AMENDMENT NO. 2 TO
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
This Amendment No.2 to the Amended and Restated Stockholders Agreement
(this "AMENDMENT") is entered into as of May 13, 1999 by and among the
Stockholders who have executed the signature pages of this Amendment and Nu Skin
Enterprises, Inc., a corporation organized under the laws of the State of
Delaware (the "COMPANY"). This Amendment shall be binding upon each person who
executes this Amendment notwithstanding the fact that any other Stockholders
fail or refuse to execute this Amendment. The capitalized terms used in this
Amendment and not otherwise defined herein shall have the meanings given such
terms in the Amended and Restated Stockholders Agreement dated November 28,
1997, as previously amended by Amendment No. 1 to such agreement (hereinafter
the "AMENDED AND RESTATED STOCKHOLDERS AGREEMENT").
RECITALS
A. WHEREAS, the Company is proposing to undertake the registration of
shares for resale by the Stockholders and the former stockholders of Pharmanex,
Inc. pursuant to an underwritten public offering (the "PROPOSED PUBLIC
OFFERING"); and
B. WHEREAS, the Company is willing to continue to proceed with the Proposed
Public Offering only if the Stockholders agree to extend certain resale
restrictions set forth in the Amended and Restated Stockholders Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto irrevocably
agree as follows:
1. Section 2.2 Lock-up Agreement is hereby amended to lengthen the lock-up
period for all Stockholders other than the trusts identified on Schedule B.
Accordingly Section 2.2 is amended to read in its entirety as follows:
"2.2 Lock-up Agreement. Notwithstanding any provision of this
Agreement to the contrary, except for Transfers pursuant to Sections 3 and
5, from and after the date hereof each Stockholder (other than the trusts
identified on Schedule B) will not, without the prior written consent of
the Company, jointly or individually, Transfer, offer, make any short sale
of, contract to sell, lend, grant any option for the purchase of, or
otherwise dispose of, directly or indirectly, any Shares owned of record or
beneficially by such Stockholder until June 30, 2000 (the "INITIAL LOCK-UP
PERIOD"); provided, however, that the Initial Lock-up Period shall be
further extended until up to December 31, 2000 (the "EXTENDED LOCK-UP
PERIOD") with respect to any Stockholder who, together with any of such
Stockholder's Stockholder Controlled Entities, receives additional gross
proceeds (the "ADDITIONAL SALE PROCEEDS") from the sale of shares in one or
any combination of public offerings (excluding the sale of up to 9 million
shares in the Proposed Public Offering, but including any shares in excess
of 9 million shares sold in the Proposed Public Offering), private
placements, or any Company share repurchases (with each Stockholder
eligible to participate in any private placements or share repurchases at a
level at least equal to that Stockholder's
percentage equity ownership interest in the Company immediately preceding
the Company's initial public offering). The extent of the Extended Lock-up
Period shall be determined by multiplying six months by a fraction (the
"EXTENDED LOCK-UP FRACTION"). The numerator of the Extended Lock- up
Fraction shall be equal to the actual Additional Sale Proceeds received by
the Stockholder divided by $120 million. The denominator of the Extended
Lock-up Fraction shall be equal to the Stockholder's percentage ownership
interest in the Company immediately preceding the Company's initial public
offering. For example, if a Stockholder received Additional Sale Proceeds
of $5 million, and that Stockholder's percentage ownership interest prior
to the initial public offering were 5%, then the Extended Lock-up Period
would run for 5 months, calculated as follows:
$5 million/$120 million
-----------------------
6 months x .05 = 5 months
If any Stockholder elects not to participate in a liquidity event that
generates Additional Sale Proceeds, then the lock-up period for that
Stockholder shall expire on June 30, 2000. In the event Additional Sale
Proceeds exceed $120 million, then the Extended Lock-up Period shall be
subject to an additional negotiated extension."
