Policies and Procedures Nu Skin Enterprises Australia
The Nu Skin Policies and Procedures together with the Distributor Agreement and the Sales Compensation Plan governs each Distributor’s relationship with Nu Skin. The Policies and Procedures guides you through the steps of becoming a Nu Skin Distributor, company refund policy, requirements of corporations or partnerships, pricing, product claims, product exchange policy, becoming a sponsor and many other aspects of the business.
Section 1: Definitions Section 2: Becoming a Nu Skin Distributor Section 3: Restrictions on Becoming a Distributor Section 4: Responsibilities of a Distributor Section 5: Sales Compensation Plan Section 6: Terminating a Distributor Contract Section 7: Becoming a Sponsor Section 8: Responsibilities of a Sponsor Section 9: Becoming an Executive-Level Distributor Section 10: Ordering Products and Sales Aids Section 11: Product Exchange Policy Section 12: Company Refund Policy Section 13: Retail Customer Refund Policy Section 14: Insurance Section 15: Door-to-Door Sales Section 16: Distribution of Company Leads Section 17: Distributor Lists Section 18: Product Claims Section 19: General Business Ethics Section 20: Advertising and the Use of the Company Name Section 21: Sales Aids Section 22: Retail Store, Service Establishment Sales and Trade Show Policy Section 23: Contract Changes Section 24: Waiver Section 25: Integrated Contract Section 26: Severance Section 27: Governing Law Section 28: Notices Section 29: Successors and Assigns Section 30: Litigation and Claims Section 31: Headings Section 32: International Business
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Policies and Procedures Nu Skin Enterprises Australia These Policies and Procedures become effective August 5, 2008 for Distributors who have signed or who subsequently sign a Distributor Agreement or an International Sponsor Agreement applicable to Australia, and supersede and replace any previous versions of the Policies and Procedures. In addition, any express term, course of dealing or performance established under a previous version of the Policies and Procedures is no longer valid nor recognised by Nu Skin International, Inc. and its Affiliated Companies. These Policies and Procedures govern the way a Distributor does business with Nu Skin, other Distributors, and retail customers. These Policies and Procedures, along with the Sales Compensation Plan, the Distributor Agreement, and the Business Organisation Information Sheet, if applicable, constitute the complete Contract between a Distributor and Nu Skin. Failure to comply with the provisions of any of these documents may result in the termination of a distributorship or the loss of a Distributor’s rights to receive a Bonus. Nu Skin reserves the right to modify any of these documents, but will provide notice of at least thirty (30) days before any change is made effective, as set forth in sections  and  herein.
Section 1: Definitions
Affiliated Nu Skin Companies/Affiliated Companies: Subsidiaries of Nu Skin Enterprises, Inc. and/or companies duly authorised by Nu Skin to establish and promote Nu Skin business in officially opened countries or territories. Approved Company Products and Sales Aids: Only those Affiliated Company products and Sales Aids which have been approved for use in a specified Authorised Country and which are offered for sale and distribution by Nu Skin International, Inc. or the respective Affiliated Nu Skin Company which is the exclusive distributor of said products and Sales Aids for the specified market or territory. Approved Company Sales Aids shall include materials approved by Nu Skin for use in Authorised Markets and a separate category of sales aid materials approved specifically for Unopened Markets. Authorised Country or Authorised Market: Any country or territory where Nu Skin International, Inc. has an officially opened, registered, Affiliated Company. These officially opened countries have been announced by Nu Skin. Nu Skin International, Inc. itself does not conduct any trade or business in any foreign market. Bonus: Compensation paid by Nu Skin to a Distributor based upon the volume of products retailed by the Distributor, his/her Downline Sales Organisation, and his/her Breakaway Executives, as set forth in the Sales Compensation Plan. Bonus pay periods are on a calendar-month basis. Breakaway Executive: Any Distributor in an Executive’s Downline Organisation, who qualifies as an Executive under the Compensation Plan, becomes a Breakaway to the upline Executives. Business Portfolio: The Business Portfolio is the only purchase required to become a Distributor. The Business Portfolio contains the Policies and Procedures, the Sales Compensation Plan and other sales and demonstration materials to help a Distributor in starting and conducting their independent business. Business Organisation Information Sheet: A supplemental document to the Distributor Agreement. The Business Organisation Information Sheet is to be completed and signed by a corporation, partnership or other business entity applying to become a Distributor. Contract: The Agreement between a Distributor and Nu Skin International comprised of these Policies and Procedures, the Sales Compensation Plan, Distributor Agreement, Business Organisation Information Sheet and supplemental Sponsor Agreements. The Contract is the complete and only Agreement between Nu Skin International and a Distributor. Distributor: A person authorised to purchase and retail Nu Skin products and to receive compensation in accordance with the requirements of the Sales Compensation Plan. A Distributor’s relationship to Nu Skin is governed by the Contract. More than one Person may be included on a Distributor Agreement. In such a case, “Distributor” refers to all the Persons collectively, although each Person individually has all the Distributor rights. A Distributor is a fully independent contractor. Distributor Agreement: The application for a Distributorship which, upon acceptance by Nu Skin International, Inc., is part of the Contract between the Distributor and Nu Skin containing information about a prospective Distributor. The Distributor Agreement is to be completed and signed by the Person(s) applying to become a Distributor. This document contains important information, which prospective Distributors should read and understand before applying for a Distributorship. Downline Sales Organisation: With respect to any Distributor, the Distributors directly or indirectly sponsored by such Distributor. Executive: A Distributor who has fulfilled the qualification requirements as set forth in the Sales Compensation Plan. Qualification periods are on a calendar-month basis. Group Sales Volume: The Personal Sales Volume of a Distributor, plus the Personal Sales Volume of all Distributors in his/her Downline Sales Organisation, but not including the volumes of Breakaway Executives and their groups. International Sponsor: A Distributor in good standing authorised under an International Sponsor Agreement to act as both a Sponsor and Distributor in a specific country, territory, or other political jurisdiction outside of the country, territory, or other political jurisdiction in which that Distributor first signed a Distributor Agreement with Nu Skin. International Sponsor Agreement: The Agreement between a Distributor and Nu Skin International pursuant to which such Distributor obtains the right from Nu Skin International to act as an International Sponsor. A separate International Sponsor Agreement must be completed for each country, territory, or other political jurisdiction in which a Distributors desires to conduct business as an International Sponsor. Nu Skin: Except where the context otherwise requires, Nu Skin International and any of its Affiliated Companies.
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Nu Skin International: Nu Skin International, Inc., a Utah corporation whose principal place of business is located at 75 West Center Street, Provo, Utah 84601, USA. Person: An individual, corporation, partnership, or other legal entity. Personal Sales Volume: The point value of products from any division or Affiliated Company ordered by a Distributor, primarily for resale to customers, in one calendar month. Points: Units of value used in the calculation of compensation payable to Distributors for their personal product sales and their Downline Organisation’s product sales as set forth in the Sales Compensation Plan. Policies and Procedures: The Policies and Procedures governing how a Distributor is to conduct his/her business as set forth in this document. Sales Aid: Any material used in the promotion, offer or sale of products promoted or sold by Nu Skin or its Affiliate Companies, recruitment of prospective Distributors or training of Distributors, which makes reference to Nu Skin, products of Nu Skin or any Affiliated Company, the Sales Compensation Plan, or Nu Skin trademarks, trade names, or logos, including, domain names or business names of Nu Skin International or any of its Affiliated Companies. Unopened Country or Unopened Market: Any country or territory which Nu Skin International, Inc. has neither officially opened for business nor established an officially opened, registered, affiliated company. Sales Compensation Plan: The compensation plan, which governs the Bonuses and other payments from Nu Skin to a Distributor as set forth in a separate document.
Section 2: Becoming a Nu Skin Distributor
A. A Person may apply to become a Distributor by purchasing a Business Portfolio and completing, signing, and returning a Distributor Agreement to Nu Skin; No other purchases are required; product purchases are optional. No fees or purchases other than those stated in literature published by Nu Skin are required for applicants for Distributorship. The Contract becomes binding upon acceptance by the Company. 1. A Business Portfolio may be purchased directly from the sponsoring Distributor. The enclosed Distributor Agreement must be sent to Nu Skin. 2. Each country has its own Distributor Agreement. A Distributor Agreement completed for the wrong country is invalid. A Distributor Agreement must be filed in the country of residence. 3. Upon request by Nu Skin, a Distributor must provide proof of residency and proof of the ability to legally conduct Nu Skin business in the country, which corresponds with the Distributor’s Distributor Agreement. If a Distributor fails to provide such documentation, Nu Skin at its election may declare a Distributor Agreement void from its inception. B. All Bonuses are paid by cheque, which will be issued in the name of the first applicant on the Distributor Agreement. C. If an applicant or Distributorship is registered for the Australian Taxation System, it must:
1. provide Nu Skin with its Australian Business Number (ABN) and;
2. notify Nu Skin if it is registered for Goods and Services Tax (GST).
D. For a company, the following requirements must be met:
1. The Distributor Agreement must be signed by an authorised officer of the corporation.
2. A Business Organisation Information Sheet must be completed and signed by the individual signing the Distributor Agreement. In the case of a corporation, the Business Organisation Information Sheet must contain the names of the principal officers (CEO or managing director, secretary, and treasurer), members of the board of directors, and all shareholders.
3. If a corporation does not have an Australian Business Number (ABN), it must provide Nu Skin with its Australian Company Number (ACN) or Australian Registered Body Number (ARBN).
E. An applicant or Distributor is prohibited from submitting any inaccurate or falsified information on a Distributor Agreement. A Distributor must inform Nu Skin of any changes affecting the accuracy of the Distributor Agreement or Business Organisation Information Sheet. Nu Skin reserves the right to immediately terminate a Distributorship if it determines that false or inaccurate information was provided.
1. Changes to a Distributorship must be submitted on a new Distributor Agreement or Business Organisation Information Sheet with “Amended” written across the top, the form signed, and returned to Nu Skin.
2. Nu Skin charges a fee to change a Distributor Identification Number. There is no charge for a change of address, telephone number, or the correction of clerical errors.
F. A person becomes a Distributor on the date on which the Distributor Agreement is accepted and approved by Nu Skin in Provo, Utah, and a permanent account is established. The permanent account must be established by the last working day of the month in order to be included in that month’s Bonus and qualification computations.
1. A temporary account can be set up by calling in all the information on the Distributor Agreement, or faxing a completed Distributor Agreement to Nu Skin (subject to acceptance in Provo, Utah). The original Distributor Agreement must be sent to Nu Skin. A temporary account which is not made permanent within thirty (30) days will be deleted.
