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<SEC-DOCUMENT>0001019056-07-000018.txt : 20070109
<SEC-HEADER>0001019056-07-000018.hdr.sgml : 20070109
<ACCEPTANCE-DATETIME>20070109171906
ACCESSION NUMBER:		0001019056-07-000018
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20070103
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20070109
DATE AS OF CHANGE:		20070109

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATURAL HEALTH TRENDS CORP
		CENTRAL INDEX KEY:			0000912061
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190]
		IRS NUMBER:				592705336
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-26272
		FILM NUMBER:		07521219

	BUSINESS ADDRESS:	
		STREET 1:		2050 DIPLOMAT DRIVE
		STREET 2:		--
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
		BUSINESS PHONE:		972-241-4080

	MAIL ADDRESS:	
		STREET 1:		2050 DIPLOMAT DRIVE
		STREET 2:		--
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>natural_8k.txt
<DESCRIPTION>FORM 8-K
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 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)  January 3, 2007
                                                   -----------------------------


                           NATURAL HEALTH TRENDS CORP.
- --------------------------------------------------------------------------------
               (Exact name of Company as specified in its charter)


           Delaware                   0-26272                 59-2705336
- --------------------------------------------------------------------------------
 (State or other jurisdiction       (Commission              IRS Employer
       of incorporation)            File Number)          Identification No.)


2050 Diplomat Drive                  Dallas, TX                  75234
- --------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)


Company's telephone number, including area code   (972) 241-4080
                                                --------------------------------


- --------------------------------------------------------------------------------
         (Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Company 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))

<PAGE>

Item 1.01   Entry into a Material Definitive Agreement

         On January 3, 2007, Natural Health Trends Corp. (the "Company") entered
into a letter agreement (the "Agreement") with Gernot Senke pursuant to which
Mr. Senke has agreed to serve as the Chief Operating Officer of the Company
commencing on February 12, 2007 (the "Commencement Date"). The Company has
agreed to pay Mr. Senke an annual base salary of $265,000 plus an annual bonus
equal to 40% of his base salary if certain annual performance goals for the
Company are achieved. In addition, the Company has agreed to pay for a temporary
living allowance equal to $5,000 per month for up to three months, or until Mr.
Senke relocates to the Dallas metropolitan area, whichever is sooner. Mr. Senke
will also be reimbursed for expenses associated with relocating to the Dallas
metropolitan area and the Company has guaranteed that he receive the Fair Value
(as defined in the Agreement) with respect to the sale of his principal
residence in New Jersey. The Company has also agreed to grant to Mr. Senke on
the Commencement Date options to purchase 35,000 shares of the Company's common
stock under the Company's 2007 Equity Incentive Plan at an exercise price equal
to the closing price of the Company' s common stock on that date. The options
will vest over a 3 year period and are scheduled to expire on February 11, 2012.

         Following Mr. Senke's relocation to the Dallas metropolitan area, he
will be entitled to severance in the event that his employment is terminated by
the Company without Cause (as defined in the Agreement) or in connection with a
Change of Control (as defined in the Agreement). He is also entitled severance
in the event that he terminates his employment for Good Reason (as defined in
the Agreement). Mr. Senke shall receive as severance the continuation of his
base salary for up to twelve (12) months for a termination without Cause or for
Good Reason, and up to twenty four (24) months for a termination in connection
with a Change of Control.

         In addition, the Company and Mr. Senke entered into a Non-Competition
and Proprietary Rights Assignment Agreement dated January 3, 2007 pursuant to
which Mr. Senke has agreed (i) to keep certain Company information confidential,
(ii) to assign the rights to certain work product to the Company, (iii) not to
compete with the Company during the term of his employment and for six (6)
months thereafter, and (iv) not to solicit Company customers or distributors
during the term of his employment and for twelve (12) months thereafter.

         Mr. Senke, age 44, has been the Chief Financial Officer of Scoop
Management , LLC, a women's apparel company based in New York City, since April
2005. From May 2004 to March 2005, Mr. Senke was a vice president and Chief
Financial Officer with Diesel U.S.A., Inc., an apparel wholesaler. Previously,
from 1997 to January 2004, Mr. Senke was a vice president of finance and
operations and Chief Financial Officer of Wella Corporation, a beauty care
company.

