Document:

Annual Director Option

NU SKIN
ENTERPRISES, INC.

SECOND AMENDED AND RESTATED

1996 STOCK INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

(Director Option Agreement)

        This
Nonqualified Stock Option Agreement (the “Agreement”) is made
effective as of May 4, 1999 (the “Effective Date”), to _____________
(the “Optionee”) under the Nu Skin Enterprises, Inc. Second Amended
and Restated 1996 Stock Incentive Plan (the “Plan”) by Nu Skin
Enterprises, Inc., a Delaware corporation (the “Company”). Capitalized
terms used herein without definition and defined in the Plan have the same
meanings as provided in the Plan. 

    
    1.        
GRANT. Pursuant to Section 7 of the Plan, the Company has granted to
Optionee ___________ (_________) options (the
“Options”) as of the Effective Date as an incentive to remain as a
director of the Company and to work to increase the value of the Company for its
stockholders. Each Option shall entitle the Optionee to purchase, on the terms
and conditions of this Agreement and the Plan, one fully paid and non-assessable
share of Class A Common Stock (the “Class A Common Stock”) of the
Company at the option price of $_____ per share. The Options are subject
to all of the terms and conditions of the Plan and this Agreement. 

    
    2.        
NATURE  OF  OPTION.  The  Options  are  intended  to
constitute  Non-qualified  Stock Options and the provisions of the Options shall
be interpreted consistent therewith.

    
    3.        
 TERMS AND EXERCISE PERIOD.

    
            (a)    
     Options awarded under
this Agreement may not be exercised at any time until such Options are vested as
provided in Section 4 of this Agreement. 

    
            (b)    
      Except as otherwise
provided in Section 5 of this Agreement the Options granted hereunder shall
terminate on the earlier of (i) the tenth anniversary of the date of this
Agreement, or (ii) the date such Options are fully exercised. 

    
    4.        
VESTING.  All of the Options granted hereunder shall vest on May 4, 2000.

    
    5.        
TERMINATION OF SERVICE.

	(a)	
In the event the Optionee’s service as a director is terminated for any
reason, all Options that are not vested at the time of termination of service as
a Director shall terminate and be forfeited immediately upon termination of
service as a director.

	(b)	
In the event the Optionee’s service as a director is terminated for any
reason, all Options granted hereunder that are vested but unexercised at the
time of termination of service as director shall terminate upon the earliest to
occur of the following: (i) the full exercise of the Options, (ii) the
expiration of the Options by their terms, or (iii) one year following the date
of termination of the Optionee’s service as a director. Until such Options
have been terminated pursuant to the preceding sentence, the vested Options at
the time of termination of service shall be exercisable by the Optionee, the
estate of the Optionee, or the person or persons to whom the Options may have
been transferred by will or by the laws of descent and distribution for the
period set forth in this Section 5(b), as the case may be.

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	(c)	
In the event that the Optionee (a) commits an act of fraud or intentional
misrepresentation related to his or her services as a director, (b) discloses or
uses confidential information in a manner detrimental to the Company, (c)
competes with the Company, or (d) takes any other actions that are harmful to
the interests of the Company, then the Committee shall have the right to
terminate this Agreement at their discretion, in which case all Options granted
hereunder shall terminate and be forfeited.

    
    6.        
STOCK CERTIFICATES.  Within a reasonable time after the exercise of an Option,
and the satisfaction of the Optionee's obligations hereunder,  the Company shall
cause to be  delivered  to the person  entitled  thereto a  certificate  for the
shares purchased pursuant to the exercise of such Option.

    
    7.        
TRANSFERABILITY OF OPTIONS.  This Agreement and the Options
granted  hereunder  shall not be  transferable  otherwise than by will or by the
laws of descent and distribution, and shall be exercised, during the lifetime of
the Optionee, only by the Optionee.

    
    8.        
EXERCISE OF OPTIONS. Options shall become exercisable at such time,
as may be provided herein and shall be exercisable by written notice of such
exercise, in the form prescribed by the Committee, to the Secretary or President
of the Company, at its principal office, or such other person as may be
designated by the Committee. The notice shall specify the number of Options that
are being exercised. The Option Price shall be payable on the exercise of the
Options and shall be paid in cash, in shares of Class A Common Stock, including
shares of Class A Common Stock acquired pursuant to the Plan, part in cash and
part in shares, or such other manner as may be approved by the Committee
consistent with the terms of the Plan as it may be amended from time to time.
Shares of Class A Common Stock transferred in payment of the Option Price shall
be valued as of the date of transfer based on the Fair Market Value of the
Company’s Class A Common Stock which for purposes hereof, shall be
considered to be the average closing price of the Company’s Class A Common
Stock as reported on the New York Stock Exchange for the ten (10) trading days
just prior to the date of exercise. Only shares of the Company’s Class A
Common Stock which have been held for at least six (6) months may be used to
exercise the Option. 

