The Melaleuca Compensation Plan

Transcription

1 The Melaleuca Compensation Plan Melaleuca s Consumer Direct Marketing program provides the opptunity f people to succeed through their own effts. Tens of thousands of families are now competing directly with maj manufacturers of nutrition, pharmaceutical, bath & body, and home care products and winning! When customers purchase Melaleuca products each month, profits from those sales go directly to families across Nth America rather than to large cpations. Frank L. VanderSloot Melaleuca CEO Melaleuca s Compensation Plan is designed to reward independent Marketing Executives who refer customers to Melaleuca products. The income you earn from your Melaleuca business is determined by three facts: the number of customers you have, the amount each customer purchases each month, and your effectiveness in building a marketing ganization that includes other Marketing Executives who help you expand your customer base as they build their own marketing ganizations. The key to understanding the Melaleuca Compensation Plan is to remember that all commissions and bonuses earned are based on the sale of products to end consumers. End consumers are customers who purchase products to use in their homes. You do not earn commissions and bonuses f recruiting signing up customers but you will be paid commissions whenever those customers buy products. And that can mean monthly residual income f years to come. The infmation on the next few pages explains the Compensation Plan, and is not representative of what any Marketing Executive will earn. Any representation guarantee of specific earnings would be misleading. Success with any business takes hard wk, diligence, perseverance, and leadership. Success with Melaleuca will depend on how effectively a Marketing Executive exercises those qualities. Frank L. VanderSloot, CEO melaleuca compensation plan BUILDING YOUR MELALEUCA BUSINESS 38

2 What are the Ways to Earn Compensation with Melaleuca? Following are several ways in which you can earn monthly commissions and bonuses as a Melaleuca Marketing Executive.* Product Introduction Commission: The first month you personally help new customers purchase Melaleuca products, you earn a commission of 2 of the total Product Points they purchase up to 10 Product Points. ly Enrolled Customer Commission: Beginning with your personal customers second month purchases, you can earn, 14%, of the Product Points they purchase monthly. Organization Commission: You earn commission on the Product Points purchased each month by customers enrolled by others in your ganization. Value Pack and Career Pack Commission: When customers you enroll assist in enrolling purchase a Value Pack Career Pack, you earn a $30 $0 commission. Weekly Pay: When you have a Quality Customer Sce of % higher you qualify to be paid weekly on the following three bonuses: 1. Product Introduction Commission of your new customer s first month Product Point purchase. 2. Quality Customer Bonus $2 f every quality Prefered Customer enrollment (after the first). 3. Value/Career Pack Commission $30 when your new customer purchases a Value Pack $0 when your new customer purchases a Career Pack. You could be paid $2 to $0 a week me! And this money is deposited via direct deposit into your account. One Advancement Bonus/Pacesetter Bonus: As you advance your business to a new status, you qualify to earn onetime advancement bonuses f each new status you achieve. If you rapidly advance through the Direct ranks, you can qualify to double each of these advancement bonuses and may earn over $13,0 from the One and Pacesetter Bonuses. Anyone can build this business to any height they desire. I know many people in my ganization who are making $00 to every month. And that is residual! What a marvelous feeling to help someone else change their life and financial situation. Debah Walters, Executive Direct III, Nth Carolina Leadership Development Bonus: Each time one of your personal Marketing Executives advances to Direct and above you earn an amount equal to 0% of the One Advancement ( Pacesetter) Bonus paid to your advancing personal each time they advance in status. To qualify f the Leadership Development Bonus your active status must be equal to higher than that of your advancing personal each time they advance in status. Leadership Pools: As your business grows, you can participate in a monthly leadership pool based on the increase of new customers in your ganization. Leadership Growth Bonus: Seni Directs and above may earn a Leadership Growth bonus paid from the Leadership Pools when they have net growth in their ganization during the month (over a rolling threemonth average). The bonus is $00 f Seni Directs and to $2,000 f Executives and Cpate Directs depending on their status. Preferred Customer Services Commission: You can receive commissions on everyday services you and the customers in your ganization use, like identity theft protection, wireless phone service and credit card purchases. Car Bonus: Seni Directs receive monthly and Executive Directs receive monthly f a qualifying car of choice. * See page 46 f complete details. 39 BUILDING YOUR MELALEUCA BUSINESS WHAT ARE THE WAYS TO EARN COMPENSATION WITH MELALEUCA?