Item 9.01   Financial Statements and Exhibits

      (d)   Exhibits

            10.1  Employment Letter Agreement dated January 3, 2007 between the
                  Company and Gernot Senke

            10.2  Non-Competition and Proprietary Rights Assignment Agreement
                  dated January 3, 2007 between the Company and Gernot Senke

                                       2
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                       NATURAL HEALTH TRENDS CORP.
Date:  January 3, 2007

                                       By: /s/ STEPHANIE S. HAYANO
                                           -------------------------------------
                                           Name:   Stephanie S. Hayano
                                           Title:  President and Chief Executive
                                                   Officer

                                       3
<PAGE>

                                  EXHIBIT INDEX


Exhibit                             Description
- -------     -----------------------------------------------------------------
10.1        Employment Letter Agreement dated January 3, 2007 between the
            Company and Gernot Senke

10.2        Non-Competition and Proprietary Rights Assignment Agreement dated
            January 3, 2007 between the Company and Gernot Senke




                                       4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10_1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
                                                                    EXHIBIT 10.1

                   [Letterhead of Natural Health Trends Corp.]

                                                          January 3, 2007

Mr. Gernot Senke
284 Partridge Run
Mountainside, NJ 07092

               Re:  Employment Terms
                    ----------------
Dear Gernot:

         I am pleased to set forth the terms and conditions of your employment
with Natural Health Trends Corp. (the "Company"). We look forward to your
significant contributions toward the achievement of our goals.

         The Position

         Commencing no later than February 12, 2007 (the "Commencement Date"),
you will be appointed as the Company's Chief Operating Officer. You will report
to the Company's President and CEO.

         Compensation Package

         Your base salary is $265,000 per year and you will also be eligible to
receive annual incentive compensation equal to 40% of your base salary if
certain annual performance goals for the Company's operations are achieved.
These goals will be established by the President/CEO and the Compensation
Committee at the beginning of each fiscal year. The incentive bonus will be paid
in cash immediately following the completion of the Company's year end audit of
its financial statements.

         Benefits Package / Relocation

         In connection with your relocation to the Dallas metroplex area, the
Company will (i) reimburse you for reasonable out-of-pocket expenses related to
the relocation of your household goods and personal property, and (ii) guaranty
that you receive the Fair Value for the sale of your primary residence located
at 284 Partridge Run, Mountainside, NJ 07092. "Fair Value" shall mean the
average of two (2) appraisals provided by independent, reputable appraisal
companies; provided however, if the difference between such appraisals is more
than 5% of the lower value, then a third appraisal shall be retained and Fair
Value shall mean the average of the two closest appraisals.

         Your compensation will also include participation in our standard
benefits program available to our U.S. based employees. For a period not to
exceed three (3) months, you will also be provided with a temporary living
allowance equal to $5,000 per month and reimbursement of automobile rental
expenses and costs incurred by you in connection with your travel to and from
the Dallas area.

<PAGE>

         Equity Participation

         I am also happy to inform you that the Company's Compensation Committee
has authorized the grant on the Commencement Date to you of options to purchase
35,000 shares of the Company's common stock, pursuant to and in accordance with
the Company's 2007 Equity Incentive Plan. The exercise price of the options will
be equal to the closing price of Company's common stock on the Commencement Date
as reported on The NASDAQ National Market. The options will vest over a three
year period and will expire 5 years following the Commencement Date (unless your
employment with the Company is sooner terminated).

         Vacation

         You will be entitled to four (4) weeks vacation per annum, in
accordance with the Company's vacation policy.

         Severance

         Following the relocation of your permanent residence to the Dallas
metroplex area, you will be entitled to Severance Payments (as defined below) if
any of the following events occur:

         (i) the Company terminates you without Cause (as defined below) during
the period commencing on the date that is thirty (30) days prior to a Change of
Control (as defined below) through and including the date that is 18 months
following such Change of Control (a "Change of Control Termination");

         (ii) you provide the Company with written notice of your resignation
for Good Reason (as defined below) and the Company has not cured such event
within 30 days following its receipt of such written notice; or

         (iii) the Company terminates you without Cause (other than in
connection with a Change of Control as contemplated in (i) above).

         However, in order to receive any Severance Payments you must execute
and deliver to the Company a full general release of all claims against the
Company and its affiliates in form and substance satisfactory to the Company.

