Components of Compensation. The components of our current compensation program consist of (i) base salary, (ii) short-term incentives in the form of cash bonus payments, (iii) long-term incentives in the form of equity awards, and (iv) certain other benefits provided to Executive Officers. These components and the relationship of each component of compensation to our performance are discussed below.

        Base Salary. The Compensation Committee is responsible for establishing the base salary for the Chief Executive Officer and approving the base salary of other Executive Officers. In establishing and approving base salaries and any adjustments paid to our Executive Officers, the Compensation Committee considers various factors including (i) salaries provided by similarly sized companies or companies within our industry; (ii) the nature of each Executive Officer’s responsibilities, capabilities and contributions; (iii) an evaluation of our financial and securities market performance; (iv) the level of cash bonuses that are payable if target performance measures are met; and, (v) with respect to Executive Officers, other than the Chairman of the Board and the Chief Executive Officer, the recommendation of the Chairman of the Board and the Chief Executive Officer. The Compensation Committee does not assign any specific weights to these factors, but does emphasize establishing salaries that are competitive in order to enable us to attract and retain qualified and effective Executive Officers. In connection with this process, the Compensation Committee reviews and considers compensation surveys prepared for the Compensation Committee by independent consulting firms and information compiled by our human resource department. The Compensation Committee believes that the base salaries for our Executive Officers are reasonable in relation to our size and performance in comparison with the compensation paid by similarly sized companies or companies within our industry.

        Annual Incentive Compensation. The Compensation Committee policy is to maintain a significant portion of the Executive Officers’ compensation at risk, tied to our financial performance. In furtherance of this objective, we have established formal incentive plans that provide for cash bonuses based on the achievement of targeted levels of revenue and operating income in quarterly and semi-annual incentive periods, after eliminating any impact of foreign currency fluctuations. The quarterly and semi-annual targets are established semi-annually and reviewed in advance of each semi-annual period for any necessary adjustments. The amount of the bonus that can be earned under these plans is based upon a formula and is determined by computing the degree to which the targeted performance measures have been met or exceeded. The base bonuses range from 30% to 60% of salary to the extent revenue and operating profit targets are achieved. If actual performance exceeds the targeted amounts, the bonus is increased linearly based on the extent to which the bonus targets are exceeded. If the operating targets are not met, the base bonus is reduced linearly to 50% of target bonus percentages, but no bonuses are paid under the current bonus plan if actual performance is less than 90% of the operating profit target. A bonus was paid to Executive Officers under these plans based on our performance during each incentive period in 2003 except for the second quarter and first-half incentive periods, when targets were not achieved. The amount of the bonuses received by Corey B. Lindley for 2003 was driven by operating results in China where the combined operating income for the second half of the year was significantly greater than targeted operating income.

        The Compensation Committee also has retained the right to make discretionary bonuses to Executive Officers for extraordinary performance and other factors. The Compensation Committee believes the incentive compensation plans for our Executive Officers reward those individuals for achieving or exceeding our goals and targeted objectives, thus benefiting our company and our stockholders. The Compensation Committee believes the achievement of these goals and targeted objectives will dictate, in large part, our future operating results. The Compensation Committee believes that providing incentive-based compensation fairly and adequately compensates individuals in relation to their responsibilities, capabilities, and contributions to our company, and in a manner that is tied to our performance.

        We have also historically made a year-end bonus payment to corporate employees in the form of a gift certificate or similar merchant credit arrangement or cash in an amount equal to a percentage of each employee’s

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base salary (approximately two-weeks’ salary). The amount of this year-end payment made to the Named Officers is included in the bonus column of the Summary Compensation Table.

        Equity Awards. The Compensation Committee has adopted a compensation policy that is designed to encourage Executive Officers to manage from the perspective of owners with an equity stake in our company. The Compensation Committee ties a portion of the total compensation of Executive Officers to our long-term financial performance through the grant of equity awards. We have adopted the Second Amended and Restated 1996 Stock Incentive Plan that provides members of the Compensation Committee with the discretion to grant equity incentive awards to key employees. These members of the Compensation Committee have the complete authority to determine the persons to whom awards will be made and the nature and size of such awards. The Second Amended and Restated 1996 Stock Incentive Plan provides for options, stock appreciation rights, contingent stock awards, and restricted stock awards. Members of the Compensation Committee determine the number of awards to be granted and the persons who are to receive such awards on a subjective basis, taking into consideration several factors including the level of options generally granted by similarly sized companies or companies within our industry for similar positions, the anticipated value of our stock if financial and operating targets are met, individual salaries and individual performance, and recommendations of the Chairman of the Board and Chief Executive Officer with respect to the other Executive Officers. The members of the Compensation Committee also utilize the services of an independent consulting firm to provide advice on the size and frequency of equity awards. Typically, the option awards are granted twice a year. The Compensation Committee is currently evaluating our equity compensation practices compared to trends by other peer companies and in light of anticipated changes to the accounting treatment of stock option grants.