2. Section 2.3 Post Lock-up Selling Restrictions is hereby amended as
follows:
(a) Section 2.3 is hereby amended to provide that the Restricted
Resale Period for each Stockholder (other than the trusts identified on Schedule
B to the Amended and Restated Stockholders Agreement) shall expire one year from
the expiration of the Extended Lock-up Period with respect to that Stockholder
and that the Restricted Resale Period for the trusts identified on Schedule B
would expire on the earlier of December 31, 2001 or the date the Restricted
Resale Period ends for any other Stockholder. Accordingly, the first sentence of
Section 2.3 is amended to read in its entirety as follows:
"2.3 Post Lock-up Selling Restrictions. Except as otherwise provided
herein, for a one year period following the expiration of the Initial
Lock-up Period or the Extended Lock-up Period, whichever is the last to
expire as it applies to each Stockholder (the "Restricted Resale Period"),
all sales of Shares in a public resale pursuant to Section 4(1) of the
Securities Act or Rule 144 promulgated thereunder or pursuant to any other
exempt transaction under the Securities Act, shall not exceed in any
calendar quarter the Stockholder's specified Rule 144 Allotment (as defined
below). Notwithstanding the foregoing, the Restricted Resale Period for the
trusts identified on Schedule B would run from March 26, 1999 through the
earlier to occur of (a) December 31, 2001, and (b) the date the Restricted
Resale Period expires for any other stockholder."
(b) The Stockholders agree that the provisions of subparagraphs 2.3.1
through 2.3.6 apply to all public resales whether effected pursuant to Rule 144,
Section 4(1) of the Securities Act or any other available exemption.
(c) Section 2.3.7 is hereby amended to read in its entirety as set
forth below to clarify the terms of such subparagraph:
"2.3.7. Following the expiration of the Restricted Resale Period, each
Stockholder agrees not to sell in public resales more shares in any
calendar quarter than the greater of (a) one percent of the outstanding
shares of Class A Common Stock as shown by the most recent report or
statement published by the Company, and (b) the average reported weekly
volume of trading in the Class A Common Stock determined in accordance with
the provisions of Rule 144(e)."
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(d) All other terms and conditions of the first paragraph of Section
2.3 of the Amended and Restated Stockholders Agreement and its subparagraphs
(2.3.1 through 2.3.7) shall remain in full force and effect.
3. Effect of Amendment. This Amendment amends the Amended and Restated
Stockholders Agreement only to the extent expressly provided herein. Pursuant to
Section 12.5 of the Amended and Restated Stockholders Agreement, this Amendment
shall be binding upon each of the Stockholders who elects to execute this
Amendment even if one or more of the Stockholders fail or refuse to execute this
Amendment. To the extent provisions of the Amended and Restated Stockholders
Agreement are not expressly modified or amended by this Agreement, such
unamended provisions shall continue in full force and effect and shall be
construed together with the amendments set forth herein as the entire agreement
of the parties hereto. The Amendment shall not apply to any Stockholder who does
not execute this Amendment, but such Stockholder shall remain subject to and
obligated under the terms of the Amended and Restated Stockholders Agreement,
without giving effect to this Amendment, and this Amendment shall in no way be
interpreted as limiting the obligations or restrictions in the Amended and
Restated Stockholders Agreement with respect to any Stockholder who does not
execute this Amendment Agreement. In the event a Proposed Public Offering is not
completed by November 1, 1999, or if prior to such date the Company provides
written notice to the Stockholders that it has elected not to proceed with the
Proposed Public Offering, then the amendments set forth in Sections 1 and 2
hereof shall expire and no longer be of any force or effect from November 1,
1999 (if a secondary offering has not been completed by such date) or the date
of such written notice (in the event the Company provides written notice it has
elected not to proceed with such offering).
4. Liquidity Events. In consideration of the redemption of 20,000 shares of
Class A Common Stock by the Company from each of Kirk Roney and Rick Roney at a
purchase price of $16.00 per share, each of Kirk Roney and Rick Roney agree to
execute and be bound by the terms of the Amendment No. 1 to Amended and Restated
Stockholders Agreement. Upon execution of such amendment, each of Kirk Roney and
Rick Roney shall have the same right to participate in any private or public
liquidity events as the other Stockholders. Each Stockholder hereby agrees that
the right to participate in liquidity events shall be subject to the following
terms.