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Section 3: Restrictions on Becoming a Distributor
A. An applicant must be of legal age in his/her state of residence. However, a minor child at least 16 years of age may become a Distributor by signing the Distributor Agreement along with his/her parent or legal guardian. In such a case, the parent or legal guardian must supervise the minor child’s activities, and the parent or legal guardian is responsible for the actions and omissions and any tax or other liabilities of the minor child. B. A Distributor may not have a simultaneous beneficial interest in more than one Distributorship. A person cannot be a Distributor under more than one Distributor Agreement. 1. Under the Contract, an individual has a beneficial interest in the Distributorship of a spouse or cohabitant. If a spouse or cohabitant wishes to become a Distributor, he or she must be added to the Distributor Agreement previously formed with the other spouse or cohabitant. 2. Under the Contract, a person listed on a Business Organisation Information Sheet is considered to have a beneficial interest in the Distributorship existing in the name of that partnership, corporation, or other business organisation. If such a Person wishes to become a Distributor, that Person must be added to the Distributor Agreement which was previously formed with that partnership, corporation, or other business organisation. 3. Under the Contract, a partnership, corporation, or other business organisation is considered to have a beneficial interest in the Distributorship existing in the name of any Person listed on its Business Organisation Information Sheet. To become a Distributor, such a partnership, corporation, or other business organisation must be added to the Distributor Agreement, which was previously formed with that listed person. 4. No partnership, corporation, or other business organisation applying may become a Distributor if it lists any Person on the Business Organisation Information Sheet who is already a Distributor under another Distributor Agreement or such a person is a director, shareholder or partner. C. A Distributor (including a Corporation or any participant therein who is or should be listed on the Partnership/ Corporation Form) may establish a distributorship under a different Sponsor only under one of the following circumstances: 1. For Distributors who held an executive or higher pin-level within the two years prior to the last incidence of “Business Activity,” that Distributor must have not engaged in “Business Activity” for the one-year period prior to establishing a new distributorship. 2. For Distributors who did not hold an executive or higher pin-level within the two years prior to the last incidence of “Business Activity,” that Distributor must have not engaged in “Business Activity” for a six-month period prior to establishing a new distributorship. As used herein, “Business Activity” includes signing a Distributor Agreement, purchasing products from or returning products to the Company, Sponsoring new Distributors, or other activities the Company, in its sole discretion, determines to be a meaningful promotion of the Company’s business. D. A Distributor who has engaged in Business Activity may not at any time acquire an interest in or merge with a pre-existing distributorship under a different Sponsor. E. A Distributor may not have or acquire a present or future ownership interest in or establish another Distributorship in the name of a family member or an unrelated individual. F. A Distributor may not encourage, entice, or otherwise assist another Distributor to transfer to a different Sponsor. This includes, but is not limited to, offering financial or other tangible incentives for another Distributor to terminate an existing Distributorship and then re-sign under a different Sponsor. In the event the Company concludes that an inappropriate line switch has occurred, in addition to other remedies listed in Section 6 the offending Distributor may be penalised and the second-in-time distributorship shall be returned to and be merged with the first-in-time distributorship. The Company may also impose penalties on any distributorship that solicits or entices an existing Distributor to change lines of sponsorship. G. A Distributor may dispose of, transfer, or otherwise assign his/her distributorship receivable or proceeds in any manner allowed by applicable law (including sale, gift, or bequest) with the prior written consent of Nu Skin International, which consent may not unreasonably be withheld. Any such assets that take the form of claims to compensation or satisfaction of contractual obligations, from or by Nu Skin, will not be recognised as assets of the transferee on the records of Nu Skin International until Nu Skin International has received written notification of the transfer and has given its formal written approval, which approval may not unreasonably be withheld. H. Nu Skin International, upon finding that a Distributorship was established in violation of Section 3 of these policies, may impose reasonable remedial measures including but not limited to termination, backing out of all commissions paid to the inappropriate upline Distributors, withholding of commissions and bonuses, withholding of Distributor recognition, and changing the Sponsor of the Distributorship established in violation of Section 3 of these policies. I. A Distributor may not convey, assign, or otherwise transfer any right conveyed by the Distributor Contract to any person or entity without the express, prior written consent of Nu Skin International, Inc., which consent will not be unreasonably withheld. The Distributor may delegate his or her responsibilities but is ultimately responsible for ensuring compliance with the Contract and applicable laws. Any person working with or for the Distributor as part of his or her Independent Distributorship and International Sponsorship will do so only under the Distributor’s direct and constant supervision.
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Section 4: Responsibilities of a Distributor A. A Distributor is an independent contractor.
1. A Distributor is not an agent, employee, partner, nor joint venturer with Nu Skin. A Distributor is prohibited from representing him/ herself as such. 2. Distributors are independent entrepreneurs who may establish their own retail prices for products. B. A Distributor must represent the products and opportunity ethically and professionally. 1. No representation or sales offers may be made relating to products which are not accurate and truthful as to price, grade, quality, performance, and availability. 2. No unreasonable, misleading, or unrepresentative earnings representation claims may be made. No income guarantees of any kind may be made. Exhibiting actual or copies of Bonus cheques is prohibited. C. 1. A Distributor may not solicit or induce any other Distributor whom he/she did not personally sponsor to sell products or services other than those offered by Nu Skin. To do so constitutes an unwarranted and unreasonable interference with the contractual relationships between Nu Skin and its Distributors. 2. Nu Skin derives, compiles, configures and maintains the Distributor Lists and has developed and continues to develop specialist marketing techniques (“Nu Skin Assets”) which it makes available to Distributors. If a Distributor who has at any time achieved a pin level of Executive or above, or any participant in such a Distributorship, or any entity from or through which they receive a financial interest, is recognised or attains a position similar to Executive level status in any other direct selling or network marketing organisation or is publicly participating as a speaker or trainer for any other direct selling or network marketing organisation or if Nu Skin reasonably believes that Distributor or the Distributorship is guilty of such conduct, Nu Skin reserves the right, notwithstanding the procedure set out in Section 6 of these Policies and Procedures, at its sole discretion to immediately withdraw Distributor privileges and/or to stop Distributor activity. In this section the following terms have the following meanings:
“Distributor privileges” means: recognition of a pin level status, including publication of such recognition in any Nu Skin publication or at a Nu Skin event; or withholding pin level recognition for the purposes of payout and bonuses under the Sales Compensation Plan; allowing participation as an international sponsor; promotion within the Sales Compensation Plan.
“Distributor activity” means: ordering products, sponsoring, holding meetings.
“recognised”: means recognised as achieving or maintaining a position similar to Executive through any direct selling or network marketing organisation’s corporate or distributor meetings (open or closed), honour board or any form of printed or electronic material.
D. A Distributor is responsible for his/her own business decisions and expenditures. E. Suggested retail prices are recommended prices only and there is no obligation to comply with the recommendations. F. A Distributor must comply fully with the Contract. G. A Distributor is personally responsible to satisfy all federal, state, territorial, and local laws and regulations. H. A Distributor who wishes to conduct business in a country outside of the country of his/her legal citizenship must ensure compliance with all applicable regulations of that country. In addition, every Distributor must sign an International Distribution and Sponsor Agreement for conducting business in an Authorised Country outside of the United States or Canada which must be accepted and acknowledged as accepted by Nu Skin prior to any international activity in the Authorised Country. Nu Skin International, Inc., in its sole discretion, reserves the right to reject the International Distribution and Sponsoring rights of a Distributor. The Distributor’s right to receive bonuses/commissions in an Authorised Country may be revoked at anytime if Nu Skin International, Inc. or any Affiliated Company has evidence that the Distributor has not conducted himself or herself in accordance with the terms and conditions contained herein and/or other requirements of the Contract incorporated herein by reference. Nu Skin’s ability to withhold a Distributor’s right to Bonuses/commissions or take other remedial measures for breach of the Contract, as set forth in other sections of these policies, is not limited by this section. I. A Distributor in any divisions of Nu Skin may sponsor new Distributors in a division only in countries where that division is approved by Nu Skin. J. Nu Skin cannot accept collect calls from a Distributor. K. Nu Skin International may, at its sole discretion, take action against a Distributorship as outlined in Section 6 of these Policies & Procedures if Nu Skin International determines that the Distributor’s conduct or the conduct of any participant to the Distributorship is detrimental or disruptive to the Nu Skin Distributor network.
Section 5: Sales Compensation Plan
A. A Distributor receives no compensation for sponsoring or introducing other Distributors. B. A Distributor is neither guaranteed a specific income nor assured any level of profit or success. A Distributor’s profit and success can come only through the successful retail sale of Nu Skin products and the retail sales of other Distributors within the Distributor’s Downline organisation. C. Without affecting a Distributor’s status as a Distributor and such Distributor’s right to profits based on his/her sale of Nu Skin products, such Distributor can receive a Bonus only if, on a monthly basis: 1. such Distributor achieves at least 100 points in Personal Sales Volume, and 2. such Distributor documents retail sales to at least five retail customers, and 3. such Distributor sells and/or personally consumes at least 80 percent of Personal Sales Volume, and 4. such Distributor is not in default in any of his/her material obligations under the Contract. 6
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D. An order for Nu Skin products to be sold is included in the Bonus and Executive-level qualification computations for a given month only if received (accompanied by a proper payment) by a Nu Skin authorised Distribution Center on or before the last business day of that month. If a credit voucher is issued on Nu Skin products ordered but not available that month, Personal Sales Volume for such products will only be included in Bonus and Executive-level qualification computations for the month in which such voucher is redeemed. E. Each Distributor receiving a Bonus agrees to retain documentation evidencing the sales referred to in Sub-section 5.C (2) above. Each Distributor agrees to make this documentation available to Nu Skin at Nu Skin’s request. A Distributor’s failure to make such documentation reasonably available constitutes a breach of the Contract and entitles Nu Skin to recoup any Bonuses paid with respect to any orders in that month. F. In addition to any recoupment rights provided above, Nu Skin reserves the right to recoup any Bonus paid to any Distributors on products: 1. returned under the refund policy established by any Nu Skin authorised Distribution Center; 2. returned to a Nu Skin authorised Distribution Center under any applicable law; or 3. returned in relation to any incident of Distributor misconduct involving unauthorised or misleading representations made either in connection with the offer or sale of any Nu Skin product, or in connection with the Sales Compensation Plan. G. In recouping Bonus payments as provided in this Section 5, Nu Skin, at its sole discretion, may require direct payment from an affected Distributor and offset the amount of the recoupment against any accrued or subsequently accruing Bonuses that Nu Skin may owe such Distributor. H. A Bonus is paid by cheque or other bank transfer in the name of the first-listed Distributor on the Distributor Agreement. 1. Bonus cheques of $5,000.00 or more are delivered by courier. Except as provided in Subparagraph 2, there is a service charge. A Distributor may cancel this service at any time. 2. Bonus cheques of $10,000.00 or more are delivered by courier at no cost to the Distributor. I.
To the extent required by law, Nu Skin will send notification to relevant tax authorities in each country, territory, or political jurisdiction in which the Distributor or downline Distributor’s in his/her organisation is authorised to conduct an independent Company-related business. This notification informs such authorities that a Distributor has received Bonus payments or purchased products, and specifies the amount thereof.