        Other Benefits. We maintain certain other plans and arrangements for the benefit of our Executive Officers. We believe these benefits are reasonable in relation to the executive compensation practices of other similarly sized companies or companies within our industry.

        Tax Limitations on Deductibility. The Compensation Committee takes into consideration the limitation on deductibility for United States income tax purposes of compensation in excess of $1 million paid to our highest paid Executive Officers when it is determining compensation for our Executive Officers. The Compensation Committee has attempted, where possible, to structure its formal bonus and equity plans to qualify for the “performance-based” exception to the deduction limitation.

        Compensation of the Chief Executive Officer. The compensation paid to Mr. Hunt in 2003 was negotiated by the Compensation Committee and established and approved in connection with the engagement of Mr. Hunt to replace Steven J. Lund as the President and Chief Executive Officer in accordance with the policies set forth above. The Compensation Committee established a salary at a level which was at approximately the 50^th percentile for salaries of chief executive officers of companies of comparable size and within our industry. We paid $305,279 in bonuses to Mr. Hunt based on our revenue and operating profit performance in 2003 compared to targeted goals. The amount of bonuses paid to Mr. Hunt included a year-end bonus payment that was equivalent, on a percentage basis of base salary, to the year-end payments provided to all corporate employees as described above. The Compensation Committee made a contingent stock award of 250,000 shares of Class A Common Stock and granted an option to purchase 250,000 shares of Class A Common Stock to Mr. Hunt in 2003 in connection with his appointment as President and Chief Executive Officer. The size of the grant was based on input from the Compensation Committee’s consultant and was intended to tie a significant portion of Mr. Hunt’s compensation to the long-term interests of our stockholders and provide a reasonable level of compensation to our long-term performance.

        In January 2003, Steven J. Lund agreed to accept a full-time volunteer leadership position for his church for three years. He continued to serve as our CEO until May 2003. The salary we paid to Mr. Lund in 2003 was reviewed and approved in accordance with the policies set forth above. The Compensation Committee believes Mr. Lund’s salary was commensurate with the compensation paid to chief executive officers by companies of

21

comparable size and within our industry. We paid $29,907 in bonuses to Mr. Lund based on our revenue and operating profit performance in the first quarter of 2003 compared to targeted goals. No equity awards were granted to Mr. Lund due to his existing stock ownership position.

    Conclusion.        The Compensation Committee believes that the concepts discussed above further the stockholders’ interests and that Executive Officer compensation encourages responsible management. The Compensation Committee regularly considers the effect of management compensation on stockholder interests.

COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS Daniel W. Campbell, Chairman Paula F. Hawkins E.J. "Jake" Garn Andrew D. Lipman Jose Ferreira, Jr.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

        The Compensation Committee is comprised of Daniel W. Campbell, Paula F. Hawkins, E.J. “Jake” Garn, Andrew D. Lipman and Jose Ferreira, Jr. Mr. Lipman is associated with a law firm that provides legal services to us in connection with contractual and regulatory issues associated with telecommunications and enhanced data and voice communications products. In addition, Mr. Ferreira is associated with a company that provides management consulting services to us. See “Certain Relationships and Transactions” for more information concerning these relationships described above.

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STOCK PERFORMANCE GRAPH

        Set forth below is a line graph comparing the cumulative total stockholder return (stock price appreciation plus dividends) on the Class A Common Stock with the cumulative total return of the S&P 500 Index and a market weighted index of publicly traded peers for the period from December 31, 1998 through December 31, 2003. The graph assumes that $100 is invested in each of the Class A Common Stock, the S&P 500 Index, and the index of publicly traded peers on December 31, 1998 and that all dividends were reinvested. The publicly traded companies in the peer group are Avon Products, Inc., Dial Corporation, Estee Lauder, Nature’s Sunshine Products, Inc., and Tupperware Corporation.

Measurement Period		Company		S&P 500 Index		Peer Group Index
December 31, 1998		$      100	.00	$      100	.00	$      100	.00
December 31, 1999		38	.36	121	.04	94	.49
December 31, 2000		22	.49	110	.02	100	.64
December 31, 2001		38	.01	96	.95	92	.26
December 31, 2002		53	.15	75	.52	96	.47
December 31, 2003		77	.80	97	.18	128	.96

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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

        The Audit Committee of the Board of Directors is responsible for monitoring our financial auditing, accounting, and financial reporting processes and our system of internal controls on behalf of the Board of Directors. The Board of Directors has adopted a written charter for the Audit Committee, which is attached hereto as Appendix A. Our management has primary responsibility for our internal controls and reporting process. Our independent public accountants, PricewaterhouseCoopers LLP, are responsible for performing an independent audit of our consolidated financial statements in accordance with generally accepted auditing standards and issuing an opinion on the conformity of our audited consolidated financial statements to generally accepted accounting principles. The Audit Committee’s responsibility is to monitor these processes. In this context, the Audit Committee met and held discussions with management, our internal auditors, and PricewaterhouseCoopers LLP. Management represented to the Audit Committee that the consolidated financial statements for the fiscal year 2003 were prepared in accordance with generally accepted accounting principles.

