Neways has created a Marketing and Compensation Plan to calculate commissions and properly reward the activities and efforts of Distributors.

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1 SECTION 14 - MARKETING AND COMPENSATION PLAN Distributor ranks and titles Neways has created a Marketing and Compensation Plan to calculate commissions and properly reward the activities and efforts of Distributors. Distributor Ranks Bonus Qualification Eligibility Rank Qualifications Multiplex Development Group Development Executive Leadership Bonus Bonus Bonus Consultant This is the starting rank when you register as a Distributor. (Indicates eligibility) Supervisor Accumulated PGV of 1000, with 100 PV in the qualifying commission month. Manager Accumulated PGV of 3000, with 100 PV in the qualifying commission month. Executive Accumulated PGV of 6000, with 100 PV and 1000 PGV in the qualifying commission month. Or accumulated PGV of 4000 or more in 1 or 2 consecutive commission months, with 100 PV in the qualifying commission month. (Subject of Leadership Executive) Titles of Leadership (L) Executive Rank PV PGV APGV L-Qualified Executive Legs Executive and less Senior Master Presidential Ambassador Diamond and more

2 Recognition Titles of Diamond Ambassador Qualified Executives Recognition Titles Crystal Diamond Ambassador Double Diamond Triple Diamond Senior Diamond Master Diamond Presidential Diamond Ambassador Diamond Crown Diamond Qualifications Maintain monthly paid as qualifications of Diamond Ambassador for one year (12 consecutive months) Maintain 18 L-Executive legs, each month for two consecutive months Maintain 27 L-Executive legs, each month for two consecutive months Maintain three Diamond Ambassador legs, each month for two consecutive months Maintain four Diamond Ambassador legs, each month for two consecutive months Maintain five Diamond Ambassador legs, each month for two consecutive months Maintain seven Diamond Ambassador legs, each month for two consecutive months Maintain nine Diamond Ambassador legs, each month for two consecutive months Marketing and Compensation Plan Marketing and Compensation Plan Terminology -- Personal Volume (PV): The sum commissionable value of all products personally purchased during the commission month. PV of each product is designated on the Neways price list. Additionally, all PV purchased by personally sponsored Healthy Home Members is added to the Distributor s PV purchases to determine the Distributor s total PV. Commissions are calculated on the total PV of each Distributor in a Distributor s Downline. PV can be reduced by product returns, which can reduce a Distributor s monthly commission qualifications. A Distributor s first 100 PV is paid in the Multiplex Profit Center and referred to as Multiplex PV. All PV over 100 PV is paid in the Affinity Profit Center and referred to as Affinity PV. -- Personal Group Volume (PGV): The sum PV of a Distributor and all Distributors in a Distributor s personal group Downline. A Distributor s Personal Group is defined as the Distributor and all downline Consultants, Supervisors, and Managers. Any downline Executives break away and they and their Downline are not considered part of a Distributor s Personal Group. -- Affinity Personal Group Volume (APGV): The sum of Affinity PV of all Distributors in a Distributor s Personal Group. -- Accumulated Personal Group Volume: Accumulated total of a Distributor s monthly PGV since becoming a Distributor. Group Development rank advancements are based on a Distributor s accumulated PGV. All rank advancements are effective in the commission period that the rank is achieved (INSTANT RANK ADVANCEMENT). For example, a Distributor that achieves the Supervisor rank advancement requirements (100PV and 1,000 cumulative PGV) will be paid as a Supervisor in the month that the requirements are achieved. -- Downline Legs: Each first level Distributor (personally sponsored by a Distributor) is the start of a Downline Leg. A Downline Leg refers to the first level Distributor and all Distributors in the first level Distributor s Downline. A Distributor s number of Downline Legs is equal to the number of first level (personally sponsored) Distributors Multiplex/Affinity bonus (A) Multiplex Profit Center (Type: Multiplex): The first 100 PV of each Distributor is paid in the Multiplex Profit Center. Distributors can qualify for Multiplex commissions with 50 PV, or 100 PV. Distributors with 100 PV are eligible for additional commissions based upon the Distributor s number of Multiplex Qualified Legs. A Multiplex Qualified Leg is a Downline Leg that includes at least one Distributor with 100 PV in the commission month.

