other professional experiences, Mr. Watkins possesses particular knowledge and experience in finance and capital structure, which strengthens the Board's collective qualifications, skills and experience.

Continuing and Other Directors

        Our other current Directors are as follows:

        The principal occupations and business experience, for at least the past five years, of each continuing director after the Annual Meeting is as follows:

        Robert B. Mercer.    Mr. Mercer served as Vice President Dealer Operations for Mazda North America from May 2007 until February 2009 and as Vice President, General Counsel and Secretary for Mazda North America from November 2002 until May 2007, a position he also held with Volvo North America for approximately 20 years prior. While at Mazda, Mr. Mercer was a member of its Executive and Audit Committees, and was also responsible for Internal Audit. He has been elected to several corporate and charitable boards and currently serves as a member of the Board of Visitors of Duke Medicine, and as a Board of Director member of the Utah Chapter of Juvenile Diabetes Research Foundation. Mr. Mercer received his J.D. from the University of Maryland School of Law in 1976 and his B.A. from Duke University in 1973. Mr. Mercer brings significant operational, legal and corporate governance experience to the Board, including experience with public, consumer-oriented companies, which supplements the Board's skills in these key areas.

        Gregory L. Probert.    Mr. Probert has served as the Executive Chairman of the Board of Directors since January 2013. On March 6, 2013, he was appointed to serve as our Interim Chief Executive Officer effective April 1, 2013. He served as the Executive Vice Chairman of the Board of Directors from June 2011 to December 2012, and he served as an independent consultant to the Company from September 2010 to June 2011. Previously, he was Chairman of the Board and Chief Executive Officer of Penta Water Company from 2008, President and Chief Operating Officer of Herbalife International of America from 2003 to 2008, Chief Executive Officer of DMX Music from 2001 to 2003. Prior to

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that, he held various senior positions at the Walt Disney Company from 1988. Mr. Probert received his B.A. from the University of Southern California in 1979. Mr. Probert brings to our Board significant direct selling experience, as well as extensive leadership and operational management skills in global consumer-oriented businesses, which strengthens the Board's aptitude in these key areas.

        Albert R. Dowden.    Mr. Dowden serves as a director of the Invesco Mutual Funds, various Reich & Tang mutual funds, and as a director of Homeowners of America Holding Corporation and Homeowners of America Insurance. Mr. Dowden is a founder and has served as managing director of The Boss Group, a Houston based private investment and management firm, since 2004. Mr. Dowden has previously served as a director of The Hertz Corporation, Volvo Group North America, Magellan Insurance Co., Genmar, National Media Corp. and CompuDyne Corp. Prior to these positions, Mr. Dowden served as President and Chief Executive Officer of Volvo Group North America, Inc. and Senior Vice President of its Swedish parent company, AB Volvo until 1998. Prior to joining Volvo in 1974 as General Counsel to its North American operations, he practiced law with the New York based international law firm of Rogers & Wells (now Clifford Chance). Mr. Dowden received his J.D. from New York University School of Law in 1966 and his B.A. from Middlebury College in 1963. Mr. Dowden's extensive operational, legal and corporate governance experience involving consumer-oriented public companies enhances the Board's knowledge and skill in these key areas.

        Mark R. Genender.    Mr. Genender is a Senior Managing Director in the principal investment area of Guggenheim Partners LLC, based in Santa Monica, California. Prior to joining Guggenheim Partners in February 2013, he was a Partner in Red Mountain Capital Partners LLC which he joined in 2011, a Managing Director in the Retail and Consumer Group at the Carlyle Group which he joined in 2010, and co-founded and was a Managing Director at Star Avenue Capital, a consumer growth equity vehicle which he formed in 2008. From 1996 to 2008, Mr. Genender was a Managing Director at Fenway Partners, LLC, both in New York and later in Los Angeles. Previous to Fenway, Mr. Genender held senior sales and marketing positions with Nabisco Holdings Inc. and PepsiCo Inc., and served as a Financial Analyst in the M&A department with Goldman, Sachs & Co. in London and New York. Mr. Genender received his M.B.A from INSEAD in 1991 and his A.B. from Princeton University in 1987. Mr. Genender's broad operational, financial and marketing experience, particularly with consumer-oriented companies, strengthens the Board's aptitude and collective qualifications in these areas of particular relevance to the Company.