3 How Much Can You Earn AS YOU GET STARTED? Once you ve enrolled, determined your participation categy, and reviewed your beginning checklist, you may wonder: What can I earn as I get started? Earnings in One Year Marketing Executives in 09 and who achieved the status of Seni Direct and above on the Pacesetter schedule earned significant income from their Melaleuca businesses (in U.S. dollars). Low $2,6 High $28,0 $6,613 There is no limit to how much you can earn in your Melaleuca business. It s all up to you your effts, your time commitment, your ability to learn and duplicate proven methods, and your dedication to success. The faster you build your business and the me people who join your ganization, the me success you will enjoy. Melaleuca offers a unique bonus to those who move quickly soon after they enroll. The Pacesetter Bonus allows advancing Directs the opptunity to double their onetime advancement bonuses through the Direct levels, including advancement to Seni Direct. The table below shows an example of the potential income available when you follow the Pacesetter Program. POTENTIAL EARNINGS IN THE First Two Months f Categies 2 and 3 Following is a realistic example of how much you can earn in your first two months with Melaleuca if you achieve the status of Direct and Direct II. Whatever your goal, it s here f you if you re willing to put fth the efft. You can reach your goals. We know we did it. Bruce and Kirstin Newby, Cpate Directs, Texas Earn $00+ Your First Month Achieve Direct Product Introduction Commission ( to 2 of total Product Points)....$130 Quality Customer Bonus...$1 Pacesetter Direct Bonus...$0 4 Value Pack Commissions ($30 each)....$1...$62 The average earnings of those who reach Direct in their first month is $614 F a complete representation of what Marketing Executives earn with their Melaleuca business, see the Compensation Plan the Income Statistics in this booklet. All figures in U.S. dollars. Earn $800+ Your Second Month Achieve Direct II Product Introduction Commission ( of total Product Points).... $1 Pacesetter Direct II Bonus (paid over three months).... Quality Customer Bonus (Four Quality )... $ 4 Value Pack Commissions ($30 each)....$1 Organization Commission (from 1st month enrollees)....$0...$81 HOW MUCH CAN YOU EARN as you get started? BUILDING YOUR MELALEUCA BUSINESS 40

4 The Pacesetter Program Example If you enroll on August 1, August would be your month of enrollment. You have two calendar months September and October, in this case to achieve Direct status. You would then need to advance one Direct status each month to continue on Pacesetter time frame. Pacesetter Bonus The Pacesetter Program is part of Melaleuca s Compensation Plan. New enrollees can earn up to $0 when they buy a Career Pack Value Pack and become a Direct. This bonus rewards new enrollees f moving rapidly to Direct level. To Qualify f the $0 Pacesetter Direct Bonus: 1. become a Preferred Customer, 2. buy a Value Career Pack, and 3. become a Direct within the first two calendar months following your month of enrollment. Pacesetter Bonus f Directs & Seni Directs Advancing Directs through Seni Direct, and Advancing Seni Directs II through Seni Directs IX, can double their One Advancement Bonuses each time they advance, depending on whether they meet the Pacesetter timeline. One Advancement Bonus Pacesetter Bonus New Pacesetter Direct # of ly Enrolled Leadership Points Required Directs Required Months to Qualify from of Enrollment Direct $0 $0 8 1* 0 2 Months Direct II $ Months Direct III $300 $ Months Direct IV $ Months Direct V $ Months Direct VI $600 $1, Months Direct VII $00 $1, Months Direct VIII $800 $1, Months Direct IX $2, Months Seni Direct $2,000 $4, Months Months Since Achieving Seni Direct Seni Directi II % % 1 Month Seni Direct III % % Months Seni Direct IV % % Months Seni Direct V % % 12 4 Months Seni Direct VI % % 12 Months Seni Direct VII % % Months Seni Direct VIII % % Months Seni Direct IX % % 14 9 Months Executive Direct % 1 12 Months Note: PEG ( Enrollee Group) volume is the total ganizational Product Point volume of a Marketing Executive's Enrollees in any given month. F advancing Directs to qualify f Pacesetter Direct bonuses, they must hold their new status f three consecutive months. *Must earn at least one Leadership Point in any 3 month period to qualify. 41 BUILDING YOUR MELALEUCA BUSINESS pacesetter program

5 New Marketing Executives may qualify f the Quality Customer Bonus in their first three months of enrollment. Thereafter, they must be a Direct above to qualify. Seni Directs and above who have developed a new Direct in the last three months two Directs in the last six months and whose status is equal to greater than an advancing Enrollee, can qualify f this bonus. Leaders with a Quality Customer Sce of % above qualify and can be paid these bonuses weekly. Directs and above are guaranteed to earn the ly Enrolled Customer Commission on the customers they personally introduced and enrolled in Melaleuca even if the Direct produces no Leadership Points in any given month. In any six month period, if a Direct earns at least one (1) Leadership Point, he/she will be eligible to earn ly Enrolled Customer Commission and a commission on product points produced by customers in their ganization f whom they did the presentation. In any three month period, if a Direct earns at least one (1) Leadership Point, he/she will be eligible to also earn Organization Commissions on product points produced by customers in their ganization. Additional requirements may apply. Interpretation of the Compensation Plan is solely at the discretion of Melaleuca. See Statement of Policies #44. * Presidential Direct 0 1,000,000 1,000, cr.,000 Cpate Direct IX 0 800, , cr. % Cpate Direct VIII 0 00,000 00,000.0 cr. % Cpate Direct VII 0 600, , cr. % Cpate Direct VI 0 2,000 2, cr. % Executive and Cpate Direct Leadership Cpate Direct V 0 40,000 40, cr. % Cpate Direct IV 0 400, , cr. % Cpate Direct III 0 30,000 30, cr. % Cpate Direct II 0 300, ,000. cr. % Cpate Direct 0 20,000 20,000 $0,000 + % Executive Direct IX ,000 22, % Executive Direct VIII 0 1 0,000 0, % Executive Direct VII 0 1 1,000 1, % Executive Direct VI ,000 10, % Executive Direct V , ,000 4 % Executive Direct IV 0 1 1,000 1,000 3 % Executive Direct III ,000 90,000 2 % Executive Direct II 0 1 0,000 0,000 1 % Executive Direct 0 1 0,000 0, % $00/ Seni Direct IX ,000 40,000 9 % % Seni Direct VIII ,000 3, % % Seni Direct Lead Seni Direct VII ,000 32, % % Seni Direct VI ,00 30,000 8 % % Seni Direct V ,000 2, % % Seni Direct IV ,00 2, % % $00/ $00/ $00/ $00/ $00/ $00/

