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EXHIBIT 10.3
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 12, 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
2
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 Lockup 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 Xxxx Xxxxx and Xxxx
Xxxxx at a purchase price of $16.00 per share, each of Xxxx Xxxxx and Xxxx Xxxxx
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 Xxxx
Xxxxx and Xxxx Xxxxx 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:
------------------------------------------
Its:
-----------------------------------------
---------------------------------------------
Xxxxx X. Xxxxx, individually
---------------------------------------------
Xxxxx X. Xxxxx, individually
THE ALL R'S TRUST
By:
------------------------------------------
X. X. XxXxxxxxxx
Its: Trustee
THE B & N XXXXX TRUST
By:
------------------------------------------
X. X. XxXxxxxxxx
Its: Trustee
THE WFA TRUST
By:
------------------------------------------
X. X. XxXxxxxxxx
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
BNASIA, LTD.
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: General Partner
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: General Partner
THE XXXXX X. AND XXXXX X. XXXXX FOUNDATION
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: Trustee
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: Trustee
THE ONE FOUNDATION
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: Trustee
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: Trustee
By:
------------------------------------------
Xxxxx X. Halls
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
B & N RHINO COMPANY, L.C.
By:
------------------------------------------
Xxxxx X. XxXxxxxxxx
Its: Manager
---------------------------------------------
Xxxxx X. Xxxxx, individually
---------------------------------------------
Xxxx X. Xxxxx, individually
---------------------------------------------
Xxxxx X. Xxxxx, individually
---------------------------------------------
Park X. Xxxxx, individually
THE MAR TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE NR TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE ROSE FOUNDATION
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: Trustee
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE XXXXX XXXXX FIXED CHARITABLE TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
NR RHINO COMPANY, L.C.
By:
------------------------------------------
Xxxxx X. XxXxxxxxxx
Its: Manager
---------------------------------------------
Xxxxxx X. Xxxxxxxxx, individually
THE SNT TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE DVNM TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE CWN TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE DPN TRUST
By:
------------------------------------------
Xxxxx X. Xxxxxxxxx
Its: Trustee
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE GNT TRUST
By:
------------------------------------------
Xxxxx X. Xxxxxxxxx
Its: Trustee
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE LMB TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE XXXXXX X. XXXXXXXXX FOUNDATION
By:
------------------------------------------
Xxxxxx X. Xxxxxxxxx
Its: Trustee
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE XXXXXX X. XXXXXXXXX FIXED
CHARITABLE TRUST
By:
------------------------------------------
Xxxxxx X. Xxxxxxxxx
Its: Trustee
By:
------------------------------------------
X. X. XxXxxxxxxx
Its: Independent Trustee
SNT RHINO COMPANY, L.C.
By:
------------------------------------------
Xxxxx X. Xxxxxxxxx
Its: Manager
---------------------------------------------
Xxxxxx X. Xxxx, individually
---------------------------------------------
Xxxxxxx Xxxx, individually
SKASIA, LTD.
By:
------------------------------------------
Xxxxxx X. Xxxx
Its: General Partner
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
By:
------------------------------------------
Xxxxxxx Xxxx
Its: General Partner
THE S AND K XXXX TRUST
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: Trustee
THE XXXXXX X. AND XXXXXXX XXXX FOUNDATION
By:
------------------------------------------
Xxxxxx X. Xxxx
Its: Trustee
By:
------------------------------------------
Xxxxxxx Xxxx
Its: Trustee
THE XXXXXX AND XXXXXXX XXXX FIXED
CHARITABLE TRUST
By:
------------------------------------------
Xxxxxx X. Xxxx
Its: Trustee
By:
------------------------------------------
Xxxxxxx Xxxx
Its: Trustee
By:
------------------------------------------
X. X. XxXxxxxxxx
Its: Independent Trustee
S & K RHINO COMPANY, L.C.
By:
------------------------------------------
Xxxxx X. XxXxxxxxxx
Its: Manager
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
---------------------------------------------
Xxxxxx X. Xxxxx, individually
---------------------------------------------
Xxxxxx X. Xxxxx, individually
BDASIA, LTD.
By:
------------------------------------------
Xxxxxx X. Xxxxx
Its: General Partner
By:
------------------------------------------
Xxxxxx X. Xxxxx
Its: General Partner
THE B AND X XXXXX TRUST
By:
------------------------------------------
Xxxxx X. Xxxxx
Its: Trustee
THE XXXXXX XXXXXXX AND XXXXXX XXXXX
XXXXX FOUNDATION
By:
------------------------------------------
Xxxxxx X. Xxxxx
Its: Trustee
By:
------------------------------------------
Xxxxxx X. Xxxxx
Its: Trustee
---------------------------------------------
Xxxx X. Xxxxx, individually
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
---------------------------------------------
Xxxxxxx X. Xxxxx, individually
KMASIA, LTD.