        Kristine F. Hughes.    Ms. Hughes has served as the Vice Chairperson of our Board of Directors since January 2013. Previously, she served as the Chairperson of our Board of Directors from December 1984 to December 2012. She was a co-founder in 1972 of Hughes Development Corporation, a predecessor of our Company, and has served as an officer or director of our Company and its predecessors since 1980. Ms. Hughes is the spouse of Eugene L. Hughes, one of our founders and a director emeritus. Ms. Hughes' extensive experience as a co-founder, senior officer and member of the Board of Directors provides her with industry-specific management and governance knowledge and skills that strengthen the Board's collective qualifications, skills and experience.

        Other Director not continuing after the Annual Meeting:

        Michael D. Dean.    Mr. Dean is the Chief Executive Officer of our Company and serves as a member of the Company's Board of Directors. On March 6, 2013, we announced that Mr. Dean resigned as the Chief Executive Officer and Director of the Company, effective March 31, 2013. He has served as a member of our Board of Directors since May 2009. Prior to his appointment as President and Chief Executive Officer in July 2010, he served as the Chief Executive Officer of Mediaur Technologies from 2003 to 2010. Previously, he was Executive Vice President of ABC Cable Networks, Senior Vice President of Corporate Strategic Planning and Development at the Walt Disney Company and a strategy consultant with Bain & Company. Mr. Dean received his B.A. in Business Administration from the University of California, Berkeley in 1986 and his M.B.A. from Harvard

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Business School in 1992. As a result of these and other professional experiences, Mr. Dean brings to our Board of Directors significant leadership and operational management skills combined with significant experience in global, consumer-oriented businesses.

CORPORATE GOVERNANCE

Director Independence

        The Board of Directors has determined that all of its current directors and nominees for election at the Annual Meeting, except Mr. Dean, Mr. Probert and Ms. Hughes, are independent directors under the current standards for "independence" established by NASDAQ. In making this determination, our Board considered Mr. Mesdag's affiliation with Red Mountain Capital Management, Inc., one of our shareholders, Mr. Watkins' affiliation with Prescott Group Capital Management, LLC, one of our shareholders, and Mr. Genender's prior relationship with Red Mountain Capital Management, Inc.

Board Committees

        The Board of Directors has three standing committees: Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Each standing committee operates under a written charter adopted by the Board. You can access the current committee charters on our website atwww.natr.com or by writing to our Corporate Secretary at our principal executive offices at 2500 West Executive Parkway, Lehi, Utah 84043.

        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.

        The Audit Committee.    The Audit Committee oversees our financial statements, preparation process and related compliance matters and performance of the internal audit function. The Committee is also responsible for 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 each current member of our Audit Committee is an audit committee financial expert, as that term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC.

        The Compensation Committee.    The Compensation Committee reviews compensation policies applicable to executive officers and board members, establishes the compensation to be paid to our Chief Executive Officer and Executive Chairman, determines the compensation and benefits of 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 establishes the compensation to be paid to our Chief Executive Officer without input from the Chief Executive Officer. At the discretion of the Committee, compensation packages for the Chief Executive Officer, when appropriate, are submitted to the Board of Directors for final approval. In addition, the Compensation Committee evaluates the performance of our

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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.

        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 retained the services of F.W. Cook, a leading compensation consulting firm, to provide advice and recommendations regarding the Company's executive compensation programs, including equity compensation practices and cash compensation structure for executive officers. F.W. Cook also provides advice to the Compensation Committee with respect to the compensation and benefits of Directors of the Board.

        The Nominating and Corporate Governance Committee.    The Nominating and Corporate Governance Committee makes recommendations to the Board of Directors about the size of the Board or any of its committees, identifies and recommends candidates for the Board and committee membership, evaluates nominations received from shareholders, and develops and recommends to the Board corporate governance principles applicable to our Company. In selecting or recommending candidates, the Nominating and Corporate Governance Committee takes into consideration any criteria approved by the Board, which may be set forth in any corporate governance guidelines adopted by the Board and such other factors as it deems appropriate. These factors may include judgment, skill, diversity, experience with businesses and other organizations of comparable size, the interplay of the candidate's experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any of its committees.

        The Nominating and Corporate Governance Committee may also consider director candidates proposed by management and by shareholders of the Company. Recommendations for consideration by the Nominating and Corporate Governance Committee, including recommendations from shareholders of the Company, should be sent in writing, together with appropriate biographical information concerning each proposed nominee, to our Corporate Secretary at our principal executive offices at 2500 West Executive Parkway, Suite 100, Lehi, Utah 84043. The Nominating and Corporate 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 sixtieth (60^th), nor earlier than the ninetieth (90^th) day, from the date of the annual meeting. This notice must also include certain information relating to the nominee and the nominating shareholders as described more fully in our Bylaws.

