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TERMINATION OF LOCK-UP AGREEMENT
 

 
THIS TERMINATION OF LOCK-UP AGREEMENT (the “Agreement”) is entered into as of
September 1, 2010, by and between Nu Skin Enterprises, Inc., a Delaware
corporation (the “Company”), and [_____________] (collectively, the
“Stockholder”), and the Stockholder Affiliated Entities identified on the
signature page (the “Stockholder Affiliated Entities”).
 
Overview
 
           On October 22, 2003, the Company and Stockholder, together with the
Stockholder Affiliated Entities, entered into a Lock-Up Agreement (the “Lock-Up
Agreement”).  The Lock-Up Agreement restricted the number of shares of the
Company’s stock that Stockholder and the Stockholder Affiliated Entities could
sell or transfer as more fully described in the Lock-Up Agreement.
 
Background Information
 
The Company has facilitated a secondary offering in which certain founders of
the Company, including Stockholder and/or a Stockholder Affiliated Entity, sold
a portion of their shares of Class A common stock in the Company.  Pursuant to
Section 17 of the Lock-Up Agreement, the Company, Stockholder and the
Stockholder Affiliated Entities desire to terminate all rights, obligations and
restrictions with respect to the Lock-Up Agreement and enter into this Agreement
on the terms and conditions as provided below.
 
           ACCORDINGLY, in consideration of the foregoing information and the
mutual agreements herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
 
1. Termination of Lock-Up Agreement. In consideration of the non-compete
agreement set forth below and the Stockholder’s willingness to participate in
the secondary offering and enter into a lock-up agreement with the underwriters,
the Company, Stockholder, and the Stockholder Affiliated Entities hereby
terminate the Lock-Up Agreement.
 
2. Restrictive Covenants.   In consideration of the agreement of the Company to
terminate the Lock-Up Agreement and the opportunity to participate in the
secondary offering, the Stockholder agrees to be bound by the following
restrictive covenants.
 
 
 
 
 
 
 

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a.  
Non-Compete. Stockholder agrees that, during the Restricted Period (as defined
in Section 2(e) below), Stockholder shall not, directly or indirectly, accept
employment with, engage in or participate, directly or indirectly, individually
or as an officer, director, employee, shareholder, consultant, partner, joint
venturer, agent, equity owner, independent distributor or in any other capacity
whatsoever, with any Competitive Business (as defined in Section 2(e) below);
provided, however, that the foregoing restriction shall not apply to (i)
Stockholder if it is the Company that elects to terminate Stockholder’s service
to the Company, and (ii) diversified mutual fund investments which may result in
the indirect ownership of interests in a competing company.

 
b.  
Restricting Solicitation.  Stockholder agrees that, during the Restricted
Period, Stockholder shall not solicit the distributors of the Company or its
affiliates (a) to participate in any other direct selling or network marketing
company, or (b) to purchase any product or service other than the Company’s
products and services.  Stockholder agrees that Stockholder will also not assist
any other person or entity in any manner to do any of the foregoing during the
Restricted Period.  This Section 2(b) shall not preclude Stockholder from
general advertising for any product or service, provided that such advertisement
is not (i) targeted or directed at distributors of the Company or its
affiliates; or (ii) related to a Competitive Business.

 
c.  
Non-Endorsement. Stockholder shall not at any time during the Restricted Period,
personally and publicly speak on behalf of or personally and publicly endorse
any Competitive Business or Competitive Product (as defined in Section 2(e)
below), or allow Stockholder’s name or likeness to be used in any way to promote
any Competitive Business or Competitive Product.

 
d.  
Reformation. The Company intends to restrict the activities of Stockholder under
this Agreement only to the extent necessary for the protection of the legitimate
business interests of the Company.  It is the intention and agreement of the
parties that all of the terms and conditions hereof be enforced to the fullest
extent permitted by law.  In the event that the provisions of this Agreement
should ever be deemed or adjudged by a court of competent jurisdiction to exceed
the time or geographical limitations permitted by applicable law, then such
provisions shall nevertheless be valid and enforceable to the extent necessary
for such protection as determined by such court, and such provisions will be
reformed to the maximum time or geographic limitations as determined by such
court.