Section 6: Terminating a Distributor Contract
A. A Distributor’s rights under this Contract are conditioned upon and subject to the Distributor’s continued performance in accordance with these Policies & Procedures. Upon failure by a Distributor to perform his/her obligations as set forth in the Contract, the Distributor’s rights cease and Nu Skin may elect to terminate the Contract. At Nu Skin’s discretion, Nu Skin may excuse a Distributor’s non-performance in whole or in part. Further, in connection with or in lieu of terminating the Contract, Nu Skin may: 1. provide written notification to the Distributor of Nu Skin’s concerns and of Nu Skin’s intent to discontinue the Distributor’s rights under the Contract if the Distributor’s non-performance continues; 2. closely monitor the Distributor’s conduct and his/her Distributorship over a specified period of time to ensure performance by the Distributor; 3. require additional assurances by the Distributor that performance will be in compliance with the Contract. Further assurances may require the Distributor to take certain actions in an effort to mitigate or correct the Distributor’s non-performance; 4. deny privileges, which are awarded to Distributors from time to time by Nu Skin or cease performing Nu Skin’s obligations under the Contract, including, but not limited to, awards, recognition at corporate events, or in corporate literature, participation in Company sponsored events, placing product orders, promotion within the Sales Compensation Plan, allowing participation by the Distributor as an international sponsor. 5. Discontinue or limit payment of Bonuses, commissions based on the premise that because of the Distributor’s non-compliance, the Distributor is not entitled to Bonuses, commission; and 6. Seek injunctive relief or other remedies available by law. B.
The following procedure applies when Nu Skin investigates a Contract violation: 1. Nu Skin will send a formal written notice to the Distributor for the alleged breach of contract. 2. Nu Skin reserves the right to prohibit Distributor activity (i.e., placing orders, sponsoring, modifying Distributor information, receiving Bonuses, etc) in relation to the respective Distributorship from the time notice is sent to the Distributor until a Company decision is rendered. 3. On the basis of any information obtained from collateral sources and from Nu Skin’s investigation of the facts, taken together with information submitted to Nu Skin during the applicable response period, Nu Skin will make a final decision regarding the appropriate sanction, which may include the termination of a Distributor’s Contract. While a case is under investigation by Nu Skin, or the subject of an appeal or mediation/arbitration, no information as it relates to the case will be released to any Distributor in order to protect the rights and privacy of all parties. Nu Skin reserves the right to impose sanctions for the Contract violations on a case-by-case basis. Nu Skin will promptly notify the Distributor of its decision. Any sanctions will be effective as of the date on which notice is dispatched.
C. A Distributor may terminate his/her Contract at any time, for any reason, by sending a written notice of intent to terminate to Nu Skin. Termination becomes effective as of the date Nu Skin International enters the termination on its computer system. D. No written notice of intent to terminate need be given by either the Distributor or Nu Skin when a Distributor is inactive for six months.
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A Distributorship is considered inactive when a Distributor has not undertaken Distributorship activity within a six month period after the anniversary date of the Distributor’s sign-up date. For inactive Distributorships, the six-month waiting period required prior to the re-signing of a Distributor Agreement under a different Sponsor begins no earlier than the anniversary date. Distributorship activity is defined as: 1. placing or paying for an order with Company; 2. sponsoring Distributors; 3. selling, gifting, or distributing in any manner, Company products, product samples, or promotional materials; 4. conducting, sponsoring or inviting potential distributors to attend a business opportunity, product, or training meeting; 5. receiving bonuses/commission from any Distributorship. E.
The act of any participant in a Distributorship or spouse or partner of a Distributor is attributable to the Distributorship and sanctions, including termination of the contract, necessitated by such act may be applied to the Distributorship generally.
Section 7: Becoming a Sponsor
A. A Distributor may act as a Sponsor only if the Distributor meets all requirements and accepts all responsibilities described herein. Under the express terms of the Contract (but subject always to limitations set forth in the Contract and in applicable laws, ordinances, and regulations), a Distributor is entitled to sponsor other Distributors. 1. A Distributor may refer Persons to Nu Skin as applicants to become Distributors. Upon acceptance by Nu Skin of the Distributor Agreement, applicants are placed as Distributors in the Downline Organisation of the Sponsor listed in the Agreement. 2. In order to be a successful Sponsor, a Distributor should assume training and support obligations with respect to Distributors in his/her Downline Organisation. A Distributor’s profit and success can come only through successful retail sales of Nu Skin products and the retail sales by other Distributors within their Downline Organisations. 3. A Distributor is entitled to sponsor Distributors only in countries, territories, and political jurisdictions approved by Nu Skin. In accordance with Section [4.1] (above) of these Policies and Procedures, a Distributor must enter into an International Sponsor Agreement with Nu Skin before he/she may sponsor Distributors in any particular country, territory, or political jurisdiction outside the country, territory, or political jurisdiction in which he/she is a Distributor.
Section 8: Responsibilities of a Sponsor A.
To be successful as leader of the Distributors in his/her Downline Organisation, a Sponsor should fulfil the following responsibilities: 1. A Sponsor should give regular retail sales and organisational training, guidance, and encouragement throughout his/her Downline Organisation. A Sponsor should maintain contact with all of his/her group members and be available to answer their questions. 2. A Sponsor should exercise his/her best efforts to ensure that all Distributors in his/her Downline Organisation properly understand and comply with the terms and conditions of the Contract and applicable national and local laws, ordinances, and regulations. 3. A Sponsor should intervene in any disputes arising between a Customer and any of his/her Distributors, and attempt to resolve the dispute promptly and amicably. 4. A Sponsor should provide training to ensure that product sales and business opportunity meetings conducted by Distributors in his/her Downline Organisation are conducted in accordance with the Contract, including these Policies and Procedures, and in accordance with any applicable laws, ordinances, and regulations.
Section 9: Becoming an Executive-Level Distributor A.
A Distributor can achieve and maintain the status of an Executive-level Distributor by fulfilling and maintaining the Executive qualification requirements set forth in the Sales Compensation Plan.
B. If an Executive-level Distributor does not maintain those qualification requirements, he/she will revert to the status of an ordinary Distributor and lose all Executive benefits beginning the month in which those requirements were not maintained (excluding the “Grace Month” as described in the Sales Compensation Plan). C.
If an Executive-level Distributor reverts to ordinary Distributor status, a limited Executive requalification program is available under certain circumstances, as outlined in the Sales Compensation Plan.
D. Nu Skin, at its discretion, reserves the right to hold, maintain, or promote to an Executive pin level without regard to fulfilment of pin-level requirements.
Section 10: Ordering Products and Sales Aids A. A Distributor may order products directly from the Affiliated Nu Skin Company in Australia.
B. A Distributor has no specific inventory requirements. A Distributor must use his/her own judgment in determining inventory needs based upon reasonably projected retail sales. A Distributor is prohibited from ordering more than a reasonable inventory. When placing an order, a Distributor must certify that he/she has personally consumed or resold to at least 5 customers at least 80% of the previous month’s purchases. Nu Skin reserves the right to verify Distributor resales of product inventory.
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C. Any payment which is not supported by sufficient funds constitutes a breach of Contract. Where necessary, a service fee will be charged. 1. If acceptable payment is not promptly made the Personal Sales Volume and Group Sales Volume of the order will be withdrawn. 2. Nu Skin reserves the right to offset the outstanding amount against any Bonuses due to the Distributor. 3. If more than one person is listed on the Distributor Agreement, all Persons will be held jointly and severally liable for the outstanding amount D. A Distributor is prohibited from submitting orders in the name of another Distributor without the other Distributor’s specified prior written approval (a copy of which is to be delivered to Nu Skin before or at the time of placing each order). E. A Distributor is prohibited from using another individual’s credit card.
Section 11: Product Exchange Policy A.
The Affiliated Nu Skin Company in each country determines product exchange policy procedures and these are set out in the applicable Product Purchase Agreement B. To exchange products, you must comply with the rules set out in the Product Purchase Agreement.
To exchange products, you must comply with the rules set out in the Product Purchase Agreement.
Section 12: Company Refund Policy
A. Nu Skin International reserves the right to back out any Bonuses paid to Distributors and their uplines on products which are subsequently returned under Nu Skin return policy. In the event of unauthorised or misleading representations by a Distributor in connection with product sales, Nu Skin International reserves the right any time, to back out from Bonuses paid on those products in order to protect the rights of the consumer or prospective Distributor. B.
To obtain a refund on products, a Distributor must comply with the procedures set out in the Product Purchase Agreement. Nu Skin reserves the right to require a Distributor to repay Bonuses paid to him or her on products returned by the Distributor’s downline under its refund policy. This may be achieved either through direct contact with the affected Distributor or by withholding from future bonus payments. This policy encompasses all refunds allowed under Nu Skin’s refund policy, extension of the refund policy as required by applicable law, or instances in which Distributor misconduct, misrepresentation, or other extenuating circumstances necessitates a company refund in excess of the stated refund policy.
Section 13: Retail Customer Refund Policy (See also Section 15: Door-to-Door Sales.)
A. Distributor must comply with customer refund policy set out in the Product Purchase Agreement Nu Skin encourages Distributors to honour a request for a refund or product exchange even if it is made more than seven days after purchase. Nu Skin supports this policy by providing replacement products up to ninety days following the refund or product exchange with a customer. B. A Distributor is solely responsible to learn and comply with any and all applicable laws in the jurisdiction he or she does business, including but not limited, to door-to-door sales laws. (See section 15.)
Section 14: Insurance Nu Skin International, Inc. or its Affiliated Companies may, from time to time, obtain product liability insurance that may cover claims arising from the use of Nu Skin products. If a claim is asserted against a Purchaser, Purchaser should immediately contact Nu Skin to ascertain the applicability of any such coverage. In no event, however, will coverage extend to any Purchaser who: 1. repackages or alters any product; 2. sells or causes to be sold or distributed products, labels or packaging which do not comply with the law or other requirements of the country in which such products, labels or packaging was sold or distributed; 3. acts negligently; 4. or makes any representation or product claim in an offer for sale of any Nu Skin product in contravention of the Agreement or in violation of any applicable law. 5. Nothing herein should be constituted to guarantee coverage or obligate Nu Skin International or any Affiliated Nu Skin Company to honour, settle or pay any product claims.
Section 15: Door-to-Door Sales
A. In addition to the rescission period which Nu Skin International requires a Distributor to extend to his or her customer (see section 13), the direct selling of products to consumers can be subject to the provisions of door-to-door sales legislation. Door-to-door sales laws vary in each Australian state and territory. A Distributor is solely responsible for becoming familiar and complying with the door-to-door laws in the jurisdiction/s in which he or she conducts his or her Nu Skin business. The Retail Order forms provided by Nu Skin Australia to a Distributor are not intended to comply with the door-to-door sales requirements in any of the Australian jurisdictions and should not be construed as such nor as a substitute for the appropriate, relevant, and correct compliance requirements, forms, and notices. The Distributor releases Nu Skin from any obligation to ensure or assist with compliance, as well as from any liability arising from a Distributor’s failure to comply. Policies & Procedures 9
Section 16: Distribution of Company Leads A.