Board Structure and Risk Oversight

Leadership Structure of the Board

        Under our bylaws, the Board is not required to appoint our Chief Executive Officer as the Chairman of the Board, and the Board does not have a policy on whether the roles of Chief Executive Officer and Chairman of the Board should be separate. Prior to March 31, 2013, two different individuals served in these two positions: Michael Dean as the Chief Executive Officer and Gregory Probert as the Executive Chairman of the Board. On March 6, 2013, we announced the resignation of Mr. Dean as our Chief Executive Officer and Director, effective as of March 31, 2013, and the appointment of Mr. Probert as the Interim Chief Executive Officer, effective as of April 1, 2013. Accordingly, Mr. Probert will serve as both our principal executive officer and Executive Chairman of the Board beginning on April 1, 2013. The Board believes that Mr. Probert's role as the Interim Chief Executive Officer, while temporary as the Board seeks to identify a new Chief Executive Officer, will provide stability and continuity to the day-to-day operations of the Company in a time of transition given his in-depth understanding of our business operations.

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        As our Executive Chairman, Mr. Probert is responsible for chairing Board meetings and meetings of shareholders, setting the agendas for Board meetings and providing information to the Board members in advance of meetings and between meetings. Prior to his resignation as the Chief Executive Officer and Director, Michael Dean also served as a Director on our Board. In addition, all of our directors are independent under applicable NASDAQ corporate governance rules, except for Ms. Hughes, Mr. Probert, and, prior to his resignation as Director effective March 31, 2013, Mr. Dean. The Board believes that the independent directors provide effective oversight of management. In addition to feedback provided during the course of Board meetings, the independent directors have regular executive sessions without any members of management. Furthermore, the independent directors have selected Willem Mesdag as the "Lead Independent Director" to coordinate and manage the activities of independent directors. The specific responsibilities of the Lead Independent Director include:

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



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



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



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



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



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

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

Board's Role in the Oversight of Risk Management

        The Board of Directors is primarily responsible for assessing risks associated with the Company's business. However, the Board delegates certain of such responsibilities to other groups. The Audit Committee is responsible for reviewing with management the Company's policies and procedures with respect to risk assessment and risk management, including reviewing certain risks associated with our financial and accounting systems, accounting policies, investment strategies, regulatory compliance, insurance programs, and other matters. Under the direction of the Audit Committee, the Company's internal audit department assists the Company in the evaluation and improvement of the effectiveness of risk management. In addition, under the direction of the Board and certain of its committees, the Company's legal department assists in the oversight of corporate compliance activities. As discussed under "Risk Assessment of Compensation Programs," the Compensation Committee also reviews certain risks associated with our overall compensation program for employees to help ensure that the program does not encourage employees to take excessive risks. In addition, the Nominating and Corporate 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.

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Board Meetings in Fiscal Year 2012

        During fiscal year 2012, our Board of Directors held four formal regular meetings, as well as five telephonic meetings and numerous informal informational sessions. Each member of the Board of Directors during fiscal year 2012 attended or participated in 75 percent or more of the aggregate of (i) the total number of regular meetings of the Board of Directors held during the fiscal year or the portion thereof following such person's appointment to the Board and (ii) the total number of meetings held by all committees of the Board on which such director served during the fiscal year or the portion thereof following such person's appointment to one or more of those committees.

        During fiscal year 2012, the Audit Committee held five formal meetings, as well as numerous informal informational sessions, the Compensation Committee held four formal meetings, as well as numerous informal meetings, and the Nominating and Corporate Governances Committee held two formal meeting during fiscal year 2012.

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 of shareholders, directors are encouraged to attend such meetings. At the annual meeting of shareholders held in fiscal year 2012, all eight of our directors were in attendance.

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 2500 West Executive Parkway, 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.

Code of Ethics

        We adopted a revised Code of Conduct on March 4, 2011 that applies to all of our employees, including our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and senior financial and accounting officers. Among other matters, the Code of Conduct establishes policies to deter wrongdoing and to promote (i) both honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest, (ii) compliance with applicable laws, rules and regulations, (iii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with or submit to the SEC and in public communications and (iv) prompt internal reporting of violations of the Code of Conduct and accountability for adherence to the Code of Conduct. In addition, we provide an ethics line for reporting any violations of the Code of Conduct on a confidential basis. A copy of our Code of Conduct is available on our website atwww.natr.com or by writing to our Corporate Secretary at our principal executive offices at 2500 West Executive Parkway, Suite 100, Lehi, Utah 84043. We intend to post on our internet website all amendments to, or waivers from, our Code of Conduct that are required to be disclosed by applicable law.

