CHAPTER EIGHT: MANAGEMENT PERFORMANCE COMPENSATION PLAN (MPCP)

Transcription

1 CHAPTER EIGHT: MANAGEMENT PERFORMANCE COMPENSATION PLAN (MPCP) SEC. 1 ORGANISATIONAL STRUCTURE Each Business Development Centre (BDC) has two sides. A side is a sales and distribution organisation or network structure in the Market Australia UnFranchise Business Development System. SEC. 2 Business Development Centre Defined: A Business Development Centre is an operational establishment set up within Market Australia s computerised organisation tracking system. Each organisation is based upon the assignment of the Independent Distributor s identification number and the BDC s three-digit extension number (e.g.; 001, 002, 003, 010, etc.). Additional Business Development Centres: Additional BDCs are established either on the left or right side of a previously established BDC. INITIAL PARTICIPATION REQUIREMENTS To participate in Market Australia s MPCP an individual (with the assistance of his/her sponsor) must complete and submit the Independent Distributor Application and Agreement. The Application and Agreement may be submitted to Market Australia by mail (faxes are unacceptable) for entry into the corporate computer database or by completing the sign-up process online, thereby establishing one s BDC(s). Note: Sponsors should sign up new Independent Distributors either by mail or online, but not both, as this could lead to the new Independent Distributor being entered improperly into the Market Australia computer database. SEC. 3 Sales Representative: Individuals who fail to submit the subscription fee enter Market Australia as Sales Representatives and cannot participate in the MPCP for the purposes of earning commissions and management bonuses. Sales Representatives may begin participating in the MPCP at a later time, if they submit the subscription fee on an order or with a new application (please indicate the appropriate box under Entry Classification on the application). Independent Distributor: Individuals must select Distributor on the Entry Classification and submit the subscription fee in order to participate in the MPCP and earn commissions and management bonuses. A PERSON MAY BE INVOLVED IN ONE DISTRIBUTORSHIP ONLY A person may be involved in one Market Australia distributorship only. If a person is already involved in a distributorship as an owner, officer, director, shareholder, partner, member, manager, beneficiary, or trustee, or is the spouse of a Distributor, or if a person otherwise plays a role in the operation of a distributorship, then that person may not be involved in any such capacity for another distributorship regardless of whether his or her name appears in the distributorship s official documents or is associated with the distributorship in any formal way. Market Australia policy prohibits the use of an Alter Ego in order to circumvent this restriction, including without limitation, Alter Ego s created using any of the following: trade names, assumed names, (C) federal identification numbers, (D) agreements to operate a distributorship, (E) a spouse or significant other, (F) family members, or (G) business or non-profit entities. SEC. 4 PLACEMENT OF BUSINESS DEVELOPMENT CENTRES Business Development Centres of new Independent Distributors are placed at the discretion of the sponsoring Independent Distributor. Existing Independent Distributors under which these new BDCs are being placed should be made knowledgeable of their placement within their organisation. Placement of BDCs of new Independent Distributors is specified on the mailed Independent Distributor Application and Agreement or during the online sign-up process by the new Independent Distributor s sponsor. SEC. 5 New Business Development Centres: New BDCs may be established only in available locations, not previously occupied or linked. All Sales Representatives and Distributors start with 3 BDCs when they establish their UnFranchise Business. Incorrectly Placed: Improper placement (attempting to place new Independent Distributors in positions already occupied in the downline), incomplete placement information, or failure to designate placement information on the Independent Distributor Application and Agreement for newly sponsored Independent Distributors will result in unlinked BDC(s). Any BDC(s) linked to an unlinked BDC will also be unlinked. (1) Unlinked BDCs may be identified by searching the L column of the Distributor Network Report on the UnFranchise Management System. If there isn t an L or R in the Independent Distributor s L column for BDC-001, then the Independent Distributor s BDCs are unlinked. (2) Corrected linkage of BDCs should be reported to Data Processing using the Placement or Linkage Correction Form via fax or mail as soon as possible. The linkage correction form may only be signed by the sponsor or the unlinked Independent Distributor. INITIAL QUALIFICATION REQUIREMENT Qualifying a BDC will permit accrual of Group Business Volume generated by Independent Distributors and Sales Representatives in the respective BDC s downline. Accrued Group Business Volume will be applied towards earning commissions and management bonuses for the qualified BDC. Rev. 3.3 June 2013 Chapter 8 1

2 Personal Business Volume Created: Both Independent Distributors and Sales Representatives create Personal Business Volume by ordering products at Independent Distributor Cost for retail sale to the end consumer and/or personal consumption. Qualification: An Independent Distributor s BDCs shall be considered Qualified in Market Australia s MPCP upon meeting three criteria: 1) accumulating 200 Personal Business Volume credits for product orders assigned to that respective BDC; 2) being linked properly; and 3) paying the subscription fee. (1) Personal Business Volume created by Sales Representatives will count towards qualifying their BDC(s) should Sales Representatives elect to change their status to Independent Distributor by submitting the subscription fee at a later date. All Personal Business Volume created by Sales Representatives will be recognised as Group Business Volume for all qualified Independent Distributors in the creating Sales Representative s upline. (2) A Sales Representative s BDC(s) will not be considered qualified, even