From time to time, Persons inquire about the Nu Skin opportunity or products directly through Nu Skin International or its Affiliated Companies. If the Person heard about Nu Skin from a Distributor, the Person is referred back to that Distributor. Persons who have heard about Nu Skin without a discoverable contact are distributed to existing Executive Distributors as fairly as possible, usually in the locality of the Persons making the inquiry. Nu Skin reserves the right to make final judgments with respect to distribution of leads.
Section 17: Distributor Lists
A. Distributor lists (“Lists”) are the confidential and proprietary property of Nu Skin International. Nu Skin International has derived, compiled, configured, and currently maintains the Lists through the expenditure of considerable time, effort, and monetary resources. The Lists, in their present and future forms, constitute commercially advantageous proprietary assets and trade secrets of Nu Skin International, which Nu Skin International’s employees have agreed to hold confidential. The right to disclose the Lists and Distributor information maintained by Nu Skin International is expressly reserved. B. Nu Skin International provides a uniquely tailored portion of the Lists to Executive-level Distributors, qualifying Executive-level Distributors and, for a fee, to other Distributors requesting such portion (collectively and individually the “Recipient”) on a monthly basis. Each portion of the provided Lists contains only information specific to the Recipient’s level and his/her own Downline Organisation. 1. These Lists are provided for the exclusive and limited use of the Recipient to facilitate the training, support, and servicing of the Recipient’s Downline Organisation for use solely for the furtherance of the Nu Skin business. Each Recipient agrees that any such use, within its intended scope, constitutes a separate, exclusive license agreement between the Recipient and Nu Skin International. 2. These Lists remain, at all times, the exclusive property of Nu Skin International, which may, at any time and in Nu Skin’s sole discretion, reclaim and take possession of the Lists. Accordingly, each Recipient agrees: a. to hold confidential and not disclose any Lists or portions thereof to any third Person, including, but not limited to, existing Distributors, competitors and the general public; b. to limit use of the Lists to their intended scope of furthering the Distributor’s Nu Skin related business; c. that any intended or unintended use or disclosure of the Lists outside of those authorised herein, or for the benefit of any third person, constitutes misuse, misappropriation, and a violation of the Recipient’s license agreement, which causes irreparable harm to Nu Skin International or its Affiliated Companies; d. that, upon any violation under this Section, the Recipient will stipulate to appropriate injunctive belief enjoying such use under applicable national or local laws, and retrieve and return to Nu Skin International all Lists previously provided to the Recipient; e. that the obligations under this Section will survive the termination of the recipient’s Contact. 3. Nu Skin International reserves the right to pursue all appropriate remedies under applicable national or local laws to protect its rights to the above-stated proprietary and trade secret lists; any failure to pursue such remedies will not constitute a waiver of those rights.
Section 18: Product Claims
A. Distributors may make only those product claims and representations found in the literature distributed by Nu Skin for use in Australia. B.
The majority of products sold by Nu Skin are cosmetics or foods, but some are therapeutic goods regulated by the Therapeutic Goods Authority (TGA).The TGA regulates and oversees the sale of therapeutic products to assure their safety and proper representation to the public.
C. A Distributor may represent only that Nu Skin products are safe for use when used as intended – for the limited purpose of improving appearance through regular use of personal care products and increasing the feeling of improved and better health through the use of nutritional products. D. All product claims and representations must be the same as those found in the current literature distributed by Nu Skin for use in Australia. E.
While Nu Skin makes every effort to achieve full compliance with complicated and periodically amended cosmetic, food, import, trade, and therapeutic goods regulations, no Distributor should claim or imply that any Nu Skin product is approved by the TGA or any other government body unless the product has been registered/approved by such governmental body. Compliance with applicable laws does not imply government approval of Nu Skin products.
Section 19: General Business Ethics
A. Each Distributor agrees that he/she will not make, by any means, misleading, unfair, inaccurate, or disparaging comparisons, claims, representations, or statements about other persons’ (including competitors), companies, their products, or their commercial activities. Each Distributor also agrees that he/she will not take unfair, misleading or inaccurate claims about Nu Skin, Nu Skin products or the commercial activities of Nu Skin. B. A Distributor acknowledges that he/she has no authority to take any steps in any country or other political jurisdiction toward the introduction of furtherance of the business. This includes, but is not limited to any business practices; or to establish business or governmental contacts. A Distributor agrees to indemnify Nu Skin for all costs incurred by Nu Skin for any remedial action needed to exonerate Nu Skin in the event the Distributor improperly acts on behalf of Nu Skin.
Policies & Procedures
Section 20: Advertising and the Use of the Company name I. Internet
1. Use of the Internet in Distributor Business
You may use the Internet to promote the Company, including its Products, only if such use is specifically authorised by Subsections 20.2 or 20.3 and is in compliance with all of the provisions of these Policies and Procedures including Sections 4, 5, 18 and 20 of the Policies and Procedures, as well as the written guidelines for internet use established by the Company. All other uses of the Internet to promote the Company or its Products or its Sales Compensation Plan are prohibited.
2. Permitted Internet Activities All Distributors may utilise the Internet as follows: (a) You are allowed to utilise Company produced Distributor websites. (b) You may use generic (i) business opportunity websites, (ii) splash pages, or (iii) social media, with links to Company websites. These generic pages may not contain the Company’s trademarks or other copyrighted material and may not contain information on the Company, its Products or its business, or pictures of Products or corporate facilities/ personnel. They also must not contain any false or misleading information. (c) You may use the internet, including social networking sites, blogs, social media and applications, and other sites that have contentthat is based on user participation and user generated content, forums, message boards, blogs, wikis and podcasts (e.g. Facebook, Twitter, Flickr etc.) to (1) communicate preliminary information about the Company or your involvement with the Company,
(2) direct users to a Company Internet Marketing Site or a registered Blue Diamond Internet Marketing Site and
(3) post Company produced Sales Aids that have been approved by the Company for posting on personal blogs or social networking sites; provided, however, that such communication and use must be (i) incidental to the primary use of such forum, site, blog, board, wiki or podcast or other form of internet use, and (ii) may not be an Internet Marketing Site. As set forth in Subsection 3 of this Section 20I, only Blue Diamond Distributors may maintain an Internet Marketing Site. The Company has the right to make the determination, in its sole discretion, whether your use of the Internet is permitted under this section or whether such use is a prohibited Internet Marketing Site. Additionally, you must comply with Company published guidelines governing use of the Internet. These guidelines may change from time to time and it is your responsibility to know the current guidelines and comply with them. In case of a violation, in addition to taking disciplinary action against you in accordance with Section 6 of the Policies and Procedures, the Company may require you to immediately remove any information or marketing site that is in violation of Company policies.
Examples of Permitted Uses by Non-Blue Diamond Distributors
If you maintain a personal Facebook page where you post a variety of information, you could post information that that you are a Nu Skin distributor, information about Nu Skin events you have participated in, and preliminary information about Nu Skin, and direct readers to a Company Internet Marketing Site or an approved Blue Diamond Internet Marketing Site for more information. If you maintain a personal blog or social network site, you may blog in a particular post that you are a Nu Skin Distributor, and that others can sign up as Distributors, and to contact you if they are interested in discussing the business with you.
Examples of Non-Permitted Uses by Non-Blue Diamond Distributors
A Facebook page that is primarily devoted to Nu Skin, that includes posted marketing materials such as videos or before and after photos, or if it is fan page or similar page that utilises the Company’s trade marks, would be considered an Internet Marketing Site, and would be a violation of policy for non-Blue Diamond Distributors. A blog or social network site that is primarily about the Products or opportunity, i.e., that is the focus of your postings and discussions, that is titled with a Nu Skin trade mark or slogan, or utilises marketing content, would be an Internet Marketing Site, and would be a violation of policy for non-Blue Diamond Distributors.
The foregoing examples are provided for illustration purposes only, and are not intended as an exhaustive list of permitted or non-permitted uses of the Internet or the conditions or factors the Company will consider in determining whether any particular use of the internet is an Internet Marketing Site.
Blue Diamond Internet Marketing Site
In order to protect the integrity of the Network and to ensure that marketing content on the internet is only created and posted by Distributors with significant experience and knowledge relating to the Company and its Products, only Blue Diamond Distributors (as defined in Subsection 20I.1) may create or maintain an Internet Marketing Site. Such Internet Marketing Sites shall be considered Sales Aids and shall be subject to Section 20 of the Policies and Procedures. In addition to the requirements set forth in Subsection 20J of the Policies and Procedures with respect to Blue Diamond Sales Aids, Blue Diamond Internet Marketing Sites are subject to the following rules: (a) You must have submitted an Application for Registration for the location of any Blue Diamond Internet received a Notice of Registration for such Blue Diamond Internet Marketing Site;
Marketing Site and
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(b) You must notify the Company immediately if posting any information on the Blue Diamond Internet Marketing Site that relates to the Company, its Products, or the opportunity/Sales Compensation Plan that has not been previously registered with the Company; (c) Downloadable materials such as PDFs, videos, pictures, PowerPoint presentations and other files are considered separate Sales Aids and you must register them with the Company and receive a Notice of Registration before posting them on your Blue Diamond Internet Marketing Site; (d) Any income claims posted on a Blue Diamond Internet Marketing Site must comply with all rules regarding earnings claims under Subsection 3 of this Section 20 of the Policies and Procedures; (e) Your Blue Diamond Internet Marketing Site may not contain more than fifty (50) pages, in the aggregate, without the written consent of the Company. You must provide the Company with any usernames or passwords as may be necessary to access all portions of the Blue Diamond Internet Marketing Site; and (f) If the Company notifies you to remove or delete any information from your Blue Diamond Internet Marketing Site, or to make any modifications or add additional information such as income disclaimers, you must make the requested changes within 24 hours (or a shorter period as the Company may require in its sole discretion) or shut down the Blue Diamond Internet Marketing Site until such changes have been made. Additional Restrictions on Internet Use All Distributor websites, whether Blue Diamond Internet Marketing Sites or Company produced Distributor websites, and any other form of internet use allowed by these Policies and Procedures, including internet video and audio, social media, and other sites that have content based on user participation and user generated content must comply with the following rules: (a) You may not use or distribute replicating websites, except Company produced replicating web sites such as NSE Dreams; (b) You may not include any Company or third party intellectual property or proprietary information in the unique domain names/URL or meta-tags of your websites, on or in any other form of internet use, including but not limited to, tags, links, blog names, social networking sites, social media and applications, and other sites that have content based on user participation and user generated content, forums, message boards, blogs, wikis and podcasts (e.g., Facebook, YouTube, Twitter, Wikipedia, Flickr), or as “wallpaper”; (c) You may not register your website(s) with search engines or web directories using any Company or third-party owned intellectual property or any proprietary information (e.g., trade marks, trade names, trade secrets, and copyrighted material) without written permission from the owner; (d) You may not use sponsored links or pay for placement advertising with internet search engines and web directories; (e) You may promote your websites or pages through one-on-one personal contact only; and (f) You may provide links to your website or pages only from other websites that have been registered with the Company. (g) You must comply with the Unsolicited Electronic Messages Act 2007 and the Privacy Act 1993 in New Zealand at all times. 4. Internet Video and Audio
You are prohibited from posting any video or audio content created by, produced by, belonging to or relating to
(i) the Company, its Products, Sales Compensation Plan or Distributors, or
(ii) you or any third party, on any website unless you have received prior written authorisation from the Company or such posting is specifically permitted by this Section 20.