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Director Compensation

        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 the 2012 fiscal year.

        Under the compensation plan for non-employee members of the Board of Directors, which was adopted on SeptemberStock Incentive Plan, including Amendment No. 1 2009 and was in effect prior to May 4, 2012, each newly elected non-employee director receives a one-time option grant to purchase 25,000 shares of Common Stock upon his or her election to the Board. All non-employee directors receive an annual retainer of $50,000 for their service on the Board and receive no additional fees paid for attendance at meetings of the

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Board or Company events atStock Incentive Plan, which a director's attendance is required. Directors that are appointed during a fiscal year receive a pro-rata portion of the annual retainer based on their period of service during the fiscal year. Our Chairperson receives an additional annual retainer of $50,000. Each non-employee director serving on the Audit Committee receives an additional annual retainer as follows: chairperson—$15,000; other committee members—$10,000. Each non-employee director serving on the Compensation Committee receives an additional annual retainer as follows: chairperson—$10,000; other committee members—$5,000. The chairperson of the Nominating and Corporate Governance Committee receives an additional annual retainer of $10,000. All cash compensation is paid on a monthly basis.

        On May 3, 2102, the Board adopted a new non-employee director compensation plan to be effective May 4, 2012. The revised program was recommended by the Compensation Committee based on a review and recommendation by F.W. Cook and provides for the following. Each non-employee director will receive an annual grant of a restricted stock unit award (with the first such grant made on May 4, 2012) with a grant date value equal to $45,000 (based on the closing selling price of our common stock on the grant date). Each such award will vest in 12 equal successive monthly installments over the 1-year period measured from the grant date subject to continued Board service. Each award will accelerate in full 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 3-year period measured from the grant date.

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

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

        The table below summarizes the equity-based awards held by the Company's non-employee directors as of December 31, 2012.

Recommendation of the Board of Directors

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

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PROPOSAL FIVE:

RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

        Our Board of Directors has, subject to shareholder approval, retained Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2013. Deloitte & Touche LLP also served as our independent registered public accounting firm for fiscal year 2012. A representative of Deloitte & Touche LLP is expected to be present at the Annual Meeting. He or she will have an opportunity to make a statement at the Annual Meeting and will be available to respond to appropriate questions.

Fees Paid to Independent Registered Public Accounting Firm

        We engaged Deloitte & Touche LLP as our independent registered public accounting firm on February 2, 2007. The table below presents the aggregate fees incurred by the Company during the fiscal years ended December 31, 2012 and 2011 for professional services rendered by Deloitte & Touche LLP. All of the fees below were approved by the Audit Committee. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence and has concluded that it is.

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 fiscal year. In addition, the Audit Committee delegates authority to its Chairperson to pre-approve certain additional audit and non-audit services rendered by 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, 2012, 100 percent of the aggregate amounts set forth above under the captions "Audit-Related Fees," "Tax Fees," and "All Other Fees" were pre-approved by the Chairperson of the Audit Committee and subsequently reported to the Audit Committee in accordance with the procedures set forth above.

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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, 2012, the Audit Committee (i) has reviewed and discussed the audited financial statements with management, (ii) has discussed with the independent registered public accounting firm the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T, or any successful standard and (iii) has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm the firm's independence. Based on the foregoing review and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012 for filing with the SEC.

Submitted by:
Robert B. Mercer
Albert R. Dowden
Mark R. Genender

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 Securities Exchange Act of 1934, as amended.

PROPOSAL SIX:

ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION

        Under the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July 2010 (the "Dodd-Frank Act"), the Company's shareholders are entitled to vote to approve the compensation of our named executive officers, as disclosed in this proxy statement in accordance with the standards established under Item 402 of Regulation S-K under the Exchange Act. Based upon the outcome of our 2011 say-on-pay frequency vote, the Company will hold an annual advisory say-on-pay vote until the next say-on-pay frequency vote which, in accordance with applicable law, will occur no later than the Company's annual meeting of stockholders in 2017. However, the shareholder vote on executive compensation is an advisory vote only, and it is not binding on the Company or our Board or the Compensation Committee.