        The Audit Committee hereby reports as follows:

•

The Audit Committee has reviewed and discussed the audited consolidated financial statements and accompanying management’s discussion and analysis of financial condition and results of operations with our management and PricewaterhouseCoopers LLP. This discussion included PricewaterhouseCoopers LLP’s judgments about the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

•

The Audit Committee also discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the applicable Statements on Auditing Standards, including SAS No. 61 (Communication with Audit Committees).

•

PricewaterhouseCoopers LLP also provided to the Audit Committee the written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee has discussed with PricewaterhouseCoopers LLP the accounting firm’s independence. The Audit Committee also considered whether non-audit services provided by PricewaterhouseCoopers LLP during the last fiscal year were compatible with maintaining the accounting firm’s independence.

•

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2003, for filing with the Securities and Exchange Commission. The Audit Committee also selected, subject to stockholder ratification, PricewaterhouseCoopers LLP to serve as our independent public accountants for the year ending December 31, 2004.

AUDIT COMMITTEE OF THE BOARD OF DIRECTORS Daniel W. Campbell, Chairman E.J. “Jake” Garn Paula F. Hawkins Andrew D. Lipman

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CERTAIN RELATIONSHIPS AND TRANSACTIONS

Stock Repurchase and Registration of Shares

        On October 22, 2003, we agreed to repurchase approximately 10.8 million shares of common stock from certain members of our original stockholder group as identified below. In a separate transaction, these same stockholders negotiated a private sale of approximately 6.2 million additional shares of common stock. Closing conditions were subsequently met, and the transactions closed on October 27, 2003. The terms and conditions of the repurchase were approved by a special committee of our Board of Directors comprised solely of independent directors. The special committee engaged independent financial and legal advisors in connection with this transaction.

        The following stockholders who are executive officers, directors or 5% or greater stockholders, or family members of the foregoing, participated in the repurchase transaction with respect to shares directly or indirectly beneficially owned by them:

Name		Relationship		Number of Shares Repurchased
Blake M. Roney		Chairman of the Board, significant stockholder		3,436,167
Nedra D. Roney		Significant stockholder		3,635,729
Steven J. Lund		Former President and Chief Executive Officer, significant stockholder		286,347
Brooke Roney		Director, Senior Vice President		283,740
Sandra Tillotson		Director, Senior Vice President, significant stockholder		1,272,654
R. Craig Bryson		Significant stockholder		636,327
Kirk V. Roney		Brother of Blake, Brooke and Nedra Roney		430,401

        The purchase price for the shares was $12.95 per share, representing approximately a 6 percent discount to the closing price of $13.75 per share on October 22, 2003, the date the agreement was executed.

        We have agreed to file a registration statement for the resale of the shares purchased by the third-party investors. In addition, we negotiated the conversion, on a 1-to-1 basis, of all shares of super-voting Class B Common Stock into the publicly traded shares of Class A Common Stock, which will be the only class of shares outstanding going forward. The Class B shares, held exclusively by our original stockholder group, enjoyed 10-to-1 voting rights, representing more than 90 percent of the voting power. As a result of these transactions, approximately 58 percent of the company’s outstanding economic and voting interests are now publicly held, with the original stockholder group retaining approximately 42 percent.

        The selling stockholders also agreed to restrictions preventing them from selling any of their remaining shares on the open market for two years. During the two-year selling restriction period, we will have the right to purchase additional shares from the selling stockholders up to 30 percent of the total number of shares sold to us and third-party investors at a similar discount to market. At the expiration of the two-year period, the selling stockholders have agreed to limit the number of shares they can sell on the open market.

        In September 2003, Sandra N. Tillotson completed the sale of 750,000 shares of Class A Common Stock to a third party. Ms. Tillotson also granted the investor the option to purchase up to 2 million shares, and the investor provided Ms. Tillotson the right to require the investor to purchase up to an additional 3.5 million shares. In connection with such transaction, we agreed to register for resale the shares acquired by the investor in any of such transactions. Ms. Tillotson agreed to reimburse us for expenses we incurred in excess of $125,000 (the

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amount she reimbursed us for expenses we incurred related to the 2002 secondary offering in which she did not participate) up to a maximum of $75,000.

Leases

        We lease our corporate offices, distribution center, and certain other property pursuant to lease agreements with two entities, Scrub Oak, Ltd. and Aspen Country LLC, owned by the following executive officers, directors, 5% or greater stockholders, and respective family members: Scrub Oak, Ltd. — Blake M. Roney, Nedra D. Roney, Sandra N. Tillotson, Brooke B. Roney, Steven J. Lund, Craig S. Tillotson, and R. Craig Bryson; Aspen Country LLC — Blake M. Roney, Sandra N. Tillotson, Brooke B. Roney, and Steven J. Lund. In 2003, we incurred lease charges totaling approximately $2.2 million and $1.1 million, respectively, to Scrub Oak and Aspen Country. The terms of the leases were negotiated and approved by a special committee of our Board of Directors.