 
 
 
 
 
 
 
 

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e.  
Definitions.

 
i.  
“Restricted Period” shall mean the period in which Stockholder is acting in any
capacity (i.e. employee, director, consultant, advisor, independent distributor,
etc.) with the Company and for a period of two (2) years after termination of
Stockholder’s service to the Company or its affiliates in any and all
capacities.

 
ii.  
“Competitive Business” shall mean direct sales or multi-level marketing company
that competes with the business of the Company or its affiliates (as such
business is set forth in the Company’s most recent Annual Report on Form 10-K).

 
iii.  
“Competitive Product” shall mean any product that is substantially similar to or
competes with a product offered or sold by the Company or any of its affiliates.

 
f.  
Commercial Enterprises. As a point of clarification, the restrictions in
paragraphs (a) and (c) of this Section 2 shall not preclude Stockholder from
participating in any commercial enterprise that markets and sells Competitive
Products, provided that (i) such commercial enterprise is not a Competitive
Business; and (ii) Stockholder complies with Section 2(c) and does not publicly
speak on behalf of or  publicly endorse  any Competitive Product marketed and
sold by the commercial enterprise, or allow Stockholder’s name or likeness to be
used in any way to promote any Competitive Product marketed or sold by the
commercial enterprise.  By way of example, if Stockholder invested in a retail
store that sold, among other products, cosmetics products, Stockholder would not
be in violation of this Section 2 provided that such retail store had no
involvement with a Competitive Business and Stockholder did not publicly speak
on behalf of or publicly endorse, or allow [his/her] name or likeness to be used
to promote any products that were Competitive Products.

 
 
 
 
 
 
 

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g.  
Acknowledgement.  Stockholder acknowledges that his or her position as a
founding stockholder and spokesperson of the Company is an important factor to
the on-going success of the Company’s operation in each product category and in
each geographic location in which the Company operates. In addition, Stockholder
acknowledges that his or her employment or involvement with any other
competitive entity in particular would create the impression that Stockholder
has left the Company for a “better opportunity,” which could damage the Company
by this perception in the minds of the Company’s independent distributors.
Therefore, Stockholder acknowledges that his or her non-solicitation,
non-endorsement, and non-competition covenants hereunder are fair and reasonable
and should be construed to apply to the fullest extent possible by applicable
laws.  Stockholder has carefully read this Agreement, has consulted with
independent legal counsel to the extent Stockholder deems appropriate, and has
given careful consideration to the restraints imposed by the Agreement.

 
h.  
Injunctive Relief.  Stockholder acknowledges: (a) that compliance with the
restrictive covenants contained in this Agreement are necessary to protect the
business and goodwill of the Company or its affiliates and (b) that a breach may
result in irreparable and continuing damage to the Company or its affiliates,
for which money damages may not provide adequate relief.  Consequently,
Stockholder agrees that, in the event that Stockholder breaches or threatens to
breach these restrictive covenants, the Company or its affiliates shall be
entitled to (1) a preliminary or permanent injunction, without bond, to prevent
the continuation of harm and (2) money damages insofar as they can be determined
with respect to a material breach.  Nothing in this Agreement shall be construed
to prohibit the Company or its affiliates from also pursuing any other remedy,
the parties having agreed that all remedies are cumulative and not mutually
exclusive.

 
3. Governing Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.
 
4. Binding Effect.  This Agreement will be binding upon and inure to the benefit
of the Company, its successors and assigns, and to the Stockholder and
Stockholder Affiliated Entities, and their respective heirs, personal
representatives, successors and assigns.
 
 
 
 
 
 
 
 

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5. Entire Understanding.  This Agreement sets forth the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof and
the transactions contemplated hereby and supersedes all prior written and oral
agreements, arrangements and understandings relating to the subject matter
hereof.  This Agreement may not be changed orally, but may only be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
 
6. Counterparts.  This Agreement may be executed by facsimile and in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.  Each counterpart
may consist of a number of copies each signed by less than all, but together
signed by all, of the parties hereto.
 
7.  Severability.  If any provision, paragraph, or subparagraph of this
Agreement is adjudged by any court or administrative agency to be void or
unenforceable in whole or in part, this adjudication shall not affect the
validity of the remainder of the Agreement, including any other provision,
paragraph, or subparagraph.  Each provision, paragraph, and subparagraph of this
Agreement is severable from every other provision, paragraph, and subparagraph
and constitutes a separate and distinct covenant.
 

 

 

 
[signature page follows]
 

 

 
 

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IN WITNESS WHEREOF, this Agreement has been signed as of the date first written
above.
 

 
NU SKIN ENTERPRISES, INC.
 
a Delaware Corporation
 
By:                                                                           
 
Name:                                                                           
 
Title:                                                                           
 

 
STOCKHOLDER:
 
Signature:                                                                           
 
Name:  [______________]
 

 
STOCKHOLDER’S SPOUSE (as applicable):
 
Signature:  __________________________________
 
Name:  [______________]
 

 
STOCKHOLDER AFFILIATED ENTITIES
 
[______________]
 
By:           ___________________________________
 
           [______________]
 
Its:           [______________]
 

 
 

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