4.1 The 9 million shares allocated to the Stockholders party to the
Amended and Restated Stockholder Agreement in the Proposed Public Offering shall
be allocated among the Stockholders, together with their respective Stockholder
Controlled Entities, in accordance with the percentages set forth on Schedule A
to the Amended and Restated Stockholders Agreement, including any additional
shares that may be allocated as a result of the Pharmanex stockholders not
selling their entire allotment, or as a result of the exercise of the
over-allotment option by the underwriters. In the event a Stockholder, together
with his or her respective Stockholder Controlled Entities, agrees at the
request of the underwriters to sell less than his or her applicable percentage
as set forth in Schedule A of the 9 million shares, he or she shall have the
right to receive a larger and priority allocation of any additional shares in
order to bring his or her percentage of the total shares allocated to him or her
up to the percentage set forth in Schedule A to the Amended and Restated
Stockholders Agreement.
4.2 Subject to agreeing to any terms and conditions the Company may
impose with respect to any such private liquidity event as set forth in Section
4.3 below, a Stockholder, together with his or respective Stockholder Controlled
Entities, shall have the right to participate in any Company sponsored private
placements or share repurchases by the Company at a level at least equal to that
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Stockholder's percentage equity ownership interest in the Company immediately
preceding the Company's initial public offering.
4.3 The Company may require as a condition to the right to
participate in any future liquidity event, that a Stockholder and his or her
Stockholder Controlled Entities, agree to such terms and conditions as may be
requested by the Company for all Stockholders, including any extensions of the
Extended Lock-up Period and the Restricted Selling Periods; provided, however,
that with respect to any liquidity event that occurs prior to June 30, 2000, the
provisions of Section 2.2 and 2.3, as amended above, shall determine the length
of any extension of the Extended Lock-up Period and Restricted Resale Period
unless the Additional Sales Proceeds are in excess of $120 million, in which
event the Company may negotiate a further extension of such selling
restrictions.
5. Counterparts. This Amendment may be executed by facsimile and by any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one agreement. Each counterpart may consist
of a number of copies each signed by less than all, but together signed by all
of the Parties hereto.
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, this Amendment has been signed by duly authorized
signatories of the Parties hereto and is binding upon the Parties hereto as of
the date first above written.
NU SKIN ENTERPRISES, INC.,
a Delaware Corporation
By: /s/
__________________________________________
Its: __________________________________________
/s/Blake M. Roney
Blake M. Roney, individually
/s/Nancy L. Roney
Nancy L. Roney, individually
THE ALL R'S TRUST
By: /s/L. S. McCullough
L. S. McCullough
Its: Trustee
THE B & N RONEY TRUST
By: /s/ L. S. McCullough
Its: Trustee
THE WFA TRUST
By: /s/ L. S. McCullough
Its: Trustee
S-1
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
BNASIA, LTD.
By: /s/ Blake M. Roney
Blake M. Roney
Its: General Partner
By: /s/ Nancy L. Roney
Nancy L. Roney
Its: General Partner
THE BLAKE M. AND NANCY L. RONEY
FOUNDATION
By: /s/ Blake M. Roney
Blake M. Roney
Its: Trustee
By: /s/ Nancy L. Roney
Nancy L. Roney
Its: Trustee
THE ONE FOUNDATION
By: /s/ Blake M. Roney
Blake M. Roney
Its: Trustee
By: /s/ Nancy L. Roney
Nancy L. Roney
Its: Trustee
By: /s/ Keith R. Halls
Keith R. Halls
Its: Trustee
S-2
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
B & N RHINO COMPANY, L.C.
By: /s/ Craig F. McCullough
Craig F. McCullough
Its: Manager
By: /s/ Nedra D. Roney
Nedra D. Roney, individually
By: /s/ Rick A. Roney
Rick A. Roney, individually
By: /s/ Burke F. Roney
Burke F. Roney, individually
By: /s/ Park R. Roney
Park R. Roney, individually
THE MAR TRUST
By: /s/ Tom D. Branch
Tom D. Branch
Its: Trustee
THE NR TRUST
By: /s/ Tom D. Branch
Tom D. Branch
Its: Trustee
S-3
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE ROSE FOUNDATION
By: /s/ Nedra D. Roney
Nedra D. Roney
Its: Trustee
By: /s/ Tom D. Branch
Tom D. Branch
Its: Trustee
THE NEDRA RONEY FIXED CHARITABLE TRUST
By: /s/ Tom D. Branch
Tom D. Branch
Its: Trustee
NR RHINO COMPANY, L.C.