        As described in the section titled "Compensation Discussion and Analysis," the Company's executive compensation programs are designed to attract, retain and reward executives whose contributions support the Company's long-term success by linking Company performance to executive compensation. These programs have been designed to ensure alignment of management's action with shareholder interests. Shareholders are urged to read the "Compensation Discussion and Analysis" section of this proxy statement, which more thoroughly discusses how we believe our compensation policies and procedures complement our compensation philosophy. The Board and our Compensation

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Committee believe that these policies and procedures are effective in implementing our compensation philosophy and in achieving its goals.

        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 executive officers.

        The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as describedAppendix A in this proxy statement.

 We are asking our shareholders to vote for the following resolution:

        "RESOLVED, the compensation of the Company's named executive officers as disclosed in the proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the various compensation tables and the accompanying narrative discussion, is hereby APPROVED."

        This vote is only advisory, and will therefore not be binding upon the Company or our Board. However, the Board encourages input from the Company's shareholders and urges all shareholders to vote their shares on this matter.

Administration.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.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth information regarding beneficial ownership of our Common Stock as of February 1, 2013, except as otherwise stated, by (1) each person who is known by us to beneficially own more than five percent of the outstanding shares of our Common Stock, (2) each of our directors, (3) each of our named executive officers in the Summary Compensation Table, and (4) all directors and executive officers of the Company as a group. As of February 1, 2013, there were 15,810,359 shares of Common Stock issued and outstanding. To our knowledge and except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to community property laws where applicable. Unless we indicate

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otherwise, each holder's address is c/o Nature's Sunshine Products, Inc., 2500 West Executive Parkway, Suite 100, Lehi, Utah 84043.

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Changes in Control

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

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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Exchange Act requires the Company's directors, officers and persons who beneficially own more than 10 percent of a registered class of the Company's equity securities, to file initial reports of ownership on Form 3 and changes in ownership on Forms 4 or 5 with the SEC. Such directors, officers and 10 percent shareholders also are required by SEC rules to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its review of the copies of such forms furnished or available to the Company, the Company believes that its directors, officers and 10 percent shareholders complied with all Section 16(a) filing requirements for the fiscal year ended December 31, 2012, except as follows: Michael D. Dean, Stephen M. Bunker and Jamon A. Jarvis each filed one late report on Form 4 covering two reportable transactions; Willem Mesdag, Mark R. Genender, Albert R. Dowden, Kristine F. Hughes, Robert R. Mercer, Gregory L. Probert, and Jeffrey D. Watkins each filed one late report on Form 4 covering one reportable transaction.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

        This Compensation Discussion and Analysis provides disclosure about the policies and objectives underlying the compensation programs for our executive officers. Accordingly, we will address and analyze each element of the compensation provided to our Chief Executive Officer, our Chief Financial Officer and the other executive officers named in the Summary Compensation Table which follows this discussion; these individuals are referred to as the named executive officers.    The Compensation Committee of our Board of Directors generally administershas the compensation programsexclusive authority to administer the 2012 Stock Incentive Plan. The term “plan administrator,” as used in this summary, means the Compensation Committee.  The plan administrator has complete discretion to determine which eligible individuals are to receive awards, the types of awards to be granted to each participant, the number of shares to be covered by (or the method by which payments or other rights to be calculated in connection with) each award, and the terms and conditions of any award, including the vesting provisions of an award. The plan administrator may grant awards under the 2012 Stock Incentive Plan for no cash consideration or for any cash or other consideration as may be determined by the plan administrator or required by applicable law. Awards may be granted either alone or in addition to, in tandem with or in substitution for any other award granted under the 2012 Stock Incentive Plan or any other of our named executive officers. However,plans or the plans of an affiliate in the plan administrator’s discretion. Awards granted under the 2012 Stock Incentive Plan may be settled in such form or forms as the plan administrator determines appropriate, including cash, shares of our common stock, promissory notes, other securities or awards under the 2012 Stock Incentive Plan, other property, or a combination of the foregoing methods, and may be made in a single payment or transfer, in installments or on a deferred basis as determined by the plan administrator.

Eligibility.    Employees, officers, consultants, independent contractors and non-employee members of our Board of Directors approvesin our employ or service or in the base salary and cash bonusemploy or service of our Chief Executive Officer.

Executive Summary

        The Company's overarching compensation goal isaffiliates (whether now existing or hereafter established) are eligible to reward our executives in a manner that supports a strong pay-for-performance philosophy while maintaining an overall level of compensation that allows us to attract and retain a talented executive team.

