Exhibit 10.11
MANAGEMENT SERVICES AGREEMENT
BETWEEN
NU SKIN INTERNATIONAL MANAGEMENT GROUP, INC.
AND
NU SKIN JAPAN COMPANY LTD.
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS..................................................1
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"Agreement"..................................................1
"Consulting Personnel".......................................1
"Direct Expenses"............................................1
"Expatriate Personnel".......................................2
"Allocable Expenses".........................................2
"Management and Consulting Services".........................2
ARTICLE 2
MANAGEMENT AND CONSULTING SERVICES...........................2
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Services.....................................................2
Performance of Services......................................2
Expatriate Employees.........................................3
Approval of Services.........................................3
ARTICLE 3
COMPENSATION OF SERVICE PROVIDER.............................3
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3.1(a) Compensation for Services by Consulting Personnel.....3
Determination of Allocable Expenses..........................3
Currency.....................................................3
Payment and Invoicing........................................4
ARTICLE 4
PREPARATION AND SHARING OF REPORTS AND INFORMATION
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Periodic Reports on Management and Consulting Services.......4
Time Allocation Study........................................4
Sharing of Information and Witnesses.........................4
ARTICLE 5
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION...................6
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ARTICLE 6
TERM.........................................................6
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ARTICLE 7
TERMINATION..................................................7
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ARTICLE 8
EFFECT OF TERMINATION........................................8
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Cessation of Rights..........................................8
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ARTICLE 9
COMPLIANCE WITH APPLICABLE LAWS..............................9
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Compliance Generally.........................................9
Authorizations...............................................9
Business Practices...........................................9
ARTICLE 10
GENERAL PROVISIONS...........................................9
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Assignment...................................................9
Notices.....................................................10
Waiver and Delay............................................10
Force Majeure...............................................10
Governing Law and Dispute Resolution........................11
Applicability of Post-Effective Laws........................11
Integrated Contract.........................................12
Modifications and Amendments................................12
Severability................................................12
Counterparts and Headings...................................12
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MANAGEMENT SERVICES AGREEMENT
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This MANAGEMENT SERVICES AGREEMENT is made and entered into effective
August 15, 1996 between Nu Skin International Management Group, Inc., a
corporation organized under the laws of the State of Delaware, U.S.A.
(hereinafter referred to as "NSIMG") and Nu Skin Japan Company, Limited, a
corporation organized under the laws of Japan and the State of Delaware, U.S.A.
(hereinafter referred to as "NSJ"). NSIMG and NSJ shall hereinafter be
collectively referred to as the "Parties" and each shall be individually
referred to as a "Party."
W I T N E S S E T H
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WHEREAS, NSIMG desires to provide Management and Consulting Services (as
hereinafter defined) to NSJ and NSJ desires to obtain such Management and
Consulting Services from NSIMG;
NOW, THEREFORE, in consideration of the premises, the mutual promises and
covenants hereinafter set forth and for other good and valuable consideration,
the sufficiency of which is hereby acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
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For purposes of this Agreement, the following terms shall have the meaning
set out below:
1.1 "AGREEMENT" shall mean this Management Services Agreement between
NSIMG and NSJ, as the same may be modified, amended or
supplemented from time to time.
1.2 "CONSULTING PERSONNEL" shall mean employees of NSIMG or, with the
consent of NSJ, such other persons or entities as NSIMG may
retain, hire, or otherwise contract with for the provision of
Management and Consulting Services on behalf of, or in
conjunction with, NSIMG.
1.3 "DIRECT EXPENSES" shall mean all expenses incurred in the
provision of Management and Consulting Services for NSJ, which
expenses are measured solely for the benefit of NSJ, including,
without limitation, certain salary costs, benefits and
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business expenses, convention expenses and travel expenses.
1.4 "EXPATRIATE PERSONNEL" shall mean Consulting Personnel who reside
in Japan and are seconded to NSJ for a definite or indefinite
period of time to perform Management and Consulting
Services.
1.5 "ALLOCABLE EXPENSES" shall mean all expenses other than Direct
Expenses including without limitation, the following: rents,
utilities, telephone, equipment, recruitment, office supplies,
and other overhead expenses, certain salary costs and expenses
related to conventions, travel and accommodations at anniversary
events, the permitted use and appropriation of the names and
likeness of directors, and executive officials of NSJ or NSIMG,
telephone calls and counseling and conferences and meetings with
country managers and distributor leaders.
1.6 "MANAGEMENT AND CONSULTING SERVICES" shall mean the following
services: management, legal, financial, marketing and
distribution support/training, public relations, international
expansion, human resources, strategic planning, product
development and operations administration and such other services
as the Parties may agree to from time to time.
