EXHIBIT 3.12
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
GNC FRANCHISING, LLC
A Pennsylvania Limited Liability Company
This Limited Liability Company Operating Agreement is made and
entered into effective as of January 1, 2004, by and between GNC Franchising,
LLC, a Pennsylvania limited liability company (the "COMPANY"), and General
Nutrition Corporation as the sole Member of the Company.
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. The following terms, as used herein,
shall have the following respective meanings:
"Agreement" means this Limited Liability Company Operating
Agreement, as it may be amended, restated or supplemented from time to time.
"Capital Contribution" means the amount of money contributed
by such Member to the Company and, if property other than money is contributed,
the fair market value of such property, net of liabilities assumed or taken
subject to by the Company.
"Certificate of Dissolution" shall have the meaning set forth
in Section 12.4.
"Certificate of Organization" means the certificate of
organization of the Company, as amended or restated from time to time, filed in
the Department of State of the Commonwealth of Pennsylvania in accordance with
the Pennsylvania Act.
"Company" means GNC Franchising, LLC.
"Fiscal Year" shall have the meaning set forth in Section 10.1
hereof.
"Governmental Body" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether federal,
state, local or foreign, or any agency or instrumentality thereof, or any court
or arbitrator (public or private).
"Interest" means the ownership interest of the Member in the
Company (which shall be considered personal property for all purposes),
consisting of (i) the Member's interest in capital, profits, losses, credits,
allocations and distributions, (ii) the Member's right to vote or grant or
withhold consents with respect to Company matters as provided herein or in the
Pennsylvania Act, and (iii) the Member's other rights and privileges as herein
provided.
"Initial Member" means General Nutrition Corporation.
"Member" means initially the Initial Member, in its capacity
as the sole Member of the Company, and any other Person who may from time to
time be admitted to the Company as an additional or substituted member by the
Initial Member as herein provided.
"Pennsylvania Act" means the Pennsylvania Limited Liability
Company Law of 1994, Pa. C.S. Sections 8901 et seq., as amended.
"Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, limited liability companies,
estates and other entities, whether or not legal entities.
"Taxes" mean all federal, state, local and foreign income,
property and sales taxes and tariffs and all charges, fees, levies or other
assessments whether federal, state, local or foreign based upon or measured by
income, capital, net worth or gain and any other tax including but not limited
to all net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, withholding, payroll, employment, social security,
unemployment, FICA, FUTA, excise, occupation, property or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever including all
interest and penalties thereon, and additions to tax or additional amounts
imposed or charged by any Governmental Body.
"Tax Authority" means any Governmental Body responsible for
the imposition of any Tax.
"Tax Return" means any return (including any information
return), report, statement, schedule, notice, form, or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or compliance with any Legal
Requirement relating to any Tax.
Section 1.2. Other Capitalized Terms. Unless the context
otherwise requires, capitalized terms used in this Agreement but not herein
defined shall have the meanings set forth in the Pennsylvania Act.
Section 1.3. Rules of Construction. Unless the context
otherwise requires, references to the plural shall include the singular and the
singular shall include the plural, and the words "hereof," "herein," "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provisions of this Agreement. Any use of the masculine,
feminine or neuter herein shall be deemed to include a reference to each other
gender.
ARTICLE II
FORMATION AND PURPOSE
Section 2.1. Name and Formation. The name of the Company shall
be "GNC Franchising, LLC" or such other name as the Member shall from time to
time select. The Company is a limited liability company formed pursuant to the
provisions of the Pennsylvania Act.
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Section 2.2. Purpose. The purpose of the Company is to engage
in any lawful act or activity for which limited liability companies may be
formed under the Pennsylvania Act.
Section 2.3. Principal Place of Business. The principal place
of business of the Company shall be at such location that the Member determines
from time to time.
Section 2.4. Registered Agent; Registered Office. The
registered agent and the registered office for the Company in the Commonwealth
of Pennsylvania shall be as set forth in the Certificate of Organization.
