Your Career Path at a Glance! October 09
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1 Your Career Path at a Glance! October 09
2 Phase 1 Becoming a Manager Career Plan CONSULTANT (C) SENIOR CONSULTANT (SC) GROUP COORDINATOR (GC) SENIOR GROUP COORDINATOR (SGC) GROUP MANAGER (GM) To Qualify and Maintain Submit a signed application $1,000 PV min 1 Level 1 Consultant with $1,000 PV $1,000 PV 3 Active Legs $6,000 GV $1,500 PV 3 Active Legs o Incl. 2 SC Legs $10,000 GV $1,500 PV 4 Active Legs o Incl. 2 GC Legs $20,000 GV Power Seller Bonuses Base Retail Profit% 20% Power Seller Bonus 1 $4,000 PV 5% Power Seller Bonus 2 $8,000 PV 7.5% Power Seller Bonus 2 $12,000 PV 10% Management Bonuses Paid-As Title C SC GC SGC GM Senior Consultant Management Bonus on Recruits $75* Management Bonus - Level 1 6% 7% 7% Management Bonus - Level 2 4% 5% Management Bonus - Level 3 2% Group Volume Bonus 2% New Group Manager Bonus $1,000 New Group Coordinator Bonus $200 Fast Start Double Bonus Levels 1 3, % doubles on volume placed by new recruits during their 1 st 2 months. No other overrides are paid when Fast Start is paid. No Double Bonus applies to $75 cash bonus paid to SC. *$75 paid for each recruit who achieves $1,000 PV or more when SC also achieves $1,000 PV or more in same month. 2
3 Phase 2 Becoming a Leader Career Plan October 2009 GROUP LEADER (GL) SENIOR GROUP LEADER (SGL) DIRECTOR (D) SENIOR DIRECTOR (SD) To Qualify and Maintain, all Leader titles must meet the minimum GM requirements plus those listed here. 1 GM Leg 3 GM Legs 2 GM Legs +2 GL Legs $300,000 DV 4 GM Legs +2 SGL Legs 1 New GM in the last 24 months $600,000 DV Management Bonuses GL SGL DIR SDIR Management Bonus - Level 1 7% 7% 7% 7% Management Bonus - Level 2 5% 5% 5% 5% Management Bonus - Level 3 5% 5% 5% 5% Group Volume Bonus 2% 2% 2% 2% Leadership Bonuses GL SGL DIR SDIR Leadership Bonus - Generation 1 3%** 3.5% 4% 4.5% Leadership Bonus - Generation 2 3.5% 4% 4.5% Leadership Bonus - Generation 3 4% 4.5% New GM Development Bonus $1000 ** If a GL or higher is paid-as a GM, then their G1 will be paid at 2% 3
4 Definition of Terms & Concepts in the Career Plan Active Active Leg Badge Title Cancellation Policy Commissionable Volume (CV) Compression Demotion Policy Downline Downline Volume (DV) Eligible Enroller (Sponsor) FastStart Double Bonus 1-3 Generation A Consultant must achieve at least $500 Personal Volume (PV) to be considered Active for that month. If a Consultant is not Active in a month, they receive no bonuses from their downline, and they may be ineligible for other Consultant benefits or privileges as specified separately. A Consultant s retail sales to customers accrue to the Consultant s PV and count toward Active status. If a Consultant is not Active, then their upline will not be paid bonuses on their volume. Inactive Consultants will receive the standard amount of profit from retail sales to their customers during any month. See also Holiday Month. A downline leg where at least 1 Consultant is Active anywhere down this leg (see also Leg). A Consultant s Badge Title is the highest title they have achieved in the Career Plan. A Consultant s Badge Title does not change unless they are demoted, or they are promoted. (see also Demotion Policy). Consultants must achieve a minimum of $3,000 PV in a 12-month period in order to remain a Consultant and keep their downline. If they fail to meet this requirement in any 12-month period, their contract with The Chefs Toolbox will be cancelled (they are terminated ) which causes them to be removed from the company downline organisation. Their downline and customers will be given to the next upline Consultant who is in good standing. Terminated Consultants are not allowed to continue to sell products, represent themselves as Consultants, nor access the Company s Consultant web site or systems. Most inventory items (products) have both a Qualifying Volume (QV) and Commissionable Volume (CV) assigned to them. Commissionable Volume (CV) is the volume on which downline bonuses are paid. In this Plan, the Commissionable Volume is equal to the Wholesale Amount less GST (GST rate = in Australia or NZ per current GST legislation). When a Consultant is terminated and no longer part of the company, their downline is compressed to their upline filling the gap left by the terminated Consultant. All Badge Titles are retained for 6 months following any month in which Consultants qualify for them. Title demotions will occur in the 7th month without qualification. The title that Consultant will be demoted to in that 7th period is the title that they are Paid-as qualified for in that 7 th month. All Consultants (who are not terminated) below you are considered to be part of your downline. The total Qualifying Volume for a Consultant and their entire downline