1.7 "NSI" shall mean Nu Skin International, Inc., a corporation duly
organized and existing under the laws of the state of Utah.
ARTICLE 2
MANAGEMENT AND CONSULTING SERVICES
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2.1 SERVICES. NSIMG hereby agrees to provide Management and
Consulting Services to NSJ as NSJ may request from time to time,
until termination of this Agreement. NSJ agrees to reimburse and
compensate NSIMG for Management and Consulting Services rendered
pursuant to this Agreement in accordance with the applicable
compensation and invoicing provisions hereof.
2.2 PERFORMANCE OF SERVICES. Unless otherwise agreed between the
Parties, the Management and Consulting Services shall be provided
through Consulting Personnel, as requested by NSJ.
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2.3 EXPATRIATE EMPLOYEES. The Parties shall agree to the terms and
circumstances pursuant to which a Consulting Employee may be
assigned as an Expatriate Employee to work at NSJ; provided that
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nothing in this Agreement shall be interpreted to mean that NSIMG
must make available any Consulting Employee to work at NSJ as an
Expatriate Employee.
2.4 APPROVAL OF SERVICES. NSJ hereby agrees that, by accepting and
paying invoices as provided in Article 3 herein, NSJ will be
deemed to have approved the nature and extent the Management and
Consulting Services so invoiced.
ARTICLE 3
COMPENSATION OF SERVICE PROVIDER
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3.1 3.1(A) COMPENSATION FOR SERVICES BY CONSULTING PERSONNEL. NSJ
agrees to compensate NSIMG for Management and Consulting Services
that it provides to NSJ through Consulting Personnel (other than
Expatriate Personnel) in the form of a fee equal to the Direct
Expenses and Allocable Expenses incurred by NSIMG for Management
and Consulting Services provided to NSJ by Consulting Personnel
plus three percent (3%) of such Direct Expenses and Allocable
Expenses, as such feemay be adjusted from time to time by mutual
agreement of the Parties; provided that unless, otherwise agreed
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between the Parties, Allocable Expenses shall not, for any
period, exceed one and one-half percent (1 1/2%) of NSJ's
revenues for such period.
3.1(B) REIMBURSEMENT OF COST OF EXPATRIATE PERSONNEL. NSJ agrees
to reimburse NSIMG for any direct costs of Expatriate Personnel
incurred by NSIMG attributable to such Expatriate Personnel
seconded to NSI.
3.2 DETERMINATION OF ALLOCABLE EXPENSES. Allocable Expenses for any
period shall be equal to the total Allocable Expenses incurred by
NSI or NSIMG's internal departments for such period multiplied by
the percentage of such Allocable Expenses allocable to NSJ
pursuant to the then applicable time allocation study prepared
pursuant to Section 4.2 hereof.
3.3 CURRENCY. Any compensation to be paid to NSIMG for Management
and Consulting Services rendered pursuant to this Agreement shall
be paid in United States Dollars.
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3.4 PAYMENT AND INVOICING. Within thirty (30) days after the end of
each month, NSIMG shall prepare and deliver an invoice to the NSJ
setting forth the fees payable hereunder for Management and
Consulting Services rendered pursuant to this Agreement during
such month.
3.5 Payments due under this Agreement shall be due and payable within
sixty (60) days after the date of dispatch of the invoice for
such payments.
3.6 Without limiting any of Parties' other rights and remedies under
this Agreement, amounts outstanding under the terms of this
Agreement not paid within sixty (60) days from the date due and
payable, and as set forth in the payment provisions herein, shall
bear interest at the prime interest rate as reported in the Wall
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Street Journal plus two percent (2%) for the full period
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outstanding. Whether or not interest charges are actually levied
is at the discretion of the Party to whom payment is due and
payable.
ARTICLE 4
PREPARATION AND SHARING OF REPORTS AND INFORMATION
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4.1 PERIODIC REPORTS ON MANAGEMENT AND CONSULTING SERVICES. NSJ may,
upon thirty (30) days' written notice, request operations reports
of NSIMG setting forth such information regarding the Management
and Consulting Services provided under this Agreement and for
such time periods as NSJ shall reasonably request.
4.2 TIME ALLOCATION STUDY. NSIMG has prepared a study accurately
reflecting the allocation of time spent by NSIMG's internal
department and consulting personnel on the services provided to
NSJ under this Agreement. The study shall be updated on a
quarterly basis. NSJ may request a copy of the then applicable
such time allocation study from NSIMG upon thirty (30) days'
written notice.