if the BDC has accumulated 200 Personal Business Volume, until he/she elects to change his/her status to Independent Distributor by submitting the subscription fee. (3) Personal Business Volume created by Independent Distributors will count towards qualifying their BDC(s) as assigned on the product order form. (4) The Personal Business Volume created by Independent Distributors will be recognised as Group Business Volume for all qualified Independent Distributors in the creating Independent Distributor s upline. (C) Qualification Date (Q-date): At the time an Independent Distributor s initial BDC becomes qualified, the Independent Distributor will be assigned a Qualification Date (Q-date). The Q-date is the most critical element in exercising the Independent Distributor s option to accrue Group Business Volume from month to month through the entire MPCP compensation cycle. (D) (1) An Independent Distributor s Q-date is the Friday of the week in which the Independent Distributor s initial BDC accumulated 200 Personal Business Volume credit for product orders assigned to that centre, if the BDC is linked properly and the Independent Distributor has paid the subscription fee. (2) A Sales Representative who has accumulated 200 Personal Business Volume in a BDC and has elected to change his/her status to Independent Distributor will receive a Q-date of the Friday of the week in which the subscription fee is received by Market Australia and entered into the corporate database, if the Sales Representative s BDC is linked properly. (3) An Independent Distributor s Q-date never changes, unless the Independent Distributor does not submit the Annual Renewal fee. See Annual Renewal. (4) An Independent Distributor s Q-date may be obtained from Market Australia s Responsive Voice Information Network (MARVIN), the UnFranchise Management System, or the bottom of shipping invoices. It is recommended that all three sources be checked for verification and validation. The Q-date will not show up in the computer database until the third week after the Friday of the week in which the Independent Distributor met all three criteria for qualification. Q-date Periods Defined: (1) Weekly Commission Cycle: All commission weekly pay cycles begin Saturday and end on Friday. If Market Australia s office is closed due to a holiday, the end of the commission weekly pay cycle for that week will be the last business day Market Australia is open that week. (2) Monthly Q-date Period: (c) If the original Q-date falls exactly on a Friday in a given month, then that monthly Q-date period ends on that Friday. E.g., if the original Q-date is 10 January 2003, then the monthly Q-date for October of 2003 will be 10 October If the original Q-date falls any day other than Friday in a given month, then that monthly Q-date period ends on the Friday immediately following that day. E.g., if the original Q-date is 10 January, 2003, then the monthly Q-date for June of 2003 will be 13 June If the original Q-date falls on the 29th, 30th, or 31st day of the month and the current month does not contain those dates (e.g., February, April, June, September, or November), then the end of that monthly Q-date period is determined by the last day of that month. In this case, if the last day of the month falls exactly on a Friday in a given month, then that monthly Q-date period ends on that Friday. E.g., if the original Q-date is 28 June 2002, then the monthly Q-date for February of 2003 will be 28 February However, in this case, if the last day of the month falls any day other than Friday in a given month, then that monthly Q-date period ends on the Friday immediately following the last day of the month. E.g. if the original Q-date is 28 June 2002, the monthly Q-date for September of 2003 will be 3 October (3) Quarter (Three-Q-date Period or Three-Start-Date Period): Market Australia quarterly periods are based on Independent Distributors initial Q-dates or Sales Representatives Start Dates. A quarter may also be referred to as a three-q-date period, or a three-start-date period, because the Market Australia quarter is comprised of three consecutive monthly Q-date periods, or in the case of a Sales Representative or an unqualified Independent Distributor, three consecutive monthly periods based on the Start Date. E.g., if the initial Q-date is 10 January 2003, then the first quarter (or three-q-date period) ends 11 April The second quarter would begin 12 April 2003, and end 11 July Rev. 3.3 June 2013 Chapter 8

3 (E) Unlinked Business Development Centre: All assigned Business Volume to unlinked BDCs shall also be unlinked. The qualifying volume for a BDC will not result in this centre receiving a Q-date until linkage has been corrected, because Independent Distributors cannot accrue any Group Business Volume until they have met all three criteria for qualification. Upon proper linkage of the unlinked Independent Distributor, unlinked Business Volume shall be credited for the date of the original order; however, the Business Volume cannot be credited as accrued Group Business Volume for qualified upline Independent Distributors until linkage has been properly corrected. Once the placement is corrected, Group Business Volume will begin to flow and accrue; however, some Independent Distributors upline may no longer be able to count the relinked Business Volume for commissions, if they have earned a cheque for reaching the 5,000/5,000 GBV compensation criteria in the meantime. (1) If the unlinked Independent Distributor (Independent Distributor A) is unlinked because of an improper linkage situation only, then upon being linked correctly Independent Distributor A will receive an initial Q-date (assuming all requirements for being qualified are met) of the Friday of the week for which Market Australia is paying commissions at the time of proper linkage (two Fridays previous). Note: This does not apply to the scenario in which the Independent Distributor to whom Independent Distributor A is linked (Independent Distributor B) did not exist in Market Australia s computer database until a later commission week than Independent Distributor A (see below). (2) If the unlinked Independent Distributor (Independent Distributor A) is unlinked temporarily because the