6 ership Direct Leadership Customer Referrals Seni Direct III ,000 22,00 6 Seni Direct II 0 22,00,000 Seni Direct 0,000 1,00 Direct IX ,00 1,000 4 Direct VIII ,000 12,00 4 Direct VII ,00,000 3 Direct VI ,000,00 3 Direct V 0 13,00,000 2 Direct IV ,000 2,00 2 Direct III ,00 1,000 1 Direct II 0 2 1,000 Direct 0 8 1* Marketing Executive III Marketing Executive II Marketing Executive 2 29 Number of Generations on Which Organization Commission Is Paid Monthly Product Point Production Required f This Number of Required f This Monthly Leadership Point Production Required f This (3Month ) Monthly Organization Product Points Required Monthly PEG Volume Required ly Enrolled Directs ly Enrolled Seni Directs ly Enrolled Executive Directs QUALIFICATIONS MELALEUCA COMPENSATION PLAN Months Since Enrollment Pacesetter Since Achieving Seni Direct Schedule First Generation Positions Available % % % % $00/ $00/ $2,000 $4,000 0% 0% 14%/ $4,000 $2,000 0% 0% 14%/ $3,00 $800 $1,600 0% 0% 14%/ $3,000 $00 $1,400 0% 0% 14%/ $2,00 $600 $1,0 0% 0% 14%/ $2,000 $00 0% 0% 14%/ $1,00 $800 0% 0% 14%/ $300 $600 0% 0% 14%/ $0 $0 0% 0% 14%/ $00 $0 $0 0% 0% $0 $0 $0 Product Introduction Commission Career / Value Pack Commission Quality Customer Bonus Organization Commission Maximum Organization Commission Available One Advancement Bonus Pacesetter Bonus Monthly Car Bonus Leadership Development Bonus Customer Commission Leadership Development Bonus f Qualifying Senis and Above Leadership Growth Bonus Leadership Pools Residual Income f wk you ve done Paid Weekly New customer bonuses that can be paid weekly Organization Commission Residual Income paid on wk done by others in your ganization Advancing and Helping Others to Advance Bonuses paid when you advance from one status to the next help others to advance to the next status Leadership Pools Bonuses paid when you grow your ganization PERSONAL COMMISSIONS LEADERSHIP BONUSES

7 Compensation Summary Product Introduction Commission. As the Enroller, you earn up to 2 commission on the first 10 Product Points purchased by your personal customers when they shop in their first month (Select Pack and Backup Orders excluded). If you are the immediate Marketing Executive in the customer s suppt team, you earn. If you are the Enroller, you earn. If you are both, you will earn 2. The Quality Customer Bonus. When you quality enroll your first new Preferred Customer f the month, you trigger your qualification to receive the Quality Customer Bonus on all future quality enrollments f the month. After quality enrolling one Preferred Customer in a month, you will earn $2 f every additional Preferred Customer you quality enroll. Therefe, you earn $2 f your second new quality customer, third new quality customer, and so fth each month. Definitions you need to know: Quality Customer Enrollment A qualityenrolled customer will have a Membership Kit on file. All necessary paperwk must be received by Melaleuca, and they will have fulfilled their monthly Product Point commitment by placing an der in their first month. (Receiving a Backup Order Select Pack will not qualify them as a quality customer.) Quality Customer Sce The Quality Customer Sce is the percentage of your personal preferred customers enrolled in the past five months (the current month plus the previous four months) who continue to be Preferred. Who can earn the Quality Customer Bonus? All active status Directs and above Marketing Executives in their month of enrollment and the two months following ly Enrolled Customer Commission. As an active Direct, the commission paid on your personal customers Product Point purchases increases to 14% (with 8 to 19 personal customers). When your active personally enrolled customers increase to, you earn on all Product Points, up to 10, generated by each of those customers each month. Organization Commissions. Each month that you qualify as an active Marketing Executive, you will receive a commission of on the first 10 Product Points purchased by each customer in your Marketing Organization. You earn the Organization Commission from customer purchases in months following the customer s month of enrollment. To qualify f commissions in the customer s second and third months, the customer must shop and place a minimum Product Point der. Career/Value Pack Commission. Marketing Executives earn $30 on the Value Packs and $0 on the Career Packs purchased by their new customers in the customer s first two months following the month of enrollment. may purchase up to two packs, but the commission is only paid on the first pack purchased. A Marketing Executive may earn the Career/Value Pack Commission if they are designated as the Assist on the Customer Agreement fm of a new Customer who is not their personal customer. One Advancement Bonuses. When you advance to Direct and each Direct status through Direct IX f the first time, you earn a onetime advancement bonus beginning with $0 at Direct and increasing by $0 f each status to at Direct IX. When you advance to Seni Direct f the first time you receive a onetime advancement bonus of $2,000. However, when you advance in Pacesetter time frame, your advancement bonus is doubled at each qualifying status. When you advance f the first time to Seni Direct II through Seni Direct IX, you receive a full % of your Enrollee Group volume as a onetime bonus, if you advance in Pacesetter time frame your advancement bonus is doubled to a full % of your Enrollee Group volume! When you advance to Executive Direct through Cpate Direct IX you receive % of your Enrollee Group volume as a onetime bonus. When you advance to Presidential Direct, you receive a onetime bonus of,000. Advancement Bonus Payouts. Marketing Executives are paid a onetime Advancement Bonus Pacesetter Bonus in the month they advance to Direct f the first time. 1. As Marketing Executives advance from Direct to Direct II and beyond, they are paid an Advancement Bonus f each new high status they achieve. Marketing Executives advancing to Direct II and Direct III status f the first time will receive one third of the Advancement Bonus Pacesetter Bonus in the month of advancement, onethird the second month and one third in the third month (assuming they maintain that status f consecutive months). 2. Beginning with advancements to Direct IV and above, Marketing Executives who have an Organization Retention rate of 90% higher will receive one third of the Advancement Bonus Pacesetter Bonus in the month of advancement, onethird the second month and one third in the third month (assuming they maintain that status f consecutive months). All other Marketing Executives must maintain their new status f three (3) consecutive months to receive the One Advancement Bonus Pacesetter Bonus. The Organization Retention Rate is calculated by taking the total number of cancellations in the current month divided by the total number of Preferred in the ganization at the end of the previous month and subtracting that from 0%. F example, if you had 0 Preferred at the end of last month and a total of cancellations in the current month, your Organization Retention Rate is 9% (0 (/0)) = 9%. Marketing Executives who have an Organization Retention Rate less than 90% will be paid the Advancement Bonus after they have held that status f 3 consecutive months. If, however, the Marketing Executive increases their Organization Retention Rate to 90% above during any of the 3 qualifying months, they will be paid 1/3 of the Advancement Bonus as part of that month s commission check. When a Marketing Executive qualifies f an Advancement Bonus and has a qualifying Organization Retention Rate of 90% higher, 1/3 of the Advancement Bonus will be paid out with that month s commission check. If the Marketing Executive does COMPENSATION summary BUILDING YOUR MELALEUCA BUSINESS 44

