The Operation and Management of A Direct Selling Company Nu Skin As An Example National Sun Yat-sen University Presented by Johnathan Kunz Vice President, Nu Skin Taiwan May 23, 2006

Johnathan Kunz – Vice President of Sales, Nu Skin Taiwan Lecturer Profile  Joined Nu Skin Enterprises in 1997  Account Manager  MBA-Brigham Young University 2001  Global Business Opportunity Development  New Market Development  Appointed as Vice President of Sales for Nu Skin Taiwan in April 2004

President of Nu Skin Taiwan John Chou Nu Skin Taiwan, Inc., Taiwan BranchPresident World Federation Direct Selling Association Association Advisory Council member for Asia Pacific Region Taiwan R.O.C Direct Selling AssociationChairman (1997 – 2000, 2 terms, 2- year term) Taiwan R.O.C Direct Selling AssociationStanding Director 2001 – 2006, (current, 2-year term) Chinese Taipei Olympic CommitteeConsultant

1. Nu Skin Enterprises Overview 2. Nu Skin Enterprises Milestone 3. Nu Skin Taiwan Milestone 4. Company Mission and Vision 5. Compensation Plan 6. Product/Marketing Strategy 7. Company Culture 8. PR 9. Communication10. Distributor Support 11. Service Centers and Logistics 12. Code of Ethics Presentation Structure

Nu Skin Enterprises Overview

Nu Skin Enterprises Founded 1984

IPO in 1996 New York Stock Exchange

Operations in 41 markets Premium-quality products Tradition of innovation Top-10 U.S. direct-selling companies Company Overview

Direct Sales Overview Top U.S. Companies RevenueProducts Avon$7,700MPersonal Care Amway$6,200MVarious Mary Kay$1,800MCosmetics Herbalife$1,300MWeight Loss Tupperware$1,200MHousehold Products Nu Skin Enterprises$1,100MSkincare / Nutrition Pampered Chef$ 700MHome Care Source: Company reports

Financial Results Annual Revenue Since 2001 In Millions of Dollars

Revenue by Geography 2005 Results

Nu Skin Enterprises Milestone

Nu Skin Taiwan Milestone

Founded in 1992 Reached top 10 in the first year 1996 – (Business Weekly) survey: Top brand 1997 – 500 Top Companies service industry :Ranked #96

1998 – Founder visited President Lee 1999 – Endorsed by COC 2002 – 10th Anniversary. Founder visited President Chen 2003 – (China Times) survey: #1 in Brand Awareness, Product Satisfaction, Corporate Image, Distributor Character Outstanding Performance: Revenue Growth +11%, EGB Bonus Growth +10%, Executive Growth +102% 2005 – Gold Medalists Endorsement Chen Shih Shin

Company Mission and Vision

Mission Statement Our Mission is to be a force for good throughout the world by empowering people to improve lives with rewarding business opportunities, innovative products, and an enriching and uplifting culture.

Vision Statement Our Vision is to become the world’s leading direct selling company by generating more income for distributors than any other company.

Direct Sales Overview Selected Top Direct Selling Companies Avon$7,700M 11%$ 847M Amway$6,200M 33% $2,046M Mary Kay$1,800M 15%$ 270M Herbalife$1,300M 33%$ 429M Tupperware$1,200M 10%$ 120M Nu Skin Enterprises$1,180M 43%$ 507M Pampered Chef$ 700M 10%$ 70M Source: press releases, company estimates Commission RateTotal PayoutAnnual Revenue

Compensation Plan

Innovative Compensation Plan Global Seamless 6 Generation 5%

Entrepreneur Driven and Most Rewarding Opportunities

We Create Millionaires Global 20 Millionaire - 20 accounts 10 Millionaire – 20 accounts 5 Millionaire – 71 accounts 1 Millionaire – 463 accounts Taiwan 10 Millionaire – 1 account 5 Millionaire – 6 accounts 1 Millionaire – 52 accounts

Leaders Recognition

Product/Marketing Strategy

Nu Skin Products - All of The Goods, None of The Bad.

Pharmanex Products - Provided by Natural, Proven by Science

R&D Team – Top Scientists Over 130 Scientists Dr. Carl Djerassi Worldwide labs

In Search of Excellence - Company Awards -

The Measurable Difference ProDerm Biophotonic Scanner Science technology breakthrough

Best Products Certified 5 Health Food Licenses BioTech Awards Innovation Award Green Mark

Product Endorsement COC Gold Medallists

Pharmacological Standard - Product Quality / 6S 1.Selection 2.Sourcing 3.Structure 4.Standardization 5.Safety 6.Substantiation

Brand Awareness China Times Survey in 2003 Brand Awareness Product Quality Satisfaction Corporate Image Distributor’s Character

Company Culture

Culture “Our mission is to be a force for good in the world ….”

“Nourish the Children may be 5 percent of what we do, but it is 95 percent of who we are.” –Blake Roney Nourish the Children

VitaMeal Production Facility in Lumbadzi, Malawi New VitaMeal Facility Under Construction in Jixi, China Will have capacity to produce more than one million meals per month. Produces enough food to feed 30,000 children a day and provides jobs for 700 Malawians NTC Global Sales Report: Donated over 40 million meals through Nourish the Children.

Force For Good

Force For Good Foundation the I want to be the do good company in the world. - Blake M. Roney

Force For Good Foundation 25 cents for each Epoch product sold EB research and care Seacology Foundation Secure rain forest Dr. Paul Cox $13 million donated Since 1996 Foundation donates more than $1 million actually to projects around the world

Force For Good In Taiwan NTC – Vita Meal Donation To Hua Lien ( 花蓮 )

Stanford University 史丹佛大學醫學院 School of Medicine EPIDERMOLYSIS BULLOSA RESEARCH PROGRAM 先天性表皮鬆解症 (EB) 研究計劃

Epidermolysis is breaking apart of skin “Epidermolysis” 是皮膚破裂的意思 Bullosa means blister “Bullosa” 是水泡的意思 Epidermolysis Bullosa = EB EB= 先天性表皮鬆解症 How EB Got Its Name EB 名稱的由來

Force For Good In Taiwan EB Family Gathering

Force For Good In Taiwan EB Trip – Lu Gang 鹿港

Force For Good In Taiwan EB Trip – Hong Kong

Force For Good In Taiwan Donate 500 bottles of ReiShi Max To Taipei Government for fighting SARS

PR

TV Program Interview

Media Exposure/Report To build up corporate image and recruit people who want to start their own business to become Nu Skin distributors, there has been a lot of propaganda in newspaper and magazine.

Media Exposure/Report

Athlete Health Forum

Press Conference

Communication

Magazine BD Update Nu Skin Update

Web Site SMS GWP

Broadcast Subscription

Distributor Support

RC/Taiwan Convention

Success SeminarGroup Success Seminar

Distributor TrainingScan Taiwan

TE Trip Incentive Trip BD Meeting

Fashion Workshop / Health Seminar

 Account Manager  Business support  Communication bridge between the company & business builder  Sales promotes  Service Agent  Walk in center service  Phone in order service  Product returns  Warehouse  ACD  Customers service information center  Follow up customers inquiries & special requests Front Line Major Functions

Branches/Service Centers

Walk-In Centers and Display

Showcase - Gym/SPA 如新泉源會館 Nu Skin Fountain Club

Ordering Type Walk in Phone in Fax Web ordering ARO COD

Code of Ethics

Education/Training Policy and Procedure Equal Playing Field