This prohibition includes, but is not limited to, video or audio recordings of Company personnel or Company or Distributor sponsored events, meetings, training, or sales presentations. As an exception to this rule, Blue Diamond Distributors may post Company produced audio and video presentations, specifically authorised by the Company for internet posting by Blue Diamond Distributors, on their Blue Diamond Internet Marketing Sites as well as audio and video presentations that have been registered with the Company and for which a Notice of Registration has been issued.
5. Internet Selling
Products may be sold on the internet only through the Company’s websites and may not be sold through Distributor websites of any kind or any other form of internet use, including internet video and audio, social networking sites, social media and applications, and other sites that have content based on user participation and user generated content, forums, message boards, blogs, wikis and podcasts (e.g., Facebook, YouTube, Twitter, Wikipedia, Flickr). Blue Diamond Internet Marketing Sites may link to Company websites. This prohibition on internet selling includes, but is not limited to, internet auction and classified advertising websites such as ebay.com.au (Australia) or trademe.co.nz (New Zealand).
Section 20: Advertising and the Use of the Company name J. Blue Diamond Produced Sales Aids 1.
Blue Diamond Sales Aids
In order to protect the integrity of the Network and to ensure that Sales Aids are only produced, utilised and distributed by Distributors with significant experience and knowledge relating to the Company and its Products, only Blue Diamond Distributors may produce, utilise and distribute their own Sales Aids. Blue Diamond Distributors may produce Sales Aids for their own use and for use by other Distributors only if they comply with the terms of these Policies and Procedures, including, without limitation, the provisions of this Section 20. Blue Diamond Sales Aids may only be used in the specific Authorised Countries in which they have been registered. For purposes of this Section 20, Blue Diamond Distributors are those Distributors that: (i) currently enjoy active status as a Blue Diamond, 12
Policies & Procedures
(ii) have been a Blue Diamond for a minimum of three months, and (iii) are not in material breach of the Contract. 2. No Endorsement or Approval by Company Although the Company allows Blue Diamond Distributors to produce, utilise and distribute Blue Diamond Sales Aids for use by other Distributors, you need to be aware that these Blue Diamond Sales Aids are independently produced by Blue Diamond Distributors and are not produced, endorsed, recommended or approved by the Company. If you elect to purchase or use Blue Diamond Sales Aids, the Company
(i) has no responsibility or obligation to you regarding refunds and exchanges, and
(ii) does not guarantee that the Blue Diamond Sales Aids comply with all applicable laws and regulatory requirements.
Moreover, the purchase of such materials is not required and there can be no guarantee that such Blue Diamond Sales Aids will contribute meaningfully to your business. You should evaluate the purchase of Sales Aids carefully. You should not spend more on such Blue Diamond Sales Aids than can be supported by your current level of Bonuses under the Sales Compensation Plan.
3. License Agreement for Sales Aids
This Subsection 3 applies to you if you are a Blue Diamond Distributor. A Blue Diamond Distributor must execute and submit to the Company a License Agreement prior to producing any Blue Diamond Sales Aids. The License Agreement is for a term of two-years and must be renewed if you want to continue to produce and use your Blue Diamond Sales Aids. The License Agreement grants you the right to use certain Company trade marks and trade names, and sets forth the terms and conditions you must agree to abide by in order to produce Sales Aids and utilise the Company’s trade marks.
4. Registration of Blue Diamond Sales Aids
Prior to using or distributing any Blue Diamond Sales Aids, a Blue Diamond Distributor must register such Blue Diamond Sales Aids with the Company and receive a Notice of Registration from the Company with respect to such Blue Diamond Sales Aids as set forth in Subsection 20K to these Policies and Procedures.
Sales by Blue Diamonds; Purpose
Blue Diamond Distributors who sell Blue Diamond Sales Aids to other Distributors must comply with the Policies and Procedures and the provisions of Subsection 20K to these Policies and Procedures. Blue Diamond Sales Aids may be sold only for the purpose of promoting Products and the Company’s business and for assisting, training, and motivating other Distributors in their promotion of the Products and the Company’s business.
Distributor Organisations offering formal materials, training, website subscriptions, Sales Aids, or other business promotion tools may only be formed by Blue Diamond Distributors. Distributor Organisations must comply with the Company’s written guidelines governing the operation of a Distributor Organisation. The Blue Diamond Distributor, who is the primary organiser of the Distributor Organisation,
(i) must notify the Company in writing of the formation of a Distributor Organisation, and
(ii) is responsible for ensuring the Distributor Organisation’s compliance with the guidelines.
Section 20: Advertising and the Use of the Company name K. Policies for Blue Diamond Sales Aids 1
Blue Diamond Sales Aids
1.1 Compliance with Law and Policies and Procedures
Blue Diamond Sales Aids must comply with these Policies and Procedures and with all applicable laws and regulations, including any intellectual property rights of other Persons. You bear full responsibility for the content of your Blue Diamond Sales Aids. The registration of your Blue Diamond Sales Aids is for tracking purposes only, and the Company has no obligation for ensuring that your Blue Diamond Sales Aids comply with applicable laws and regulations. The registration process is not legal advice from the Company and you are strongly advised to seek the advice of independent legal counsel with regard to the legality and regulatory compliance of your Blue Diamond Sales Aids.
1.2 Identification of Publisher
Blue Diamond Sales Aids must prominently indicate (a) that the materials are “Independent Distributor Produced,” and such other designation as may be required by the Company to identify the materials as distributor-produced, and (b) the name and address of the Blue Diamond Distributor publishing the Blue Diamond Distributor Sales Aids.
For example: “This was produced by John Doe, an independent distributor of Nu Skin International, Inc., [address]. You may not state, suggest, or imply that the Blue Diamond Sales Aids were produced, approved, endorsed, offered, or recommended by the Company.
1.3 Use of Company-Produced Content
Blue Diamond Sales Aids may use Company-produced content such as pictures, videos, and descriptions of Products and the Sales Compensation Plan that have been designated by the Company as available for use in
(i) Blue Diamond Sales Aids, and
(ii) the Authorised Market you intend to use such materials. Policies & Procedures 13
The use of any Company trade marks, trade names, slogans, or copyrighted materials and any Company-produced content in Blue Diamond Sales Aids must comply with the terms set forth in the Licence Agreement . If you use Company-produced content, you must not alter the content and must clearly designate the Company’s copyright in such content. The Company reserves the right to revoke the right to use any Company-produced materials at any time in its sole discretion.
Sale of Blue Diamond Produced Sales Aids
2.1 Registration Required Prior to Sale
You must register the Blue Diamond Sales Aids with the Company and receive a Notice of Registration in accordance with the provisions of Subsection 4 of Section 20J prior to selling them to other Distributors.
2.2 Primary Focus is Selling Products
Your principal business focus must always be on the sale of Products for consumption. The sale of Sales Aids must not become a material profit centre for you. The Company recommends that Blue Diamond Sales Aids generally should be sold at cost, and must, in any event, be sold at reasonable prices. Consistent with this principle, you also may not offer any incentives to other Distributors in connection with any sale of Blue Diamond Sales Aids to other Distributors and customers. For example, you cannot offer to pay a Bonus, directly or indirectly, to a Distributor for selling Blue Diamond Sales Aids to other Distributors or customers or for referring a potential purchaser of Blue Diamond Sales Aids to you.
2.3 No Required Purchases; No Sale to Prospective Distributors
You may not require any prospective Distributor to purchase Sales Aids as a precondition to signing up as a Distributor. You also may not state, suggest, or imply that • Company or Blue Diamond Sales Aids are required or necessary to join or succeed in the business; • Company or Blue Diamond Sales Aids are required or necessary to receive upline support and training; • The Blue Diamond Sales Aids were produced by the Company or are being offered or sold by the Company; or • The Company approves, endorses, or recommends the Blue Diamond Sales Aids.
You may not sell any Company or Blue Diamond Sales Aids to a prospective Distributor before the prospective Distributor has submitted an application to become a Distributor to the Company.
2.4 Return Policy In connection with the sale of Blue Diamond Sales Aids, you must offer the same return policy that is offered by the Company for its Products and Sales Aids. You must refund 90 percent of the wholesale price of any unopened and resalable Blue Diamond Sales Aids for a period of 12 months from the date of purchase. 2.5
You must provide a Sales Aids Disclosure Statement to a Distributor before the first sale of Blue Diamond Sales Aids to that Distributor. You may obtain a copy of the required Disclosure Statement from the My Office website. You should regularly check the web site to ensure you have the most recent version of the Disclosure Statement. Delivery of a receipt in compliance with Subsection 2.6 below will satisfy the obligation set forth in this Subsection 2.5 if such receipt is delivered simultaneously with the purchase of the Blue Diamond Sales Aids.
You must provide a receipt for all purchases of Blue Diamond Sales Aids. The receipt must comply with Subsection 13 and 15 and also include the following disclosure:
“You are not required to purchase any Sales Aids or services in order to become a Nu Skin distributor.
These Sales Aids or services are produced and distributed by an independent distributor of Nu Skin International, Inc. and not by Nu Skin International, Inc. Although some distributors may have found these products and services to be helpful in their Nu Skin business, they are not required in order to be a distributor and no success is guaranteed because you purchase them. Your refusal to purchase these items will not affect your upline’s responsibility to provide you with training and support. Nu Skin International, Inc. does not approve, endorse, recommend or support these materials and services. Your expenditures on these items should be reasonable and the amount you spend should be in relation to your business and sales volume.
In the event you desire to return the Sales Aids or services, you may obtain a refund only from the independent distributor who sold you the Sales Aids or services. You may cancel your purchase at any time prior to midnight of the seventh (Australia) or tenth (New Zealand) business day after the date of your purchase for a full refund of the purchase price. After the seventh (Australia) or tenth (New Zealand) day, you are entitled to a refund of 90 percent of the purchase price if you return the Sales Aids or services to the seller at the address listed on this receipt within 12 months of the date of purchase. You are entitled to a refund of 90 percent of the purchase price if you return any unopened and resalable Sales Aids or services to the seller at the address listed on this receipt within 12 months from the date of purchase. In the event that you provide Blue Diamond Sales Aids on a subscription basis or other method in which the Distributor does not have to affirmatively request each purchase (e.g., a monthly web access fee), then you must include the following sentence in the receipt described above for the initial subscription or order and any subsequent receipts: “You may terminate your [order/subscription, etc.] at any time by providing written or electronic notice to [insert name and contact information(including e-mail)].”