Independent Distributor to whom Independent Distributor A was intended to be linked (Independent Distributor B) did not exist in Market Australia s database at the time Independent Distributor A was entered into the database, and Independent Distributor B is entered into the computer database in a subsequent commission week than Independent Distributor A, then Independent Distributor A will receive an initial Q-date (assuming all requirements for being qualified are met) of the Friday of the week in which Independent Distributor B was entered into the computer database (assuming Independent Distributor B is linked properly). SEC. 6 MINIMUM ACTIVITY REQUIREMENTS The following minimum activity requirements shall apply for the respective status and/or Pin Levels to be considered active. Independent Distributors will be considered inactive and have accumulated PBV purged (erased to 0) and any accrued GBV flushed (erased to 0), if they do not meet the following minimum activity requirements. Sales Representatives (Individuals Electing Not To Earn Commissions/Bonuses Through The MPCP): Sales Representatives must place minimum product orders totaling 150 Personal Business Volume (PBV) assigned to any of their personal BDCs each quarter based on their Start Date in order for their Business Volume to be accrued month-to-month by qualified Independent Distributors upline. This 150 PBV requirement should substantiate sufficient product purchased to meet the AUD$ retail sales per three-start-date period requirement. (1) Failure to order a minimum 150 Personal Business Volume every three-start-date period will cause accumulated Personal Business Volume to be purged (erased to 0) from the Sales Representative s BDC(s), thereby purging the same Business Volume from qualified upline Independent Distributors accrued Group Business Volume totals. (2) A Sales Representative must submit an Independent Distributor Sales Report (Form 1000) to Market Australia along with a minimum of two retail receipts totaling AUD$ every three-start-date period for BDC-001 to meet the retail sales requirement. Submitted receipts must contain the date of sale, the customer s first and last name, and either a complete address or complete phone number for acceptance (addresses must include a valid postal code, and phone numbers must include the area code). Sales receipts from products sold in any country/territory in which Market Australia is not opened for business are not considered valid receipts. (3) The company will periodically and/or randomly audit retail receipts for authenticity. Bogus or fabricated receipts are considered invalid and will result in: (c) the immediate removal of the Form 1000 from the computer system; the purging (erasing to 0) of Personal Business Volume in all personal BDCs at the end of the Independent Distributor s quarter. possible sanctions and corrective action, especially in the cases of repeated use of bogus or fabricated receipts. (4) A Sales Representative shall complete and submit an Annual Renewal Form (Form 1052) in accordance with the renewal procedure. Failure to submit a renewal form will result in Personal Business Volume being purged (erased to 0). See Annual Renewal. (5) Unqualified Independent Distributors (Independent Distributors who are not yet qualified and have not been assigned an initial Q-date) are treated as are Sales Representatives with respect to minimum activity requirements (i.e., they must submit a valid Form 1000 for BDC-001 and a minimum of 150 PBV in any of their personal BDCs every three-start-date period), until they become qualified Independent Distributors. Rev. 3.3 June 2013 Chapter 8 3

4 Qualified Independent Distributors (Individuals Electing To Earn Commissions/Bonuses Through The MPCP): Qualified Independent Distributors shall place minimum product orders totaling 150 Personal Business Volume assigned to any of their BDCs every three-q-date period following their initial three-q-date period (see First-Quarter Grace Period). This will substantiate sufficient product purchased for meeting the AUD$ retail sales requirement per three-q-date period. (1) An Independent Distributor shall complete and submit an Independent Distributor Sales Report (Form 1000) accompanied by a minimum of two retail sales receipts totaling a minimum of AUD$ every three-q-date period for BDC-001 to Market Australia to meet the retail sales requirement. (2) A Form 1000 accompanied by a minimum of two retail receipts totaling AUD$ in retail sales shall be submitted one time only for all other BDCs (i.e., 002, 003, 004, etc.), as long as the Independent Distributor never purges. Submitted receipts must contain the date of sale, the customer s first and last name, and either a complete address or complete phone number for acceptance (addresses must include a valid Postal code, and phone numbers must include the area code). Sales receipts from products sold in any country/territory in which Market Australia is not opened for business are not considered valid receipts. (3) The company will periodically and/or randomly audit retail receipts for authenticity. Bogus or fabricated receipts are considered invalid and will result in: (c) (d) the immediate removal of the Form 1000 from the computer system; the immediate flushing (erasing to 0) of Group Business Volume in all personal BDCs; the eventual purging (erasing to 0) of Personal Business Volume in all personal BDCs at the end of the Independent Distributor s quarter. possible sanctions and corrective action, especially in cases of repeated use of bogus or fabricated receipts. (4) Failure to meet the three-q-date period requirements PBV ordered and Form 1000 submitted - will cause accrued Group Business Volume totals to be flushed (erased to 0) and accumulated Personal Business Volume to be purged erased to 0) from the Independent Distributor s BDC(s), thereby purging the same Business Volume from qualified upline Independent Distributors accrued Group Business Volume totals. (5) If a qualified BDC purges for any reason, any BDC on which the Independent Distributor wishes to earn future commissions must be requalified with a 200 PBV product order or accumulating 200 PBV in the respective BDC. Any individual BDC will not begin accruing Group Business