        As used herein, the term:

         (a) "Severance Payments" shall mean the continuation of the payment of
your base salary then in effect (plus health and medical insurance coverage as
previously provided to you) for a period of up to 12 months following the
termination date, or until such earlier date on which you become engaged in any

                                       2
<PAGE>

Competitive Activity (as defined in the Non-Competition Agreement) or otherwise
breach the terms and conditions of the Non-Competition Agreement (each, a
"Severance Payment Termination Event"); provided however, that with respect to a
Change of Control Termination, the Employee shall be entitled to receive
Severance Payments for a period of up to two (2) years only, subject to earlier
discontinuation following a Severance Payment Termination Event;

         (b) "Cause" shall include, without limitation, the following: (i)
failure or neglect, by you to perform the duties of your position; (ii) your
failure to obey orders given by the Company or your supervisors; (iii) your
misconduct in connection with the performance of any of your duties, including,
without limitation, misappropriation of funds or property of the Company,
securing or attempting to secure personally any profit in connection with any
transaction entered into on behalf of the Company, misrepresentation to the
Company, or any violation of law or regulations on Company premises or to which
the Company is subject; (iv) your commission of an act involving moral
turpitude, dishonesty, theft or unethical business conduct, or conduct which
impairs or injures the reputation of, or harms, the Company; (v) your
disloyalty, including without limitation, aiding a competitor; (vi) your failure
to devote your full time and best efforts to the Company's business and affairs;
(vii) your failure to work exclusively for the Company; (viii) your failure to
fully cooperate in any investigation by the Company; (ix) your breach of this
Agreement or Company rules; (x) any other act of misconduct by you that could
reasonably be expected to have a material adverse effect on the Company, its
business, prospects or reputation; (xi) your abuse of alcohol or other drugs or
controlled substances; or (xii) your resignation (other than for Good Reason).

         (c) "Change of Control" shall mean: (i) when any "person" as defined in
Section 3(a)(9) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and as used in Section 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) of the Exchange Act, but excluding the
Company or any subsidiary or any affiliate of the Company or any employee
benefit plan sponsored or maintained by the Company or any subsidiary of the
Company (including any trustee of such plan acting as trustee), becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
securities of the Company representing more than 50% of the combined voting
power of the Company's then outstanding securities; or (ii) when, during any
period of twenty-four (24) consecutive months, the individuals who, at the
beginning of such period, constitute the Board of Directors (the "Incumbent
Directors") cease for any reason other than death to constitute at least a
majority thereof, provided, however, that a director who was not a director at
the beginning of such 24-month period shall be deemed to have satisfied such
24-month requirement (and be an Incumbent Director) if such director was elected
by, or on the recommendation of or with the approval of, at least two-thirds of
the directors who then qualified as Incumbent Directors either actually (because
they were directors at the beginning of such 24-month period) or through the
operation of this provision; or (iii) the occurrence of a transaction requiring
stockholder approval under applicable state law for the acquisition of the
Company by an entity other than the Company or a subsidiary or an affiliated
company of the Company through the purchase of assets, or by merger, or

                                       3
<PAGE>

otherwise; provided however, that none of the foregoing shall constitute a
Change of Control if such transaction, event or occurrence shall be approved by,
or consented to, by the Employee;

         (d) "Good Reason" shall mean the occurrence of any of the following
without your written consent or approval: (A) the assignment to you of duties
inconsistent with this Agreement or a material diminution in your title or
authority; (B) any change in reporting responsibility so that you report to any
person other than the President or CEO, or (C) any material breach of the
Agreement by this Company.

         Non-Competition and Confidentiality Agreement

         You agree to enter into a Non-Competition and Proprietary Rights
Assignment Agreement, a form of which is attached hereto as Exhibit B (the
"Non-Competition Agreement"), pursuant to which you will agree that you will
keep in confidence the Company's confidential information, you will not compete
with the Company, and you will not solicit employees or independent distributors
of the Company.