organization. It includes ALL downline Consultants regardless of their titles, plus the Consultant themselves. A Consultant is considered eligible to receive a bonus if they have a relevant Badge Title in the Career Plan. For example, a Consultant is eligible to receive the Group Volume Bonus if they have a Badge Title of Group Manager title or higher. Eligibility does not mean a Consultant will receive the particular payout. To receive a payout, a Consultant must be both eligible and qualified for the title. It is possible for a Consultant to be eligible, but unqualified. Please also refer to the definition of Qualified. A Consultant must be both eligible and qualified to receive a particular payout. The person who introduces an individual to the company is considered to be the Enroller. This is often referred to as the Sponsor also. CV from a new Consultant during their Month 1 and Month 2 of their FunStart period, will pay the Management Bonuses at double (twice) their normal percentages to their uplines. No other payouts will pay on volume that pays the FastStart Double Bonuses. To receive the FastStart Double Bonuses, the upline must be Active, qualified, and eligible. If a Consultant is Inactive, unqualified, or ineligible, then that Management Bonus will not roll upline. Please refer to the definitions of Active, Eligible, and Qualified, as well as Management Bonuses. FastStart Double Bonus does not apply to the Senior Consultant Management Bonus. The relationship between one Group Manager or higher and another Group Manager or higher, based on Badge Titles. If a GM or higher is not paid-as a GM, they are still considered a Generation to their upline GM or higher. 4
5 Grace Period Group Group Volume (GV) Group Volume Bonus (GVB) Holiday Month Leadership Generation Bonuses Leg Level Management Bonuses 1-3 Matching New Group Manager Bonus Minimum Bonus New Group Manager Bonus When a GM or higher (Badge Title) has a Consultant in their personal group promote to a GM (or higher) for the first time, then in the three periods following the promotion, that upline GM (or higher) will only be required to have $12,000 GV ($8,000 less than the usual $20,000 GV). (If additional new promotions to GM occur from their group during the same three periods, then the GV requirement is zero for the overlapping Grace Periods.) Beginning with the fourth period following the promotion, they must again have the full GV required for GM or higher in order to be paid at that level. Please see also Group Volume (GV). A Consultant themselves and their entire downline, down to but not including, the next GM (Badge Title) or higher. Group Volume is the QV from the Consultant themselves and their entire downline, down to but not including, the next Group Manager or higher (Badge Title). In the period that a Consultant promotes to a GM for the first time, their GV will be included in their upline s GV for qualification purposes only, in that period. Beginning with the following period, their GV is not included in their upline s GV and the Grace Period applies to their upline GM or higher. The Group Volume Bonus pays to paid-as Group Managers and higher. It pays on the Commissionable Volume of the GM s (or higher) Group Volume, including the GM s (or higher) personal volume (PV). Group Managers and higher (Badge Title) are awarded one Holiday Month each Calendar Year where they may be paid-as their Badge Title even though they do not meet the qualifications. These Holiday Months do not accumulate, are limited to 1 per Calendar Year, and must be notified to The Chefs Toolbox prior to the first calendar day of the intended Holiday Month. To be eligible for Holiday Month and receive Paid As title bonuses, the Group Manager or higher must still achieve $500PV in the Holiday Month, ie. be Active. Leadership Bonuses are overrides paid on downline Generation GMs and higher, and their Group (see also Group). For example, A leg begins with a first level Consultant and includes all of the Consultants beneath them. A Consultant has as many legs as they have first level Consultants. (see also Active Leg). The position a Consultant has in a downline relative to another upline or downline Consultant. Consultants personally sponsored (i.e. first level) are Level One. Those Consultants sponsored by Level One Consultants are Level Two, relative to the original Consultant, and so on, whether or not the Consultant is Active. A percentage of Commissionable Volume (CV) can be paid to a Consultant when they are Paid-As the relevant title, down to 3 levels. receive a Management Bonus, they must be Active, qualified, and eligible. Please also refer to the definitions of Active, Eligible, and Qualified, as well as FastStart Double Bonus and Group Volume Bonus. The first upline Group Manager or higher (Badge Title) is