By: /s/ Craig F. McCullough
Craig F. McCullough
Its: Manager
By: /s/ Sandra N. Tillotson
Sandra N. Tillotson, individually
THE SNT TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE DVNM TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
S-4
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE CWN TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE DPN TRUST
By: /s/ Craig S. Tillotson
Craig S. Tillotson
Its: Trustee
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE GNT TRUST
By: /s/ Craig S. Tillotson
Craig S. Tillotson
Its: Trustee
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE LMB TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
S-5
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE SANDRA N. TILLOTSON FOUNDATION
By: /s/ Sandra N. Tillotson
Sandra N. Tillotson
Its: Trustee
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE SANDRA N. TILLOTSON FIXED CHARITABLE TRUST
By: /s/ Sandra N. Tillotson
Sandra N. Tillotson
Its: Trustee
By: /s/ L. S. McCullough
L. S. McCullough
Its: Independent Trustee
SNT RHINO COMPANY, L.C.
By: /s/ Craig S. Tillotson
Craig S. Tillotson
Its: Manager
/s/ Steven J. Lund
Steven J. Lund, individually
/s/ Kalleen Lund
Kalleen Lund, individually
SKASIA, LTD.
By: /s/ Steven J. Lund
Steven J. Lund
Its: General Partner
S-6
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
By: /s/ Kalleen Lund
Kalleen Lund
Its: General Partner
THE S AND K LUND TRUST
By: /s/ Blake M. Roney
Blake M. Roney
Its: Trustee
THE STEVEN J. AND KALLEEN LUND
FOUNDATION
By: /s/ Steven J. Lund
Steven J. Lund
Its: Trustee
By: /s/ Kalleen Lund
Kalleen Lund
Its: Trustee
THE STEVEN AND KALLEEN LUND FIXED
CHARITABLE TRUST
By: /s/Steven J. Lund
Steven J. Lund
Its: Trustee
By: /s/ Kalleen Lund
Kalleen Lund
Its: Trustee
By: /s/ L. S. McCullough
L. S. McCullough
Its: Independent Trustee
S & K RHINO COMPANY, L.C.
By: /s/ Craig F. McCullough
Craig F. McCullough
Its: Manager
S-7
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
/s/ Brooke B. Roney
Brooke B. Roney, individually
/s/ Denice R. Roney
Denice R. Roney, individually
BDASIA, LTD.
By: /s/ Brooke B. Roney
Brooke B. Roney
Its: General Partner
By: /s/ Denice R. Roney
Denice R. Roney
Its: General Partner
THE B AND D RONEY TRUST
By: /s/ Blake M. Roney
Blake M. Roney
Its: Trustee
THE BROOKE BRENNAN AND DENICE RENEE
RONEY FOUNDATION
By: /s/ Brooke B. Roney
Brooke B. Roney
Its: Trustee
By: /s/ Denice R. Roney
Denice R. Roney
Its: Trustee
/s/ Kirk V. Roney
Kirk V. Roney, individually
S-8
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
/s/ Melanie K. Roney
Melanie K. Roney, individually
KMASIA, LTD.
By: /s/ Kirk V. Roney
Kirk V. Roney
Its: General Partner
By: /s/ Melanie K. Roney
Melanie K. Roney
Its: General Partner
THE K AND M RONEY TRUST
By: /s/ Rick A. Roney
Rick A. Roney
Its: Trustee
THE KIRK V. AND MELANIE K. RONEY
FOUNDATION
By: /s/ Kirk V. Roney
Kirk V. Roney
Its: Trustee
By: /s/ Melanie K. Roney
Melanie K. Roney
Its: Trustee
THE KIRK AND MELANIE RONEY FIXED
CHARITABLE TRUST
By: /s/ Kirk V. Roney
Kirk V. Roney
Its: Trustee
S-9
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
By: /s/ Melanie K. Roney
Melanie K. Roney
Its: Trustee
By: /s/ L. S. McCullough
L. S. McCullough
Its: Trustee
K & M RHINO COMPANY, L.C.
By: /s/ Craig F. McCullough
Craig F. McCullough
Its: Manager
/s/ Keith R. Halls
Keith R. Halls, individually
/s/ Anna Lisa Massaro Halls
Anna Lisa Massaro Halls, individually
KAASIA, LTD.