Policies & Procedures
2.7 Compliance with Laws
The sale of Blue Diamond Sales Aids and the performance of any Blue Diamond services must comply with these Policies and Procedures and with all applicable laws and regulations, including but not limited to laws related to consumer privacy, data protection, do not call regulations, anti-spam regulations, and any related consumer protection laws. You bear full responsibility for ensuring that you comply with all applicable laws and you will be liable to the Company in the event the Company incurs any liability as a result of your non-compliance. You are encouraged to consult with your own legal counsel regarding your compliance with these laws and regulations. While the Company may review Blue Diamond Sales Aids and may request modifications to such materials, the Company’s review of, and its permission to sell, such Blue Diamond Sales Aids are neither legal advice from the Company nor a representation in any form that the materials and/or services comply with all applicable laws.
You must ensure that the quantity and cost of any Blue Diamond Sales Aids that you sell to another Distributor is reasonably related to the sales volume and Bonus level of that Distributor. You may not encourage a Distributor to go into debt to purchase either Company or Blue Diamond Sales Aids.
2.9 No Selling Activity at Corporate Events
You may not display, promote, or sell any Blue Diamond Sales Aids at meetings or events sponsored and conducted, in whole or in part, by the Company.
2.10 Web Sites Although you may allow other Distributors to use your website and assess a reasonable charge to cover your costs for providing the service; you may not sell replicating or template websites to other Distributors without the prior written approval of the Company. 2.11 Company Retained Rights; Restrictive Covenants (a) Your right to sell Blue Diamond Sales Aids to other Distributors is conditioned upon your agreement that all information relating to Distributors who purchase the Blue Diamond Sales Aids remains the property of the Company, including their contact information. You agree that in the event you terminate your Distributorship that you will:
(i) immediately return to the Company, or destroy, all such information and any copies thereof; and
(ii) not utilise this information for any purpose.
(b) In consideration of the Company allowing you to market and sell Blue Diamond Sales Aids to its Distributors you hereby agree that during the period in which you are a Distributor and for a period of two years thereafter, you will not, in any manner, directly or indirectly, recruit, solicit, or sponsor any Distributor (including any who purchase Blue Diamond Sales Aids from you), to
(i) form a relationship with,
(ii) promote, sell or purchase the products or services of,
(iii) participate as a salesperson of,
(iv) or otherwise associate with, a Direct Sales Company, or encourage any Distributor or customer to do so or to terminate their relationship with the Company. This obligation survives the termination of the Contract.
(c) However, Subsections 2.11(a) and (b) of this Section do not limit your rights under Sections 4C and 22 of the Policies and Procedures concerning the sale of Third-Party Products and Services where you have a pre-existing business relationship with a Distributor prior to one of you becoming a Distributor. 2.12 Records
You must maintain accurate and complete records with respect to any sales of Blue Diamond Sales Aids, including financial records documenting production costs and profits generated from the sale of the Blue Diamond Sales Aids. At the request of the Company, you must make these records available for review by the Company to confirm whether you have been complying with these Policies and Procedures with respect to the sale of any Blue Diamond Sales Aids. You must comply with any request to review your Distributorship records promptly and completely.
3 Registration of Blue Diamond Sales Aids 3.1 Application for Registration (a) In order to register Blue Diamond Sales Aids, you must file an Application for Registration with the Company together with a copy of the proposed Blue Diamond Sales Aids with supporting documentation. The Application for Registration contains additional terms and conditions that governs your production and distribution of your Blue Diamond Sales Aids. A Notice of Registration issued pursuant to an Application for Registration will expire two years from the date of issuance. Until its expiration, any additional proposed Blue Diamond Sales Aids will be treated as an addendum to the current Application of Registration on file with the Company. Upon expiration of a Notice of Registration, you must submit a new Application for Registration for the continued use of any previously submitted Blue Diamond Sales Aids or with the submission of any new Blue Diamond Sales Aids. (b) The Application for Registration may be obtained from the My Office website or by calling Distributor Compliance or your Account Manager. The Company could require you to make changes to your proposed Blue Diamond Sales Aids, so you should not produce multiple copies of the materials or incur other significant costs until you have received a Notice of Registration from the Company. Failure to do so may require you to destroy such copies, pay for the reprint of the Blue Diamond Sales Aids, or otherwise incur unnecessary or duplicative expenses which will not be reimbursed by the Company.
Policies & Procedures 15
3.2 Additional Documentation; Right of Review; Modifications Upon receipt of an Application for Registration, the Company will review the application and related submissions and provide you with any required modifications to the Blue Diamond Sales Aids that it deems appropriate in its sole discretion. The Company may ask for additional documentation, support, and legal opinions as it determines to be appropriate. The Company also has the right to review your Blue Diamond Sales Aids at any time, including additional reviews after the issuance of a Notice of Registration. You must provide the Company with any passwords or IDs as may be necessary for the Company to review the Blue Diamond Sales Aids. Based upon any such review, the Company may require you to make modifications to the Blue Diamond Sales Aids as the Company determines appropriate in its sole discretion. If the Company notifies you of any required modifications, you must promptly make such changes to the Blue Diamond Sales Aids and may no longer use, offer, sell or perform any Blue Diamond Sales Aids that have not been modified in accordance with the instructions of the Company. 3.3 Application Fees
The Company may impose a reasonable fee for registering Blue Diamond Sales Aids.
3.4 Notice of Registration
Following a review of the Application for Registration, the Company will decide whether to issue a Notice of Registration with respect to the Distributor Sales Aids covered by the application. The Company has the right to make this decision in its sole discretion and has no obligation to issue a Notice of Registration for an Application for Registration and may refuse to issue a Notice of Registration in its sole discretion. In such event, you may not use, offer, sell, or perform the Blue Diamond Sales Aids covered by the Application for Registration. In the event the Company decides to issue a Notice of Registration, it will deliver the Notice of Registration to you at the address indicated on the application.
3.5 Renewal of Registration; Revocation (a) The Notice of Registration will indicate the date on which such Notice of Registration expires. You may not continue to use, offer, sell or perform any Sales Aids for which the Notice of Registration has expired unless you have re-submitted the materials for registration with the Company and have received a new Notice of Registration from the Company for such Blue Diamond Sales Aids. The materials you wish to renew will be submitted as part of your current Application for Registration that is on file with the Company and handled in accordance with the same procedure. If your Application of Registration has expired, then you must file a new Application for Registration together with any Blue Diamond Sales Aids that you wish to renew. (b) Notwithstanding anything to the contrary in these Policies and Procedures, the Company reserves the right to terminate and revoke any Notice of Registration at any time in its sole discretion. If the Notice of Registration is revoked, then you must immediately cease using or distributing the specified Blue Diamond Sales Aids. The Company is not liable for and will not reimburse you for any costs incurred by you for the production of your Blue Diamond Sales Aids that are the subject of the revoked Notice of Registration
Section 21: Sales Aids A.
A Distributor may only use, distribute or sell Sales Aids either: 1. produced and distributed by Nu Skin and bearing its copyright designation; or 2. produced and distributed by an independent Distributor only after review by Nu Skin and bearing the specific designation “Content reviewed by Nu Skin International, Inc.” a. The above-stated designation may only be used after a certificate has been received by the submitting Distributor from Nu Skin, which certificate specifically indicates that the material may be made available for distribution.
B. Nu Skin may impose a reasonable fee for reviewing a Sales Aid. Distributors should allow for a minimum of three weeks for Nu Skin to complete its review of submitted materials. C. Nu Skin reserves the right to require any change to Sales Aid it deems necessary to ensure appropriate content before allowing the Sales Aid to bear its review designation as stated above. D. Nu Skin reserves the right to deny approval for any proposed Sales Aid and, if changes in regulatory requirements or other circumstances so dictate, to require the removal from the marketplace of previously reviewed Sales Aids. E. Any Distributor who produces or has previously produced or distributed materials as set forth in this section bears ultimate responsibility for the material contained therein. Nu Skin International’s review process does not guarantee that the Sales Aid complies with all applicable federal or state legal and other regulatory requirements. Nu Skin International, by its review, does not warrant legality of the reviewed Sales Aid. In addition to Nu Skin International’s review, all Distributors who intend to produce and distribute Sales Aids in accordance with this section are strongly advised to seek the advice of independent legal counsel with regard to the legality and regulatory compliance of sales aids. F.
Distributors are free to establish their own prices for Sales Aids reviewed by Nu Skin International under this section.
G. Sales Aids shall be identified by the name of the individual or individuals who produce them. Group or organisational identifiers shall not be used in connection with the production of Sales Aids. H. All mailing lists of Nu Skin Distributors obtained in connection with the production or sale of independently produced Sales Aids are the confidential and proprietary property of Nu Skin International. Independent tape duplicators or other persons obtaining access to Distributor lists through their production or distribution of such materials must contractually agree in writing to the confidentiality and proprietary nature of such mailing lists. They must also stipulate that such information is the proprietary property of Nu Skin International, and any materials which make any reference to Nu Skin or its programs offered to such distributors may be done so only with the prior written consent of Nu Skin International. The Distributor responsible for the reproduction of Sales Aids through such parties is responsible 16
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to ensure that the above-stated contractual protection is in place prior to any production or distribution of Sales Aids through a third-party producer or tape duplicator. I.
The return policy of Independent Distributors with regard to Sales Aids which they have produced or sold must be in full compliance with the pertinent Sales Aid return policy employed by Nu Skin for company-produced and approved Sales Aids.
J. Distributors who use, distribute, or sell Sales Aids in violation of this section are subject to appropriate disciplinary action by Nu Skin International, up to and including termination of the violating distributorship. K. As of the effective date of this policy, any Distributor who has previously produced Sales Aids shall be responsible for insuring that the use of all such Sales Aids which have not been reviewed by Nu Skin International shall be discontinued and removed from the marketplace in the most expeditious manner possible.