Stockholder Distributors

        During a portion of 2003, each of R. Craig Bryson and Craig S. Tillotson were beneficial owners of more than 5% of our Class A Common Stock and have been company distributors since 1984. Messrs. Bryson and Tillotson and Clara McDermott, the mother of Mr. Tillotson, are partners in an entity (the “Partnership”) that receives substantial commissions from us on product sales. For the fiscal year ended December 31, 2003, total commissions we paid to the Partnership were approximately $3.2 million. By agreement, we pay commissions to the Partnership at the highest level of commissions available to distributors.

        Craig S. Tillotson has three brothers who are company distributors. For the year ended December 31, 2003, total commissions we paid to these persons or the partnerships in which they are partners from the sale of our products were approximately $2.4 million.

Lease of Airplane

        We periodically charter air service from a charter company, Keystone Aviation LLC, in which Blake M. Roney, our Chairman of the Board, currently owns a 50% interest. In 2003, we paid $550,148 to this charter company. Keystone Aviation, LLC, leases from time to time an aircraft from Arrow Plane, L.C. to provide its charter services to us. Mr. Roney and his spouse directly or indirectly own substantially all of Arrow Plane, L.C. In 2003, Arrow Plane, L.C. received payments of approximately $216,840 from Keystone Aviation related to charter services provided to us. The Audit Committee of the Board of Directors has reviewed and approved the rates being charged by Keystone Aviation, LLC.

Certain Loans

        In July 2001, we loaned $500,000 to Joseph Chang, President of Pharmanex in connection with the purchase of a home. This loan was secured by real estate purchased by him for his primary residence. The loan bears interest at 5.03% per annum, payable in semi-annual payments. The loan was repaid in full in 2003. The highest amount of principal outstanding during 2003 was $500,000.

Other

        Andrew D. Lipman, a director of our company, is a partner in the law firm Swidler Berlin Shereff Friedman LLP (“Swidler Berlin”). Swidler Berlin provides legal services to us in connection with contractual and regulatory issues associated with the telecommunications and enhanced data and voice communications products of Big Planet.

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        In April 2003, we engaged the Woodclyffe Group, LLC, to perform consulting work for us for a monthly retainer of $22,500 plus a daily rate per consultant for time above the contractual commitment. Jose Ferreira, Jr., who subsequently became a director of our company, is a founder and principal of the Woodclyffe Group and has 100% ownership interest. A total of $251,200 was paid for services provided by the Woodclyffe Group in 2003.

        We currently employ a brother of Blake M. Roney and Brooke B. Roney and two brothers-in-law of Blake M. Roney who make in excess of $60,000 per year. We paid these individuals an aggregate of $366,266 in salary and bonuses in 2003. In addition, these employees also participated in the employee benefit plans available generally to our employees.

PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS

        The firm of PricewaterhouseCoopers LLP, our independent public accountants for the fiscal year ended December 31, 2003, was selected by the Audit Committee of the Board of Directors to act in the same capacity for the fiscal year ending December 31, 2004. Representatives of PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they so decide and will be available to respond to appropriate questions.

        The following table presents fees for professional services rendered by PricewaterhouseCoopers LLP for the audit of our annual financial statements for the fiscal years ending December 31, 2003 and December 31, 2002 and fees billed for other services rendered by PricewaterhouseCoopers LLP during those periods.

		Fiscal 2003		Fiscal 2002
Audit Fees(1)		$         811,063		$         776,221
Audit-Related Fees(2)		58,750		72,800
Tax Fees(3)		1,614,000		1,026,080
All Other Fees(4)		--		12,583
Total		$   2,483,813		$   1,887,684

(1)

Audit Fees consist of fees billed for the audit of annual financial statements, review of quarterly financial statements and services normally provided in connection with statutory and regulatory filings or engagements, including services associated with SEC registration statements.

(2)

Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements including audits of benefit plans and other such services.

(3)

Tax Fees consist of fees billed for tax compliance, tax advice, and tax planning.

(4)

All Other Fees consist of fees billed for all other services not included in the categories above.

Audit and Non-Audit Services Pre-Approval Policy

        Under the Audit and Non-Audit Services Pre-Approval Policy, as adopted by the Audit Committee in 2003, the Audit Committee must pre-approve all audit and non-audit services provided by the independent auditors. The policy, as described below, sets forth the procedures and conditions for such pre-approval of services to be performed by the independent auditors. Under the policy, proposed services may be either pre-approved categorically within specified budgets (“general pre-approval”) or specifically pre-approved on a case-by-case

27

basis (“specific pre-approval”). In approving any services by the independent auditors, the Audit Committee will consider whether the performance of any such service would impair the independent auditors’ independence.