         Arbitration

         All disputes between Parties in connection with arising out of the
existence, validity, construction, performance and termination of this Agreement
shall be finally settled by arbitration. The arbitration shall be held in
Dallas, Texas in accordance with the Rules of the American Arbitration
Association by one or more arbitrators appointed in accordance with the said
Rules and the award of such arbitrators shall be final and binding upon the
Parties. The non-prevailing party shall pay for all reasonable costs and
expenses incurred in connection with such dispute, including filing and
arbitrator fees as well as the reasonable costs and expenses of opposing legal
counsel.

         Employment At Will

         You understand that your employment will be at will, and either you or
the Company may terminate the relationship at any time upon four (4) weeks
notice; provided however, that the at will relationship will not in any way
affect the Company's obligation to pay severance to you as set forth above under
"Severance".


                                       4
<PAGE>

         We all look forward to working with you and know that you will do an
outstanding job in this critical role. All of the benefits described in this
letter are conditioned upon your acceptance of this offer. Please indicate your
acceptance and agreement with the terms of this letter by signing below in the
space provided and by signing the Non-Competition Agreement.


                                       Sincerely,

                                       NATURAL HEALTH TRENDS CORP.


                                       By: /s/ STEPHANIE S. HAYANO
                                           -------------------------------------
                                           Name:  Stephanie S. Hayano
                                           Title: President and CEO


Agreed to and Accepted:


/s/ GERNOT SENKE
- ---------------------------------
Gernot Senke


                                       5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>ex10_2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
                                                                    EXHIBIT 10.2

                           NATURAL HEALTH TRENDS CORP.

                     NON-COMPETITION AND PROPRIETARY RIGHTS
                     --------------------------------------
                              ASSIGNMENT AGREEMENT
                              --------------------

Employee's Name:  Gernot Senke  ("Employee")

Date:    January 3, 2007

         In consideration of Employee's employment by or other similar
         relationship with Natural Health Trends Corp. (including their
         subsidiaries, successors and assigns, the "Company") and in
         consideration for and as a condition to the transactions contemplated
         by that certain Letter Agreement dated as of the date hereof by and
         between the Company and the Employee, the Employee hereby agrees with
         the Company as follows:

         1.       Confidential Information. During the term of this Agreement
and in the course of Employee's performance of services for the Company,
Employee may receive and otherwise be exposed to confidential or competitively
sensitive information of the Company, or of a third party with which the Company
has a business relationship, relating to the Company's or such third party's
current or prospective business, research and development activities, products,
technology, strategy, organization and/or finances (collectively, "Confidential
Information"). Such Confidential Information, which may be disclosed orally or
in writing, shall include, without limitation, Technology (as defined in Section
2(a)), Work Product (as defined in Section 2(a)), plans, strategies,
negotiations, customer or prospect identities, market analyses, projections,
forecasts, cost and performance data, sales data, financial statements, price
lists, pre-release information regarding the Company's products, personnel lists
and data, and all documents and other materials (including any notes, drawings,
reports, manuals, notebooks, summaries, extracts or analyses), whether in
written or electronic form, that disclose or embody such Confidential
Information.

         Confidential Information shall not include information that is now, or
hereafter becomes, through no act or failure to act on Employee's part,
generally known to the public; information that was rightfully in Employee's
possession without confidentiality restriction prior to the Company's disclosure
to Employee; information that was rightfully obtained by Employee from a third
party who has the right, without obligation to the Company, to transfer or
disclose such information; or information which Employee is required to disclose
pursuant to judicial order, provided that in the latter case Employee shall
promptly notify the Company and take reasonable steps to assist the Company in
protecting the Company's rights prior to disclosure. At all times, both during
Employee's relationship with the Company and after the termination thereof,
Employee will keep all Confidential Information in strict confidence; will not
use Confidential Information except for the purpose of providing services to the
Company; and will not divulge, publish, disclose or communicate Confidential
Information, in whole or in part, to any third party. Employee further agrees
that Employee will not allow any unauthorized person access to Confidential
Information, either before or after the termination of this Agreement, and will
take all action reasonably necessary and satisfactory to the Company to protect
the confidentiality of Confidential Information. Employee agrees not to
reproduce or copy by any means Confidential Information, except as reasonably
required to accomplish the purposes of this Agreement, and further agrees not to
remove any proprietary rights legend from such Confidential Information or
copies thereof made in accordance with this Agreement. Upon termination of
Employee's services for any reason, or upon demand by the Company at any time,

<PAGE>

Employee's right to use Confidential Information shall immediately terminate,
and Employee shall return promptly to the Company, or destroy, at the Company's
option, all tangible and electronic materials that disclose or embody
Confidential Information.