        Our compensation decisions for 2012 and their relation to Company performance may be summarized as follows:

•

The Company experienced some financial growth for 2012 in a challenging global economic environment. The Company's consolidated net sales decreased 0.1 percent to $367.5 million in 2012. However, in local currency, net sales increased by 1.0 percent compared to 2011 as fluctuations in foreign exchanges rates had a $4.1 million unfavorable impact on net sales for 2012. The Company excludes the impact of foreign exchange rates when assessing its financial results for compensation purposes. Operating income increased approximately $13.5 million during the year ended December 31, 2012. However, excluding one-time contract termination costs of $14.7 million that occurred in 2011, consolidated operating income decreased by $0.9 million, or 2.6 percent in 2012. Similarly, excluding one-time contract termination costs in 2011, consolidated operating income as a percentage of net sales was relatively flat with 9.3% in 2012 compared to 9.5% in 2011. This financial performance in 2012 as compared to 2011 corresponds to the decrease in executive cash bonuses for 2012 as compared to 2011.



•

We target total direct compensation at the peer median; however target cash compensation is weighted at the 25th percentile.



•

We continue to structure a substantial portion of the total direct compensation of our named executive officersparticipate in the form of annual performance based cash incentive and long-term

Stock Incentive Plan.

Compensation Policy for Executive OfficersSecurities Subject to 2012 Stock Incentive Plan..

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

•

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



•

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



•

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

        The Compensation Committee seeks to achieve these objectives by:

•

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



•

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



•

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



•

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

        For our compensation programs, the Compensation Committee utilizes a combination of cash and equity incentive programs under which the compensation of the executive officers will vary with our performance and the market priceamendment, 1,500,000 additional shares of our common stock. The general objective is to target cash compensation (base salary plus performance-based annual target bonus) per executive officer tostock will be reserved for issuance over the 25th percentile of the comparable position at an identified peer group, and to target total direct compensation (which includes the grant-date fair value of the executive officer's long-term equity awards, annualized for any multi-year award) to the median of the comparable position at the peer group. However, the actual levels at which we may set compensation for a particular executive officer may vary somewhat from those targeted percentiles based on the Company's overall financial

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performance and an evaluation of each executive officer's individual performance level, experience and his or her potential contribution to the Company's future growth.

Setting Executive Compensation

        Major compensation decisions for each fiscal year, including base salary adjustments, the determination of target annual bonus opportunities and the determination of long-term equity incentive awards, are generally made by the Compensation Committee during the first quarter of the current year. For the 2012 fiscal year, such decisions were made in March 2012. The principal factors that the Compensation Committee considers when setting the compensation levels for the named executive officers are as follows:

•

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



•

Comparative market data;



•

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



•

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



•

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

        Impact of 2012 Say-on-Pay Vote:    The most recent shareholder advisory vote on executive officer compensation required under the federal securities laws was held on August 1, 2012, after the Compensation Committee had approved the 2012 compensation of the named executive officers. More than 97 percent of the votes cast on such proposal were in favor of the compensation of the named executive officers, as that compensation was disclosed in the Compensation Discussion and Analysis and the various compensation tables and narrative that appeared in the Company's proxy statement dated June 18, 2012. Based on that level of shareholder approval, the Compensation Committee decided not to make any material changes to the Company's compensation philosophies, policies and practices for the remainderterm of the 2012 fiscal year. However, the Compensation Committee will continue to take into account future shareholder advisory votes on executive compensation in order to determine whether any subsequent changes to the Company's executive compensation programs and policies would be warranted to reflect any shareholder concerns reflected in those advisory votes. Based on the voting preferenceStock Incentive Plan, for a total of our shareholders, the frequency of future Say-on-Pay votes will be every year.3,000,000

        Role of External Advisor:    In November 2011, the Compensation Committee engaged the services of F. W. Cook, a leading consulting firm in the area of executive compensation, to conduct an independent comprehensive benchmark study of executive compensation practices at the Company against other comparable public companies in our industry. The Compensation Committee retained F.W. Cook directly, although in carrying out its assignments, F.W. Cook interacted with our management to the extent necessary and appropriate. However, F.W. Cook has not been retained to perform any consulting or advisory services for our management and did not have any potential business conflicts that would affect its role as an independent advisor.

        Benchmarking:    In setting executive officer compensation for 2012, the Compensation Committee reviewed a report (the "Executive Compensation Report") prepared by F.W. Cook. The Executive Compensation Report benchmarked the compensation paid by comparable U.S.-based specialty retail and personal products companies to their executive officers.5