eligible to receive a Matching New Group Manager Bonus when a downline Consultant earns the New Group Manager Bonus. The first upline GM or higher (Badge Title) is qualified to receive this bonus only if they are paid-as a GM or higher in the month that the New Group Manager Bonus is awarded (the upline GM does not have to be paid-as a GM or higher for two consecutive periods). They cannot use the Promotion Security bonus to qualify for this, they can use the Grace Period (reduced GV) or Holiday Month. $10 no bonus will be issued less than $10. If a Consultant does not have $10 in earnings then their earnings will be carried forward and accrued until they have earned $10 (all balance forwards will then be included). If a Consultant is terminated then the company will pay them outside of the commission program. When a person is promoted to Group Manager for the first time and maintains it for two consecutive months (the first month can be the month of qualification) within the first year of promotion (beginning with the period of promotion), they receive a $1,000 bonus. Their first upline Group Manager or above (Badge Title) is eligible to receive a matching $1000 bonus. Please see Matching New Group Manager Bonus. The Grace Period, Promotion Security, and Holiday Period cannot be used to qualify for this bonus they must meet the full paid-as requirements. If a Consultant receives this bonus, later demotes to a lower title (see Title Maintenance), and then promotes to GM again, they will not receive this bonus again it is paid only once in their career. 5
6 New GM in 24 month rolling period New Group Coordinator Bonus Paid As Title Period Personal Volume (PV) Power Seller Bonus (Volume Rebate) Promote (Promotion) Promotion Security Qualified Qualified Leg Senior Directors (SDIR) and above must meet an additional maintenance requirement in order to be paid-as their title. They need to promote from their personal group at least 1 New Group Manager (GM) every 24 months or they must promote to a higher title during that period. This means that every 24 month rolling period (oldest month off, newest month on), they need to have at least 1 new Group Manager from their personal group (new 1st Generation GM), or promote to a higher title. If they fail to meet this, then they will be paidas demoted to a Director. However, if they subsequently meet the requirements for this or promote to a higher title (even without this requirement), then the counter will be reset and they will once again have 24 months. For example, Julie becomes a Senior Director in January January becomes month one in her counter for this maintenance requirement. Julie has until December 2008 to meet this requirement. If she doesn t then in January 2009, she will be paid-as a Director. If Julie meets this requirement in November 2008, she would have until October to meet the requirement (1 new GM or promote to higher title). If she does, the counter is reset. If she does not, then she is paid-as demoted. When a Consultant promotes to Group Coordinator for the first time and is paid-as a Group Coordinator for 2 consecutive periods within 4 months of their promotion (the period of promotion can count as one of the consecutive periods), then they will receive a one-time New Group Coordinator Bonus. If the Consultant later demotes to a lower title and again promotes to the Group Coordinator title, then they will not receive this bonus again it is paid only once in their career. Each Consultant is paid at the title for which they qualify during the period. If in any period they fail to achieve their Badge Title level, they are paid at the lower title to which they do qualify for during the period. They retain their Badge Title but are paid as the title they actually qualify for. Please see also Title Maintenance Policy. A period refers to the specific time frame in which qualifications and payouts are calculated for. In this plan, a period is equal to an actual Calendar month. Six periods would be six calendar months. A Consultant s retail sales to customers accrue to the Consultant s PV each period. Consultant Half-Price Purchases, Host Half Price Items, items sold via Web Orders on the Consultant s Personal Web Site, items obtained for free via ChefsClub redemption and certain other sale types/products specified from time to time do not accrue PV for the Consultant. PV = retail price of a product minus GST, if sold via a Cooking Party sales order. PV is shown in real-time in jcoach displays on the Consultant Portal. Consultants that achieve a minimum of 4,000 PV in the period will be qualified to receive an additional percentage bonus, also called a Volume Rebate. The percentage will be paid on the total Qualifying Volume (QV) of their orders which accrued to form their period s PV. This is also called