COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2011

Notes To Financial Statements [Abstract]

NOTE 12: COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain office space, automobiles, computer hardware, and warehouse equipment under various non-cancelable operating leases. Some of these leases have renewal options. All of the Company’s leases expire at various times through August 2023. The Company also leases equipment under various month-to-month cancelable operating leases. For the years ended December 31, 2011, 2010, and 2009, total rent expense was approximately $4.3 million, $4.2 million, and $4.0 million, respectively.

Approximate future minimum rental commitments for non-cancelable operating leases (in thousands) are as follows:

Years ending December 31,
2012	$	3,434
2013		1,841
2014		1,087
2015		1,002
2016		806
Thereafter		955
	$	9,125

Purchase Commitments

The Company maintains supply agreements with its suppliers and manufacturers. Some of the supply agreements contain exclusivity clauses and/or minimum annual purchase requirements. Purchase agreements with suppliers that contain minimum purchase clauses are as follows:

In January 2006, the Company entered into a five-year supply agreement with Larex, Inc. to exclusively purchase Arabinogalactan, an important component used in the formulation of its Ambrotose® complex. In order to retain exclusive rights to purchase Arabinogalactan, the Company is required to purchase a minimum monthly quantity over the five year agreement. Effective December 31, 2010 the supply agreement with Larex, Inc. was terminated. The Company is negotiating a new agreement with Larex, Inc., and continues to purchase Arabinogalactan from Larex, Inc.

·	In March 2006, the Company entered into a ten-year supply agreement to purchase plant-derived mineral nutrition products from InB:Biotechnologies, Inc. As of December 31, 2011, the Company is required to purchase an aggregate of $6.7 million through 2016.

In June of 2008, the Company entered into a three-year supply agreement with Improve U.S.A. to purchase an aloe vera powder. In August 2011, the Company entered into an amendment to its supply agreement to extend the term of the agreement for a period of three years commencing June 1, 2011 and expiring on May 14, 2014. As of December 31, 2011, the Company is required to purchase an aggregate of $3.6 million through 2014 under the terms of the agreement.

Royalty and Consulting Agreements

In 2001, the Company entered into a royalty agreement with a high level associate and shareholder, whereby the Company agreed to pay royalties totaling $1.6 million related to the sale of certain sales aids developed by the associate and sold by the Company. Pursuant to this royalty agreement, the Company has paid an aggregate of $1.4 million through December 31, 2011, of which less than $0.1 million was paid in 2011 and approximately $0.1 million was paid in each of the years 2010 and 2009.

The Company also utilizes royalty agreements with individuals and entities to provide compensation for items such as reprints of articles or speeches relating to the Company, sales of promotional videos featuring sports personalities, and promotional efforts used by the Company for product sales or attracting new associates. The Company paid royalties for such royalty agreements of approximately $0.2 million in 2011, and approximately $0.3 in 2010 and 2009.

Employment Agreements

The Company has non-cancellable employment agreements with certain executives. If the employment relationships with these executives were terminated, as of December 31, 2011, the Company would continue to be indebted to the executives for $1.3 million, payable through 2012.