Item 1.01      Entry into a Material Definitive Agreement.

On February 3, 2005, the Compensation Committee of the Board of Directors of Nu Skin Enterprises, Inc. (the “Company”) met and approved the Nu Skin Enterprises, Inc. 2005 Executive Incentive Plan (the “Plan”). The Plan provides for the payment of cash incentive awards on a quarterly as well as a semi-annual basis to the CEO and other key executives of the Company based on performance of the Company compared to certain performance targets.

The Plan is administered by the Compensation Committee. Revenue and operating profit are the measures used under the Plan to establish incentive targets for bonus eligibility. For each quarterly and semi-annual incentive period, the Compensation Committee establishes operating profit and revenue targets at three levels, referred to as “Minimum”, “Budget”, and “Stretch”. Bonus amounts payable under the Plan are based on a certain pre-established percentage of a participant’s salary (“Bonus Percentage Levels”). If Budget targets are met for a particular incentive period, a participant will receive a bonus amount at the Bonus Percentage Level (the “Budget-Level Bonus”). If a Budget target is not met, the bonus amount decreases linearly from the Budget-Level Bonus until reaching 50% of the Budget-Level Bonus at the Minimum target level. No bonus is paid if Minimum operating profit targets are not met. The bonus amount increases linearly above the Budget-Level Bonus to the extent actual revenue or operating profit measures exceed Budget level, until reaching 200% of the Budget-Level Bonus at the Stretch level. Beyond the Stretch level, the bonus amount increases in proportion to the extent to which Stretch targets are exceeded.

The Bonus Percentage Levels are set by the Compensation Committee from time to time. Currently, Bonus Percentage Levels for Plan participants are as follows: