Exhibit 10.7 Exeucitve Incentive Plan







Nu Skin Enterprises




Executive Incentive Plan 




July 2001 (Updated July
1, 2003) 










Nu Skin Enterprises, Inc. 2





Purpose 



      Nu
Skin Enterprises, Inc. (“Nu Skin”) believes that sound compensation programs
are essential to the retention, attractionand 
motivation of personnel. The purpose of
the Plan is to focus employees on excellent, sustained performance that leads tolong-term

growth, profitability and stability. 



Objectives 



      The
objectives of the Incentive Plan include: 



	•	
Focusing employees on the achievement of Nu Skin Enterprise business and strategic
objectives;








	•	
Enhancing operational efficiency and teamwork within each division and country and across
divisions and countries;  








	•	
Increasing revenue and operating income; and  








	•	
Attracting, retaining and motivating employees by emphasizing “pay for performance” compensation
programs that offer  competitive
total compensation (base salary + incentives) opportunities upon achievement of Nu Skin
Enterprises’ (NSE) financial and strategic objectives; and Division, Country/Region,
Department and Individual objectives















Nu Skin Enterprises, Inc. 3





Effective Plan Date,
Duration and Performance Cycles 



         Effective
Plan Date 



	  	
The
effective Plan date is July 1, 2001. The Plan is in effect until further notice and can be
cancelled or changed by notification to plan participants prior to the start of any
performance cycle. 






         Performance
Cycles 



	  	
The
Plan has two six-month performance cycles. Each cycle is based on the specific results of
each period. The six-month periods are January through June and July through December.
Within each six-month period, the results of each quarter are calculated. 






	•	
Employees
are eligible to earn 25% of their potential semi-annual incentive award each fiscal
quarter. 












	•	
50%
of the semi-annual incentive is dependant on the combined results of both quarters.  









	Six-month Period	
	 	 	 	 
	50%
	
		
	
	25%	 	25%	 
	
		
	
	Quarter	 	Quarter	 












Nu Skin Enterprises, Inc. 4








	•	
The
quarter and six-month period results are based upon the Company, Division or
Country/Region, Department, and Individual                                performance
during the quarters and the six-month period. and, 









	• 	
 The
calculation is based upon the Individual’s base salary at the time of the payment.  






         Constant
Currency Basis 



	  	
The
Operating Profit and Revenue targets will be set based on budgets and projections
converted on a constant currency basis and the results for each fiscal quarter will be
converted to constant currency amounts for use in computing performance bonuses. 






	  	
Constant
Currency means using the same currency exchange rate used to translate the financial
results for the corresponding period of the prior year, thus eliminating the impact of
currency fluctuations. These amounts will be computed by the Nu Skin Enterprises’
Finance Department. 






Incentives and
Participants 



      Incentive
Plan Participants have target award opportunities designed to reward superior NSE,
Division, Country/Region,
Department
and Individual performance and maintain externally competitive total cash compensation
commensurate with NSE’s performance: 




	• 	
Participants’ incentive awards will be based upon the areas of the Company in which
they contribute and,  









	• 	
Participants are assigned a target incentive award opportunity expressed as a percentage
of their base salary. The following chart summarizes the percentages used to calculate
the bonus for each executive group.  













Nu Skin Enterprises, Inc. 5















	Incentives

		Operating Profit
	Revenue

	Position
	Total Target

Incentive
	NSE Portion
	Country/Region
	NSE Portion
	Division/Country/Region

	Chairman & CEO	 	60%	 	60%	 	 	 	40%	 	 	 
	
		
		
		
		
		
	
	Senior Vice Presidents	 	60%	 	60%	 	 	 	40%	 	 	 
	
		
		
		
		
		
	
	Executive Committee	 	60%	 	60%	 	 	 	40%	 	 	 
	
		
		
		
		
		
	
	CFO, CIO, CAO, CLO	 	60%	 	60%	 	 	 	40%	 	 	 
	
		
		
		
		
		
	
	Division Presidents	 	50%	 	60%	 	 	 	10%	 	30%	 
	
		
		
		
		
		
	
	Corp. Regional Vice Presidents, US	 	50%	 	20%	 	40%	 	10%	 	30%	 
	
		
		
		
		
		
	
	US Country Vice Presidents	 	30-40%	 	20%	 	40%	 	10%	 	30%	 
	
		
		
		
		
		
	
	Division Vice Presidents	 	30-40%	 	60%	 	 	 	10%	 	30%	 
	
		
		
		
		
		
	
	Vice Presidents	 	30-40%	 	60%	 	 	 	40%	 	 	 
	
		
		
		
		
		
	














Nu Skin Enterprises, Inc. 6




Critical Success
Factors (“CSF’s”) 



	• 	
The Company will use operating profit and revenue as Critical Success Factors (“CSF’s”).








