SETTLEMENT AND RELEASE AGREEMENT
THIS
SETTLEMENT AND RELEASE AGREEMENT is entered into in Provo, Utah, by
and between Nu Skin Enterprises, Inc., 75 West Center Street,
Provo, Utah 84601, and Gary Sumihiro effective as of the 1
st day of March- 2009.
Parties
1.
Nu Skin or Company . As used herein, Nu Skin or Company
shall mean and refer to Nu Skin Enterprises, Inc., or any affiliate
of Nu Skin Enterprises, Inc. Affiliate means any person or entity
that controls, is controlled by or is under common control with Nu
Skin Enterprises, Inc., including, without limitations, any direct
or indirect parent or subsidiary of Nu Skin Enterprises, Inc., or
any officer, director, shareholder, employee, or agent of Nu Skin
Enterprises, Inc., or of any direct or indirect parent or
subsidiary of Nu Skin Enterprises, Inc.
2.
Employee . As used herein, Employee shall mean and refer to
Gary Sumihiro.
Background
Employee
was hired on April 9, 2007 and has been an at-will employee of Nu
Skin since that date. Employee has elected to terminate his
employment with the Company. As Employee and Nu Skin sever their
employment relationship, they mutually agree it is in the best
interests of both to enter into a mutual understanding, settle and
compromise of all claims and disputes, if any, between
them.
Agreement
Now,
therefore, in consideration of the foregoing, the mutual promises
and covenants set forth herein, and for other good and valuable
consideration, the receipt, adequacy, and legal sufficiency of
which are hereby acknowledged, the parties mutually agree as
follows:
1.
Employee’s
employment with the Company shall terminate as of March 1, 2009
(the “Termination Date”). As of the Termination Date,
Employee shall have no further rights as an employee and all rights
to additional compensation and benefits arising from
Employee’s employment shall end. Simultaneously with the
execution of this Agreement Nu Skin and Employee are entering into
a Consulting Agreement (the “Consulting Agreement”)
pursuant to which Nu Skin has agreed to retain Employee as a
consultant for a period of time. Except as specifically set forth
below in this Agreement or in the Consulting Agreement, Nu Skin
shall have no further obligation to provide any benefits or make
any payments to or on behalf of Employee. Nu Skin agrees to provide
the following payments or benefits to Employee as part of
Employee’s separation:
|
(a)
|
Nu Skin shall
make a one-time severance payment to Employee in the amount of
$224,722 plus JPY 935,000 for transportation.
|
|
(b)
|
Nu Skin agrees
that it will not claw back or seek to recover any portion of
Employee’s signing bonus.
|
|
(c)
|
Nu Skin also
agrees that nothing in this Agreement shall affect Employee’s
post-employment rights set forth in the agreements related to Nu
Skin’s deferred compensation plan, Nu Skin’s 401(k)
plan, and Employee’s stock option agreements. Any vested
deferred compensation will be paid out in accordance with the terms
of such plan and Employee shall have the right to exercise any
vested options as of the Termination Date for a period of 90 days
to the extent set forth in the applicable stock option
agreements.
|
|
(d)
|
Nu Skin shall
pay the lease and utility payments for Employee’s
accommodations in Japan through July 31, 2009, it being understood
that Employee and his family shall continue to live in the same
accommodations in Japan that they are currently living in. Nu Skin
also shall pay any termination and or restoration costs associated
with terminating the lease for these accommodations if and when
Employee vacates the premises provided that Employee vacates the
premises on or before September 30, 2009. Nu Skin will also
continue to pay the storage costs on Consultant’s stored
items in the US, the insurance coverage on items in
consultant’s home in Japan, and the property management fees
for Consultant’s home in Keystone Colorado through July
2009.
|
|
(e)
|
Nu Skin shall
pay the tuition costs for Consultant’s children attending
school in Japan consistent with what was being paid while
Consultant was a Nu Skin employee, through the end of the school
year ending in 2009.
|
|
(f)
|
Nu Skin shall
reimburse Consultant for the cost of the family membership fee to
the Tokyo American Club through July 2009. In addition, Employee
can continue to use his Roppongi Hills Club membership, which
previously has been paid by Nu Skin through September 2009 (it
being understood that Nu Skin shall not make any further payments
with respect to the Roppongi Hills Club membership).
|
|
(g)
|
Nu Skin shall
also pay the costs to transport Consultant’s furnishings and
goods back to Keystone, Colorado or such other location in the
United States as designated by Consultant if Consultant elects to
relocate to the United States prior to September 30, 2009. Nu Skin
shall also pay the costs to transport Consultant’s
furnishings and goods currently stored in Grand Rapids to Keystone,
Colorado or such other location in the United States as designated
by Consultant if such request is made on or before September 30,
2009. Nu Skin shall reimburse the reasonable travel costs (for
flights in business class and rental car or other public
transportation expenses) for Employee and his family to return to
Keystone, Colorado or such other location in the United States as
designated by Employee if he relocates back to the United States
prior to September 30, 2009. All of the foregoing relocation
benefits shall be subject in all respects to Nu Skin’s policy
for such relocation costs and Employee must work with Nu Skin in
making any arrangement for the shipment of furnishings or goods or
in making any travel arrangements. If Employee does not relocate to
the United States prior to September 30, 2009, then Nu Skin shall
have no further obligation under this Agreement to pay the for the
benefits described in this subparagraph (g).
|
|
(g)
|
Nu Skin shall
provide tax equalization with respect to the income and benefits
provided hereunder (and any compensation payable under the
Consulting Agreement entered concurrently herewith) consistent with
Nu Skin’s policies regarding tax equalization for expatriate
employees. Nu Skin shall also pay for tax equalization for income
outside of Nu Skin during the Consulting Term in an amount not to
exceed $50,000. Nu Skin shall also pay to have Consultant’s
tax returns prepared for 2008 and 2009 using Ernst & Young.
Foreign tax credits accrued while Consultant resides in Japan shall
be the property of Consultant.
|
|
(h)
|
In the event
Employee competes with Nu Skin on or prior to December 31, 2009, Nu
Skin shall have the right to stop making payments for any of the
foregoing and seek reimbursement of any expenses related to the
period that Employee was competing with Nu Skin.
|
2.
In consideration
of the payments and benefits to be provided by Nu Skin as set forth
in Section 1, Employee, all persons and entities claiming by,
through, or under Employee, hereby completely releases Nu Skin from
all claims, charges, demands, grievances, and/or causes of action
which Employee had, has, or may claim to have based on,
ari