        The Audit Committee must specifically pre-approve the terms and fees of each annual audit services engagement. All other Audit, Audit-related, Tax, and other services may be generally pre-approved pursuant to projected categorical budgets. The Audit services subject to general pre-approval include such services as statutory audits or financial audits for subsidiaries or affiliates and services associated with SEC registration statements, periodic reports, and other documents filed with the SEC or other documents issued in connection with securities offerings. Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of our financial statements that are traditionally performed by the independent auditors. Tax services include tax compliance, tax planning, and tax advice. All Other services are those routine and recurring services that the Audit Committee believes will not impair the independence of our auditors, such as new market development advice and other miscellaneous services. The SEC prohibits our independent auditors from performing certain non-audit services, and under no circumstances will the Audit Committee approve such services by the independent auditors.

        The Audit Committee will review the generally pre-approved services from time, at least annually. Any changes to budgeted amounts or proposed services will require specific pre-approval by the Audit Committee.

        In 2003, all of the services provided by PricewaterhouseCoopers were approved by the Audit Committee in accordance with the Audit and Non-Audit Services Pre-Approval Policy.

Vote Required and Board of Directors’ Recommendation

        Ratification of PricewaterhouseCoopers LLP as our independent accountants will require the affirmative vote of a majority of the total number of votes of outstanding shares of Class A Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote. In determining whether Proposal 2 has received the requisite number of affirmative votes, abstentions will be counted as shares entitled to vote and will have the same effect as votes against Proposal 2. Broker non-votes, however, will be treated as not entitled to vote for purposes of determining approval of Proposal 2 and will not be counted as votes for or against Proposal 2. Properly executed, unrevoked proxies will be voted FOR Proposal 2 unless a vote against Proposal 2 or abstention is specifically indicated in the proxy.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF
OUR SELECTION OF INDEPENDENT ACCOUNTANTS.

OTHER MATTERS

        As of the date of this Proxy Statement, the Board of Directors knows of no other matters to be brought before the Annual Meeting. If other matters are properly brought before the Annual Meeting or any adjournment or postponement thereof, it is intended that the persons named in the enclosed proxy will have discretionary authority to vote on such matters in accordance with their best judgment, acting together or separately.

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STOCKHOLDER PROPOSALS FOR 2005 ANNUAL MEETING

        In order for a stockholder proposal to be considered for inclusion in our proxy statement for next year’s annual meeting, the written proposal must be received by us no later than December 16, 2004. Such proposals also will need to comply with Securities and Exchange Commission regulations regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Similarly, in order for a stockholder proposal to be raised at next year’s annual meeting, written notice must be received by us no later than December 16, 2004 and shall contain such information as required under our Bylaws.

        In addition, our Bylaws permit stockholders to nominate directors at the annual meeting by providing advance written notice to us. In order to make a director nomination at a stockholder meeting, a stockholder must notify us not fewer than 120 days in advance of the date of our proxy statement released to stockholders in connection with the previous year’s annual meeting. Thus, since April 16, 2004 is specified as the date of this year’s proxy statement, in order for any such nomination notice to be timely for next year’s annual meeting, it must be received by us no later than December 16, 2004 (i.e., 120 days prior to April 16). In addition, the notice must meet all other requirements contained in our Bylaws.

        A stockholder may contact our Corporate Secretary at our headquarters for a copy of the relevant Bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

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ANNUAL REPORT TO STOCKHOLDERS

        The Annual Report to Stockholders concerning our operations for the fiscal year ended December 31, 2003, including financial statements, is enclosed with this Proxy Statement.

ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION

        A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2003, as filed with the Securities and Exchange Commission, without exhibits, may be obtained by stockholders without charge by written request to Scott Pond, Investor Relations Manager, Nu Skin Enterprises, Inc., 75 West Center Street, Provo, Utah 84601. A copy of the Annual Report on Form 10-K is also available on our website, www.nuskinenterprises.com. Exhibits will be provided upon written request and payment of an appropriate processing fee.

By Order of the Board of Directors, /s/ Blake M. Roney Blake M. Roney Chairman of the Board

DATED: April 16, 2004

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Appendix A

Nu Skin Enterprises, Inc.
Audit Committee Charter
(Last Approved Revisions: October 20, 2003)

I.       PURPOSE (NYSE)

        The purpose of the Audit Committee (the “Committee”) shall be to provide assistance to the Board of Directors (the “Board”) in fulfilling its responsibility to the stockholders, potential stockholders and investment community with respect to its oversight of:

(i)

The quality and integrity of the financial statements of Nu Skin Enterprises, Inc. (“NSE”);

(ii)

NSE’s compliance with legal and regulatory requirements;

(iii)

The independent accountants’ qualifications and independence; and

(iv)

The performance of NSE’s internal audit function and independent accountants.