Volume until it has been requalified. The original Q-date received shall stay in effect, except for purges due to non-renewal (see Annual Renewal). (6) If an Independent Distributor purges due to not meeting one or both of the quarterly minimum activity requirements (150 PBV and Form 1000), valid Form 1000(s) must be resubmitted for each BDC in order to be eligible to earn commissions for that respective BDC. (7) An Independent Distributor shall complete and submit an Annual Renewal Form (Form 1052) in accordance with the renewal procedure. Failure to submit the Annual Renewal Form will result in an Independent Distributor s status being changed to Sales Representative, their initial Q-date being erased from the computer database, accrued Group Business Volume being flushed (erased to 0), and accumulated Personal Business Volume being purged (erased to 0). See Annual Renewal. (8) Independent Distributors who submit an Annual Renewal Form (Form 1052) without a renewal fee will result in their status being changed to Sales Representative and their initial Q-date being erased from the computer database. Their accrued Group Business Volume totals will be flushed (erased to 0); however, accumulated Personal Business Volume will remain and not be subtracted from qualified Independent Distributors upline. Once an Independent Distributor has been reduced to Sales Representative, then the Independent Distributor must submit a Late Renewal Application and Agreement Form along with a subscription fee to regain Independent Distributor status. Independent Distributors who have been reduced to Sales Representative status due to non-renewal will receive a new Q-date only after they meet all requirements for requalification. See Annual Renewal. (C) 270-Day Rule: Independent Distributors/Sales Representatives who have been inactive for 270 days or more from the date of their last quarterly purge (submission of an annual renewal form or a late renewal application, by itself, does not constitute activity) CANNOT return to the same BDCs/placement in the genealogy line. (1) Independent Distributors/Sales Representatives Inactive 270 Days but <1,000 Days Reapplying Same Line: Distributors/Sales Representatives who have been inactive for 270 days, but less than 1,000 days (i.e., 270 days plus an additional two years), who want to become a Distributor again in the same line of sponsorship as their previous Distributorship, may go through the online Sign-Up Wizard and submit an Independent Distributor Application and Agreement (IDA&A) for placement at the bottom of the genealogy, or submit a standard paper IDA&A. Such IDA&A must be in the same name and under the same tax identification number as their previous Distributorship. The same line of sponsorship means any placement in the genealogy under their previous BDC s. 4 Rev. 3.3 June 2013 Chapter 8

5 SEC.7 (2) Independent Distributors/Sales Representatives Inactive 270 Days but <1,000 Days Reapplying Different Line or Different Name/ID#: All Distributors/Sales Representatives who have been inactive for 270 days, but less than 1,000 days, and who want to become a Distributor again under a different line of sponsorship, or under a different name or a different tax identification number, must submit a notarized letter, signed by the reapplying Distributor, explaining why they want to change their line of sponsorship or name/id#, to the attention of the Field Compliance Department, by to FieldCompliance@MarketAmerica.com, or by fax to (336) In the sole discretion of Market America (or its subsidiaries/affiliated family of international companies) an application of a former Distributor/Sales Representative who has been inactive for the 270 days, but less than 1,000 days may be approved to be in a different line of sponsorship. This may be done if the following is found (this list is not all inclusive and inclusion on the list does not guaranty that a change in line of sponsorship will be approved): (i) (ii) (iii) The sponsor/upline didn t fulfill their management responsibilities as defined in the Career Manual; A legitimate grievance is filed against the sponsor/upline for activity that undermined the reapplying Distributor s business; The company determines that there are extenuating circumstances that justify placement in a new line of sponsorship; or (iv) It is determined that the Save A Distributor (SAD) program was utilized and there were no satisfactory attempts of support made by the upline. (3) Distributors/Sales Representatives Inactive 1,000 days: Distributors/Sales Representatives who have been inactive for 1,000 days or more may go through the online Sign-Up Wizard or submit a standard paper IDA&A for placement in their previous line of sponsorship, or in any new line of sponsorship, as long as the Distributor/Sales Representative has complied with all other policies and procedures regarding the integrity of lines of sponsorship and non-manipulation of the Management Performance Compensation Plan (MPCP). (4) Unethical Activity: If the company determines that a Distributor has acted unethically by reapplying under a different line of sponsorship, the Distributor ( Unauthorized Distributor ) will be subject to having their IDA&A terminated immediately. The organization receiving credit from this unethical reapplication will have all BV resulting from this activity removed, and all commissions generated from this BV will be reversed (See Commission Reversal). Distributors placed under the Unauthorized Distributor will be moved to the original line of sponsorship OR to an appropriate placement determined at the sole discretion of the company. BDCs unrelated to the Unauthorized Distributor will remain in their current positions. If it is found that any other active Distributor participated in or encouraged this unethical activity, the Corrective Action Procedure will be initiated with respect to that Distributor (see Corrective Action Policy). (5) Circumvention of Policy: If it is found that an Independent Distributor has circumvented this policy (or any other policy) by using a spouse/significant other, family member, a different ID#, a business entity or other third party to re-establish an UnFranchise business in another line of sponsorship or by arranging