8 not maintain that status the next month, the unpaid ption of that advancement bonus will be deferred until they reach that status again. The Leadership Development Bonus How you earn this bonus: Help your personally enrolled Marketing Executive advance to Direct and above. To qualify, your active status must be equal to, higher than, that of your advancing personally enrolled Marketing Executive. What you earn: You will earn an amount equal to 0% of the onetime Advancement ( Pacesetter) Bonus paid to your advancing personal each time they advance in status. When this bonus is paid: You are paid in any month in which your personally enrolled Marketing Executive is paid an Advancement Pacesetter bonus. You are paid on every advancement! To earn the Leadership Development Bonus, your advancing personal needs to advance in the same month they achieve the ganization volume required f the status do so within the two months following the month they first achieved the required ganization volume. In other wds, your personal needs to have the required number of personal Directs during the first month he she reaches the ganization volume of the new status (there will be a threemonth grace period f this requirement, i.e. two additional months to develop the required number of Directs). then select your new car truck and let Melaleuca start paying f it! Seni Directs receive a month towards a vehicle valued in excess of $1,000. Executive and Cpate Directs receive a month towards a vehicle valued in excess of $30,000. Your Melaleuca vehicle must be new nearly new (less than 24 months old). Leadership Pools Directs III and above can participate in a monthly Leadership Pool. Directs III through IX, Seni Directs, and Executive/Cpate Directs share in the pools accding to the Pool Fmula. The Pool Fmula is: (Retention Fact x Net Preferred Customer Growth x Fact) + Leadership Points. Leadership Points Leadership Points measure the level of suppt a Marketing Executive provides to his her ganization. Melaleuca s Compensation Plan requires each Direct II and above to regularly produce Leadership Points. Up to six Leadership Points are available f enrolling a new Preferred Customer. These six Leadership Points are distributed as follows: Enroller 3 Leadership Points Earned by the enroller who is the Marketing Executive who provided the name of the new Preferred Customer. Seni, Executive, and Cpate Directs who have developed at least one new Direct in the pri three months ( two new Directs in the previous six months) will earn 0% of the onetime Advancement ( Pacesetter) Bonus paid to their advancing personal enrollees each time their personal enrollee advances in status on each advancement up to Seni Direct! Seni, Executive, and Cpate Directs will earn $00 each time their personal advances to a status of Seni Direct II through Executive Direct. Or if a Seni, Executive, Cpate Direct has developed at least one new Direct in the pri three months ( two new Directs in the previous six months), they will be paid each time their personal advances to a status of Seni Direct II through Executive Direct. Presenter Career/ Value Pack 2 Leadership Points 1 Leadership Point Earned by the Marketing Executive who gave the majity of the presentation that resulted in the enrollment of the Preferred Customer. Awarded to the presenter if the new Preferred Customer purchases a Career Value Pack during the month of enrollment. Direct Development Incentive. In any month in which a Direct above develops a new personal Direct, the Leadership Point requirements f status will be waived f that month and the following two months as long as the personal Direct remains active. Directs III and above will earn 1 Leadership Points f developing a new Direct. Monthly Car Bonus. Move your business to Seni Direct, Additional Incentives / Club Marketing Executives who develop personally enrolled Preferred earn the / Club award. Certificates of Achievement and Recognition Each time Marketing Executives advance to a new status, they receive a Certificate of Achievement, a gold pin signifying the status achievement, and are recognized in the Leadership in Action magazine. 4 BUILDING YOUR MELALEUCA BUSINESS Compensation Summary