4.3 SHARING OF INFORMATION AND WITNESSES. At all times during the
term of this Agreement and for a period of three years
thereafter, each of the Parties shall maintain at its principal
place of business full, complete and accurate books of account
and records with regard to its activities under this Agreement.
In addition to the books and records pursuant to Section 4.3,
NSIMG and NSJ
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may from time to time have in their possession or under their
control (or the control of persons or entities which have
rendered services to time) additional books, records, contracts,
instruments, data and other information (together with the books
and records referred to in the first sentence of this Section
4.3, the "Information") which may prove necessary or desirable to
the other in connection with the other's business. Accordingly,
(i) NSIMG shall provide to NSJ, and NSJ shall provide to NSIMG
upon the other's request, at all reasonable times, full and
complete access to (including access to persons with respect to,
and all Information as the other may reasonably request and
require in the conduct of its business, and (ii) NSIMG shall make
available to NSJ and NSJ shall make available to NSIMG, upon the
other's request, such persons as may reasonably be required to
assist with any legal, administrative or other proceedings in
which NSJ or NSIMG, as the case may be, may from time to time be
involved. The Information shall include, without limitation,
information sought for audit, accounting, claims, litigation and
tax purposes as well as for, in the case of NSJ, purposes of
fulfilling disclosure and reporting obligations under the United
States securities laws. The party providing Information or making
available witnesses shall be entitled to receive from the other
party, upon the presentation of invoices therefor, payment for
its reasonable out-of-pocket expenses incurred in connection
therewith (but not the labor costs thereof), but shall not be
entitled to receive any other payment with respect thereto.
Nothing in this Agreement shall require either party to reveal to
the other any information if to do so would violate such party's
written and enforceable duty of confidence to a third party from
whom or which such information was obtained; under such
circumstances, however, the parties shall work together to obtain
a release of such information without violation of such duty of
confidence.
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ARTICLE 5
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
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All trade secrets, proprietary technology, know-how or other non-public or
proprietary business or technical information owned or used by NSIMG or NSJ and
supplied to or acquired by the other whether in oral or documentary form (the
"Confidential Information") shall be supplied and acquired in confidence and
shall be solely for the use of the receiving party pursuant to this Agreement
and such party shall keep the Confidential Information confidential and shall
not disclose the same, at any time during the term of this Agreement or after
its termination, except to its employees for the purposes of its business in
accordance with this Agreement and except as may be required by law; provided
that if the receiving party determines that a disclosure is required by law, the
receiving party shall notify the disclosing party in order to give the
disclosing party an opportunity to seek an injunction or otherwise attempt to
keep the Confidential Information confidential. The receiving party shall, at
the request of the disclosing party, destroy or return the Confidential
Information without retaining copies if, as and when this Agreement is
terminated or expires. For purposes of this Agreement, the term "Confidential
Information" shall not include information or documents that (i) become
generally available to the public other than as a result of a disclosure by the
receiving party, (ii) was otherwise lawfully available to the receiving party,
or (iii) was generated independently by the receiving party. The provisions of
this Article shall survive termination of this Agreement.
ARTICLE 6
TERM
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Subject to Article VII hereof, this Agreement shall be for a term ending on
December 31, 2016; provided, however, that (i) Xxxxx X. Xxxxx, Xxxxx X. Xxxxx,
Xxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxx X. Xxxx, Xxxxxx X.
Xxxxx, Xxxx X. Xxxxx and Xxxxx X. Halls (the "Existing Stockholders"), or
members of their families, or trusts or foundations established by or for the
benefit of the Existing Stockholders or members of their families on a combined
basis no longer beneficially own a majority of the voting stock of Nu Skin Asia
Pacific, Inc ("Nu Skin Asia"), or (ii) the Existing Stockholders, or members of
their families, or trusts or foundations established by or for the benefit of
the Existing Stockholders or members of their families on a combined basis no
longer beneficially own a majority of the voting stock of NSI.
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ARTICLE 7
TERMINATION
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7.1 This Agreement may be terminated by either Party immediately or
at any time after the occurrence of any of the following events:
(a) the other Party shall commence any case, proceeding or other
action (i) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, compensation or
other relief with respect to it or its debts, or (ii) seeking
appointment of a receiver, trustee, custodian or other similar
action; or
(b) there shall be commenced against the other Party any case,
proceeding or other action of a nature referred to in clause (a)
above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 90 days. Events
described in clauses (a) and (b) of this Section 7.1(a) shall be
referred to as a Bankruptcy Event. If a Bankruptcy Event occurs,
all amounts owing under this Agreement shall become immediately
due and payable, without any notice thereof; or
(c) if the other Party causes or allows a judgment in excess of
twenty-five million dollars ($25,000,000) to be entered against
it or involuntarily allows a lien, security interest, or other
encumbrance to attach to its assets which secures an amount in
excess of twenty-five million dollars ($25,000,000).