    
    9.        
 NO RIGHTS AS  STOCKHOLDER.  This Agreement  shall not entitle the
Optionee to any rights as a  stockholder  of the  Company  until the date of the
issuance  of a stock  certificate  to the  Optionee  for shares  pursuant to the
exercise of Options covered hereby.

    
    10.        
GOVERNING PLAN DOCUMENT.  This Agreement incorporates by reference
all of the  terms  and  conditions  of the  Plan as  presently  existing  and as
hereafter amended. The Optionee expressly acknowledges and agrees that the terms
and  provisions of this  Agreement are subject in all respects to the provisions
of the Plan.  The  Optionee  also  hereby  expressly  acknowledges,  agrees  and
represents as follows:

     
           (a)    
 Acknowledges receipt of
a copy of the Plan and represents that the Optionee is familiar with the
provisions of the Plan, and that the Optionee enters into this Agreement subject
to all of the provisions of the Plan. 

     
           (b)    
 Recognizes that the Committee has been granted complete authority to administer the Plan in its sole
discretion, and agrees to accept all decisions related to the Plan and all
interpretations of the Plan made by the Committee as final and conclusive upon
the Optionee and upon all persons at any time claiming any interest through the
Optionee in any Option granted hereunder. 

     
           (c)    
Acknowledges  and  understands  that  the  establishment  of the  Plan  and  the
existence of this Agreement are not sufficient,  in and of themselves, to exempt
the Optionee from the

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requirements of Section 16(b) of the Exchange Act and any
rules or regulations promulgated thereunder,  and that the Optionee shall not be
exempt  from such  requirements  pursuant  to Rule  16b-3  unless  and until the
Optionee shall comply with all applicable  requirements of Rule 16b-3, including
without limitation,  the possible requirement that the Optionee must not sell or
otherwise dispose of any share of Class A Common Stock acquired upon exercise of
an Option  unless and until a period of at least six months  shall have  elapsed
between the date upon which such Option was granted to the Optionee and the date
upon which the  Optionee  desires to sell or  otherwise  dispose of any share of
Class A Common Stock acquired upon exercise of such Option. 

     
           (d)    
 Acknowledges and
understands that the Optionee’s use of Class A Common Stock owned by the
Optionee to pay the Option Price of an Option could have substantial adverse tax
consequences to the Optionee, and that the Company recommends that the Optionee
consult with a knowledgeable tax advisor before paying the Option Price of any
Option with Class A Common Stock. 

    
    11.        
REPRESENTATIONS AND WARRANTIES. As a condition to the exercise of any
Option granted pursuant to the Plan, the Company may require the person
exercising such Option to make any representations and warranties to the Company
that legal counsel to the Company may determine to be required or advisable
under any applicable law or regulation, including without limitation,
representations and warranties that the shares of Class A Common Stock being
acquired through the exercise of such Option are being acquired only for
investment and without any present intention or view to sell or distribute any
such shares. 

    
    12.        
OPTIONEE RIGHTS. No provision of this Agreement or the Plan shall be
deemed to give to Optionee any right to be retained in the service of the
Company, or to interfere in any way with the right of the Company at any time to
discontinue using the services of Optionee as an independent contractor or other
capacity or to remove Optionee as a director. 

    
    13.        
WITHHOLDING OF TAXES. To the extent required by applicable law, the
Optionee authorizes the Company to withhold, in accordance with applicable laws
and regulations, from any compensation or other payment payable to the Optionee,
all federal, state and other taxes attributable to taxable income realized by
the Optionee as a result of the grant or exercise of any Options. As a condition
to the exercise of any Option, Optionee shall remit to the Company the amount of
cash necessary to pay any withholding taxes, if any, associated therewith or
make other arrangements acceptable to the Company, in the Company’s sole
discretion, for the payment of any withholding taxes. 

    
    14.        
  EFFECTIVE  DATE OF  GRANT.  Each  Option  granted  pursuant to this
Agreement shall be effective as of the date first written above.

    
    15.        
COMPLIANCE WITH LAW AND REGULATIONS. The obligations of the Company
hereunder are subject to all applicable federal and state laws and to the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Class A Common Stock is then listed and any
other government or regulatory agency. 

    
    16.        
SECTION  REFERENCES.  The references to Plan sections shall be to the
sections as in  existence  on the date hereof  unless an  amendment  to the Plan
specifically provides otherwise.

    
    17.        
QUESTIONS.  All questions regarding this Agreement shall be addressed
to M. Truman Hunt.

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IN WITNESS WHEREOF,  these parties
hereby  execute  this  Agreement  to be  effective  as of  the  Effective  Date.

                                                       NU SKIN ENTERPRISES, INC., a Delaware corporation

                                                     By:    ______________________________

                                                     Its:   Steven J. Lund, President and CEO

______________________________

Optionee

______________________________

______________________________

 Optionee's Address

3NSE 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.

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