9 Leadership Pools Each month, Melaleuca pays total commissions equal to 1% of total company Product Points. In any month where the payout is less than 1%, the difference between total Product Points and commissions paid out is added to the Leadership Pools. Directs III through Directs IX with growth in the number of net Preferred share in the Direct Pool accding to The Pool Fmula. Seni and Executive Directs with growth in the number of net Preferred in their ganization (over a rolling 3month average) earn a Leadership Growth Bonus, plus share in the remaining pool dollars accding to The Pool Fmula. The Pool Fmula + = + (Retention Fact * Net Preferred Customer Growth Fact) Leadership Points Pool Points (used to calculate your share of the total Pool) + *Up to 0 in any given month Fmula Components 1) Retention Fact: Calculated by first determining the number of Preferred enrolled in the ganization in each of the previous five months. Then determine how many of those iginally enrolled customers are Preferred in the current month. Next the number of Preferred still remaining is divided by the number of Preferred iginally enrolled (customers remaining/ customers iginally enrolled). This process is repeated f each of the past five months. This will result in five percentages one f each of the past five months. Finally, add those percentages together and divide by. The resulting number is the month ARI Retention Index f the current month. If the ARI is in the top third of those in the Leadership Pool, a Retention Fact of 3 will be assigned f the Pool Calculation. If the ARI is in the middle third of those in the Leadership Pool, a Retention Fact of 2 will be assigned. If the ARI is in the bottom third, a Retention Fact of 1 will be assigned. 2) Net Preferred Customer Growth: Calculated by taking the greater of the average ganization net Preferred Customer (PC) growth f the previous three months the current month s PC growth divided by three (excluding rollups) up to a maximum of 0. Participants in the Direct and Seni Direct pools must have PC growth to participate in the pools. Executive and Cpate Directs can participate in the Leadership Pool without Preferred Customer growth, but will be automatically assigned an Fact (ASF) of ) Fact: Dir III Dir IV Dir V Dir.VI Dir VII Dir VIII Dir IX Sr Dir Sr Dir II Sr Dir III Sr Dir IV Sr Dir V Sr Dir. VI Sr Dir VII Sr Dir. VIII Sr. Dir. IX Exec Dir Exec Dir II Exec Dir III Exec Dir IV Exec Dir V Exec Dir VI Exec Dir VII Exec Dir VIII Exec Dir IX Cp Dir ) Leadership Points: Any Marketing Executive who earns a 3month average of 0 0 Leadership Points in the applicable month will receive two times the Leadership Point credit f that month. Leadership Points earned from the Marketing Executive s personal enrollments are limited to 40 f the pool fmula in the pool calculation. Leadership Growth Bonus Monthly Bonus Sr Direct Sr Direct IX...$00 Exec Direct... Exec Direct II... $1,0 Exec Direct III... $1,300 Monthly Bonus Exec Direct IV... $1,400 Exec Direct V... $1,00 Exec Direct VI... $1,600 Exec Direct VII... $1,00 Monthly Bonus Exec Direct VIII... $1,800 Exec Direct IX... $1,900 Cp Direct... $2,000 LEADERSHIP pools BUILDING YOUR MELALEUCA BUSINESS 46