By: /s/ Keith R. Halls
Keith R. Halls
Its: General Partner
By: /s/ Anna Lisa Halls
Anna Lisa Halls
Its: General Partner
THE K AND A HALLS TRUST
By: /s/ Michael Lee Halls
Michael Lee Halls
Its: Trustee
S-10
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
By: /s/ Dennis Morgan
Dennis Morgan
Its: Trustee
THE HALLS FAMILY TRUST
By: /s/ Micahel Lee Halls
Michael Lee Halls
Its: Trustee
By: /s/ Dennis Morgan
Dennis Morgan
Its: Trustee
THE KEITH AND ANNA LISA HALLS FIXED
CHARITABLE TRUST
By: /s/ Keith R. Halls
Keith R. Halls
Its: Trustee
By: /s/ Anna Lisa Halls
Anna Lisa Halls
Its: Trustee
By: /s/ L. S. McCullough
L. S. McCullough
Its: Independent Trustee
THE KEITH RAY AND ANNA LISA MASSARO
HALLS FOUNDATION
By: /s/ Keith R. Halls
Keith R. Halls
Its: Trustee
S-11
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
By: /s/ Anna Lisa Halls
Anna Lisa Halls
Its: Trustee
K & A RHINO COMPANY, L.C.
By: /s/ Craig F. McCullough
Craig F. McCullough
Its: Manager
/s/ Craig S. Tillotson
Craig S. Tillotson, individually
THE CST TRUST
By: /s/ Robert L. Stayner
Robert L. Stayner
Its: Trustee
THE JS TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE JT TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE CB TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
S-12
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE CM TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE BCT TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE ST TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE NJR TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE RLS TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE RBZ TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
S-13
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE LB TRUST
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE CRAIG S. TILLOTSON FOUNDATION
By: /s/ Craig S. Tillotson
Craig S. Tillotson
Its: Trustee
By: /s/ Lee M. Brower
Lee M. Brower
Its: Trustee
THE CRAIG S. TILLOTSON FIXED CHARITABLE
TRUST
By: /s/ Craig S. Tillotson
Craig S. Tillotson
Its: Trustee
By: /s/ Lee M. Brower
Lee M. Brower
Its: Independent Trustee
CST RHINO COMPANY, L.C.
By: /s/ Sandra N. Tillotson
Sandra N. Tillotson
Its: Manager
/s/ R. Craig Bryson
R. Craig Bryson, individually
/s/ Kathleen D. Bryson
Kathleen D. Bryson, individually
S-14
SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
RCKASIA, LTD.
By: /s/ R. Craig Bryson
R. Craig Bryson
Its: General Partner
By: /s/ Kathleen D. Bryson
Kathleen D. Bryson
Its: General Partner
THE C AND K TRUST
By: /s/ Steven J. Lund
Steven J. Lund
Its: Trustee
THE BRYSON FOUNDATION
By: /s/ R. Craig Bryson
R. Craig Bryson
Its: Trustee
By: /s/ Kathleen D. Bryson
Kathleen D. Bryson
Its: Trustee
THE BRYSON FIXED CHARITABLE TRUST
By: /s/ R. Craig Bryson
R. Craig Bryson
Its: Trustee
By: /s/ Kathleen D. Bryson
Kathleen D. Bryson
Its: Trustee
By: /s/ Robert L. Stayner
Robert L. Stayner
Its: Independent Trustee
S-15
SIGNATURE PAGE OF AMENDMENT NO.2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
CKB RHINO COMPANY, L.C.
By: /s/ Keith R. Halls
Keith R. Halls
Its: Manager
THE RICK AND KIMBERLY RONEY VARIABLE
CHARITABLE REMAINDER UNITRUST
By: /s/ James Blaylock
James Blaylock
Its: Trustee
THE RICK AND KIMBERLY RONEY FIXED
CHARITABLE UNITRUST
By: /s/ Rick A. Roney
Rick A. Roney
Its: Trustee
By: /s/ Kimberly Roney
Kimberly Roney
Its: Trustee
By: /s/ L. S. McCullough
L.S. McCullough
Its: Independent Trustee
S-16