7.2 This Agreement may be terminated by either Party, if the other
Party is in default in the performance of any material obligation
under this Agreement and such default has not been cured within
sixty (60) days after receipt of written notice of such default
by the defaulting Party; or
7.3 This Agreement may be terminated by NSIMG if Nu Skin Asia
Pacific, Inc. shall no longer own or control a majority of the
voting interest in NSJ,
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with such termination to take effect thirty (30) days after NSI
gives written notice to NSJ of the occurrence of a change in
control and its intention to terminate this Agreement based
thereon.
7.4 NSJ may terminate any specific Management and Consulting Service
provided pursuant to this Agreement by providing written noticed
thereof to NSIMG not less than sixty (60) days prior to the
desired termination date. NSIMG may discontinue providing any
specific Management and Consulting Service provided pursuant to
this Agreement by providing written notice thereof to the NSJ not
less than sixty (60) days prior to the desired termination date;
provided, however, that NSIMG shall not deliver any such notice
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in respect of any service to the extent that NSIMG continues to
provide such service to any other international affiliate of
NSIMG.
ARTICLE 8
EFFECT OF TERMINATION
8.1 CESSATION OF RIGHTS. Upon expiration or termination
(collectively, the "Termination") of this Agreement for any
reason whatsoever, all rights and obligations of the Parties
hereunder shall cease; provided, however, that upon Termination
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of this Agreement, no Party shall be released from its
obligations to pay monies due or to become due or to complete any
unfulfilled obligations under this Agreement, and the provisions
of Article 5 shall service such Termination.
8.2 DAMAGES. Upon the Termination of this Agreement for any reason,
no Party shall be liable or obligated to the other Party with
respect to any payments, future profits, exemplary, special or
consequential damages, indemnifications or other compensation
regarding such Termination, and, except as otherwise required by
applicable law, each Party hereby waives and relinquishes any
rights, pursuant to law or otherwise, to any such payments,
indemnifications or compensation.
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ARTICLE 9
COMPLIANCE WITH APPLICABLE LAWS
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9.1 COMPLIANCE GENERALLY. In the performance of its obligations
under this Agreement, the Parties shall, at all times, strictly
comply with all applicable laws, regulations and orders of the
countries and jurisdictions in which they operate and such United
States laws as outlined in paragraph 9.3 of this Article.
9.2 AUTHORIZATIONS. Each Party shall, at its own expense, make,
obtain and maintain in force at all times during the term of this
Agreement, all filings, registrations, reports, licenses, permits
and authorizations required under applicable law, regulations or
orders in order for it to perform its obligations under this
Agreement.
9.3 BUSINESS PRACTICES. In conformity with the United States Foreign
Corrupt Practice Act and with the Parties' established corporate
policies regarding business practices, the Parties and their
respective employees shall not directly or indirectly make an
offer, payment, promise to pay, or authorize payment, or offer a
gift, promise to give, or authorize the giving of anything of
value for the purpose of influencing an act or decision
(including a decision not to act) of an official of any
Government or of an employee or any company or including such a
person to use his influence to effect any such act or decision in
order to assist any of the Parties in obtaining, retaining or
directing any business.
ARTICLE 10
GENERAL PROVISIONS
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10.1 ASSIGNMENT. This Agreement shall be binding on and inure to the
benefit of the heirs, successors, assigns and beneficiaries of
the Parties; provided that no Party may assign this Agreement or
any rights or obligations hereunder, whether by operation of law
or otherwise, without the prior written consent of all the other
Party's authorized representatives (which consent may be granted
or withheld). Any attempted assignment by any Party without the
prior written consent of the other Party shall be void and
unenforceable.