10 ADDITIONAL LEADERSHIP BONUS INFORMATION This section outlines the leadership bonus opptunities and requirements f active Directs III and above, Seni Directs, Executive Directs, and Cpate Directs. These bonuses are designed to reward leaders who are creating growth within their ganization and who continue to help others reach their goals. Leadership Points Required f Leaders Directs above who have achieved,000 me Organization Product Points are required to produce an average of Leadership Points per month. Directs above with an Organization Product Point Volume of 0,000 me will be required to produce an average of 1 Leadership Points per month in der to receive all of the Organization Commission available to them. Those producing fewer Leadership Points will receive a percentage of the total commission available. Directs above with an Organization Product Points greater than,000 but with a PEG Volume less than their Organization Volume may receive an Organization Commission of up to % of their PEG Volume. Leadership Pool Infmation & Details Directs III through Cpate Directs can participate in exclusive leadership pools. The leadership pools are designed to reward those leaders who provide an ongoing contribution to their ganization by creating growth and helping others reach their goals. Directs III through IX can participate in the Directs' Leadership Pool up to a monthly amount equal to the status caps in place f their status ganization commission up to 90% of what they would make as a Seni Direct in the Seni Direct Leadership Pool, whichever is less. Directs III through IX must have a rolling threemonth average of five Leadership Points to participate in the pool. If the rolling threemonth average of Leadership Points is less than 1, participants may earn up to a maximum of $00 in the Leadership Pool. The Top 30 pool point earners will participate in an additional pool bonus. To be eligible f the Top 30 bonus, Directs must have a threemonth average of at least 1 Leadership Points. In calculating the average net Preferred Customer growth, Directs III through IX are limited to 0 in any given month. Seni Directs through Seni Directs IX may earn up to $4,000 of their PEG volume, whichever is greater (not to exceed $,000) from the Seni Direct Leadership Pool. Seni Directs may earn up to the maximum of 90% of what they would make as an Executive Direct in the Executive Direct pools. New Seni Directs will, in the third consecutive month as a new Seni Direct, receive double their nmal status fact f that month. In that month they may earn up to $8,000 of their PEG volume, whichever is greater (not to exceed $,000). The Top pool point earners will participate in an additional pool bonus. To be eligible f the Top bonus, Seni Directs must have a threemonth average of at least 40 Leadership Points. In calculating the average net Preferred Customer growth, Seni Directs through Seni Directs IX are limited to 0 in any given month. Top pool point earners in the Direct pools may not have been active Seni Directs previously. Top pool point earners in the Seni Direct pools may not have been active Executive Directs previously. To participate in the top pool ption of any Leadership Pool, Directs III and above must have a minimum threemonth average net Preferred Customer growth in their ganization of me Preferred. Leadership Growth Bonus Seni Directs and above can receive a minimum payout in the Leadership Pools. Seni Directs and above must have net growth in their ganization during the current month over a rolling 3month average. When they qualify by having average net growth, Seni Directs receive a bonus of $00 paid out of the Leadership Pools, and Executive and Cpate Directs receive to $2,000 depending on their status. When an active Seni Direct above develops a new firsttime Direct in the month, they receive a minimum of $00 to be paid out of the Leadership Pool f each new Direct. F example, if you develop 2 new directs, you would be guaranteed a minimum payout of from the Leadership Pools f that month. Onethird of the bonus may be earned in months in which the leader has growth in the current month, but has no growth over the rolling threemonth average. Road to Executive Direct Training This is one of the most infmative and effective events f Seni Directs wking their way to Executive Direct status. When Marketing Executives become Seni Directs, they are invited on an allexpensespaid trip to Melaleuca s Home Office in Idaho Falls, Idaho f a threeday training session, with the opptunity to tour Melaleuca s facilities and meet with Management Team members. 4 BUILDING YOUR MELALEUCA BUSINESS ADDITIONAL LEADERSHIP BONUS INFORMATION

11 Executive and Cpate Directs may earn 14% of their PEG volume $,000, whichever is less from the Executive Direct Pools. The top three producers of points in the Executive Direct pool may earn up to 14% of their PEG volume $40,000, whichever is less. The Top pool point earners will participate in an additional pool bonus. To be eligible f the Top bonus, Executive Directs must have a threemonth average of at least 40 Leadership Points and average Preferred Customer growth of at least. At least of these positions are reserved to Masters ( Executive Directs who have been with Melaleuca f me than years since becoming a Seni Direct). Qualifying Seni through Cpate Directs with negative growth over a rolling threemonth average, but positive growth in the current month will receive onethird (1/3) of their Leadership Growth Bonus. Seni, Executive, and Cpate Direct Guarantee. Seni Directs who grow by one net Preferred Customer in a month will be guaranteed a minimum of $00 from the Leadership Pools that month. Executive Directs who grow by one net Preferred Customer are guaranteed from the Leadership Pools that month, Executive Directs II who grow by one are guaranteed $1,0, Executive Directs III are guaranteed $1,300, etc. Seni, Executive, and Cpate Directs who develop a new Direct are guaranteed a minimum of $00 f each new Direct from the Leadership Pools that month. Direct Emergency Leadership Point Bank. Each time an active Direct III through Direct IX develops a new personal Direct, Melaleuca will give the leader an extra Leadership Points and automatically place those points in a bank. In any future month in which the Direct III through IX needs additional Leadership Points to qualify f status, points will be used from the bank to meet status requirements. Up to Leadership Points can be accumulated in the bank. Points can only be used by active Directs III above. Additional First Generation Position. An additional first generation position will be given to leaders who advance to Direct VI f the first time! Leadership Point Banking Program. By filling out the Leadership Point Insurance fm, active Seni Directs and above are able to bank Leadership Points produced in the current month. These points will remain in the bank until they are redeemed. These points can only be banked if the Marketing Executive has a rolling threemonth average of at least 1 Leadership Points. These points will automatically be redeemed if the leader s monthly average is less than 1. At that time only enough Leadership Points will be redeemed to ensure that the leader s average remains at 1. At the time of banking, the Leadership Points will not be used in the calculating of status Leadership Pools. When they are redeemed these points will count towards Leadership Pools and status. Leaders may only have a maximum of 90 Leadership Points banked at one time. Vesting. The key to vesting is enrolling customers and developing Directs over your lifetime with Melaleuca. The vesting opptunity at Melaleuca rewards those leaders who have made a significant contribution in leadership and growth to their business over a meaningful period of time. Because the Vesting Program rewards enrolling customers and developing Directs, leaders are not only earning commissions and building residual income, but they are also establishing the vesting credits that will benefit them in the longterm. Directs and above accumulate credits in their vesting account based on the development of new Directs and enrolling. When a Direct above does any of the following activities, they earn vesting credits in addition to Leadership Points as follows: After 4 Consecutive Months Months Enroll a Customer 1 credit 1 additional credit Develop a Direct 2 credits Develop a Direct V 2 credits Once an Executive Direct has achieved and maintained Executive Direct status f years ( out of 12 months in a year), he she can qualify to use their vested credits to meet their Leadership Point requirements as follows: Executive Direct Vesting Credits = 1 Leadership Point (:1) Executive Direct II 4 Vesting Credits = 1 Leadership Point (4:1) Executive Direct III 3 Vesting Credits = 1 Leadership Point (3:1) Executive Direct IV 2 Vesting Credits = 1 Leadership Point (2:1) Executive Direct V 1 Vesting Credit = 1 Leadership Point (1:1) and above As long as the Executive Direct maintains the respective status, they can use vesting credits in the ratios shown above. Note: all other requirements f achieving status must be met, including Directs, Organization Volume, and PEG Volume. Once a Seni Direct above has maintained active Seni Direct above status f years ( out of 12 months in each year) and the youngest person involved in the business is 69 years of age, and continues to meet all the requirements to remain an active Seni Direct under the compensation plan, they can use their vesting credits in lieu of Leadership Points f maintaining status at ratio of 1 to 1 as long as they meet all the ongoing requirements to remain an active status Seni Direct. Melaleuca s Vesting Program became effective March 1, 08. After 6 Consecutive What is vesting? Vesting means a Seni Executive Direct can use vesting credits to meet the Leadership Point requirements f determining status. Some have interpreted the concept of vesting as being exempt from being required to be in compliance with all of Melaleuca s policies. That is, of course, not the case. A vested Marketing Executive must still comply with all existing and future Melaleuca policies and other compensation requirements except that of producing Leadership Points. ADDITIONAL LEADERSHIP BONUS INFORMATION BUILDING YOUR MELALEUCA BUSINESS 48