         2.       Assignment of Work Product.
                  --------------------------

                  (a)      For purposes of this Agreement: "Technology" shall
                           mean all ideas, concepts, inventions, discoveries,
                           developments, creations, methods, techniques,
                           processes, machines, products, devices, compositions
                           of matter, improvements, modifications, designs,
                           systems, specifications, schematics, formulas, mask
                           works, works of authorship, software, algorithms,
                           data and know-how, whether or not patentable or
                           copyrightable, and all related notes, drawings,
                           reports, manuals, notebooks, summaries, memoranda and
                           other documentation; "Intellectual Property Rights"
                           shall mean all worldwide intellectual property rights
                           including, without limitation, all rights relating to
                           the protection of inventions, including patents,
                           patent applications and certificates of invention;
                           all rights associated with works of authorship,
                           including copyrights and moral rights; all rights
                           relating to the protection of trade secrets and
                           confidential information; all rights related to the
                           protection of trademarks, logos and service marks;
                           any rights analogous to those set forth herein, and
                           all other proprietary rights related to intangible
                           property; and "Work Product" shall mean any and all
                           Technology made, conceived, designed, created,
                           discovered, invented or reduced to practice by
                           Employee during the term of this Agreement that (i)
                           results from Employee's performance of services for
                           the Company, (ii) is related to the business of the
                           Company or (iii) is based upon the use of
                           Confidential Information.

                  (b)      Employee agrees to promptly disclose to the Company
                           in writing all Work Product upon the development,
                           conception or creation thereof by Employee, as well
                           as, at any time, upon the request of the Company.

                  (c)      Employee agrees that all Work Product shall be the
                           sole and exclusive property of the Company, and does
                           hereby irrevocably and unconditionally transfer and
                           assign to the Company, its successors and assigns,
                           all right, title and interest it may have or acquire
                           in or to any Work Product, including all Intellectual
                           Property Rights therein. Employee further agrees that
                           any and all works of authorship created, authored or
                           developed by Employee hereunder shall be deemed to be
                           "works made for hire" within the meaning of the
                           United States copyright law and, as such, all rights
                           therein including copyright shall belong solely and
                           exclusively to the Company from the time of their
                           creation. To the extent any such work of authorship
                           may not be deemed to be a work made for hire,
                           Employee agrees to, and does hereby, irrevocably and
                           unconditionally transfer and assign to the Company
                           all right, title, and interest including copyright in
                           and to such work.

                  (d)      Upon request by the Company, Employee agrees to
                           execute and deliver all such documents, certificates,
                           assignments and other writings, and take such other
                           actions, as may be necessary or desirable to vest in
                           the Company ownership in all Work Product as provided

                                       2
<PAGE>

                           in this Section 2, including, but not limited to, the
                           execution and delivery of all applications for
                           securing all United States and foreign patents,
                           copyrights and other intellectual property rights
                           relating to Work Product. The Company shall reimburse
                           Employee for any reasonable expenses incurred by
                           Employee at the Company's request to secure title or
                           legal protection on the Company's behalf for any such
                           Work Product. In the event that the Company is unable
                           to secure Employee's signature to any document, or if
                           Employee otherwise fails to take any action deemed
                           necessary by the Company to protect or maintain the
                           Company's ownership of Work Product and Intellectual
                           Property Rights therein, then the Company may, and
                           Employee hereby irrevocably designates and appoints
                           the Company and its duly authorized officers and
                           agents as Employee's agent and attorney-in-fact to
                           act on and in Employee's behalf and stead to, execute
                           and file any such applications and perform all other
                           lawfully permitted acts to perfect Employee's
                           assignment and transfer of ownership rights to the
                           Company with the same legal force and effect as if
                           executed, filed and performed by Employee.

