NSE Executive Bonus Plan




NU SKIN ENTERPRISES


Corporate Executive -  Incentive Bonus Plan  (US Based)

July 2001 (updated August 15, 2001)




Purpose



	 	
Nu Skin Enterprises, Inc. (“Nu Skin”) believes that sound compensation
programs are essential to the retention, attraction and
motivation of personnel . The purpose of the Plan is to
focus executives on excellent, sustained performance that
leads to long-term growth, profitability and stability.	 





Objectives



	 	
The objectives of the Incentive Plan include:	 





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





	•	
Enhancing operational efficiency and teamwork within each division/region and
across divisions and regions;





	•	
Increasing revenue and operating income on a constant currency basis; and





	•	
Attracting, retaining and motivating executives by emphasizing “pay for
performance” compensation programs that offer competitive total
compensation (base salary + incentives) opportunities based on achievement of
Company financial and strategic objectives.










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 fiscal quarter.





	•	
Performance Cycles





 	 	
Executives are eligible to earn the incentive award each fiscal quarter calculated on the
individual’s base salary as of the start of the quarter, and based upon the
Company’s performance during the quarter.






	•	
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 NSE Finance Department.





Incentives and Participants



	 	
Executive  Incentive  Plan  Participants  have target award  opportunities
designed  to reward  superior  Corporate  and  Division/Region  performance  and
maintain  externally  competitive total cash compensation  commensurate with the
Company'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.





	INCENTIVES	 	 	 	 
	 	 	 	 	 
	Position	Total
Target
Incentive	NSE
Profit
Portion	NSE
Revenue
Portion	Division/
Region
Revenue
	Chairman & CEO	60%	60%	40%	0%
	Senior Vice Presidents	60%	60%	40%	0%
	EVPs	60%	60%	40%	0%
	Division Presidents, Regional VPs	50%	60%	10%	30%
	Division COO, U.S. General Manager	40%	60%	10%	30%
	Corporate VPs > 5 years VP service	40%	60%	40%	0%
	Corporate VPs < 5 years VP service	30%	60%	40%	0%
	Division, Country Vice Presidents	30%	60%	10%	30%









	PARTICIPANTS	 
	 	 
	Position	Participants
	Chairman & CEO 	Blake Roney, Steve Lund
	Senior Vice Presidents	Brooke Roney, Sandie Tillotson, Max Pinegar
	Executive Vice Presidents 	Truman Hunt, Corey Lindley
	Division Presidents, Regional VPs 	Lori Bush, Joe Chang, Richard King,
Robert Conlee, Mark Wolfert, Mike Smith
	U.S. General Manager, Division COO 	Scott Schwerdt, Jack Peterson
	Vice Presidents > 5 years VP service 	Mark Adams,
 Claire Averett, Max Esplin, Gary Garrett, Rich Hartvigsen, Sid Henderson,
 Larry Macfarlane, Brad Morris, R. Brent Ririe, Mike Smith
	Vice Presidents < 5 years VP service 	Joe Ford, John Fralick,
James Frary, Keith Howe, Ritch Wood, Rob Young
	Division, Country Vice Presidents	Luiz Cequeira, Char Knox, Brett Nelson,
Bart Mangum









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.






	•	
  As  shown  in  the  table  above,  Division  or  Region/Country
executives  will split the revenue based bonus between  Corporate  (10%) revenue
and Division or  Region/Country  (30%) revenue.  The Division or  Region/Country
executive   must  achieve  at  least  80%  of  their   respective   Division  or
Region/Country target revenue in order to be eligible for any payment related to
the Corporate portion of the incentive.  In addition, to receive the Division or
Region/Country   revenue  portion  of  the  bonus  the   Division/Region/Country
threshold level of 90% must be met.











Performance Thresholds



	•	Threshold
 levels represent the minimum acceptable actual
performance levels, relative to the targets, required for incentive pay-out.






	 	•	 The threshold level for operating profit is 95%






	 	•	The threshold level for revenue is 90%






	 	Note:	If  either CSF is below
the threshold level at the end of the Plan
performance cycle, no incentive will be paid.






	•	At the Threshold
level of performance, the incentive pay-out will
begin at 50% and increase linearly to the Targeted or 100%
level of performance.






	•	Target levels are set to essentially be in line with
achievement of 100% of budgeted revenue and operating profit.






	•	Outstanding levels represent performance levels that exceed the
target objectives. The bonus continues to increase linearly when the targets are
exceeded.










Target Guidelines



	•	Target incentive award levels are set by the executive committee based on the
individual’s level of job responsibility, considering that job’s
potential 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.






	•	The actual incentive payout may be smaller or larger, depending on overall NSE,
and Division or Region/Country performance results.






Incentive Award Pay-out Guidelines



	•	Eligible participants will
be chosen by the Chairman and the CEO/President and
approved by the Executive Compensation Committee, and must be on the payroll at
the time of the payment;






	•	The number of days from
the date the Participant was selected for participation
to the fiscal quarter-end will be used to prorate the incentive award;






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






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






	•	Payments  will be made
approximately sixty days after each quarter-end.