12 A vested Executive Direct will still have to comply with policy 23, f example, which states, in part, that Marketing Executives have the ongoing responsibility to promote the Melaleuca business opptunity and to service, supervise, motivate and train the Marketing Executives in their Marketing Organization to sell and market the Melaleuca products and promote the Melaleuca business opptunity. Melaleuca reserves the option to establish whatever measurements it deems appropriate to assure compliance with any of its policies including policy 23. Of course, Melaleuca also reserves its option to change enhance the compensation plan as it deems appropriate to reward businessbuilding activities and to assure the health of the ganization as a whole. Additional Ways to Earn Leadership Points In addition to enrollments and presentations, leaders can also earn Leadership Points as follows: 1. Directs II and above will earn points f each new Direct they develop in any given month (when the Direct is not a Pacesetter Direct). 2. Directs II and above will earn 1 Leadership Points f each new Pacesetter Direct developed when they are both the enroller and they do the majity of the presentation points. Directs II and above who do the majity of the presentation points f the new Direct s s and the new Direct s s s will earn Leadership Points, and the Enroller will earn Leadership Points. 3. In the cases of #1 #2 above, if someone other than the enroller does the majity of the presentation points f customers enrolled by the new Direct, the enroller earns five Leadership Points and the Direct II above doing the presentations earns Leadership Points. 4. Directs II and above earn Leadership Points f each Enrollee who advances to a status of Direct II through Seni Direct in the month following the month of advancement. Please note: the advancement does not need to be a Pacesetter advancement, but the leader receiving the Leadership Points needs to have a status equal to greater than the advancing Enrollee up to but not past Seni Direct. Executive Direct Credits To advance beyond Cpate Direct, a Cpate Direct must maintain the minimum qualifications f Cpate Direct, which are: at least personally enrolled Directs (five of which need to be Executive Directs), achieve minimum Organization & PEG Volume equal to the status they are trying to achieve, and achieve the ly Enrolled Executive Cpate Direct credits. Executive Cpate Direct credits are calculated each month based on the active status of your personally enrolled Executive Cpate Directs as follows: Credit Credit Executive Direct 1.1 Executive Direct VI 1.6 Executive Direct II 1.2 Executive Direct VII 1. Executive Direct III 1.3 Executive Direct VIII 1.8 Executive Direct IV 1.4 Executive Direct IX 1.9 Executive Direct V 1. Cpate Directs 2.0 Volume Credits Once a Marketing Executive becomes a Seni Executive Direct and above and maintains that status f three consecutive months, his her Enroller can receive ongoing credit f that executive status as long as the enroller has an active status of Executive Direct II through Executive Direct IX and the Enrollee s Organizational Volume is maintained at the required level. This is f the purpose of calculating Enrollee requirements f Executive Directs II through IX only. Credit f Cpate Directs In der to qualify f Cpate Direct bonuses using volume status f Exeucutive Directs, a Cpate Direct needs to have net Preferred Customer growth each month. This growth includes international growth but excludes all rollups. A Cpate Direct who advances due to volume status will not receive the % PEG bonus, the 2% monthly bonus, 1% annual bonus until they have active Executive Directs. Cpate Directs II and above who advance with the volume status will not receive the 2% PEG bonus and the 1% annual bonus until they qualify with nmal qualifications. Cpate Directs who advance to Cpate Direct II through Cpate Direct IX must achieve and hold that new status f three months (may may not be consecutive) in der to earn the onetime % advancement bonus. Disability/Charitable Service Exemption Seni Directs and above who are disabled may apply f a Disability Exemption from the Leadership Point production requirements. Marketing Executives who are engaged in fulltime missionary charitable service away from their homes may apply f a Charitable Exemption from the Leadership Point production requirements. Contact Melaleuca Business Development at f instructions on submitting an application f these exemptions. 49 BUILDING YOUR MELALEUCA BUSINESS ADDITIONAL LEADERSHIP BONUS INFORMATION