for someone to establish an UnFranchise business to be used as a passive alter ego, the Independent Distributor will be subjected to immediate termination of their IDA&A and all BV resulting from this activity will be removed and commissions reversed. Passive shall be defined as not engaging in the customary, and in some cases required, activities of legitimate Distributors including retailing, meeting sales requirements, sponsoring, attending meetings, attending training classes completing certification requirements, trainings, etc. In addition, if a Distributor pays with their credit card or other form of payment to meet the sales requirements of an alter ego, and thus keeps the alter ego active and/or qualified, this is also considered passive. There will be zero tolerance for violations of this section. (6) New Q-Date: Upon initially qualifying a BDC in the new placement, the Independent Distributor will receive a new Q-date and first-quarter grace period, because s/he is effectively a new Independent Distributor in terms of the MPCP. (7) Monthly Service Charge: Independent Distributors inactive for 270 days who have a credit on their Market Australia account will be assessed a monthly service charge, either until the Independent Distributor establishes a new distributorship at the bottom of a genealogy line (or as otherwise permitted by this policy) or the balance of the credit account is zero, whichever comes first. This service charge will apply to any credit account the Independent Distributor has with Market Australia: U.S., Canada, Taiwan, Hong Kong, United Kingdom and Mexico The monthly service charge for each specific account is as follows: AUS$30 for Accounts in Australia USD$20.00 for accounts in the US., CAD$28.00 for accounts in Canada, NT$ for accounts in Taiwan, HK$ for accounts in Hong Kong, for accounts in the United Kingdom andmxn$ for accounts in Mexico. ANNUAL RENEWAL All Market Australia Independent Distributors and Sales Representatives are required to submit an Annual Renewal Form, filled out completely in a timely manner. Each Independent Distributor must pay his/her own Annual Renewal fee with an acceptable method of payment. No other person, current Independent Distributor or otherwise, may pay for your Annual Renewal fee. The Start Month is defined as the month in which a Distributor or Sales Representative s Start Date falls. Rev. 3.3 June 2013 Chapter 8 5

6 Sales Representatives: There is no required fee for renewal of Market Australia Sales Representatives. However, Sales Representatives may not participate in the MPCP. (1) Sales Representatives must renew by the last business day of their Start Month each year. (2) Sales Representatives not submitting an Annual Renewal Form will have all Personal Business Volume purged (erased to 0). Independent Distributors: Independent Distributors participating in the MPCP must submit an Annual Renewal fee to maintain Independent Distributor status. (1) Independent Distributors must renew by the last business day of their Start Month each year. (2) Independent Distributors not submitting an Annual Renewal Form will have all Personal Business Volume purged (erased to 0), Group Business Volume flushed (erased to 0), their initial Q-date erased from the computer database and their access to the UnFranchise Business Account will be suspended. (3) Independent Distributors not submitting an Annual Renewal fee with the Annual Renewal Form will have accrued Group Business Volumes flushed (erased to 0), their initial Q-date erased from the computer database, and their status reduced to Sales Representative. However, the Independent Distributor s Personal Business Volume will not be purged, as long as an Annual Renewal Form is submitted. Being reduced to Sales Representative will cause the Independent Distributor s quarter (on which quarterly minimum activity requirement due dates are based) to be based no longer on his/her initial Q-date (which has been erased from the computer database), but on his/her Start Date. See Minimum Activity Requirements. (4) Once an Independent Distributor has been reduced to Sales Representative or suspended due to non-renewal, then the Independent Distributor must submit a Late Renewal Application and Agreement along with a subscription fee to regain Independent Distributor status. A Late Renewal does not alter the Independent Distributor s initial placement and sponsor information. Independent Distributors who have been reduced to Sales Representative status or suspended due to non-renewal will receive a new Q-date only after they meet all requirements for qualification. See Minimum Activity Requirements. (5) Once an Independent Distributor who had been reduced to Sales Representative or suspended due to non-renewal has been issued a new Q-date based on the Friday of the week of requalification, then the new Q-date will also allow the Independent Distributor another First-quarter Grace Period, even though technically the initial quarter with the new Q-date is not the Independent Distributor s first quarter with Market Australia as a qualified Independent Distributor. See Exercising the Monthly Accrual Option. (6) Annual Renewal Forms submitted with Annual Renewal fees that are unable to be accepted by Market Australia for whatever reason (counter or starter cheques, cheques without the Independent Distributor s name and address printed on them by the bank, etc.) will be returned to the Independent Distributor unprocessed. In this case the Annual Renewal Form will not be entered into the computer system as a form with no fee, and the Independent Distributor must submit another Annual Renewal Form (with fee, if applicable) by the Annual Renewal deadline. (7) Annual Renewal can be setup to charge automatically with the Auto Renewal Program. To exercise the Auto Renewal Program you must elect to Opt In to the program in your UnFranchise Business Account. Primary and Secondary credit cards can be designated on the credit card screens in the UnFranchise Business Account. (i) (ii) (iii) The Primary credit card will be charged the renewal fee on the first business day of the Start Month. If the first attempt to charge the Primary credit card fails, then the Primary credit card will be charged the renewal fee