UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

□	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

(e)

 

On October 14, 2015, Nu Skin Enterprises, Inc. (the "Company") entered into a settlement and release agreement (the "Settlement Agreement") with Daniel R. Chard, who served as the Company's President of Global Sales and Operations until his resignation, which was effective September 4, 2015. The Settlement Agreement makes certain modifications to Mr. Chard's non-competition obligations under his employment agreement (the "Employment Agreement") and other agreements with the company to allow him to accept a position with Blyth, Inc. and its subsidiaries. The Settlement Agreement includes the following terms, among others:

•

The parties agree that Mr. Chard's employment with Blyth will not be in violation of the non-competition provisions of Mr. Chard's employment agreement or the Company's deferred compensation plan so long as Blyth does not modify its business or compensation practices as specified in the Settlement Agreement.

 

•

Mr. Chard releases the Company from any and all claims or causes of action arising from, or relating to, his employment with the Company or the termination thereof, except that he does not waive certain rights and benefits, including under the Company's 401(k) plan, deferred compensation plan, equity award agreements under the Company's compensation plans, indemnification rights and any insurance policy insuring officers and directors of the Company.

 

•

For a specified period of time, Mr. Chard agrees not to solicit any employee, distributor or other sales force member of the Company, or the vendor or supplier of the Company's material products, to (1) terminate their employment or other relationship with the Company; or (2) accept employment, become a distributor or member of the sales force or enter into any consulting or other arrangement, or become a supplier or vendor for, any person or entity other than the Company.

The foregoing description of the Settlement Agreement is not intended to be complete and is qualified in its entirety by reference to the full text of the Settlement Agreement, which is filed as Exhibit 10.1 hereto.

10.1	Settlement and Release Agreement dated October 14, 2015 between the Company and Daniel R. Chard.

 

 

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NU SKIN ENTERPRISES, INC.
(Registrant)

Ritch Wood
Chief Financial Officer

Date:  October 15, 2015

 

 

 

EXHIBIT INDEX

10.1

Settlement and Release Agreement dated October 14, 2015 between the Company and Daniel R. Chard.

SETTLEMENT AND RELEASE AGREEMENT

THIS SETTLEMENT AND RELEASE AGREEMENT (this "Agreement") is entered into in Provo, Utah, on October 14, 2015, by and between Nu Skin Enterprises, Inc., a Delaware corporation (together with its subsidiaries and affiliates, the "Company"), and Daniel R. Chard ("Employee"). The Company and Employee are sometimes referred to herein collectively as the "parties" and individually as a "party."

RECITALS

A.	Employee was hired on August 17, 1998, and has been an at-will employee of the Company since that date.

B.	On August 1, 2012, Employee entered into an Employment Agreement with the Company, which was amended on December 27, 2012 (the "Employment Agreement"), and Employee and the Company are also parties to other agreements related to deferred compensation and stock incentive awards.

C.	On September 1, 2015, Employee provided notice that he was voluntarily resigning and terminating his employment with the Company effective September 4, 2015 (the "Termination Date").

D.

Employee has requested that his non-compete obligations under the Employment Agreement and other agreements be modified to allow Employee to take an employment position with Blyth, Inc. and its subsidiaries (together with the entities formed to acquire Blyth, Inc. and each of their respective subsidiaries, collectively, "Blyth").

E.	The Company is willing to make certain modifications to such non-compete obligations to allow such employment on the terms and conditions set forth in this Agreement.

 

AGREEMENT

NOW, THEREFORE, in consideration of 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 hereby mutually agree as follows:

 

 

 

 

 

 

 

a.	Title VII of the Civil Rights Acts of 1964 and 1991, as amended, which prohibit discrimination on the basis of race, color, sex, religion, or national origin;

b.	Section 1981 of the Civil Rights Act of 1866, which prohibits discrimination on the basis of race;

c.	The Employee Retirement Income Security Act as of the effective date of this Agreement;

d.	any state laws against discrimination; or

e.	any other federal, state, or local statute or common law relating to employment.