        The Committee shall also prepare such reports as the New York Stock Exchange (“NYSE”) or the Securities and Exchange Commission (“SEC”) may require be included in NSE’s annual proxy statement or other public filings.

II.       STRUCTURE AND OPERATIONS

Composition and Qualifications

The Committee shall be comprised of three or more members of the Board, each of whom shall meet the applicable independence, financial literacy and experience requirements of the NYSE and of the SEC as they may be amended or supplemented from time to time, subject to any applicable transition periods with respect to such requirements (SO-NYSE). No member of the Committee may serve on the audit committee of more than three public companies, including NSE, unless the Board (i) determines that such simultaneous service would not impair the ability of such member to effectively serve on the Committee and (ii) discloses such determination in the annual proxy statement (NYSEC).

Appointment and Removal

        The members of the Committee shall be appointed by the Board and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation or removal. The members of the Committee may be removed, with or without cause, by a majority vote of the Board.

1

Chairman

        Unless a Chairman is elected by the full Board, the members of the Committee shall designate a Chairman by the majority vote of the full Committee membership. The Chairman shall be entitled to cast a vote to resolve any ties. The Chairman will chair all regular sessions of the Committee and set the agendas for Committee meetings.

III.       MEETINGS

        The Committee shall meet at least quarterly, or more frequently as circumstances dictate. As part of its goal to foster open communication, the Committee shall periodically meet separately with each of management, the Chief Internal Audit Executive and the independent accountants to discuss matters that are more appropriate to discuss privately (NYSE). In addition, the Committee should meet with the independent accountants and management quarterly to review NSE’s financial statements in a manner consistent with that outlined below (NYSE). The Chairman of the Board or any member of the Committee may call meetings of the Committee. All meetings of the Committee may be held by telephone conference.

        All non-management directors that are not members of the Committee may attend meetings of the Committee. Additionally, the Committee may invite to its meetings any other persons as it deems appropriate in order to carry out is responsibilities including management personnel and other directors. The Committee may also exclude from its meetings any persons it deems appropriate.

IV.       RESPONSIBILITIES AND DUTIES

        The following responsibilities shall serve as the general guidelines of the Committee in carrying out the purposes of the Committee as outlined in Section I of this Charter. These responsibilities should serve as a guide with the understanding that the Committee may diverge from or carry out additional functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, stock exchange, regulatory, legal or other conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time related to the purposes of the Committee outlined in Section I of this Charter.

        The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the Committee deems appropriate. In this regard, the Committee shall have the authority to retain outside legal, accounting or other advisors for the purpose of carrying out its duties as set forth herein, including the authority to determine and approve the fees payable to such advisors and any other terms of retention and any administrative expenses of the Committee that are necessary or appropriate to carry out such duties (NYSE).

        The Committee shall be given full access to NSE’s internal audit group, Board, executives and independent accountants as necessary to carry out these responsibilities. While acting within the scope of its stated purpose, the Committee shall have all the authority of the Board.

2

        Notwithstanding the foregoing, the Committee is not responsible for certifying NSE’s financial statements or guaranteeing the independent accountant’s report. The fundamental responsibility for NSE’s financial statements and disclosures rests with management.

        The Committee’s responsibilities are organized into five categories; (i) Independent Accountant Oversight, (ii) Internal Audit Oversight, (iii) Financial Reporting Process/Document Review, (iv) Compliance Oversight, and (v) Reporting.

Independent Accountant Oversight Responsibilities

1.

The Committee has sole authority to appoint, retain, compensate, evaluate and terminate NSE’s independent accountants (SO-NYSE). The Committee shall be directly responsible for oversight of the work of the independent accountants (including approving the audit plan and resolution of disagreements between management and the independent accountants), and the independent accountants shall report directly to the Committee (SO-NYSEC). The Committee may seek the input and advice of management and other board members in fulfilling these responsibilities, but these responsibilities may not be delegated to management.

2.

The Committee shall establish procedures for the approval of audit and non-audit services in advance. In accordance with such procedures, the Committee shall pre-approve all audit and non-audit services to be provided for the Company by the independent accountants (including the related fees and terms) to the extent required by and in a manner consistent with applicable law. Pre-approval authority may be delegated to one or more of the members of the Committee, who shall report at the next meeting of the Committee of any pre-approvals granted (SO).

3.

The Committee shall review, at least annually, the qualifications, performance and independence of the independent auditors. (NYSE) In conducting this review and evaluation, the Committee should:

a)

Obtain and review a report by the independent accountants describing: (i) the firm’s internal-quality control procedures; (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (iii) (to assess the auditor’s independence) all relationships between the independent accountants and NSE (NYSE);

b)

Include the review and evaluation of the lead partner of the independent accountants and assure the regular rotation of the lead partner as required by SEC rules (NYSEC-SO);

c)

Take into account the opinions of management and the Vice President, Internal Audit; (NYSEC)

d)

Review and assess such other requirements as may be applicable; and

3

e)

present its conclusions to the full Board (NYSEC).