3 MULTIPLEX PROFIT CENTER *Unlimited Bonus: 2, 4, or 6 percent that is paid through an unlimited number of Downline legs. The Unlimited Bonus is calculated independently of the commission percentage per level bonus. The Unlimited Bonus can be partially blocked by Downline Distributors that qualify for a lower percentage of the Unlimited Bonus, or fully blocked by Downline Distributors that qualify for the same percentage of the Unlimited Bonus. The Unlimited Bonus is calculated by paying the difference between a Distributor s qualification amount and the amount already paid to Downline qualified Distributors. (B) Group Development Bonus of the Affinity Profit Center (Type: Affinity): The Group Development Bonus section identifies a Distributor s Personal Rebate on PV greater than 100. Supervisors, Managers, and Executives are entitled to an additional commission of Distributors in a Distributor s Personal Group, that is calculated as the difference between a Distributor s Personal Rebate and the Group Development Commissions already paid to Downline Distributors in a Distributor s Personal Group. Downline Executives are not part of a Distributor s Personal Group and thus are not subject to commission payments in the Group Development Bonus section of the Affinity Profit Center (Executives are paid on Downline Executive Personal Groups in the Executive Leadership Bonus section of the Affinity Profit Center). AFFINITY PROFIT CENTER (GROUP DEVELOPMENT) (C) Executive Leadership Bonus Section of the Affinity Profit Center (Type: Affinity) Executive Distributors can qualify for Executive Leadership Bonuses by maintaining 100 PV, 1000 PGV, and 400 Affinity PGV each month (PGV and Affinity PGV requirements are reduced for Ambassador and Diamond Ambassador qualifications). Executives that maintain the monthly

4 Executive Leadership qualifications are identified as L-executives and are eligible to receive Executive Leadership commissions on Downline Executive groups. AFFINITY PROFIT CENTER (EXECUTIVE LEADERSHIP) -- An Executive s PGV requirement can be reduced by borrowing 100 PV from up to 3 first level executives with at least 100 PV each. -- Generations are referring to the pay level. -- Unlimited bonus: When a Distributor s Downline qualifies, he/she has the priority for this bonus *2: Qualifying Diamond Ambassadors receive a 7% Unlimited Bonus which increases to 8% after three consecutive months of 200,000 organizational volume. A Distributor s organizational volume is the total PV of all Distributors in a Distributor s Downline that achieve at least 100 PV Commission Payments Commissionable Values Distributor commissions are calculated on PV, which is set by Neways and reported in United States Dollars ( USD ). Commissions are paid in Taiwan Dollars ( HKD ) at a conversion rate to be determined by Neways. The conversion rate is used for the calculation of HKD wholesale pricing and commission payments. Updates to the conversion rate shall be effective upon thirty (30) days notice to Distributors that the conversion rate has been modified. Notification shall be published in Official Neways Materials and made available by one or more of the following methods: (a) posting on the Company s official Distributor website; (b) electronic mail ( ); (c) fax-on-demand; (d) inclusion in Company periodicals; (e) inclusion in product orders; or (f) special mailings Minimum amount for which Neways will issue a funds transfer Commissions are calculated for each commission period, which typically follows each calendar month. Orders by mail are valid for a particular month when postmarked up to the 28th of that month (excluding February), and commissions will be paid in HKD, based on the current conversion rate, on the 25 th day of the month following the commission period. When the 25 th is a Saturday, Sunday, or National Holiday, commissions will be paid on the first business day following the 25 th. Orders by fax, Internet, or portable terminal that are not received by the last day of the month will be considered orders for the next month. The Distributor must confirm whether he or she has met the PV requirement by the deadline of the given commission period (month). Commissions over USD$25 are paid in HKD by electronic funds transfer. If a Distributor does not have a valid electronic funds

