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): February 10, 2006
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NATURAL HEALTH TRENDS CORP.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-26272 59-2705336
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(Commission File Number) (IRS Employer Identification No.)
2050 Diplomat Drive, Dallas, Texas 75234
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(Address of Principal Executive Offices) (Zip Code)
(972) 241-4080
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(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
Item 3.02 Unregistered Sale of Equity Securities
On February 10, 2006, Natural Health Trends Corp. (the "Company") entered into
an Escrow Agreement (the "Agreement") with Mark D. Woodburn ("Woodburn") and
Terry L. LaCore ("LaCore"), who are former officers and directors of the
Company, and the LaCore and Woodburn Partnership, an affiliate of Woodburn and
LaCore. Pursuant to the Agreement, (i) the Company agreed to issue and deposit
with the escrow agent (the "Agent") stock certificates in the name of the Agent
representing an aggregate of 1,081,066 shares of the Company's common stock (the
"Escrowed Shares") and (ii) Woodburn and LaCore deposited with the Agent
$1,206,000 in immediately available funds (the "Cash Deposit"). The Escrowed
Shares are the shares of common stock issuable upon the cashless exercise of
certain options issued in 2001 and 2002 to LaCore and the LaCore and Woodburn
Partnership exercisable at $1.00 and $1.10 per share. The number of Escrow
Shares is based upon the closing price of the Company's common stock on February
9, 2006 of $10.14 and the surrender of 118,934 option shares as payment of the
aggregate exercise price of $1,206,000.
The Escrowed Shares will be issued pursuant to Section 4(2) of the Securities
Act of 1933, as amended, to the Agent upon the grant by the Agent of an
irrevocable proxy (the "Proxy") to the Company to vote the Escrowed Shares on
all matters presented at meetings of stockholders or any written consent
executed in lieu thereof. The parties have agreed that the Agent will hold the
Escrowed Shares and the Cash Deposit until it receives joint written
instructions from the Company, Woodburn and LaCore, or until it receives a final
non-appealable order from a court of competent jurisdiction. Each of the Company
and Woodburn and LaCore has further agreed that all current and future rights,
claims, defenses and causes of actions they have or may have against each other
are preserved.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
10.1 Escrow Agreement dated February 10, 2006 among Natural Health
Trends Corp., Terry L. LaCore, Mark D. Woodburn, LaCore and
Woodburn Partnership and Krage and Janvey LLP, as escrow agent.
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: February 15, 2006
NATURAL HEALTH TRENDS CORP.
By: /s/ ROBERT H. HESSE
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Robert H. Hesse
Interim Chief Executive Officer
EXHIBIT INDEX
Exhibit Description
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10.1 Escrow Agreement dated February 10, 2006 among Natural Health
Trends Corp., Terry L. LaCore, Mark D. Woodburn, LaCore and
Woodburn Partnership and Krage and Janvey LLP, as escrow agent.