Section 22: Retail Store, Service Establishment Sales and Trade Show Policy
A. A Distributor may not sell products and/or promote the Nu Skin Enterprises business opportunity through retail stores such as health food stores, grocery stores, and other such establishments. A Distributor is also prohibited from selling to any person who will ultimately sell products or services through retail stores. B. In general a Distributor may not sell any products and/or services of the Company nor promote the Company’s opportunity at flea markets, swap meets, bazaars, men’s/women’s groups, supermarkets, malls or any other similar gathering where the opportunity or products are displayed. However, upon the prior written approval of the Company, an Executive level Distributor may rent a booth or set up an exhibit at a trade show or convention (“Convention”), subject to the Company’s approval of the Convention and compliance with the following requirements: 1. An Executive level Distributor may rent or set up a booth at one Convention at a time if the Convention theme is directly related to the Distributor’s Nu Skin Enterprises business. Additional Conventions can only be requested upon completion of the Distributor’s first convention and receipt of the Trade Show Results form. 2. At least four weeks prior to the Convention, the Executive must submit to the Company a proposal regarding the Convention and obtain prior written approval from the Company. a. The Distributor may only use Company-produced sales aids and promotional material. b. The Distributor will not reference Nu Skin Enterprises in any form of advertisement or promotional material that implies that Nu Skin Enterprises is participating in the Convention. Instead, any Company-approved advertisement or promotional material must make specific reference to the Distributor as an independent Executive level Distributor of Nu Skin Enterprises, including any maps or listings prepared by the sponsor of the Convention. c. The Distributor will not make any earnings representations of any kind. 3. The Distributor will not use the Convention to promote any product, service, or business opportunity other than Pharmanex, Nu Skin, Big Planet, or any other Nu Skin Enterprises business in which the Distributor may be involved. 4. During the Convention the Distributor must personally comply with the Policies and Procedures and is responsible for (i) the actions of every person who works in the booth at the Convention, (ii) all material distributed at the Convention, and (iii) all other aspects of participation in the Convention. 5. In addition to the other remedies provided in the Policies and Procedures, the Company reserves the right to deny future Convention participation for any policy violation at a Convention. 6. The Company reserves the right to charge a fee for participation in Conventions. C. A Distributor who owns or is employed by a service-related establishment may provide Nu Skin products and services to customers through this establishment as long as he/she is providing proper pre-screening and ongoing support to his/her customers as called for by the Contract. In any event, no Nu Skin products, banners, or other sales aid materials may be displayed visibly to the general public in such a manner as to attract the general public into the establishment to purchase Nu Skin products. 1. A service-related establishment is one whose revenue is earned primarily by providing personal service rather than by selling products. Such establishments include offices of doctors, dentists, chiropractors and other health professionals, health clubs, gymnasiums, barber shops, beauty shops, nail boutiques, counselling services, tanning centres, and other such businesses where customer use of the establishment is controlled by membership or appointment. D. Nu Skin reserves the right to make the final determination as to whether an establishment is service related or otherwise a proper place for the sale of Nu Skin products.
Section 23: Contract Changes Nu Skin International expressly reserves the right to make any modifications to the Contract (including these Policies and Procedures, the Sales Compensation Plan, the Distributor Agreement, the Business Organisation Information Sheet and the International Sponsor Agreement) upon thirty days’ prior written notice through normal channels of communication or separate mailer. Each Distributor agrees that thirty (30) days after publication of such notice, any such modifications become effective and automatically incorporated into the Contract between Nu Skin International and its Distributors as an effective and binding provision. 1. By continuing to act as a Distributor after such modifications have become effective, a Distributor acknowledges acceptance of the new Contract terms. Policies & Procedures 17
Section 24: Waiver The waiver by Nu Skin International of any Distributor’s breach of any provision of the Contract must be in writing and will not be construed as a waiver of any subsequent or additional breach. The failure by Nu Skin International to exercise any right or prerogative under the Contract will not operate as a waiver of such right or prerogative.
Section 25: Integrated Contract A.
The Contract is the final expression of the understanding and agreement between Nu Skin International and a Distributor concerning all matters touched upon in the Contract, and supersedes all prior and contemporaneous agreements or understandings (both oral and written) between the parties, and invalidates all prior notes, memoranda, demonstrations, and descriptions relating to the subject matter of the Contract. The Contract may not be altered or amended, except as provided in these Policies and Procedures. The existence, and the terms, of the Contract may not be contradicted by evidence of any alleged prior or contemporaneous oral or written agreement.
B. Should any discrepancy exist between the terms of the Contract and verbal representations made to any Distributor by any Nu Skin employee, the terms and requirements of the Contract will prevail.
Section 26: Severance Any provision of the Contract that is prohibited, judicially invalidated, or otherwise rendered unenforceable in any jurisdiction is 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 the Contract will not invalidate or render unenforceable any other provision of the Contract, nor will such provision of the Contract be invalidated or rendered unenforceable in any other jurisdiction.
Section 27: Governing Law The place or origin of this Contract, the place where Nu Skin International accepted the offer of a prospective Distributor to form the Contract, is the State of Utah, USA. This Contract is to be construed, with respect to its validity and performance obligations thereunder, in accordance with the laws of the State of Utah applicable to contracts made and to be wholly performed within such State. A Distributor agrees to submit to the jurisdiction of the courts of the State of Utah for resolution of any conflict or litigation arising under or purporting to interpret the Contract.
Section 28: Notices Any notice or other communications requested or permitted to be given under the Contract shall be in writing and shall be delivered personally transmitted by facsimile, or sent by certified (or registered), or express mail, postage prepaid, and, unless otherwise provided in the Contract, shall be deemed given when delivered personally, or if transmitted by facsimile, one day after the date of such facsimile; or if mailed, five (5) days after the date of mailing to the address of Nu Skin’s headquarters or to the Distributor’s address (as provided on the Distributor Agreement), unless notice of a change thereof has been received. Nu Skin International shall have the right, as an alternative method of notice under this Section 28, to use mailers or other normal channels of communication with Distributors.
Section 29: Successors and Assigns The Contract shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
Section 30: Litigation and Claims
A. In order to protect Nu Skin, its assets, and its reputation from claims or disputes created by outside (non-Distributor) third parties, Nu Skin International, Inc. requires the following: if any Distributor is charged with any infringement of any proprietary right of any outside third party (who is not a Distributor) arising from, any of Nu Skin’s proprietary assets, or if the Distributor becomes the subject of any claims or suit related to such Distributor’s conduct, related business or any other action that directly or indirectly negatively affects or puts at risk Nu Skin, its reputation, or any of its tangible or intangible assets of whatever nature, such Distributor shall immediately notify Nu Skin, and Nu Skin may, at its own expense and upon reasonable notice, take whatever action it deems necessary (including, but not limited to, controlling any litigation or settlement discussion related thereto) to protect itself, its reputation, and its tangible and intangible property. Such Distributor shall take no action related to any such claims and suit, unless Nu Skin consents, which consent shall not unreasonably be withheld. B.
To expedite the prompt resolution of any disputes which may arise under the Contract, Nu Skin International, Inc. has instituted a Mediation/ Arbitration policy. This policy deals with the disposition of disputes arising out of the independent contractor relationship between Nu Skin International, Inc. and its independent contractors and/or disputes arising out of the relationship between Nu Skin International, Inc. independent contractors themselves. Distributors’ complaints are first handled by the Distributor Conduct Review Committee as described by Section 6 of the Policies and Procedures. The Mediation/Arbitration policy will also apply in the event a Distributor disagrees with any disciplinary action or interpretation of the Contract by Nu Skin. The Mediation/Arbitration policy is mandatory. The complete Mediation/ Arbitration policy is available upon request from Nu Skin International to parties who are involved in the controversy as defined above.
Policies & Procedures
Appeal and Mediation/Arbitration Policy
In order to expedite the resolution of any disputes that may arise under the independent Distributor Agreement, Nu Skin International, Inc. (“Nu Skin” or “ Company”) and its sales force of independent contractors (“distributors”) desire to institute the following Appeal and Mediation/Arbitration Policy (“Policy”). Disputes arising out of the independent contractor relationship between Nu Skin and its independent distributors and/or disputes between distributors arising out of business relationships as Nu Skin independent contractors will be resolved according to the Policies and Procedures and this Policy. This Policy is incorporated into Section 30 of the Policies and Procedures by reference. In consideration of the mutual promises and covenants contained herein, Nu Skin and each distributor agree to abide by the provisions of this Policy. All disputes between Nu Skin and a distributor, which arise out of the contract between the parties, are handled initially by the Distributor Conduct Review Committee (“DCRC”) as described in Section 6 of the Policies and Procedures. Pursuant to this Policy, all disputes between distributors that consist of adverse legal interests, which arise out of or are related directly to the Nu Skin business, and that require an immediate and definitive determination, will also be initially referred to the DCRC. After a dispute has been reviewed and decision made by the DCRC, then the appeal procedures of this Policy will apply. There are three potential forums of review of a distributor’s dispute: 1. review and decision by the Distributor Conduct Appeal Committee; 2. Mediation by a neutral third party; and 3. Arbitration by a neutral third party. If a party is not satisfied with a decision, then said party may request the decision to be reviewed in the next forum for resolving the dispute. However, a dissatisfied party may only proceed to the next level of review or abide by the decision. A distributor cannot remove the dispute to a court of law. This Policy is the agreed upon procedure for resolving any of the above-described disputes.
The last forum for resolving a dispute is arbitration. The arbitrator’s award is final and binding, which means that the award is conclusive and a final adjudication of the dispute. It is the same as a judgment and is enforceable by a court of law. Nu Skin’s Policy is intended to balance the privacy of participants and witnesses with the right of distributors to information and evidence. Therefore, until the initiation of the arbitration process, information and evidence will be released to distributors as Nu Skin deems necessary in its sole discretion depending on the complexity of the case and its duty to preserve the delicate balance between privacy and disclosure. If the dispute proceeds to arbitration, then information and evidence shall be discoverable pursuant to the rules of the arbitration.
D. Distributor Disputes 1. Disputes Between Distributors a. In the event of a dispute between Nu Skin distributors that consist of adverse legal interests, which arise out of or are related directly to the Nu Skin business, the aggrieved distributor is encouraged to first attempt to resolve the issue with the other party by direct discussion. The parties involved shall also contact Nu Skin in writing with a brief description of the dispute. b. If the direct discussions do not resolve the dispute, the complaining distributor (“Claimant”) shall notify Nu Skin by providing Nu Skin’s DCRC with a written, sworn statement of the material facts of the dispute (“Complaint”).The Complaint shall include the following: i. The full name, title, work or home address and telephone number of each person known to have relevant information about factual matters pertaining to the circumstances set forth in the Complaint; ii. Copies of all relevant documents in the Claimant’s possession, custody or control that support the position of the Claimant; and iii. Copies of relevant agreements between any of the distributors involved in the dispute. c. Additionally, the Claimant may include a description of the efforts used by the parties to informally resolve the dispute. Failure to provide the DCRC with a complete Complaint may result in a delay of the investigation of the Complaint by the Company. Furthermore, failure to provide the DCRC with a complete Complaint may result in dismissal of the Complaint and forfeiture of all rights under this Policy. d. The Company shall undertake a reasonable review of the Complaint and within ninety (90) days of receipt of the Complaint, the DCRC shall issue a written decision (“DCRC Decision”) of its findings regarding the Complaint and send it by priority mail to the Claimant. When deemed appropriate by the Company in its sole discretion, a copy of the DCRC Decision will be sent to any other interested party to the Complaint. e. If the Claimant and the identified parties to the Complaint are satisfied with the DCRC Decision, then the dispute is deemed resolved and there is no need to proceed further. Furthermore, the Claimant and the identified parties to the Complaint agree to comply with the DCRC Decision. However, if the Claimant or any identified party to the Complaint is not satisfied with the DCRC Decision, then the dispute is not resolved and the parties may proceed to the appeal process set forth below in Section III. 2. Disputes Between Nu Skin and Distributors Disputes between Nu Skin and a distributor arising out of their contractual relationship are initially reviewed by DCRC pursuant to the procedure set forth in section 6 of the Company’s Policies and Procedures. Once the DCRC has rendered a decision (“DCRC Decision”), it will promptly notify the distributor. If the distributor is not satisfied with the DCRC Decision, then the distributor may appeal. The appeal process is set forth below in Section III.