4.

The Committee shall establish policies consistent with the SEC, NYSE and other applicable regulatory requirements for the hiring by NSE of employees or former employees of the independent accountants (NYSE).

Internal Audit Oversight Responsibilities

1.

The Committee shall have the ultimate responsibility for the appointment, replacement, reassignment, or dismissal of the Chief Internal Audit Executive. The Committee may seek the input of other Board members and the executive management team in fulfilling this responsibility.

2.

The Committee shall confirm and assure the independence of the internal auditor.

3.

The Committee shall consider and evaluate the audit scope, plan, staff, and budget of the internal audit function and confer with the independent accountant and management as they determine appropriate on these matters (NYSEC).

4.

The Committee shall consider and review with management and internal audit:

a)

Significant findings and management’s responses thereto;

b)

Encountered audit difficulties, including scope restrictions and information access;

c)

Changes in the planned scope of the audit plan; and

d)

Compliance with the Standards for the Professional Practice of Internal Auditing.

Financial Reporting Process/Document Review Responsibilities

1.

The Committee shall review and discuss with management, and to the extent the Committee deems necessary or appropriate, internal audit and the independent accountants, the Company’s disclosure controls and procedures that are designed to ensure the reports the Company files with the SEC comply with the SEC’s rules and forms.

2.

The Committee shall review with management as well as internal audit and the independent accountants the adequacy and effectiveness of the Company’s internal accounting and financial controls and the recommendations of management, internal audit, and the independent accountants regarding the accounting and financial reporting processes and system of internal controls for the improvement of accounting practices and internal controls.

3.

The Committee shall review and discuss with management, internal audit, and the independent accountants:

4

a)

NSE’s annual and quarterly financial statements, related footnotes and financial disclosures including Management’s Discussion and Analysis of Financial Condition and Results of Operations. (NYSE)

b)

The clarity of the financial disclosures made by the Company.

c)

The significant accounting and reporting policies, practices and procedures used to prepare the annual and quarterly financial statements, any significant financial reporting issues and judgments made in connection with the preparation of the financial statements including the effects of (i) alternative GAAP methods, (ii) off-balance sheet structures, and (iii) regulatory and accounting initiatives on NSE’s financial statements (NYSEC).

d)

A description of transactions on which management obtained accounting treatment letters (SAS No. 50) and other matters related to the conduct of the audit that are to be communicated to the Committee under generally accepted auditing standards or as may be requested by the Committee. (LR)

4.

The Committee shall review and discuss the independent accountants’ report of audit or review of the financial statements, including the report required under Section 204 of the Sarbanes Oxley Act (SO). The Committee shall inquire as to the independent accountant’s judgment of the quality, not just the acceptability, of the accounting principles used. (LR)

5.

The Committee shall review with the independent accountants significant changes required in the independent accountant’s audit plan and any problems, difficulties or disagreements and management’s response to such matters (NYSE). This review shall include issues such as (NYSEC):

a)

Restrictions on the scope of the independent accountant’s activities or on access to requested information;

b)

Accounting adjustments that were proposed by the independent accountant but were “passed” (as immaterial or otherwise);

c)

Communications between the audit team and the audit firm’s national office respecting auditing or accounting issues presented by the audit engagement; and

d)

Any “management” or “internal control” letter issued, or proposed to be issued, by the independent accountants to NSE.

6.

The Committee shall review and discuss with management and, if the Committee deems appropriate, the independent accountants the Company’s earnings press releases and other financial information, including earnings guidance provided to analysts and rating agencies. (NYSE) This discussion may be done generally (i.e., discussion of the types of information to be disclosed and the type of presentation to be made, paying particular attention to any use of “pro forma,” or “adjusted” non-GAAP information). The entire Committee need not discuss in advance each earnings release or each instance in which earnings guidance is provided (NYSEC).

5

7.

The Committee shall discuss with management and the independent accountants NSE’s guidelines and policies with respect to risk assessment and risk management. The Committee shall discuss NSE’s major financial risk exposures and the steps management has taken to monitor and control such exposures.(NYSE).

8.

The Committee shall discuss with management and the independent accountants any material negative issues presented in any press stories and analysts’ reports, and obtain an explanation thereof. (LR)

9.

The Committee shall provide input regarding the appointment of individuals to significant management positions related to financial accounting and reporting, such as Chief Financial Officer, Controller and other significant financial positions.

10.

Receive and review disclosures made to the Committee by the Company’s Chief Executive Officer and Chief Financial Officer during their certification process for the Company’s Form 10-K and Form 10-Q about (a) any significant deficiencies in the design or operation of internal controls or material weakness therein, (b) any fraud involving management or other employees who have a significant role in the Company’s internal controls and (c) any significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

Compliance Oversight Responsibilities

1.

The Committee shall obtain from the independent accountants assurance that Section 10A(b) of the Exchange Act has not been implicated. Section 10A(b) relates to illegal acts that have come to the attention of the independent accountants during the course of the audit.