again on the second business day of the Start Month. If the second attempt to charge the Primary credit card also fails and there is a Secondary credit card selected, then on the third business day of the Start Month the Secondary credit card will be charge the annual renewal fee. (iv) If all of the above attempts to charge the annual renewal fee fail, then the Distributor will need to manually renew by sending in a paper annual renewal form before the last business day of their Start month. (c) Distributors can set up Auto Renewal for countries that they globally expanded to as well, with the exception of Market Taiwan. To do this, log into that country s UnFranchise Business Account. (8) Annual Renewal fees are non-refundable. SEC. 8 EXERCISING THE MONTHLY ACCRUAL OPTION A qualified BDC will accrue Group Business Volume month-to-month provided (1) the minimum amount of Personal Business Volume is ordered and assigned to BDC-001 and (2) an order for the UnFranchise Management System (UFMS) is received by Market Australia, both by the appropriate dates. This Monthly Accrual Option may be exercised by using the Transfer Buying Program or placing manual orders for the minimum amount of PBV and/or the UnFranchise Management System. Note: Independent Distributors must pay for their own UFMS. The only exception is if UFMS is ordered on an Independent Distributor s first-time order, which can be paid for by an upline Independent Distributor. 6 Rev. 3.3 June 2013 Chapter 8

7 To Exercise the Monthly Accrual Option: Minimum monthly Personal Business Volume amounts for exercising the Monthly Accrual Option are as follows: 50 Personal Business Volume for Distributor Level; 100 Personal Business Volume for Coordinator Level; and 150 Personal Business Volume for Executive Coordinator Level or higher Pin Level. The respective Pin Levels shall be determined based on MPCP pay out criteria being satisfied in ANY of the MPCPs (i.e. Global ) in which the Distributor is qualified. Example: if a Distributor receives the equivalent of AUD$300 AUD commission for reaching 1200/1200, 2400/2400, or 3600/3600 GBV in a Global MPCP, then the Distributor shall be considered a Coordinator in their Home Country MPCP and ALL associated Pin Level requirements for all MPCPs shall apply. Independent Distributors placing a product order or orders for the minimum monthly Personal Business Volume (50, 100, or 150) assigned to their BDC-001 and ordering or renewing their UnFranchise Management System subscription by their monthly Q-date will satisfy the Monthly Accrual Option for every one of their qualified BDCs regardless of the number (excluding acquired/purchased BDCs). (1) First Three-Q-date Period (First-Quarter Grace Period): A qualified BDC will continue to accrue Group Business Volume through the first three-q-date period provided a minimum of 50 Personal Business Volume in addition to the qualifying order(s) has been placed and assigned to the respective Independent Distributor s BDC-001, and the respective Independent Distributor has purchased at least one month s subscription to the UnFranchise Management System, within (i.e., prior to the end of) their first three-q-date period. No Commissions Earned in First Quarter: If no commissions are earned within the first three-q-date period, and if both a minimum of 50 Personal Business Volume and at least one month's subscription to the UnFranchise Management System is not placed within the first three-q-date period, then all Group Business Volume accrued by the Independent Distributor s qualified BDC(s) will be flushed (erased to 0). Commissions Earned in First Quarter: If a commission has been earned within the first three-q-date period, the Firstquarter Grace Period is effectively ended (unless a 28-day Grace Period applies see 28-day Grace Period). If no 28- day Grace Period applies, the Independent Distributor must submit the applicable minimum Personal Business Volume (100 PBV for Coordinator; 150 PBV for Executive Coordinator) and an order for the UnFranchise Management System to exercise the Monthly Accrual Option. This is accomplished by assigning the minimum PBV amount to the Independent Distributor's BDC-001 and purchasing a subscription to the UnFranchise Management System for the current monthly Q- date period. If a commission cheque is earned by an Independent Distributor within the first three-q-date period, he/she should immediately contact an active upline Certified Executive Coordinator to ensure that appropriate Business Volume and an order for the UnFranchise Management System are placed to continue to accrue GBV month-to-month. (2) After the First Quarter: After the first three-q-date period, to continue accruing Group Business Volume on a month-to-month basis, Independent Distributors must place the applicable minimum PBV amount (50, 100, or 150 PBV) assigned to their BDC- 001 and order or renew their UnFranchise Management System subscription prior to their Q-date each month. Note: The minimum PBV and order for the UnFranchise Management System must be received by the week-ending Friday in which the Q- date falls. To count for a given month, the BV and order for the UnFranchise Management System must be placed after the end of the previous monthly Q-date period and by the last day of the current monthly Q-date period. (3) 28-day Grace Period: For any commissions earned that cause Independent Distributors' criteria to change regarding exercising the Monthly Accrual Option, a 28-day Grace Period applies under the following guidelines: BV-related: If a commission cheque that will increase an Independent Distributor s minimum monthly PBV amount is earned within 28 days of the upcoming monthly Q-date, then the Independent Distributor remains at the current BV level to continue to accrue GBV month-to-month. The Independent Distributor must then submit the applicable PBV (100 PBV for Coordinator; 150 PBV for Executive Coordinator) for the first monthly Q-date period for which the 28-day Grace Period does not apply. However, if a commission cheque that will increase an Independent Distributor s minimum monthly PBV amount is earned, and the upcoming monthly Q-date is more than 28 days from the date the cheque is earned, then the Independent Distributor must submit