Kin Y. Chung notified Natural Health Trends Corp. (the Company) on May 28, 2020 that he is resigning from the Board of Directors (the Board), as well as from the standing committees thereof on which he serves, effective June 1, 2020. Mr. Chung indicated that his resignation is not the result of any disagreement with the Company on any matter relating to its operations, policies (including accounting or financial policies) or practices. The Company wishes to thank Mr. Chung for his many years of service to the Company.
On June 1, 2020, the Board, upon the recommendation of the Company's Nominating and Corporate Governance Committee, elected Dr. Ching C. (Nelson) Wong as a director of the Company to fill the vacancy created by Mr. Chungs resignation. Dr . Wong served as a consultant to the Company from July 2016 until immediately prior to his election as a director, and was also an employee of the Company from 2004 to 2007 and 2009 to 2010. Dr. Wong served as Corporate Controller from 2000 to 2004 for North Pole Limited, a Hong Kong-based manufacturing and trading company of outdoor consumer goods and also held several senior Asia regional positions for two U.S. publicly-held companies. The Board also appointed Dr. Wong to the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Dr. Wong was not selected as a director of the Company pursuant to any arrangement or understanding between him and any other person.
The Board determined that as of June 1, 2020, Dr. Wong satisfied the definition of independent director under the applicable standards of the NASDAQ Marketplace Rules, as well as under Rule 10A-3(b) promulgated under the Securities Exchange Act of 1934, as amended.
Upon his election to the Board and in his capacity as a non-employee director of the Company, Dr. Wong is entitled to a payment of $8,333 per month for his service during the remainder of 2020, plus the reimbursement of his out-of-pocket expenses incurred in connection with the performance of his duties as a director. Dr. Wongs compensation for serving on the Board in 2021 will be determined in early 2021, along with that for the Companys other non-employee directors.
Contemporaneous with his election to the Board, the Company and Dr. Wong entered into an Indemnification Agreement on terms consistent with those entered with the Companys other directors. The Indemnification Agreement confirms the Companys obligation to indemnify its directors and executive officers against liability arising out of the performance of their duties. The Indemnification Agreement provides mandatory indemnification, on the terms and conditions set forth in the agreement, for expenses and losses actually and reasonably incurred by directors and executive officers in defending legal proceedings in which they are parties by reason of their service to the Company or other entities to which they provide services at the Companys request or on its behalf. Pursuant to the Indemnification Agreement, the Company will advance reasonable expenses incurred by directors and executive officers in defending these legal proceedings, on the terms and conditions set forth in the Indemnification Agreement, and subject to repayment in the event of a determination that a director or executive officer is not entitled to indemnification for those expenses. The foregoing description of the Indemnification Agreement is qualified in its entirety by reference to the form of Indemnification Agreement filed as Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on February 12, 2015.
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: June 1, 2020
NATURAL HEALTH TRENDS CORP.
Timothy S. Davidson
Timothy S. Davidson
Senior Vice President and Chief Financial Officer
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