2.

The Committee shall discuss with management, the Company’s Chief Internal Auditor Executive and the independent accountants concerning whether the Company and its subsidiaries are in conformity with applicable legal requirements and the Company’s code of ethics and code of business conduct (NYSE).

3.

The Committee shall review with management and the Company’s General Counsel any legal matters that may have a material impact on the financial statements and any material reports or inquiries received from regulators or governmental agencies (NYSE).

4.

The Committee shall review transactions or courses of dealing with parties related to NSE which are significant in size and that are relevant to an understanding of NSE’s financial statements, and shall review the policies and procedures utilized by management for the implementation of such transactions. In addition, the Committee shall review and approve or reject such related-party transactions with executive officers, members of the Board, or significant stockholders submitted for which a special committee of the Board has not been established, as submitted to the Committee by the Board or management from time to time.

6

5.

The Committee shall establish procedures for: (i) the receipt, retention and treatment of complaints received by NSE regarding accounting, internal accounting controls, or auditing matters; and (ii) the confidential, anonymous submission by employees of NSE of concerns regarding questionable accounting or auditing matters (SO-NYSE).

Reporting

1.

The Committee shall prepare all reports or other disclosures required to be included in NSE’s proxy statement and other public filings pursuant to and in accordance with applicable rules and regulations of the SEC (NYSE).

2.

The Committee shall report regularly to the full Board as appropriate in fulfilling its oversight obligation hereto any issues that arise with respect to the quality or integrity of NSE’s financial statements, NSE’s compliance with legal or regulatory requirements, the performance and independence of NSE’s independent auditors or the performance of the internal audit function and with respect to such other matters as are relevant to the Committee’s discharge of its responsibilities. The report to the Board may be in writing or in the form of an oral report by the Chairman or any other member of the Committee designated by the Committee to make such report (NYSE).

3.

The Committee shall maintain minutes or other record of meetings and activities of the Committee.

V.      ANNUAL PERFORMANCE EVALUATION (NYSE)

        The Committee shall perform a review and evaluation, at least annually, of the performance of the Committee and its members, including by reviewing the compliance of the Committee with this Charter. In addition, the Committee shall review and reassess, at least annually, improvements to this Charter that the Committee considers necessary or valuable. The Committee shall conduct such evaluations and reviews in such manner as it deems appropriate.

(NYSE) New York Stock Exchange Listing Requirement
(SO) Sarbanes-Oxley Act Requirement
(NYSEC) New York Stock Exchange Listing Requirement (Commentary)
(LR) Recommended by Legal Counsel

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APPENDIX B - FORM OF PROXY

NU SKIN ENTERPRISES, INC.

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 2004

         The undersigned hereby appoints M. Truman Hunt and D. Matthew Dorny as proxies with full power of substitution and hereby authorizes either of them to act and to vote, as designated on the reverse, all shares of Class A Common Stock of Nu Skin Enterprises, Inc. (the "Company") the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company to be held at the corporate offices of the Company, 75 West Center Street, Provo, Utah, May 17, 2004 at 4:00 p.m., Mountain time, and at any adjournments or postponements thereof, upon all matters referred to on this proxy card and described in the accompanying Proxy Statement, and, at the proxies' discretion, upon any other matters which may properly come before the meeting.

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

ANNUAL MEETING OF STOCKHOLDERS OF

NU SKIN ENTERPRISES, INC.

May 17, 2004

Class A Common Stock

Please date, sign and mail
your proxy card in the
envelope provided as soon as possible.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]

1.    Elect members of the Board of Directors of the Company.


[    ] FOR ALL NOMINEES
[    ] WITHHOLD AUTHORITY FOR ALL NOMINEES
[    ] FOR ALL EXCEPT (See instructions below)

NOMINEES

[    ]     Blake M. Roney
[    ]     M. Truman Hunt
[    ]     Sandra N. Tillotson
[    ]     E.J. "Jake" Garn
[    ]     Paula F. Hawkins
[    ]     Daniel W. Campbell
[    ]     Andrew D. Lipman
[    ]     Jose Ferreira, Jr.

INSTRUCTIONS:

To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here [X].

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. [    ]

2.	To ratify the selection of PricewaterhouseCoopers LLP as the Company's independent accountants for the fiscal year ending December 31, 2004. FOR [    ]     AGAINST[    ]    ABSTAIN[    ]

Shares represented by all properly executed proxies will be voted in accordance with instructions appearing on this proxy card and in the discretion of the proxy holders as to any other matters that may properly come before the meeting. IN THE ABSENCE OF SPECIFIC INSTRUCTIONS, PROXIES WILL BE VOTED FOR EACH OF THE NOMINEES AND FOR EACH OF THE PROPOSALS SET FORTH ABOVE.

Signature of Stockholder

Date:

Signature of Stockholder

Date:

Note:

This proxy must be signed exactly as the name appears hereon. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.