Section 2.5. Term. The term of the Company shall commence on
the filing of the Certificate of Organization and shall continue until the
Company is terminated upon the filing of a Certificate of Dissolution in
accordance with Section 9.3 of this Agreement.
ARTICLE III
MANAGEMENT
Section 3.1. Management Committee.
(a) The Company shall be managed by Managers acting as a
committee in accordance with this Agreement (sometimes herein referred to as the
"Management Committee"). Except as reserved to the Members in this Agreement,
the business and affairs of the Company shall be managed under the direction of
the Management Committee, and the Management Committee shall have all power and
authority to manage, and direct management and the business and affairs of, the
Company. Any power not specifically delineated in this Agreement, or delegated
by the Management Committee pursuant to a policy of delegation adopted by the
Management Committee, shall remain with the Management Committee. Approval by or
action taken by the Management Committee in accordance with the Agreement shall
constitute approval or action by the Company and shall be binding on the Member.
(b) The Management Committee shall consist of three (3)
Managers. At any time the Member shall have the power to remove (with or without
cause) any Manager by delivering written notice of such removal to the Company.
Vacancies on the Management Committee shall be filled by the Member.
(c) Subject to the indemnification provisions set forth at
Section 15.2, each Manager shall have a responsibility to perform his duties as
a Manager, including his duties as a member of any committee of the Management
Committee upon which he may serve, in good faith, in a manner he reasonably
believes to be in the best interests of the Company and with such care,
including reasonable inquiry, skill and diligence, as a person of ordinary
prudence would use under similar circumstances. In performing his duties, a
Manager shall be entitled to rely in good faith on the records of the Company
and upon such information, opinions, reports or statements presented to the
Company by a Person as to matters the Manager reasonably believes are within
such other Person's professional or expert competence and who has been selected
with reasonable care by or on behalf of the Company, including information,
opinions, reports, or statements as to the value and amounts of the assets,
liabilities, profits, losses or cash flow or any other facts pertinent to the
existence and amount of assets from which distributions to Member might properly
be paid.
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(d) No Manager shall be personally liable, as such, for
monetary damages for any action taken in his capacity as a Manager unless the
Manager has breached or failed to perform the duties of a Manager set forth in
this Agreement and such breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness.
Section 3.2. Notice of Management Committee Meetings;
Location; Waiver of Notice. Regular meetings of the Management Committee shall
be held at least once per quarter at the offices of the Company or at such other
times and places as may be fixed by the Management Committee, and may be held
without further notice. Special meetings of the Management Committee may be
called by the Chief Executive Officer or by any Manager upon seven (7) days'
prior written notice, which notice shall identify the purpose of the special
meeting or the business to be transacted. Notice of meeting may be waived before
a meeting by a written waiver of notice signed by the Manager entitled to
notice. A Manager's attendance at a meeting shall constitute waiver of notice
unless the Manager states at the beginning of the meeting his objection to the
transaction of business because the meeting was not lawfully called or convened.
Section 3.3. Quorum; Approvals; Proxies; Written Action. The
presence, in person, by proxy, or by telephone conference call (with all parties
able to hear and speak to all other parties) of at least three (3) Managers
shall be required for the transaction of business at a Management Committee
meeting. A vote of three (3) Managers present, in person or by proxy, at a duly
constituted meeting shall govern all of the Management Committee's actions and
constitute the approval of the Management Committee. Each Manager may vote by
delivering his proxy to another Manager. The Management Committee may act
without a meeting if the action taken is approved in advance in writing by the
unanimous consent of all Managers on the Management Committee. The Management
Committee shall cause written minutes to be prepared of all action taken by the
Management Committee and shall cause a copy thereof to be delivered to the
Member within fifteen (15) days thereafter.