By:
------------------------------------------
Xxxx X. Xxxxx
Its: General Partner
By:
------------------------------------------
Xxxxxxx X. Xxxxx
Its: General Partner
THE K AND M XXXXX TRUST
By:
------------------------------------------
Xxxx X. Xxxxx
Its: Trustee
THE XXXX X. AND XXXXXXX X. XXXXX FOUNDATION
By:
------------------------------------------
Xxxx X. Xxxxx
Its: Trustee
By:
------------------------------------------
Xxxxxxx X. Xxxxx
Its: Trustee
THE XXXX AND XXXXXXX XXXXX FIXED
CHARITABLE TRUST
By:
------------------------------------------
Xxxx X. Xxxxx
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
By:
------------------------------------------
Xxxxxxx X. Xxxxx
Its: Trustee
By:
------------------------------------------
X. X. XxXxxxxxxx
Its: Trustee
K & M RHINO COMPANY, L.C.
By:
------------------------------------------
Xxxxx X. XxXxxxxxxx
Its: Manager
---------------------------------------------
Xxxxx X. Halls, individually
---------------------------------------------
Xxxx Xxxx Xxxxxxx Halls, individually
KAASIA, LTD.
By:
------------------------------------------
Xxxxx X. Halls
Its: General Partner
By:
------------------------------------------
Xxxx Xxxx Halls
Its: General Partner
THE K AND A HALLS TRUST
By:
------------------------------------------
Xxxxxxx Xxx Halls
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
By:
------------------------------------------
Xxxxxx Xxxxxx
Its: Trustee
THE HALLS FAMILY TRUST
By:
------------------------------------------
Xxxxxxx Xxx Halls
Its: Trustee
By:
------------------------------------------
Xxxxxx Xxxxxx
Its: Trustee
THE XXXXX AND XXXX XXXX HALLS FIXED
CHARITABLE TRUST
By:
------------------------------------------
Xxxxx X. Halls
Its: Trustee
By:
------------------------------------------
Xxxx Xxxx Halls
Its: Trustee
By:
------------------------------------------
X. X. XxXxxxxxxx
Its: Independent Trustee
THE XXXXX XXX AND XXXX XXXX XXXXXXX
HALLS FOUNDATION
By:
------------------------------------------
Xxxxx X. Halls
Its: Trustee
By:
------------------------------------------
Xxxx Xxxx Halls
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
K & A RHINO COMPANY, L.C.
By:
------------------------------------------
Xxxxx X. XxXxxxxxxx
Its: Manager
---------------------------------------------
Xxxxx X. Xxxxxxxxx, individually
THE CST TRUST
By:
------------------------------------------
Xxxxxx X. Xxxxxxx
Its: Trustee
THE JS TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE JT TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE CB TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE CM TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE BCT TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE ST TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE NJR TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE RLS TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE RBZ TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THE LB TRUST
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE XXXXX X. XXXXXXXXX FOUNDATION
By:
------------------------------------------
Xxxxx X. Xxxxxxxxx
Its: Trustee
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Trustee
THE XXXXX X. XXXXXXXXX FIXED CHARITABLE TRUST
By:
------------------------------------------
Xxxxx X. Xxxxxxxxx
Its: Trustee
By:
------------------------------------------
Xxx X. Xxxxxx
Its: Independent Trustee
CST RHINO COMPANY, L.C.
By:
------------------------------------------
Xxxxxx X. Xxxxxxxxx
Its: Manager
---------------------------------------------
R. Xxxxx Xxxxxx, individually
---------------------------------------------
Xxxxxxxx X. Xxxxxx, individually
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SIGNATURE PAGE OF AMENDMENT NO. 2
TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
RCKASIA, LTD.
By:
------------------------------------------
R. Xxxxx Xxxxxx
Its: General Partner
By:
------------------------------------------
Xxxxxxxx X. Xxxxxx
Its: General Partner
THE C AND K TRUST
By:
------------------------------------------
Xxxxxx X. Xxxx
Its: Trustee
THE XXXXXX FOUNDATION
By:
------------------------------------------
R. Xxxxx Xxxxxx
Its: Trustee
By:
------------------------------------------
Xxxxxxxx X. Xxxxxx
Its: Trustee
THE XXXXXX FIXED CHARITABLE TRUST
By:
------------------------------------------
R. Xxxxx Xxxxxx
Its: Trustee
By:
------------------------------------------
Xxxxxxxx X. Xxxxxx
Its: Trustee
By:
------------------------------------------
Xxxxxx X. Xxxxxxx
Its: Independent Trustee
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CKB RHINO COMPANY, L.C.
By:
------------------------------------------
Xxxxx X. Halls
Its: Manager
THE XXXX AND XXXXXXXX XXXXX VARIABLE
CHARITABLE REMAINDER UNITRUST
By:
------------------------------------------
Xxxxx Xxxxxxxx
Its: Trustee
THE XXXX AND XXXXXXXX XXXXX FIXED
CHARITABLE UNITRUST
By:
------------------------------------------
Xxxx X. Xxxxx
Its: Trustee
By:
------------------------------------------
Xxxxxxxx Xxxxx
Its: Trustee
By:
------------------------------------------
X.X. XxXxxxxxxx
Its: Independent Trustee
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