a Volume Rebate. A Consultant promotes to a new Badge Title when they meet all of the qualifications for that title in the period. The promotion is effective the first day of the same period meaning that regardless of what day the promotion was actually qualified for, the new Badge Title is effective for the entire period. For example, if a Consultant meets the qualifications for a Group Leader on June 23rd, they promote to the title of Group Leader for the entire period of June (effective June 1) and will be paid-as a Group Leader for the entire period of June. For the two periods following a promotion to GM or higher, the Consultant will be paid-as their new title regardless of what they actually qualify for. Beginning with the third period, they will be paid-as the title for which they qualify for. The Grace Period may be used for the GV requirement, however, if a Consultant qualifies for it. A Consultant is considered to be Qualified if they meet the Paid-As requirements for a particular payout and/or title. A Consultant will only receive the payouts that they are both eligible and qualified for. For example, a Consultant may be eligible for the Group Volume Bonus because they have a Badge Title of Group Manager. However, if they are paid as a Senior Group Coordinator or below, then they are unqualified for the bonus and would not receive it. Qualified Legs require that at least one individual in the leg is qualified to be paid as a specific title (or above) during the period. For example, to be a Group Manager, one needs four Active Legs and includes two legs which must have at least one representative that is paid-as a Group Coordinator or higher. Qualified Legs depend on the monthly Paid-As Title, not Badge Titles. 6
7 Qualifying Volume (QV) Senior Consultant Recruit Bonus Sponsor (Enroller) Start Date Reinstatement Policy Title Maintenance Each inventory item (product) has both a Qualifying Volume (QV) and Commissionable Volume (CV) assigned to it. QV is used for Personal Volume (PV), Group Volume (GV), and Downline Volume (DV) calculations and is used solely to determine if the Consultant is qualified based on the conditions of their respective title. The Power Seller Bonus is the only bonus that is paid out based on the Qualifying Volume (QV) instead of the Commissionable Volume (CV). All other bonuses are paid based on Commissionable Volume (CV). The Qualifying Volume is equal to the Retail Price less GST. Consultants that have at least $1,000 PV and are paid-as a Senior Consultant will receive this bonus for each Level 1 Consultant they have in that period that also has at least $1,000 PV. These Level 1 Consultants do not have to be new recruits. This bonus will pay month after month so long as the receiving Consultant has at least $1,000 PV and is paid-as a Senior Consultant, and the Level 1 Consultant also achieves a minimum of $1,000 PV in each month. When that Senior Consultant promotes to a higher title (and is paid-as a higher title) then they will no longer receive this bonus. However, if they are paid-as demoted to Senior Consultant (or demoted and paid-as a Senior Consultant) then they will once again receive this bonus, if qualified. The Consultant directly above another Consultant in the genealogy is considered to be the Sponsor. A Consultant s Start Date is the date (in Sydney, Australia) on which they completed their online enrolment to become a Consultant, and this enrolment was received by The Chefs Toolbox via their computer systems. This date is the start of the Consultant s contract with The Chefs Toolbox, and is shown on their Profile online. It is used to calculate incentives and some concepts in this Career Plan, as stipulated. If a Consultant is terminated or resigns, they may request reinstatement at any time and, if approved, will be reinstated under their original sponsor. Their downline organization will not be reinstated nor their previous title. FunStart, FastStart Double Bonus or other new-consultant incentives do not apply to reinstated Consultants. If a Consultant wishes to join under a different sponsor, they must wait for a minimum of six months after termination before reapplying and will start as a new Consultant, without their former downline and title. After a Consultant has promoted to a Badge Title, they may maintain that title by meeting all of the same qualifications each period (except for Senior Director and above which has one additional requirement see New GM in 24 month rolling period). If they do this, then they will be Paid-as their Badge Title (their Badge Title and Paid-As Title will be the same). If they fail to maintain their Badge Title qualifications, then they will be paid-as whatever title they do qualify for. See also Demotion Policy. 7
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