	• 	
The
incentive bonus will be weighted 60% to operating profit and 40% to revenue. 








	• 	
The revenue portion directly related the area of responsibility, NSE,
Country/Region or Division, is the revenue CSF for that area.  






Performance Thresholds 



	• 	
       Threshold levels represent the minimum acceptable performance levels required for
incentive pay-out in each category. 










	  	
The
Operating Profit threshold  is 90% 
















	  	
The
Revenue threshold is 90% 









	  	
The
Department Goals threshold  is 80% 












	  	
The
Individual Goals threshold is 80% 









	• 	
 If the Operating Profit threshold is not met, no Revenue incentive will be
paid. If the Operating Profit threshold is met and the Revenue
threshold if not met, the Operating Profit portion will be paid but the Revenue
portion will not be paid. If Department objectives or Individual
objectives are below the threshold level at the end of the Plan performance
cycle, no incentive will be paid. Payout of the Region portion of the incentive bonus is
not dependant on first attaining Corporate results. 














Nu Skin Enterprises, Inc. 7







Targets 



Target
levels are established by NSE’s Executive Committee and represent achievement of
100% of budgeted revenue andoperating 
profit, adjusted for currency fluctuations. 



	• 	

 At achievement of 90% of the CSFs and achievement of “Pass” for
Department and Individual Goals,one-half of the cash incentive will be paid out.
The pay-out amount is increased linearly up to full payment at 100% achievement of CSFs.  






	• 	
Outstanding levels represent performance levels that exceed the target objectives.  












	• 	
At the Outstanding performance level, target cash incentives will be increased linearly.  






      Department
Targets 



	• 	

Departments set objectives that align with CSFs and the priorities of NSE and the
Division/Country/Region they support. 








	• 	
A Department must achieve 80% of its respective Goals to earn a “pass” (P) to
be eligible for any payment under the                           incentive plan; 











	• 	
A Department is defined as a cost- center or group of cost- centers as determined by the
employee’s vice president; 













	• 	
The approved budget must account for 25% of Department Goals. If a Department exceeds
their approved budget by 5% or more, the
employees in the Department are not eligible for the incentive unless such overruns are
approved in advance by the NSE Executive Committee. 














Nu Skin Enterprises, Inc. 8




      Individual
Targets 



	• 	
Target incentive award levels are determined by the Individual’s level of job
responsibility, reflecting that job’s ability to impact NSE’s financial
performance, as well as competitive total compensation practices (base salary plus
incentives) for comparable jobs within organizations similar in size and scope.  






	• 	
 Individual performance objectives for each participant are established prior to the
start of the performance period. Some Individual objectives may stretch for the entire
fiscal year. Performance levels for Individual objectives are negotiated with each
manager.  






	• 	
       The cost center of the participant determines which CSFs relate to the
participant's incentive payout; 










	• 	
A participant must achieve at least 80% of Individual Goals to earn a “pass” (P)
to be eligible for any payment under the incentive plan; and  






	• 	
A participant’s job performance must be at least at “competent” level.  











Incentive Award
Pay-Out Guidelines and Eligibility 






	• 	
       Incentive awards, if earned, will be distributed to Plan participants at the end
of each performance   cycle; 








	• 	
      All participants must be on the payroll at the time of the payment; 









	• 	
       Participants must be actively employed (not on a leave-of-absence) a minimum of
six weeks to participate in the plan.  The award
amount will be prorated based on the number of days actively employed during the bonus
period;









	• 	

Participants will receive their awards, when earned, by separate check; 








	• 	
Award payments shall be subject to any State and/or Federal tax withholdings; and  







	• 	
Award payments will be made within 45 days of the close of each quarter or 6 month
period.  






	• 	
The actual incentive pay-out may be smaller or larger, depending on overall NSE, Country
and Division performance results.