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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 26, 1998
(Date of earliest event reported)
NU SKIN ASIA PACIFIC, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-12421 87-0565309
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
75 West Center Street, Provo, Utah 84601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 345-6100
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(Former name or former address, if changed since last report.)
The Index to Exhibits appears on page 5.
Item 2. Acquisition or Disposition of Assets.
On March 26, 1998, Nu Skin Asia Pacific, Inc., a Delaware corporation
("NSAP") completed the previously announced acquisition of the capital stock of
Nu Skin International, Inc., a Utah corporation ("NSI"), its primary supplier
and the owner of rights to the worldwide Nu Skin distributor network, the Nu
Skin product formulas and trademarks and the rights to future markets for Nu
Skin products worldwide. In addition, NSAP acquired the capital stock of NSI
affiliates operating in Europe, South America, Australia and New Zealand and
certain other NSI affiliates, including Nu Skin Europe, Inc., a Delaware
corporation; Nu Skin U.K., Ltd., a United Kingdom corporation, domesticated in
Delaware under the name Nu Skin U.K., Inc.; Nu Skin Germany, GmbH, a German
corporation, domesticated in Delaware under the name Nu Skin Germany, Inc.; Nu
Skin France, SARL, a French corporation, domesticated in Delaware under the name
Nu Skin France, Inc.; Nu Skin Netherlands, B.V., a Netherlands corporation,
domesticated in Delaware under the name Nu Skin Netherlands, Inc.; Nu Skin
Italy, (SRL.), an Italian corporation, domesticated in Delaware under the name
Nu Skin Italy, Inc.; Nu Skin Spain, S.L., a Spanish corporation, domesticated in
Delaware under the name Nu Skin Spain, Inc.; Nu Skin Belgium, N.V., a Belgium
corporation, domesticated in Delaware under the name Nu Skin Belgium, Inc.; Nu
Skin Personal Care Australia, Inc., a Utah corporation; Nu Skin New Zealand,
Inc., a Utah corporation; Nu Skin Brazil, Ltda., a Brazilian corporation,
domesticated in Delaware under the name Nu Skin Brazil, Inc.; Nu Skin Argentina,
Inc., a Utah corporation; Nu Skin Chile, S.A., a Chilean corporation,
domesticated in Delaware under the name Nu Skin Chile, Inc.; Nu Skin Poland
Spa., a Polish corporation, domesticated in Delaware under the name Nu Skin
Poland, Inc.; Nu Skin International Management Group, Inc., a Utah corporation;
and Cedar Meadows, L.C. (together with NSI, the "Acquired Entities").
The initial consideration paid by NSAP to the stockholders of the
Acquired Entities (the "NSI Stockholders") consisted of 2,986,663 shares of a
newly created series of preferred stock of NSAP (the "Series A Preferred
Stock"). Contingent upon NSI and NSAP meeting certain earnings growth targets,
NSAP may pay up to $100 million in cash (up to $25 million per year) to the NSI
Stockholders over the next four years. In connection with the acquisition, NSAP
also will assume the liabilities of the Acquired Entities, including the
obligation to repay approximately $156 million principal amount of promissory
notes (the "S Distribution Notes") previously distributed to the NSI
Stockholders for payment of earned and undistributed S corporation earnings in
the Acquired Entities. The S Distribution Notes bear interest at 8% per annum
and mature on December 31, 2004.
The shares of Series A Preferred Stock will be automatically converted
on a one-to-one basis, subject to adjustment, into shares of Class A Common
Stock of NSAP if stockholder approval for such conversion is obtained. NSAP
intends to seek approval for conversion at its next annual meeting, scheduled
for May 5, 1998. If stockholder approval for conversion is not received prior to
September 30, 1998, NSAP may, at its option, redeem the Series A Preferred Stock
at a redemption price per share equal to the lesser of (i) $14.0625 (the
"Preference Value") or (ii) 60% of average of the last sales prices per share of
the Class A Common Stock of the Company on the New York Stock Exchange for the
20 consecutive trading days ending on the trading day five days prior the
redemption date. The redemption price would be payable 25% in cash on the
redemption date and the remaining 75% in equal installments on the anniversary
of the redemption date in each of the three succeeding years. If stockholder
approval for conversion is not received prior to September 30, 1998, the Series
A Preferred Stock will also be entitled to cumulative dividends at the rate of
7% of the Preference Value per share per annum, payable quarterly. If such
dividends become in arrears in an amount equal to at least six quarterly
dividends, holders of the Series A Preferred Stock will have the right to elect
two new directors, provided that such right will terminate when all accrued and
unpaid dividends are paid. The shares of Series A Preferred Stock are entitled
to a liquidation preference equal to the Preference Value per share.
Several of the NSI Stockholders were at the time of the acquisition and
continue to be significant holders of the Class A Common Stock of NSAP and
collectively the NSI Stockholders held and continue to hold all of the
outstanding shares of the Class B Common Stock of NSAP. In addition, several of
the NSI Stockholders were at the time of the acquisition and continue to be
directors and/or officers of NSAP. The acquisition was approved by a special
committee of NSAP's board of directors consisting solely of members of the board
who were not NSI Stockholders.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
Financial statements for the Acquired Entities required in
connection with the acquisition of the Acquired Entities will be
filed by amendment within 60 days of the filing of this Report on
Form 8-K.
(b) Pro Forma Financial Information.
Pro forma financial information required in connection with the
acquisition of the Acquired Entities will be filed by amendment
within 60 days of the filing of this Report on Form 8-K.
(c) Exhibits.
2.1 Stock Acquisition Agreement dated as of February 27, 1998
among Nu Skin Asia Pacific, Inc. and the NSI Stockholders
(incorporated by reference to Exhibit 2.1 of the Annual
Report on Form 10-K filed by Nu Skin Asia Pacific, Inc. on
March 13, 1998 with the Securities and Exchange
Commission).
SIGNATURES:
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the date indicated.
NU SKIN ASIA PACIFIC, INC.
(Registrant)
By: /s/ M. Truman Hunt
M. Truman Hunt
Vice President of Legal Affairs
and Investor Relations
Dated: March 31, 1998
INDEX TO EXHIBITS
Exhibit Description
2.1 Stock Acquisition Agreement dated as of February 27, 1998 among
Nu Skin Asia Pacific, Inc. and the NSI Stockholders (incorporated
by reference to Exhibit 2.1 of the Annual Report on Form 10-K
filed by Nu Skin Asia Pacific, Inc. on March 13, 1998 with the
Securities and Exchange Commission).