the applicable PBV (100 PBV for Coordinator; 150 PBV for Executive Coordinator) by the next monthly Q-date to continue to accrue GBV month-to-month. Note: If a commission cheque that will increase an Independent Distributor s minimum monthly PBV amount is earned within 28 days of the upcoming monthly Q-date, and the Independent Distributor is in his/her first three-q-date period, then the rules of the first three-q-date period still apply as if no commissions have been earned [see First Three-Q-date Period (First-Quarter Grace Period)]. UnFranchise Management System-related: If a commission cheque is earned within 28 days of the upcoming monthly Q-date, and the Independent Distributor is in his/her first three-q-date period, then the rules of the first three-q-date period still apply as if no commissions have been earned [see First Three-Q-date Period (First-Quarter Grace Period)]. Independent Distributors Not Exercising Accrual Option: Exercising the Monthly Accrual Option is not required. (1) If Independent Distributors choose not to exercise the Monthly Accrual Option, their accrued Group Business Volume through the end of the monthly Q-date period for which the Monthly Accrual Option is not exercised will flush (reset to 0); however, Independent Distributors who remain qualified will begin accruing Group Business Volume again beginning the commission week directly after the flush. (2) If Independent Distributors do not exercise the Monthly Accrual Option by their next monthly Q-date, their accrued Group Business Volume will flush (reset to 0) again at the end of that monthly Q-date period, and so on. Rev. 3.3 June 2013 Chapter 8 7

8 (C) Active Life Span Of Group Business Volume: Accrued Group Business Volume shall have a 365-day life span from the date of the order. The life span of Group Business Volume does not extend to the Friday of the week in which the order turns 365 days old, but expires on the 366th day. Group Business Volume greater than 365 days old shall no longer count towards the pay out of commissions. SEC. 9 ACTIVATING A BUSINESS DEVELOPMENT CENTRE (ACTIVATION) A BDC must be activated to earn commissions and leadership bonuses, which is accomplished by the Independent Distributor personally sponsoring at least one qualified Independent Distributor placed in the left downline of the BDC and personally sponsoring at least one qualified Independent Distributor placed in the right downline of the BDC. SEC. 10 Minimum Requirements and Maintenance: For a BDC to earn commissions and management bonuses at least one personally sponsored and qualified Independent Distributor must be in the left and right downline. Failure to maintain at least one personally sponsored and qualified Independent Distributor on both the left and right side of a BDC will result in the sponsoring Independent Distributor forfeiting commission pay outs when required volumes are reached. No retroactive commission will be issued. Independent Distributor Eligibility: (1) A newly sponsored and qualified Independent Distributor who is not properly linked (unlinked BDC) will not be valid for activating the sponsoring Independent Distributor until the date of linkage correction. (2) Qualified Independent Distributors operating from the same address as any existing Independent Distributor, even if the distributorship has been approved by the company, will not count towards meeting the activation requirement for any Independent Distributor. (3) BDCs placed from re-entry authorisation or other acquired BDCs will not count towards meeting the activation requirement. (4) Non-profit Organisation (NPO) distributorships will not count towards meeting the activation requirement. (5) Fraudulent, bogus, or fabricated sponsorship to meet the activation requirement is prohibited and will invalidate activation. If the company discovers such practices, the following consequences may result: the violating Independent Distributor may be required to pay back all unearned commissions paid out as a result of the invalid sponsorship; the violating Independent Distributor may have all accrued volume flushed (erased to 0); (c) the violating Independent Distributor may be subject to the Corrective Action Procedure. MINIMUM COMMISSIONS REQUIREMENTS The following minimum requirements shall apply for Independent Distributors to continue to earn commissions and/or bonuses under the MPCP. Form 1000: An Independent Distributor shall complete and submit to Market Australia a current, valid Form 1000, accompanied by a minimum of two sales receipts totaling AUD$200.00, to receive any commission cheque, including the Independent Distributor s first cheque. Failure to comply will result in the commission cheque being held either four consecutive weekly commission cycles from the week the cheque would have otherwise been mailed, or through the end of the current quarter if the cheque was for BDC-001, whichever comes first. If the Form 1000 requirement has still not been met by the end of this hold period, the cheque will be forfeited. Note: The Form 1000 for BDC-001 is due by the end of the Independent Distributor s quarter, regardless of commissions. If a valid Form 1000 is not received for BDC-001 by the Independent Distributor s quarter-ending date, not only will the Independent Distributor flush any Group Business Volume and purge Personal Business Volume totals, but also any commission cheques on hold for BDC- 001 for failing to meet the Form 1000 requirement will be forfeited. Coordinators (Independent Distributors Who Have Earned A AUD$300 Commission): In addition to the Form 1000 requirement, Coordinators shall complete and submit to Market Australia an Executive Coordinator Qualification and Application (Form 1001) and an Executive Coordinator Acknowledgement and Agreement (Form 925) within 28 days of qualifying for their first AUD$300 commission. Failure to comply will result in the next commission cheque being held for four consecutive weekly commission cycles from the week the cheque would have otherwise been mailed and if the requirement has still not been met by the end of this hold period, the cheque will be forfeited. Completion and submission of Form 1001 and Form 925 shall be performed initially, and thereafter this requirement shall be satisfied annually by submitting the Annual Renewal Form. (C) Executive Coordinators (Independent Distributors Who Have Earned A AUD$600 Commission For Accruing 5,000 Group Business Volume On Left And Right Sides): In addition to the Form 1000 requirement and the minimum commissions requirements set forth for Coordinators, Executive Coordinators shall satisfy the following minimum commissions requirements: (1) Executive Coordinators must submit a New Independent Distributor/Basic 5 Training Certificate and an Executive Coordinator Certification Training Test (passing grade) within 28 days of qualifying for their first Executive Coordinator AUD$600 commission. Failure to comply will result in the next commission cheque being held for four consecutive weekly commission 8 Rev. 3.3 June 2013 Chapter 8