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10.2 NOTICES. All notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been
duly given, if delivered by hand, or if communicated by facsimile
to the facsimile number as may be provided from time to time by
each Party to the other, at the time that receipt thereof has
been confirmed by return electronic communication signal that the
message has been received, or if sent by reputable international
courier service three (3) days after dispatch addressed to the
Parties at the addresses outlined hereafter. Either Party may
change its facsimile number or address by a notice given to the
other Party in the manner set forth as follows:
If to NSIMG:
Attn: Chief Operating Xxxxxxx
00 Xxxx Xxxxxx, Xxxxx, Xxxx 00000 XXX
(000) 000-0000
(000) 000-0000 Fax
If to NSJ:
Attn: General Manager
Shinjuku X-Xxxx Xxxxx, 00xx Xxxxx
0-0-0 Xxxxxxxxxxx-xx, Xxxxxxxx-xx
Xxxxx, Xxxxx 163-13
(000) 0000-0000
(000) 0000-0000 Fax
10.3 WAIVER AND DELAY. No waiver by any Party of any breach or
default in performance by any other Party, and no failure,
refusal or neglect of any Party to exercise any right, power or
option given to it hereunder or to insist upon strict compliance
with or performance of the other Party's obligations under this
Agreement, shall constitute a waiver of the provisions of this
Agreement with respect to any subsequent breach thereof or a
waiver by any Party of its right at any time thereafter to
require exact and strict compliance with the provisions thereof.
10.4 FORCE MAJEURE. The Parties shall not be responsible for failure
to perform hereunder due to force majeure, which shall include,
but not be limited to: fires, floods, riots, strikes, labour
disputes, freight embargoes or transportation delays, shortage of
labour, inability to secure fuel, material, supplies, equipment
or power at reasonable prices or on account of shortage
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thereof, acts of God or of the public enemy, war or civil
disturbances, any existing or future laws, rules, regulations or
acts of any government (including any orders, rules or
regulations issued by any official or agency or such government)
affecting a Party that would delay or prohibit performance
hereunder, or any cause beyond the reasonable control of a Party.
If an event of force majeure should occur, the affected Party
shall promptly give notice thereof to the other Party and such
affected Party shall use its reasonable best efforts to cure or
correct any such event of force majeure.
10.5 GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Utah, applicable to contracts made and to be wholly
performed within such State. Any dispute arising out of this
Agreement, if not resolved by mutual agreement of NSIMG and NSJ
within 30 days after written notice of such dispute is given by
NSIMG or NSJ, as the case may be, shall be resolved through
arbitration with the Utah office and division of the American
Arbitration Association ("AAA"). If the dispute is not resolved
within such 30-day period, the Parties shall petition the AAA to
promptly appoint a competent, disinterested person to act as such
arbitrator. Within 30 days after the designation or appointment
of such arbitrator, such arbitrator shall be required to commence
the arbitration proceeding in the state of Utah at a time and
place to be fixed by the arbitrator, who shall so notify NSIMG
and NSJ. Such arbitration proceeding shall be conducted in
accordance with the applicable rules and procedures of the AAA,
and/or as otherwise may be agreed by NSIMG and NSJ and may be
enforced in any court of competent jurisdiction. The expenses and
costs of such arbitration shall be divided and borne equally by
NSIMG and NSJ; provided, that such of NSIMG and NSJ shall pay all
fees and expenses incurred by it in presenting or defending
against such claim, right or cause of action.
10.6 APPLICABILITY OF POST-EFFECTIVE LAWS. The Parties agree that
neither the Vienna Convention on the International Sale of Goods
nor any such similar law, treaty or act that becomes effective
during the term of this Agreement shall be applicable to this
Agreement or the transactions contemplated hereunder.
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10.7 INTEGRATED CONTRACT. This Agreement constitutes the entire
agreement between the Parties relating to the subject matter
hereof and supersedes all prior or contemporaneous negotiations,
representations, agreements and understanding (both oral and
written) of the Parties.
10.8 MODIFICATIONS AND AMENDMENTS. No supplement, modification or
amendment of this Agreement shall be binding unless it is in
writing and executed by all Parties.
10.9 SEVERABILITY. To the extent that any provision of this Agreement
is (or, in the opinion of counsel mutually acceptable to all
Parties, would be) prohibited, judicially invalidated or
otherwise rendered unenforceable in any jurisdiction relevant to
the Parties, such provision shall be deemed ineffective only to
the extent of such prohibition, invalidation or unenforceability
in that jurisdiction, and only within that jurisdiction. Any
prohibited, judicially invalidated or unenforceable provision of
this Agreement will not invalidate or render unenforceable any
other provision of this Agreement, nor will such provision of
this Agreement be invalidated or rendered unenforceable in any
other jurisdiction.
10.10 COUNTERPARTS AND HEADINGS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument. All headings and captions are inserted for
convenience of reference only and shall not affect the meaning or
interpretation of any provision hereof.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their authorized representatives.
NU SKIN INTERNATIONAL MANAGEMENT GROUP, INC.
By: ___________________________________
Name:
Title:
NU SKIN JAPAN COMPANY, LIMITED
By: ___________________________________
Name:
Title:
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