 

The foregoing release also includes, without limitation, release of any claims for wrongful discharge, breach of express or implied contract of employment, employment-related torts, personal injury (whether physical or mental), or any other claims in any way related to Employee's employment with or termination of employment with the Company. Employee acknowledges and agrees that Employee has not been discriminated against in any manner prohibited by law during Employee's employment with the Company or with regard to the termination of Employee's employment with the Company.

Notwithstanding the foregoing, Employee does not waive any rights to (i) unemployment insurance benefits or worker's compensation benefits, (ii) any benefits accrued, vested, or otherwise available to Employee under the 401(k) plan, the Employee's Health Savings Account, and the Deferred Compensation Plan, the equity award agreements under the 2010 Omnibus Incentive Plan or the 2006 Stock Incentive Plan as set forth on Exhibit A (the "Equity Award Agreements"),  (iii) any indemnification rights under the Company's charter documents or the indemnification agreement entered into between the Company and Employee, (iv) any insurance policy insuring officers and directors of the Company, (v) the Accrued Obligations, (vi) any claims that cannot be waived under applicable law and (vi) any claims for a breach by the Company of this Agreement.  Employee further understands that nothing in this Paragraph 2 prohibits Employee from paying COBRA premiums to maintain Employee's participation in the Company's group health plan to the extent allowed by law and subject to the terms, conditions, and limitations set forth in the Company's group health plan.

Employee will continue to be covered by the Company's medical and dental benefits through the last day of the month in which the employment terminated. Except as expressly set forth herein, all employee benefits available to Employee under current policies of the Company will cease at 11:59 p.m. on the Termination Date.

 

 

a.	Employee should consult with an attorney prior to executing this Agreement;

b.	Employee has at least 21 days within which to consider this Agreement, although Employee may accept the terms of this Agreement at any time within those 21 days;

c.	Employee has at least seven days following the execution of this Agreement by the parties to revoke this Agreement; and

d.	This Agreement will not be effective until the revocation period has expired.

a.	The parties hereby confirm and agree that the Restricted Period under the Employment Agreement shall continue until September 4, 2016, and shall not be terminated by this Agreement.

b.	To allow Employee to accept an employment position at Blyth, the parties agree that the definition of Competitive Business in the Employment Agreement is hereby amended to read in its entirety as follows:

""Competitive Business" shall mean Direct Selling; provided, however, that Blyth, Inc. and its subsidiaries (together with the entities formed to acquire Blyth, Inc. and each of their respective subsidiaries, collectively "Blyth") shall not be considered to be engaged in a Competitive Business so long as (i) Blyth does not expand the business of Blyth into the personal care or nutritional supplement and health product market beyond its current direct-to-consumer business in its Silver Star division (whether by expansion of the product line or through acquisition), and (ii) Blyth does not increase (whether by modification, adoption of a new plan or acquisition of another Direct Selling company) the total potential aggregate commissions (assuming no breakage for qualification below the maximum level) payable under the "leadership portion" of Blyth's compensation plan(s) for all commissionable levels of distributors from the current maximum of 10.0% (on an aggregate basis) of commissionable sales to a potential maximum amount in excess of 20.0% (on an aggregate basis) of commissionable sales.  For purposes of this paragraph, "leadership portion" shall mean the portion of the compensation plan that pays compensation based on performance of other distributors/sales leaders rather than a distributor/sales leader's personal consumer sales (and the parties hereto further agree that, for purposes of this definition, the sales by consultants (not qualified as a unit leader or higher) and team leaders of Blyth shall be considered the personal sales of the direct up-line unit leaders of such consultants and team leaders)."

 

 

c.

In consideration of the Company's agreement to modify the non-competition provisions of the Employment Agreement,  Employee agrees that the Company shall be released from its Employment Agreement obligation to pay Employee 75% of his Annual Salary during the Restricted Period, and Employee hereby waives all rights to such payment.

d.