                  (e)      For purposes of this Section 2(e), "Background
                           Technology" shall mean Technology owned by or
                           licensed to Employee as of the Effective Date of this
                           Agreement or developed or otherwise obtained by
                           Employee following the Effective Date hereof
                           independently of the performance of services
                           hereunder by Employee. The Company acquires no rights
                           in the Background Technology, except as specifically
                           provided in this Agreement and, as between the
                           parties, Employee retains all rights therein.
                           Employee hereby grants to Company a royalty-free,
                           worldwide, non-exclusive, perpetual, sublicensable
                           and irrevocable right and license to use, for all
                           purposes in Company's business, Background Technology
                           that has been disclosed by Employee to Company or
                           that is embodied within or related to the use,
                           operation or improvement of Work Product created by
                           Employee in connection with Employee's performance of
                           services for the Company.

         3.       Representation. Employee hereby represents to the Company that
the Work Product Employee creates under this Agreement will be original, and
that Employee's performance of services under this agreement and the Company's
use of Employee's Work Product will not breach any agreement Employee has with
any third party or the intellectual property rights or other rights of any third
party.

         4.       Return of Materials. All documents, records, apparatus,
equipment and other physical property, whether or not pertaining to Confidential
Information, which are furnished to Employee by the Company or are produced by
Employee in connection with Employee's services will be and remain the sole
property of the Company. Employee will return to the Company all such materials
and property as and when requested by the Company. In any event, Employee will
return all such materials and property immediately upon termination of
Employee's services for any reason. Employee will not retain any such material
or property or any copies thereof upon such termination.

         5.       Competitive Activities. From the date hereof until the six (6)
month anniversary of the later of the date on which Employee no longer is
employed by the Company, serves as a consultant to the Company or serves as a
member of the Board of Directors of the Company (the "Non-Compete Restricted

                                       3
<PAGE>

Period"), Employee will not, directly or indirectly, whether as owner, partner,
shareholder, director, agent, employee, co-venturer or otherwise, without the
written consent of the Company, engage, participate or invest in any business
activity with respect to any multi-level marketing or direct sales organization
that indirectly or directly competes with the Company in recruiting for
independent distributors (collectively, the "Competitive Activities"). The
prohibition set forth in this Section 5 shall not restrict Employee from owning
or holding up to two percent (2%) of the shares of stock of any company
registered or sold on any recognized stock exchange or sold in the
over-the-counter market. Employee understands and agrees that the restrictions
set forth in this Section 5 are intended to protect the Company's reasonable
competitive business interests, its interest in its Confidential Information and
established and prospective customer relationships and goodwill, and agree that
such restrictions are reasonable and appropriate for this purpose.

         6.       Nonsolicitation of Customers and Distributors. During the
Non-Compete Restricted Period plus six (6) months (the "Nonsolicitation
Period"), Employee will not, in any capacity, directly or indirectly:

                  (a)      solicit business or patronage of any customer or
                           prospective customer (collectively, "Customer"), or
                           distributor or prospective distributor (collectively,
                           "Distributor") of the Company in connection with any
                           Competitive Activity;

                  (b)      divert, entice, or otherwise take away from the
                           Company the business or patronage of any Customer or
                           Distributor, or attempt to do so;

                  (c)      solicit, induce or assist any Customer, Distributor
                           or supplier to terminate or reduce its relationship
                           with the Company;

                  (d)      assist with the provision of any services to a
                           Customer or Distributor (except in Employee's
                           capacity as an employee of the Company); or

                  (e)      refer a Customer, Distributor or supplier to another
                           person engaged (or to be engaged) in Competitive
                           Activities.

         7.       Nonsolicitation of Employees. During the Nonsolicitation
Period, Employee will not:

                  (a)      hire or employ, directly or indirectly through any
                           enterprise with which Employee is associated, any
                           current employee of the Company or any individual who
                           had been employed by the Company within one (1) year
                           preceding Employee's termination (other than persons
                           whose employment by the Company was terminated by or
                           at the request of the Company); or

                  (b)      recruit, solicit or induce (or in any way assist
                           another person or enterprise in recruiting,
                           soliciting or inducing) any employee or director of
                           the Company to terminate his or her employment or
                           other relationship with the Company.

         8.       Acknowledgments. Employee acknowledges and agrees that the
restrictions set forth in this Agreement are intended to protect the Company's
interest in Confidential Information and its commercial relationships and
goodwill (with its Customers, Distributors, vendors, directors and employees),
and are reasonable and appropriate for these purposes.

                                       4
<PAGE>

         9.       Disclosure of Agreement. Employee will disclose the existence
and terms of this Agreement to any prospective employer, partner, co-venturer,
investor or lender prior to entering into an employment, partnership or other
business relationship with such person or entity.