Section 3.4. Authority of the Management Committee. Unless
otherwise agreed to in writing by the Member, the Management Committee, by its
own action or by action of a committee of the Management Committee, but not by
delegation to officers or other employees of the Company, shall, in addition to
the other powers granted to it in this Agreement, have the right, power and
authority to take the following actions:
(a) making fundamental policy decisions with respect to the
business and affairs of the Company;
(b) approving the Annual Budget (a copy of the Company's
initial Annual Budget, is attached hereto as Schedule 7.4), and related
marketing plan for the Company and any material amendments and supplements
thereto;
(c) approving any capital expense line item deviation from
the Annual Budget in excess of $25,000 or expense line item in excess of
$25,000;
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(d) approving any contract, agreement or commitment with a
value in excess of $25,000 or a term longer than three (3) years (or a group of
related contracts, agreements or commitments with an aggregate value in excess
of $25,000);
(e) approving the choice of any bank depositories, and
approving arrangements relating to the signatories on bank accounts;
(f) approving the choice of the Company's attorneys,
independent accountants and any other consultants, where it is contemplated that
such consultants will provide services with a value in excess of $10,000, or for
a period longer than six (6) months;
(g) approving any change of the Company's fiscal year;
(h) approving all contracts that are proposed to be entered
into between the Company and the Member or an Affiliate of the Member and all
amendments or modifications to such contracts;
(i) approving the conveyance, sale, transfer, assignment,
pledge, encumbrance, or disposal of, or the granting of a security interest in,
any assets of the Company valued in excess of $5,000;
(j) approving the entry of the Company into any other
partnership or joint venture;
(k) approving the incurring of any indebtedness for
borrowed money by the Company in an amount in excess of $100,000;
(l) the loaning of any sum or any other extension of credit
by the Company to any Person;
(m) the guarantee by the Company of any indebtedness of any
other Person;
(n) the entrance by the Company into any real estate lease
with a value in excess of $25,000 or a term in excess of three (3) years, or the
acquisition by the Company of any real estate with a value in excess of $25,000;
(o) the authorization of the Member to act for or to assume any obligation or
responsibility on behalf of the Company;
(p) the employment and appointment of any Executive Officer
and any Company employee who will be involved in the day-to-day management of
the business of the Company and who will receive salary and bonus in excess of
$75,000 per year;
(q) any change in accounting principles used by the
Company, except to the extent required by generally accepted accounting
principles;
(r) approving any tax elections of the Company;
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(s) the conduct of litigation to which the Company is a
party;
(t) approving the acquisition of any business or a business
division from any Person whether by asset purchase, stock purchase, merger or
other business combination;
(u) approving the acquisition of any assets by the Company,
the fair market value of which may reasonably be expected to exceed $100,000;
(v) engaging in an activity other than those expressly
permitted by Section 2.4; and
(w) approving additional Capital Contribution permitted by
Section 3.5,
provided, however, that (i) matters referred to in subsections
(i), (j) and (l) through (o) shall require unanimous approval of the Management
Committee.
Section 3.5. No Individual Authority. Except as otherwise
expressly provided in this Agreement, no individual Managers, acting alone,
shall have any authority to act for, or undertake or assume any obligation or
responsibility on behalf of the Company or the Management Committee.
Section 3.6. Executive Officers.
(a) Appointment of Chief Executive Officer. The Management
Committee shall appoint a chief executive officer (the "Chief Executive
Officer"), who will manage the day-to-day affairs of the Company, carry out the
direction of the Management Committee and effectuate the business plan set forth
in the Annual Budget.
(b) Duties of Chief Executive Officer. Subject to the
control of the Management Committee and, within the scope of their authority,
any committees thereof, the Chief Executive Officer shall: (i) have general and
active management of all the business, property and affairs of the Company, (ii)
see that all orders and resolutions of the Management Committee and the
committees thereof are carried into effect, (iii) effectuate the business plan
of the Company as set forth in the Annual Budget, (iv) appoint and remove
subordinate officers, employees and agents, other than those appointed, approved
or elected by the Management Committee, as the business of the Company may
require, (v) act as the duly authorized representative of the Company in all
matters, and in that capacity, execute agreements and other contracts on behalf
of the Company, except where the Management Committee has formally designated
some other person or group to act, and (vi) in general perform all the usual
duties incident to the office of Chief Executive and such other duties as may be
assigned to such person by the Management Committee. The Chief Executive Officer
shall have the authority to make all decisions for the Company which are not
reserved to the Management Committee or the Member pursuant to this Agreement.