The Company agrees that, so long as Employee does not violate the non-compete provisions contained in Section 8 of the Employment Agreement, as modified in this Paragraph 5, the Company shall not terminate Employee's rights under the Deferred Compensation Plan as a result of Employee's employment with Blyth.  For avoidance of doubt, the Company will have no right to terminate Employee's rights under the Deferred Compensation Plan after the Restricted Period unless Employee violates the non-compete provisions of the Employment Agreement, as modified by this Paragraph 5, during the Restricted Period, and, in such case, may only terminate a pro rata portion of the vested amount otherwise payable based on the number of months during the Restricted Period that Employee was in violation of the non-compete provisions of the Employment Agreement.  Employee's vested amount in his Company Contribution Account under the Deferred Compensation Plan is $457,493.29 as of the date of this Agreement.

e.

The parties agree that the non-solicitation provision of the Employment Agreement shall be amended to read as follows: "For a period of 21 months following September 4, 2015, Employee shall not, directly or indirectly, solicit any employee or distributor or other  sales force member  of the Company or any of its respective subsidiaries or affiliates (each of the preceding, a "Group Company"), or the vendor or supplier of the Company's material skin treatment or nutrition  products, in any case to (i) terminate such employment or other relationship with a Group Company, and/or (ii) accept employment, become a distributor or member of the sales force or enter into any consulting or other arrangement, or become of supplier or vendor for, any person or entity other than a Group Company. For purposes of this Agreement a skin treatment or nutrition product shall be considered material if that product or product system (inclusive of all versions of such product) generates in excess of US$100,000,000 in revenue annually."

 

 

f.

Employee agrees that, in addition to his non-disparagement obligations set forth in the Key-Employee Covenants and incorporated by reference in the Employment Agreement, Employee agrees that he shall not in any way, directly or indirectly, make any statement disparaging the Company, its management, any of its distributors or its network marketing distribution channel, or that would be reasonably likely to negatively impact the reputation of the Company.  Nothing herein shall restrict or limit any statements of Employee made in connection with any litigation matter or regulatory investigation or proceeding related to the Company in which he is interviewed, deposed or called as a witness.  The Company agrees not to issue any statements disparaging Employee; provided, however, that nothing herein shall restrict or limit any statements of the Company made in connection with any litigation matter or regulatory investigation or proceeding related to the Company.

 

 

 

[Signature page follows]

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first set forth above.

 

SCHEDULE A
Schedule of Stock Option Agreements
Grant Date	Type		Shares Outstanding			Option  Agreement
2/27/2009	NQ			42,500		2009.2.27- 2006 Grant Notice and Agreement
3/2/2010	PSO			17,500		2010.3.2- 2006 Grant Notice and Agreement
6/28/2010	NQ			13,750		2010.6.28- 2010 Grant Notice and Agreement
8/31/2010	NQ			13,750		2010.8.31- 2010 Grant Notice and Agreement
11/15/2010	PSO			50,000		2010.11.15- 2010 Plan US Master Performance Stock Option Agreement
2/28/2011	PSO			17,500		2011.2.28  2010 US Performance Stock Option Agreement
2/28/2011	NQ			13,750		2011.2.28  2010 Plan US Master Stock Option Agreement dated as of 2/28/2011
8/15/2011	NQ			13,750		2011.8.15 2010 Plan US Master Stock Option Agreement  dated as of 2/28/2011
2/9/2012	PSO			17,500		2012.2.9 2010 Plan US Master Performance Stock Option Agreement
2/9/2012	NQ			10,313		2012.2.9 2010 Plan US Master Stock Option Agreement
8/31/2012	NQ			10,312		2012.8.31 2010 Plan US Master Stock Option Agreement
2/15/2013	PSO			8,750		2013.2.15 2010 Plan US Master Performance Stock Option Agreement
2/15/2013	NQ			6,875		2013.2.15 2010 Plan US Master Stock Option Agreement
12/9/2013	NQ			6,875		2013.12.9 2010 Plan US Master Stock Option Agreement
3/31/2014	NQ			1,700		2014.03.31 Global Stock  Option Agreement
12/17/2014	NQ			1,700		2014.12.17 Global Stock Option Agreement