13 09 Annual Income Statistics The majity (me than 60%) of those who buy Melaleuca products each month are strictly customers. They are not interested in pursuing the Melaleuca financial opptunity. They just love Melaleuca products. Only a few of them will ever decide to build a Melaleuca business. Customer Referrals 29% of all Melaleuca customers have referred at least one customer but fewer than eight customers. As those customers purchase products directly from Melaleuca, those who referred them receive a small commission. These households are not necessarily interested in the financial opptunity. Their relationship with Melaleuca is primarily because they love Melaleuca products. Their status is determined by how many customers they have referred. A Marketing Executive has at least one customer. A Marketing Executive II has referred at least two customers and a Marketing Executive III has referred at least four customers at some time in their life. While these individuals may not be considered serious business builders, their customers (like the vast majity of Melaleuca customers) come from wdofmouth referrals. Therefe, the overall contribution of these individuals is significant. Executive Percent at This Annual Income High Low to Achieve 1 Mkt. Exec. 3. $1,43 $24 $ Mo. 1 Mo. 3 Mo. Mkt. Exec. II 1.6% $2,169 $24 $ Mo. 1 Mo. 6 Mo. Mkt. Exec. III. $,82 $63 $ Mo. 1 Mo. 6 Mo. Shtest Longest Developmental Only 1 out of 9 customers (11%) will decide to start their own Melaleuca business and eventually achieve Direct status above. Directs have made a substantial efft (probably spent at least 0 hours) in developing at least eight Melaleuca customers. Those estimated 0 hours could have been spent in a single week could have been spent over several years. But at some point in their lives, Directs have invested enough time to develop (and maintain) at least eight Melaleuca customers. Executive Percent of Business Builders with This Annual Income High Low to Achieve 1 Shtest Direct I/II 84.4% $1,3 $10 $2, Mo. 1 Mo. 8 Mo. Longest Annual Income Statistics BUILDING YOUR MELALEUCA BUSINESS 0

14 Initial Leadership Leaders at these statuses have made a me serious efft at building a Melaleuca business. Those who have reached these leadership statuses have not only invested enough time to develop several customers, but they have also helped some of those customers start a business and become Marketing Executives. Those Marketing Executives have, in turn, referred additional customers who purchase Melaleuca products each month. Commissions are paid based on the development of customers and the development of leaders who help others reach their goals. Executive Percent of Business Builders with This Annual Income High Low to Achieve 1 Shtest Longest Direct III 84.4% $23,300 $2,03 $6, Mo. 1 Mo. 14 Mo. Dir. IV & V 6.1% $30,39 $4,14 $11, Mo. 1 Mo. 21 Mo. Dir. VI & VII 3.1% $42,601 $9,294 $18, Mo. 1 Mo. 22 Mo. Dir. VIII & IX 1.% $60, $,836 $26, Mo. 1 Mo. 23 Mo. Advanced Leadership Those Marketing Executives who reach Seni Executive Direct status have shown substantial interest and dedication in building a Melaleuca business. While they may not wk their business fulltime, it is essential that they invest some time each month nurturing, training, and helping those in their marketing ganization. Melaleuca advocates that Marketing Executives keep their fulltime job and wk their Melaleuca business in their spare time. However, some Executive Directs at the higher income levels do wk their business close to fulltime. Melaleuca strongly advocates that Marketing Executives do not quit their fulltime job until their Melaleuca income far surpasses the income they receive from their fulltime employer. Rather, they should add their Melaleuca income to their regular income, thereby making a substantial difference in their family finances. Executive Percent of Business Builders with This Annual Income High Low to Achieve 1 Shtest Longest Seni Dir % $213,92 $22,4 $4, Mo. 1 Mo. 22 Mo. Executive Dir. 3 1.% $639,386 $61,42 $149, ,641 4 Mo. 1 Mo. 23 Mo. Cpate Dir % $2,180,1 $19,01 $1,302,2 9 8,00 14, Mo. 1 Mo. 39 Mo. The above annual income statistics include all Melaleuca Nth American Marketing Executives who were active during all 12 months of the period ending December 09 and perfmed the minimum activity required at each status level. The incomes stated include all commissions and bonuses actually paid during the period. F the purpose of these statistics, a Marketing Executive s leadership developmental level was calculated by taking the highest status achieved and maintained f at least five consecutive months. The infmation on this page is not necessarily representative of what any individual Marketing Executive will earn with this program. Any representation guarantee of specific earnings would be misleading. Success with any business takes hard wk, diligence, perseverance, and leadership. Success with Melaleuca will depend on how effectively a Marketing Executive exercises those qualities. 1 Includes all active Marketing Executives joining Melaleuca within the past years. 2 Includes statistics f Seni Direct through Seni Direct IX. 3 Includes statistics f all positions of Executive Direct through Executive Direct IX. 4 Includes statistics f positions of Cpate Direct and higher. 1 BUILDING YOUR MELALEUCA BUSINESS Annual Income Statistics