9 SEC. 11 cycles from the week the cheque would have otherwise been mailed, and if the requirement has still not been met by the end of this hold period, the cheque will be forfeited. (2) Executive Coordinators and higher Pin Levels shall fulfill their supervisory/managerial responsibilities as demonstrated by maintaining an acceptable MAPS rating score each MAPS quarter. Failure to comply will result in the forfeiture of an entire week s commissions at the end of the MAPS quarter for which an unacceptable score was earned [see Market Australia Partners in Success (MAPS)]. MANAGEMENT PERFORMANCE COMPENSATION PLAN (MPCP) PAY OUT CRITERIA Qualified, active, and activated BDCs participating in the MPCP shall be eligible to earn commission and leadership bonuses weekly on Group Business Volume generated by Independent Distributors in their downline organisations. Weekly Cycle: Weekly commission cycles calculating accrued Group Business Volume from product orders placed, correctly assigned, and processed shall run from 2:00 p.m. AET on Friday to 2:00 p.m. AET of the following Friday (excluding grace period provided to UnFranchise Management System (UFMS) members using faxed orders, 800 number orders, or the online ordering process). If Market Australia s office is closed due to a holiday, the end of the commission weekly pay cycle for that week will be the last business day that Market Australia is open that week. Note: The Friday-to-Friday commission cycle only refers to the weekly cycle by which Market Australia determines the qualification of commissions; it does not refer to the time frame in which Market Australia processes those commissions. (1) Orders received by mail prior to 2:00 p.m. AET Friday will count towards the current week. The 2:00 p.m. deadline also pertains to all other mail, such as forms, sales tax documents, etc., and for the submission of Form 1000 s online. (2) UFMS members will have until 5:00 p.m. AET on Fridays to fax orders or until 7:00 p.m. AET to place orders through the 800 number using an approved and registered credit card or credit on account as the method of payment. (3) UFMS members have until 11:59 p.m. AET on Fridays to place orders through the online ordering process. Non-UFMS members ordering online have until 1:59 p.m. AET on Fridays to place orders through the online ordering process using B-Pay. Note: If Market Australia determines that the UFMS is not functioning correctly from corporate office for an unacceptable amount of time, UFMS members have until 2:00 a.m. AET on Saturday to fax orders using an approved and registered credit card or credit on account as the method of payment. The UFMS member must print clearly at the top of the order form UFMS Problem please consider for week ending xx/xx/xx. No other orders will be accepted. Note: The determination to extend the normal ordering deadline is completely at the discretion of Market Australia. If Market Australia determines that there was not enough down time to warrant an extension past the 11:59 p.m. AET deadline for Online Electronic Ordering, then any orders received by Market Australia after 11:59 p.m. AET will be credited for the following week. (4) Weekly commissions and management bonuses shall be paid on Group Business Volume totals, based on final posting and reconciliation figures, two weeks from the week-ending Friday of that particular commission cycle. Weekly Compensation Criteria And Management Parameters: (1) AUD$ Commission: for accruing equal to or greater than 1,200 Group Business Volume on the left side and 1,200 Group Business Volume on the right side of the respective BDC. (2) AUD$ Commission: for accruing equal to or greater than 2,400 Group Business Volume on the left side and 2,400 Group Business Volume on the right side of the respective BDC. This includes the previous 1,200 Group Business Volume. (3) AUD$ Commission: for accruing equal to or greater than 3,600 Group Business Volume on the left side and 3,600 Group Business Volume on the right side of the respective BDC. This includes the previous 2,400 Group Business Volume. (4) AUD$ Commission: for accruing equal to or greater than 5,000 Group Business Volume on the left side and 5,000 Group Business Volume on the right side of the respective BDC. The includes the previous 3,600 Group Business Volume. (5) AUD$ Leadership Bonus: when having a BDC on the left side and a BDC on the right side each receive a AUD$ commission for reaching the 5,000/5,000 Group Business Volume compensation criteria, in the same weekly commission cycle that the respective BDC earns a AUD$ commission for reaching the 5,000/5,000 Group Business Volume compensation criteria. Note: All three commission cheques must meet all requirements for release at the same time. If any cheque that would otherwise contribute to a Leadership Bonus is held for any reason (see Minimum Commissions Requirements), then that held cheque will not be eligible to contribute towards any Leadership Bonus for the week that the cheque would have been earned if not held. (6) All accrued Group Business Volume totals are cumulative (i.e., inclusive of the Group Business Volume accrued for reaching the previous compensation criteria), until reaching the 5,000/5,000 Group Business Volume compensation criteria. Upon reaching the 5,000/5,000 GBV compensation criteria, a BDC flushes (erases GBV to 0), and starts the commission cycle over again the next week. Rev. 3.3 June 2013 Chapter 8 9