UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 7, 2005
-------------------------
Natural Health Trends Corp.
--------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware
--------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-26272 59-2705336
--------------------------------------------------------------------------------
(Commission File Number) (IRS Employer Identification No.)
2050 Diplomat Drive, Dallas, Texas 75234
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(972) 241-4080
--------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On December 13, 2005, Natural Health Trends Corp. (the "Company")
entered into an Indemnification Agreement with each of the members of its Board
of Directors (the "Board"). Under the terms of the Agreements, the Company has
agreed to indemnify and advance expenses to each of Sir Brian Wolfson, Robert H.
Hesse, Anthony B. Martino, Randall A. Mason, Terrence M. Morris and Colin J.
O'Brien (collectively, the "Indemnitees"), to the fullest extent permitted by
Delaware law. A copy of the form of Indemnification Agreement is attached hereto
as Exhibit 10.01.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers
On December 7, 2005, Anthony B. Martino, Terrence M. Morris, and Colin
J. O'Brien were appointed to the Board and certain committees thereof which are
currently constituted as follows:
Audit Committee Compensation Committee Nominating Committee
--------------- ---------------------- --------------------
Anthony B. Martino* Colin J. O'Brien* Sir Brian Wolfson*
Colin J. O'Brien Terrence M. Morris Terrence M. Morris
Terrence M. Morris
*Indicates Chairman
The following is a summary of certain biographical information on
Messrs. Martino, Morris and O'Brien:
Anthony B. Martino, age 63, is currently Chairman of the
Audit Committee of the Dormitory Authority of the State of New
York, a position appointed by the Governor of the State of New
York. From 1965 to 1976, Mr. Martino was a certified public
accountant with Price Waterhouse. From 1976 to 2000, Mr. Martino
was a partner with Lumsden & McCormick, LLP, a certified public
accounting firm. From 2000 to 2002, Mr. Martino was an Investment
Advisor with Barlar Management Company, an investment firm
specializing in oil and gas investments. Mr. Martino is member of
several boards of directors, including the regional board of Key
Bank, the Buffalo Niagara Medical Campus, the Mount Calvary
Cemetery, Cradle Beach Camp, and the Kelly for Kids Foundation.
Mr. Martino is a member of the American Institute of Certified
Public Accountants and the New York State Society of Certified
Public Accountants. He earned a bachelors of science degree in
accounting from the University of Buffalo.
Terrence M. Morris, age 53, was a founder and Managing
Director of Morningside Ventures, a $200+ million venture capital
fund, from 1987 to 2002. From 1984 to 1987, Mr. Morris worked at
Bay Partners, a venture capital firm. From 1980 to 1984, Mr.
Morris was a consultant with Boston Consulting Group, Inc., a
large, full-service international consulting firm. From 1977 to
1980, Mr. Morris held a variety of positions with Baxter
International, Inc. a global healthcare company. Mr. Morris is on
the Board of Trustees of Marietta College and previously served as
a member of the boards of directors of Family Education Network,
Cell Therapeutics, and Dendreon Corporation. Mr. Morris earned a
bachelor of science in physics from Marietta College, a PhD in
electrical engineering from the California Institute of
Technology, and a MBA in finance from the Harvard Business School.
Colin J. O'Brien, age 66, has been retired since 2001.
Mr. O'Brien was employed in various positions with Xerox
Corporation from February 1992 to January 2001, including Vice
President of Business Development and Systems Strategy, and Chief
Executive Officer of Xerox's New Enterprise Board and Executive
Chairman of XESystems, Inc., a subsidiary of Xerox. In 1986, Mr.
O'Brien formed an investment company with E.M. Warburg Pincus &
Co. Inc., making a number of acquisitions in defense electronics.
Prior to that time, Mr. O'Brien served as Chairman and Chief
Executive of Times Fiber Communications, Inc., a publicly traded
company, and President of General Instrument's cable television
operations. He has held management positions with Union Carbide in
both Canada and Europe. From September 2000 until September 2005,
Mr. O'Brien was a director of Scientific Games Corporation, a
Nasdaq listed company that provides services, systems, and
products to the lottery industry, and since February 2003 served
as Chairman of its Audit Committee. Mr. O'Brien is currently a
director of Kepner-Tregoe Inc., a global consulting and training
services firm, and Document Sciences Corporation, a Nasdaq listed
software developer. Mr. O'Brien received a Bachelor of Sciences
degree in Chemical Engineering from the University of New South
Wales, Australia.
The Board has determined that each of Messrs. Martino, Morris and
O'Brien is independent as defined by the applicable rules of The Nasdaq Stock
Market and the regulations of the Securities and Exchange Commission and each of
whom is able to read and understand fundamental financial statements. In
addition, the Company considers Mr. Martino to be an "audit committee financial
expert" as defined by applicable rules and regulations promulgated by the
Securities and Exchange Commission.
In exchange for services to be rendered to the Company as members of
the Board, each of Messrs. Martino, Morris and O'Brien (i) shall be paid a
monthly amount equal to $3,333, plus reimbursement of out-of-pocket expenses
incurred in connection with the performance of his duties as a member of the
Board or a committee thereof; provided however, that Mr. Martino, as the
Chairman of the Audit Committee, shall be paid an additional $2,000 per month
for services rendered as Chairman of the Audit Committee, and (ii) were issued
options, pursuant to the terms and conditions of the Company's 2002 Stock Option
Plan, exercisable for 7,500 shares of the Company's common stock at an exercise
price equal to $10.34 per share (the closing price of the Company's common stock
on the date of grant) which options are exercisable for a period of 5 years
commencing on December 8, 2005.
Item 9.01(c) Financial Statements and Exhibits.
10.1 Form of Indemnification Agreement dated December 13, 2005
between the Company and each of its directors.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 13, 2005
NATURAL HEALTH TRENDS CORP.
By: /s/ ROBERT H. HESSE
------------------------------------
Robert H. Hesse