(c) Preparation of Annual Budget. The Chief Executive
Officer shall prepare, and submit to the Management Committee for its approval,
at least sixty (60) days prior to the commencement of each subsequent fiscal
year, an Annual Budget. Each Annual Budget approved by the Management Committee
shall remain operative until amended by the
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Management Committee or a successor Annual Budget has been approved by the
Management Committee. The Chief Executive Officer shall conduct the day-to-day
affairs of the Company in accordance with the approved Annual Budget.
(d) Other Officers. The Management Committee may also elect
a President, a Vice President, a Chief Financial Officer, a Treasurer and a
Secretary and such other officers of the Company as the Management Committee may
from time to time designate or the business of the Company may require. Any
number of offices may be held by the same person.
ARTICLE IV
THE MEMBER
Section 4.1. Limitation of Liability. The debts, obligations
and liabilities of the Company, whether arising by contract, or otherwise, shall
be solely the debts, obligations and liabilities of the Company, and the Member
shall not be obligated personally for any such debt, obligation or liability by
reason of the Member's managing the affairs of the Company or otherwise, and the
Member shall not be obligated personally for any such debt, obligation or
liability of the Company by reason of his status as a Member of the Company or
otherwise. The Member shall, however, be liable to the Company for payment of
his capital contribution in the amount set forth in Exhibit A hereto.
Section 4.2. Reimbursement. Except as otherwise provided for
herein, the Member shall be entitled to reimbursement of expenses reasonably
incurred on behalf of the Company. Such expenses shall include, without
limitations, supplies and equipment, rentals, salaries to third persons,
insurance, legal services, accounting services, fees or commissions paid to
third parties, and similar costs and expenses.
ARTICLE V
TRANSFER OF INTERESTS
Section 5.1. Transfers by the Member. The Member may transfer
all or any portion of its Interest or rights in its Interest in the Company to
one or more other Persons.
Section 5.2. Admission of Members. Additional Members may be
admitted to the Company upon the approval of the Member. No prospective Member
may be admitted to the Company until such prospective Member shall execute a
joinder to this Agreement in form and substance satisfactory to the Company,
whereby the additional Member agrees to be bound by all of the terms and
conditions of this Agreement then in effect. Upon the admission of each
additional Member, the Interest in the Company of such additional Member shall
be as specified at the time such additional Member shall be admitted, the
Interests in the Company of all other Members of the Company shall be
proportionately reduced and Exhibit A hereto shall be amended to reflect the
Capital Contributions and respective Interests of the Members as so changed.
PRIOR TO THE ADMISSION OF ADDITIONAL MEMBERS, IT IS THE INTENTION OF THE MEMBER
THAT THIS AGREEMENT BE AMENDED TO PROVIDE FOR THE COMPANY'S MANAGEMENT AND
CONTROL.
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ARTICLE VI
CAPITAL MATTERS
Section 6.1. Member. The Member and its Interest in the
Company shall be as set forth on Exhibit A to this Agreement.
Section 6.2. Capital Contributions. In exchange for its
Interest in the Company, the Member has made the initial Capital Contribution to
the Company set forth on Exhibit A to this Agreement. The Member shall not be
entitled to receive any interest on any Capital Contribution. The Member shall
not be obligated to make any additional Capital Contribution to the Company;
provided, however, that Exhibit A to this Agreement shall be amended from time
to time to reflect any additional Capital Contributions made by the Member to
the Company.
ARTICLE VII
PROFITS AND LOSSES; DISTRIBUTION
Section 7.1. Profits and Losses. All income, expenses,
deductions, profits and losses of the Company for both book and tax purposes
shall be allocated to the Member.
Section 7.2. Cash Distributions. Cash distributions shall be
distributed to the Member of the Company as and when determined by the Member.