5 transfer agreement on file with Neways, all commissions earned will be applied to the Distributor s Neways account until a valid electronic funds transfer agreement is received by Neways. Commissions less than USD$25 (after any adjustments made pursuant to Section ) are applied to the Distributor s Neways account Method of payment Commissions will be paid via electronic funds transfer or a credit to the Distributor s account, or any other appropriate method as determined by Neways Commission deductions and adjustments When a commission is paid, a commission management fee will be charged to both earnings from the Multiplex and Affinity Profit Centers independently. The amount will be 4% of earnings in each Profit Center (excluding tax) to a maximum of USD$25 (HKD equivalent based on conversion rate) in each Profit Center. When products are returned or qualification adjustments are made, the relevant commission will be adjusted to/from your Neways account and applied to the next commission payment Car/House Bonus Program This is a program in which Neways helps with the payments for automobile purchase loans/leasing fees, home purchase loans, or rent for an apartment for participants in the program. A Distributor can qualify to apply for this program by maintaining a rank of Senior Executive or higher and earnings of USD$2,000 (HKD equivalent based on conversion rate), or higher for three consecutive months. A Distributor is eligible to receive the Car/House bonus as part of his or her monthly commissions beginning in the month following the qualification period. The Car/House Bonus will be paid as an amount equal to 15% of a Distributor s total commission (not including handling fees, coordination fees, or sales tax) up to the amount of the Distributor s monthly loan payment, or an amount of HKD equivalent to USD$1,000 per month (based on the HKD conversion rate), whichever is less. A Distributor must maintain monthly qualifications at a rank of at least senior executive and generate commission in HKD equivalent to USD$2,000 (not including handling fees, coordination fees, or sales tax) in order to continue receiving the Car/House Bonus throughout the contract period. The Car/House Bonus is not paid for months in which these requirements are not met, and extensions are not given for these periods. The Car/House Bonus may not be applied to purchases or loans made before the qualifications are met. Even if a Distributor has previously met the qualifications, if there is a month in which the qualification requirements are not met before an application is approved, the Distributor must reapply in accordance with the requirements of this Section after once again meeting the qualification requirements for three (3) consecutive months. Car Bonus A Car Bonus can be granted for up to a maximum of 60 months. Loan/lease fees exceeding this period are the responsibility of the Distributor. Only household passenger vehicles of less than two (2) years old are eligible for this program. Only one application by a Distributor for one car will be considered at any time. When the Car Bonus period ends or at any time during the Car Bonus period, a Distributor may trade in the car for a different one or instead apply to receive a House Bonus. (In this case, the unpaid loan/lease fees for the previous car cannot be incorporated into the calculation of the loan/lease fees for the trade-in car.) Documents Required for each application (to be mailed): 1 Form #9030, Car Bonus Program Application; 2 Copies of payment certificates (loan agreement and receipt); 3 Copies of purchase or lease agreements; 4 Copy of a valid car insurance policy for the applicant and the car concerned; and 5 Photograph of the vehicle (including the license plate and the applicant, if possible). House Bonus A House Bonus can be applied for only in connection with the purchase, new construction, reconstruction, or lease of a residential property to be inhabited by the Distributor. The Distributor cannot apply for a House Bonus in connection with the purchase/lease of office space or the extension/remodeling of the Distributor s present home. Applications for reconstruction can only be made for properties within one year of the Distributor entering into the reconstruction agreement. Applications for leases can only be made for properties in which the month the Distributor enters into the lease agreement is the same as the month of the House Bonus application. House Bonuses are paid in accordance with the term of the loan, but procedures must be completed to renew the House Bonus every 36 months or when the lease on the property automatically renews. In the month of lease renewal, a

6 Distributor must continue to maintain a rank of at least Senior Executive and generate earnings of USD$2,000 (HKD equivalent based on conversion rate). If the requirements are not met in the month of renewal, the payment of the House Bonus will be terminated. During the House Bonus period, the Distributor may change the property or instead apply to receive a Car Bonus. Documents required for each application (to be mailed): 1 Form #9030, House Bonus Program Application; 2 Form #9073, Address Change Application; 3 Copies of payment certificates (for example the loan agreement and receipt); 4 Copies of purchase or lease agreements; 5 Copies of the property floor plans (for custom-built houses); 6 Photographs of the exterior and interior of the property (including the applicant, if possible). If the property has not yet been constructed, photographs must be sent within one year of the application date; and 7 The applicant s Taiwan Identification Card or Passport. When completing renewal procedures, a Distributor must attach a copy of his or her Taiwan Identification Card or Passport to a form detailing his or her name, ID#, the property address (present address), and contact information and mail them to Neways.