Career Plan Terms and Conditions updated as at 1 October 2017

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1 Career Plan Terms and Conditions updated as at 1 October 2017 A note about how Career Plan months are calculated: All calculations and criteria related to the Career Plan rewards are calculated on a calendar month basis, and based on the local time in Sydney. Each month ends at exactly 6.00pm local time on the last calendar day of the month. For example, the month of June is calculated from 6.01pm on 31st May, until 6.00pm on the 30th of June (Sydney time). Explanation of terms and conditions Active A Consultant (of any Badge Title) is Active when they reach 450 Personal Volume (PV) in a month. Active Leg 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. An Active Leg is when at least 1 Consultant is Active anywhere down a given Leg. Badge Title A Consultant s Badge Title is the highest title they have achieved (been Paid As) in the Career Plan. You can think of this as your job title if you like. See Paid As Title and Badge Title Maintenance for the related information. Badge Title Maintenance and Changes After a Consultant has promoted to a Badge Title, they maintain that Title by meeting all of the Title qualifications each month. 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 in that month. If they don t get Paid As their Badge Title for 1 month, in the 2nd month after that their Badge Title will become the same as their Paid As Title in the 2 nd month. (The month of promotion does not count as Month 1, the count of 1 starts after the month of promotion.) Commissionable Volume (CV) This is used to calculate most downline bonuses, the ones which you earn as a reward for the time and effort you put into managing and supporting your team. It s calculated as 80% of PV (as 20% profit has already be paid on the Personal Volume, see Personal Volume PV). For example if your Team Volume is 10,000 your Management Bonuses will be paid on 8,000 CV.

2 Downline All Consultants (who are not suspended) below you are considered to be part of your downline. However they must be Active in order to count towards your bonus payments. Group Volume (GV) Group Volume is the sum total of the PV from the Consultant themselves and their entire downline, down to but not including the next Executive Manager+ (Badge Title). Group Volume is used to calculate a Consultant s qualification for M+ titles, and is shown on Graphical Genealogy and jcoach in the Consultant Portal. KitchenAid From 1 May 2017, The Chefs Toolbox is in partnership with KitchenAid Australia, which allows The Chefs Toolbox and our Consultants to sell defined KitchenAid products only in Australia via accredited Consultants Discovery Classes. Separate terms and conditions apply to Consultants to be able to offer this, and separate bonuses and profits also apply for such sales. Offers available to Consultants and Customers may change from time to time depending on KitchenAid and The Chefs Toolbox s commercial arrangements. Level The position a Consultant has in a downline relative to their Upline Consultant. Management Bonus on Levels 1 and 2 (Senior Consultant, Manager & Senior Manager only) Management Bonus is a percentage bonus paid down one or two levels on the Commissionable Volume (CV) generated. A Paid as Senior Consultant - earns 3% on their level 1 (no payment on level 2 or beyond) A Paid as Manager - earns 6% on their level 1 (no payment on level 2 or beyond) A Paid as Senior Manager - is paid 6% on level 1 and 5% on level 2 Monthly Bonuses PowerSeller Bonus, Management, Team Volume and Leadership Bonuses are all paid on the 15th of the month, for the previous month s sales achievements. Where the 15th falls on a weekend or public/bank holiday in Sydney, payment will be made the following working day. Your monthly bonus statements can be accessed in your Consultant Portal under the My Earnings >> Commission Statement (available after the bonus run has been completed on the 15th of the month). Please note that the Commission Statement shows payments excluding GST. You will also be sent an EFT remittance for the payments sent to your bank account. Paid As Title Each Consultant is paid at the title for which they qualify during the month. This is not necessarily the same as their Badge Title. For example, Kathleen is a Badge Title SM, but in January her team only achieves 8,500 GV. Therefore, for January, Kathleen will be Paid As a M. She will not lose her Badge Title of SM (see also Badge Title Maintenance)

3 Personal Volume (PV) PV = retail price of a product minus GST*. For example, when you sell $4,400 (Australian Dollars) in one month, your PV = 4,000. PV is used to calculate a Consultant s personal sales achievements in a month. Most products which you sell to Customers carry PV, which is shown on the sales order screen as you process orders. Your accumulated PV for the month is also shown in real time in your jcoach and Graphical Genealogy displays. Consultant-only items, Host Special Price items, shipping and handling, items obtained for free via ChefsClub redemption and certain other products specified from time to time do not accrue PV for the Consultant. PV is used to calculate Group Volume (GV). The Power Seller Bonus is the only bonus that is paid based on PV. *KitchenAid sales PV values are set at specific levels, refer separate document. PowerSeller Bonus 1-3 (Volume Rebate) Consultants can earn 20-30% profit*, the more you sell the more you earn! Consultants who achieve a minimum of 4,000 PV in a month will be qualified to receive an additional PowerSeller Bonus. The additional percentage bonus (see table below) will be paid on the total PV of orders which add to form current month s PV. For example, Jake achieves 6,500 PV in March. He is eligible for PowerSeller Bonus 1. This is calculated as an additional 5% on the whole 6,500 PV he achieved, which will pay him an extra $325 for March. PowerSeller Bonus (shown as Volume Rebate on statements) is paid along with all other Bonuses, on the 15th of the following month.