         10.      Third-Party Agreements and Rights. Employee hereby confirms
that Employee is not bound by the terms of any agreement with any previous
employer or other party which restricts in any way Employee's use or disclosure
of information or Employee's engagement in any business, except as may be
disclosed in Schedule A attached to this Agreement prior to its acceptance by
the Company. Employee has delivered to the Company true and complete copies of
any agreements listed on Schedule A. Employee represents to the Company that
Employee's execution of this Agreement, Employee's employment with the Company
and the performance of Employee's proposed duties for the Company will not
violate any obligations Employee may have to any such previous employer or other
party. In Employee's work for the Company, Employee will not disclose or make
use of any information in violation of any agreements with or rights of any such
previous employer or other party, and Employee will not bring to the premises of
the Company any copies or other tangible embodiments of non-public information
belonging to or obtained from any such previous employment or other party.

         11.      Injunction. Employee agrees that it would be difficult to
measure any damages caused to the Company which might result from any breach by
Employee of the promises set forth in this Agreement, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
Employee agrees that if Employee breaches, or proposes to breach, any portion of
this Agreement, the Company shall be entitled, in addition to all other remedies
that it may have, to an injunction or other appropriate equitable relief to
restrain any such breach without showing or proving any actual damage to the
Company.

         12.      Binding Effect. This Agreement will be binding upon Employee
and Employee's heirs, executors, administrators and legal representatives and
will inure to the benefit of the Company, any subsidiary of the Company, and its
and their respective successors and assigns.

         13.      Enforceability. If any portion or provision of this Agreement
is to any extent declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, will not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. In the event that any provision of this
Agreement is determined by any court of competent jurisdiction to be
unenforceable by reason of excessive scope as to geographic, temporal or
functional coverage, such provision will be deemed to extend only over the
maximum geographic, temporal and functional scope as to which it may be
enforceable.

         14.      Entire Agreement. This Agreement constitutes the entire
agreement between the Company and Employee with respect to the subject matter
hereof, and supersedes all prior representations and agreements with respect to
such subject matter. This Agreement may not be amended, modified or waived
except by a written instrument duly executed by the person against whom
enforcement of such amendment, modification or waiver is sought. The failure of
any party to require the performance of any term or obligation of this
Agreement, or the waiver by any party of any breach of this Agreement, in any
particular case will not prevent any subsequent enforcement of such term or
obligation or to be deemed a waiver of any separate or subsequent breach.

                                       5
<PAGE>

         15.      Notices. Any notices, requests, demands and other
communications provided for by this Agreement will be sufficient if in writing
and delivered in person or sent by registered or certified mail, postage
prepaid, to Employee at the last address which Employee has filed in writing
with the Company or, in the case of any notice to the Company, at its main
offices, to the attention of the undersigned officer.

         16.      Governing Law. The validity, interpretation, performance and
enforcement of this agreement shall be governed by the laws of the State of
Delaware, without applying the conflict of laws provisions thereof.

         17.      Arbitration. All disputes between Parties in connection with
arising out of the existence, validity, construction, performance and
termination of this Agreement shall be finally settled by arbitration. The
arbitration shall be held in the Dallas, Texas in accordance with the Rules of
the American Arbitration Association by one or more arbitrators appointed in
accordance with the said Rules and the award of such arbitrators shall be final
and binding upon the Parties. The non-prevailing party shall pay for all
reasonable costs and expenses incurred in connection with such dispute,
including filing and arbitrator fees as well as the reasonable costs and
expenses of opposing legal counsel.



EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. EMPLOYEE HAS
READ IT CAREFULLY AND IS SATISFIED THAT EMPLOYEE UNDERSTANDS IT COMPLETELY.


NATURAL HEALTH TRENDS CORP.                 EMPLOYEE


By: /s/ STEPHANIE S. HAYANO                 By: /s/ GERNOT SENKE
    --------------------------------            --------------------------------
    Name:  Stephanie S. Hayano                  Name:  Gernot Senke
    Title: CEO and President

Dated:  January 3, 2007                     Dated: January 3, 2007

                                       6
<PAGE>

                                   Schedule A
                                   ----------



                                     [None]




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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