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Appeal 1. Appeal Request a. A distributor, who has received a DCRC Decision, may appeal the DCRC Decision by providing the Company’s Distributor Conduct Appeals Committee (“DCAC”) with a written appeal (“Appeal”). Any distributor who submits an Appeal to the DCAC shall be referred to as an “Appellant.” b. The Appeal must be submitted to the DCRC within ten (10) business days (“Appeal Period”) from the date of the DCRC Decision and detail the Appellant’s objections to DCRC Decision. Failure to appeal the DCRC Decision within the Appeal Period will constitute acceptance of the DCRC Decision and the distributor agrees to abide by its terms. Should an Appellant require additional time beyond the Appeal Period in which to submit his Appeal, said Appellant must send written notice to the DCAC stating the reasons why he needs additional time for his submission. The DCAC will then notify the Appellant whether it will grant or deny the request. If granted, the DCAC will provide a new deadline for the Appellant’s submission of an Appeal. c. The Appeal is limited in length to ten (10) written pages. It must include a sworn statement in response or rebuttal to the DCRC Decision and should contain all relevant information reasonably necessary for the DCAC to evaluate the Appeal. 2. Decision of DCAC a. Upon the expiration of the Appeal Period or any extension, the DCAC will review the Appeal and the information provided to the DCRC. The DCAC will issue its final report (“DCAC Decision”) within ninety (90) days, and will send its DCAC Decision to the Appellant. A copy of the DCAC Decision will also be sent to any other identified party to the Appeal and any upline that is affected by the DCAC Decision. b. If the Appellant and the identified parties to the Appeal are satisfied with the DCAC Decision, then the dispute is deemed resolved and there is no need to proceed further. Furthermore, the Appellant and the identified parties to the Appeal agree to comply with the DCAC Decision. However, if the Appellant or any identified party to the Appeal is not satisfied with the DCAC Decision, then the parties may proceed to the mediation process set forth below in Section IV.
Mediation 1. Request for Mediation a. The Appellant or any party to the Appeal shall promptly notify the DCAC in writing within ten (10) business days from the date of the DCAC Decision that said party requests that the dispute be referred to a neutral third party mediator (“Petition for Mediation”). Failure to submit a timely Petition for Mediation will constitute acceptance of the DCAC Decision and the distributor agrees to abide by its terms. The Petition for Mediation shall include any additional statements of facts or legal causes of action that have not already been provided to the DCRC or DCAC. b. Within ten (10) business days of receipt of the Petition for Mediation, Nu Skin shall notify its outside counsel of the Petition for Mediation. Nu Skin’s outside counsel shall contact the parties to the Appeal, including those uplines affected by the DCAC Decision, regarding a mediation date and provide a list of potential mediators. The mediation shall be conducted by a neutral third party or professional mediator that has been agreed to by the parties. Parties that participate in the mediation and/or arbitration, including Nu Skin, will be referred to as the “Participants.” 2. Mediation a. The Participants agree to attempt in good faith to resolve the dispute by mediation before resorting to arbitration. The mediation will be held in Salt Lake City, Utah at the offices of Nu Skin’s outside counsel. The mediation will take place no later than six months from the date of the Appeal. b. The mediation will be conducted in the English language. However, at the request and the expense of the requesting Participant, documents and testimony will be translated into the requesting Participant’s preferred language. All fees and costs of the mediation will be borne equally by the Participants in the mediation. c. No Participant in the mediation may disclose the existence, content, or results of the mediation without the prior written consent of all Participants. d. If the Participants in the mediation are satisfied with the results of the mediation, then the dispute is deemed resolved, and there is no need to proceed further. Furthermore, the Participants agree to comply with the mediated settlement. However, if any of the Participants in the mediation are not satisfied with the mediation, or there are issues of the dispute that remain unresolved, then the Participants may proceed to arbitration as set forth below in Section V.
G. Arbitration 1. Request for Arbitration
Within ten (10) business days from the date of the mediation, the Participant shall promptly notify all the other Participants in the mediation, in writing, that the Participant requests that the dispute be referred to arbitration before a neutral third party arbitrator (“Petition for Arbitration”). Failure to submit a timely Petition for Arbitration will constitute acceptance of the DCAC Decision and the distributor agrees to abide by its terms. Within a reasonable time after receipt of the Petition for Arbitration, Nu Skin, by and through its outside counsel, will contact all the Participants in the mediation regarding an arbitration date and provide a list of potential arbitrators
Policies & Procedures
2. Arbitration a. The arbitration will be conducted by a professional arbitrator that has been agreed to by the Participants. The arbitration will be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court within the state of Utah. b. The arbitrator will have the discretion to order a pre-hearing exchange of information by the Participants, including but not limited to, production of requested documents, exchange of summaries of testimony of proposed witnesses, and the depositions of witnesses and the Participants. Additionally, subject to the approval of the selected arbitrator, the Participants may submit a pre-arbitration brief outlining the legal causes of action and factual background. c. The arbitration will be held Salt Lake City, Utah in the offices of Nu Skin’s outside counsel. The arbitration will take place no later than six months after the date of the Petition for Arbitration. The arbitration will be conducted in the English language, but at the request and expense of the requesting Participant, documents and testimonies shall be translated into the requesting Participant’s preferred language. d. The arbitration will be final and binding. It will be a full resolution of all claims and disputes between the Participants in the arbitration. All uplines and downlines of the Participants shall be bound by the final arbitration award. e. Each Participant in the arbitration is limited to the attendance of the Participant, those individuals appearing on the Participant’s Distributor Agreement, and no more than two attorneys per Participant. f. All fees and expenses of the arbitrator will be borne equally by the Participants in the arbitration. The arbitrator is authorised to award a Participant any sums that are deemed proper for the time, expense, and trouble of arbitration including arbitration fees and attorney’s fees. Punitive damages, however, shall not be allowed in any dispute. g. Except as may be required by law and Nu Skin’s use of an arbitrator’s award as precedence for deciding future disputes, neither a Participant nor the arbitrator may disclose the existence, content, or results of any arbitration without the prior written consent of all the Participants.
Section 31: Headings The headings in the Contract are for convenience of reference only and shall not limit or otherwise affect any of the terms or provisions of the Contract.
Section 32: International Business A.
Prior to the official opening of an Authorised Country, permissible Distributor activity in an unopened country is limited to providing business cards and conducting, organising or participating in meetings where the number of attendees at any given meeting, including the Distributor, does not exceed five - Participants in such meetings must be personal acquaintances of the distributor or personal acquaintances of the distributor’s personal acquaintances in attendance at the meeting. The meetings must be held in a home or a public establishment but may not be held in a private hotel room. All cold calling techniques (soliciting persons who are not prior personal acquaintances of the contacting distributor) are strictly prohibited in unopened countries. The Company has limited retail store operations in China. However, the Company prohibits all direct selling activities in China and China is deemed an unopened direct selling country. Distributor pre-market opening conduct prohibited in all countries includes but is not limited to: 1. importing or facilitating the importation of, selling, gifting, or distributing in any manner, Company products, services, or product samples; 2. placing any type of advertisement or distributing any promotional materials regarding the Company, its products or the opportunity, except for the Company Approved Sales Aids (See Section 1) specifically authorised for distribution in unopened countries as designated by the Company; 3. soliciting or negotiating any agreement for the purpose of committing a citizen or resident of an unopened country to the opportunity, a specific Sponsor or specific line of sponsorship. Furthermore, Distributors may not sign up citizens or residents of unopened countries in an Authorised Country or by using Distributor Agreement forms from an Authorised Country, unless the citizen or resident of the unopened country has, at the time of sign up, permanent residence and the legal authorization to work in the Authorised Country. It is the sponsoring Distributor’s responsibility to ensure compliance with residency and work authorisation requirements. Membership or participation in, or ownership of a corporation, partnership or other legal entity in an Authorised Country does not by itself fulfil the residency or legal authorisation to work requirements. If a participant to a Distributorship fails to provide verification of residency and work authorisation when requested by the Company, the Company may, at its election, declare a Distributor Agreement void from its inception; 4. accepting money or other consideration, or being involved in any financial transaction with any potential Distributor either personally or through an agent, for purposes relating to Company products or the opportunity, including renting, leasing or purchasing facilities for the purpose of promoting or conducting Company-related business; 5. conducting, organising, or participating in meetings in an Authorised Country with citizens or residents from an unopened country where the number of attendees at the meeting, including the Distributor, exceeds five or the other activities prohibited by Section 33 take place. In conducting meetings in an Authorised Country with citizens or residents from an unopened country, the same guidelines must be followed as if the meeting were being held in an unopened country; or 6. promoting, facilitating or conducting any type of activity which exceeds the limitations set forth in these Policies and Procedures or which the Company, in its sole discretion, deems to be contradictory to the Company’s business or ethical interests in international expansion.
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B. China activities, including all meetings, are limited to those authorised by the Company under its retail store operations and policies. Participants in any meeting held in China must be personal acquaintances of the distributor who organised the meeting or personal acquaintances of those at the meeting. The meetings must be held in a home or other public establishment and not in a hotel room. All cold-calling techniques (soliciting non-personal acquaintances) are strictly prohibited in China. C.
The Company reserves the right to designate certain countries wherein all pre marketing conduct is expressly prohibited. It is the responsibility of each Distributor, prior to each instance of conducting pre-market opening activities in an unopened market, to verify through current contact with the Company that the country in which she plans to conduct those activities is not a prohibited country. A Distributor may obtain a list of prohibited countries and Company Approved Sales Aid materials to distribute in other unopened countries by calling Executive Support on 02 9491 0900.
In addition to other remedies allowed by the Contract, a Distributor, who fails to comply with any provision of Section 33, may be prohibited from participating in the affected international market for a period deemed appropriate by the Company. This prohibition could include, but is not limited to the following: the Distributor may have no right to international distribution/sponsorship rights in the affected international market; the Distributor and the Distributor’s upline may not be entitled to Bonuses generated by the Distributor and the Distributor’s Downline Organisation in the respective international market. The Company, at its sole discretion and for the purpose of promoting ongoing support of new Distributors by upline Executive Distributors, may consider paying the fourth, fifth, and sixth generation Breakaway Bonuses on the Personal Sales Volume generated by the Distributor or the Distributor’s Downline in the affected international market. In addition, in all markets, for a period of up to one year, the Distributor may not be entitled to privileges traditionally afforded Distributors such as recognition at corporate events or in corporate literature, and receipt of new Distributor packets prior to the official opening of any new market.
E. A Distributor who has been unable to participate in a market because of non compliance with Section 33 of these Policies and Procedures, must petition the Company in writing for written permission to participate in the market after the period of prohibition has passed. F.
The provisions of Section 33 do not waive the Company’s rights as set forth elsewhere in these Policies and Procedures or in the Contract.
If you have any questions regarding the above, please do not hesitate to contact your Account Manager.
© 2012 Nu Skin Enterprises Nu Skin Enterprises Australia, Inc. [email protected]
www.nuskin.com.au Nu Skin Enterprises New Zealand, Inc [email protected]
Policies & Procedures