4 Profit Payments: Weekly The 20% profit* which Consultants earn from retail sales is paid weekly on Fridays via EFT into their nominated bank account. Payment is made on Friday for all order processed up until the previous Friday (midnight, Sydney time). An EFT remittance is ed once payment is made. We recommend that Consultants store all EFT advices, statements and invoices for tax and business records. Where Friday is a public holiday in Sydney, payment will be made the following working day. *KitchenAid sales attract a different level of profit, also paid weekly, please refer to separate document. Promotion A Consultant promotes to a new Badge Title when they meet all of the qualifications for that title in a month for the first time. Their promotion is effective the first day of the month, even if they qualify at any time during that month. For example, when Kate meets all the qualifications for a Manager on 23 June, she will promote to the title of Manager for the entire month of June (effective 1 June) and will be Paid As a Manager for the entire month of June. Reinstatement Policy If a Consultant is suspended or resigns, they may request reinstatement at any time and, if approved, will be reinstated under their original Sponsor. The cost to re-join or re-activate is $0. Their downline will not be reinstated nor their previous title. The Go For It Program or other new-consultant incentives do not apply to reinstated Consultants, unless a special offer is in place at the time or an exemption is made. If a Consultant wishes to join under a different Sponsor, they must wait for a minimum of six months after suspension before reapplying and will start as a new Consultant, without their former downline and title. Sponsor The person who introduces a person to The Chefs Toolbox and processes the online enrolment for them is considered to be the Sponsor. Over time, as Consultants resign or are suspended, this may change. In this case, the Consultant directly above another Consultant in the genealogy is considered to be the Sponsor. Start Date (Enrolment Date) A Consultant s Start Date is the date (in Sydney, Australia) on which their Sponsor completed their online enrolment on their behalf to enrol them as a Consultant. The Start Date is the date on which 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 like Go For It Program and some concepts in this Career Plan. Suspension Consultants must achieve a minimum of 1,000 PV over a 4-month period (4 consecutive calendar months) in order to remain a Consultant and keep their downline. If they fail to meet this requirement in any 4-month period, their contract with The Chefs Toolbox will be suspended automatically at 6.01pm AEST (Sydney time) on the last calendar day of the 4th month. Their downline will be given to the next Upline Consultant who is in good standing. Suspended Consultants are not allowed to continue to sell products, represent themselves as Consultants, nor access the Company s web sites or systems. See also Reinstatement Policy.

5 EXECUTIVE MANAGER & ABOVE ONLY Leadership Bonuses (GL+) Leadership Bonuses are paid to GLs+ in recognition of their focus on developing and supporting their downlines to promote to and maintain EM+. Leadership Bonuses are only paid when the GL+ maintains paid as status. They are paid as a percentage on the CV of the downline EM+ s Team Volume (incl the downline EM+ s own PV). When there is more than one EM+ Badge Title in one Leg, Generations start count from the first EM+ in a leg = Generation 1, the next one down is = Generation 2 and the next one down is = Generation 3. Promoting to Group Leader (GL) Developing an EM in many cases means their Upline will promote to GL, if they are not already a GL+. An EM s GV is not counted towards the Upline s GV, and both must reach GV targets in their own right (see also Grace Period) to qualify Paid As each month. Exception: ONLY in the month of the downline s promotion to EM, the new EM s volume will count towards their Upline s GV to help their Upline qualify for their title. As this volume counts for the Upline to promote to GL, they have met their own GL GV target, therefore all that is required to promote to GL is PV and Active Legs targets (4 Active Legs or more, not including the new EM) to be met. To support your maintenance of the GL level as you strengthen your business after an EM promotion, Grace Period applies to reduce your GV requirement slightly. Note: Promoting to and maintaining GL is necessary for you to earn Leadership Bonuses on your downline EM and their team. Leadership Bonuses apply only from GL and higher. EMs earn Team Volume Bonus on their GV, excluding the GV of any downline EM+.

6 Grace Period (EM+) Grace Period is a reduction in the GV requirement for EM+ to be Paid As when they have a new EM+ promote within their team, to allow you a period of 3 months during which you can focus on building your Group Volume up away from the new EM+ s team. Example: Month What s happening Your GV requirement to be Paid As MARCH A new EM+ promotes within your team. APRIL Grace Period Month 1 12,000 GV* MAY Grace Period Month 2 12,000 GV* JUNE Grace Period Month 3 12,000 GV* JULY Grace Period has ended, you need to achieve the full criteria for your Badge Title in order to maintain your Paid As status *Your new EM+ s GV no longer counts towards your GV. 25,000 GV (during this month, the new EM+ s GV still counts towards your GV) 25,000 GV* Grace Period only applies for the Upline when an EM+ promotes for the first time, it does not apply to re-promotions. If you have a second EM+ promote during the same time period as the first, your GV requirement drops to zero for the months in which the Grace Periods overlap for the two new EM+. Holiday Month (EM+) Holiday Month is an added benefit offered to Badge Title EM+. The intention of this benefit is to allow leaders to plan for their Holiday Month to take a break from their business, and still be Paid As their Badge Title in the nominated month. Requests for Holiday Month must be ed to support@chefstoolbox.com prior to the beginning of the Holiday Month being requested. During the Holiday Month, the EM+ must achieve minimum 450PV to be eligible for bonus payments. Actual bonuses paid are based on the volumes achieved by their team as per the Career Plan. Holiday Month is limited to 1 per calendar year, and does not carry forward if not used in a given year. Holiday Month does not count as Paid-As qualified for title maintenance or incentives that require Paid As status.

7 Team Volume Bonus (EM+) Paid As EM+ earn 7% Team Volume Bonus on their team down to but not including the next Executive Manager+ (Badge Title). As with all other Management and Leadership Bonuses, Team Volume Bonus is paid on CV. Team Volume Bonus is calculated based on the EM+ s Group Volume minus the EM+ s own Personal Volume. Example: Casey is an EM, and her GV for the month is 27,500. Her PV is 5,500. Her Team Volume Bonus is based on her GV minus her PV and will be paid on the CV. GV 27,500 PV 5,500 = 22,000. Her TV is 22,000 = CV 17,600. Her Team Volume Bonus is 7% of 17,600 = $1,232.