ARTICLE VIII
TERMINATION AND LIQUIDATION
Section 8.1. Termination. The existence of the Company shall
terminate upon the occurrence of any of the following: (i) the written consent
of the Member to dissolve the Company, (ii) the sale of all or substantially all
of the assets owned by the Company and the collection of all of the net proceeds
therefrom, or (iii) entry of a decree of judicial dissolution pursuant to the
Pennsylvania Act.
Section 8.2. Liquidation. In the event of the termination of
the Company, the Member shall within a reasonable period of time prepare, or
cause to be prepared, a full and accurate statement of the Company's assets and
liabilities and results of operations since the last previous statement, convert
the Company's assets to cash, collect all amounts due the Company, including
amounts owed by the Member, discharge the debts of the Company, and then
distribute all remaining funds to the Member.
Section 8.3. Certificate of Dissolution. Following dissolution
of the Company pursuant to Section 9.1 hereof, when all debts, liabilities and
obligations of the Company have been paid, satisfied, comprised or otherwise
discharged or adequate provisions have been made therefore, and all assets have
been distributed to the Member, a Certificate of Dissolution shall be filed if
required by the Pennsylvania Act.
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ARTICLE IX
FINANCIAL/TAX MATTERS
Section 9.1. Fiscal Year. The fiscal year of the Company shall
end on December 31.
Section 9.2. Company Funds. Pending application or
distribution, the funds of the Company shall be deposited in such bank accounts,
or invested in such interest-bearing or non-interest-bearing investments,
including without limitation, federally insured checking and savings accounts,
certificates of deposit and time or demand-deposits in U.S. government agencies
or government backed securities or mutual funds investing primarily in such
securities, or such other investments as the Member deems appropriate.
Section 9.3. Tax Returns. To the extent the Company is
required by the applicable federal, state, local, or foreign Tax law to file Tax
Returns, the Member shall cause Tax Returns of the Company to be prepared and
timely filed with the appropriate Tax Authorities and shall timely pay, out of
Company funds, any Tax owing by the Company.
ARTICLE X
GENERAL MATTERS
Section 10.1. Checks, Drafts, Evidence of Indebtedness. All
checks, drafts, or other orders for payment of money, notes or other evidences
of indebtedness issued in the name of or payable to the Company shall be signed
or endorsed in such manner and by such person or persons as shall be designated
from time to time by the Member.
Section 10.2. Contracts and Instruments; How Executed. The
Member, except as otherwise provided in this Agreement, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Company, and this authority may
be general or confined to specific instances; and unless so authorized or
ratified by the Member or within the agency power of an officer, no officer,
agent, or employee other than the Member shall have any power or authority to
bind the Company by any contract or engagement or to pledge its credit or to
render it liable for any purpose or for any amount.
Section 10.3. Books and Records. The Member shall be
responsible for overseeing the maintenance of the Company's books and records.
The Company's books and records shall at all times be maintained in the
principal office or such other office as the Member shall designate for such
purpose, and shall be open to the inspection and examination at reasonable times
by the Member or its duly authorized representatives.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Amendments. Amendments to this Agreement shall
become effective only upon the execution of a written instrument describing such
amendments signed by the Member.
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Section 11.2. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
Section 11.3. Headings. The headings herein have been included
for convenience of reference only and shall not be considered in interpreting
this Agreement.
Section 11.4. Integration. This Agreement constitutes the
entire agreement of the Member and the Company with respect to the subject
matter hereof and shall supersede all oral agreements and prior writings with
respect to the subject matter hereof.
Section 11.5. Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the Company and the Member and its
permitted successors and assigns.
Section 11.6. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, and intending to be legally bound, the
Member and the Company have executed this Operating Agreement as of the day and
date first above written.
GNC FRANCHISING, LLC
By: /s/ James M. Sander
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MEMBER:
GENERAL NUTRITION CORPORATION
By: /s/ James M. Sander
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Name: James M. Sander
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Title: SVP, Chief Legal Officer & Secretary
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EXHIBIT A
Name and Address Interest in the
of Member Capital Contribution Company
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General Nutrition Corporation $ 100.00 100%
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