COMPENSATION PLAN There are two fundamental ways in which a Wholesale Associate can earn bonuses: (1) through retail markups; and (2) through bonuses (sometimes called commissions) paid on a Wholesale Associate s product sales and the sales of other Wholesale Associates in his Organization. Retail Sales. Wholesale Associates buy elevare360 products from the Company at wholesale prices for resale to customers, for use as sales aids, or for personal consumption. The Company suggests retail prices. However, Wholesale Associates are free to set their own selling price, so long as the price is above the wholesale price, and the purchasers personally consume the products they purchase. Advertisements are to be in accordance with the Company minimum advertised price, or wholesale price. Bonuses. Wholesale Associates can also earn bonuses based on the sale of products in all markets where the Company conducts business. Not all products or promotions from the Company generate bonuses. All products or promotions that will generate a bonus are assigned a Personal Volume (PV) value. 1. Definitions Commissionable Order: An order that is assigned Personal Volume points, which is timely ordered and paid for by a Wholesale Associate or Preferred Customer. Company Volume: Company Volume is the total amount of personal volume earned by all Wholesale Associates currently doing business with elevare360, including the Wholesale Associate s own purchases, purchases by Preferred Customers, and purchases by Retail Customers. Frontline Organization: A Frontline Organization is the Organization of one of a Wholesale Associate s personally sponsored Wholesale Associates and his Customers. Local Market Volume: The collective Personal Volume of all Wholesale Associates that live in a designated Local Market. Organizational Volume (OV): The Personal Volume of a Wholesale Associate plus the Personal Volume of all other Wholesale Associates, Preferred Customers, and Retail Customers in the Wholesale Associate s Organization. Personal Volume (PV): The point value of products purchased by a Wholesale
2 Associate in one calendar month, primarily for resale to customers or personal consumption of the Wholesale Associate. Not all products qualify for PV value. PV does not include purchases of product with Product Credit. The PV of a product is clearly delineated on the Product Order Form. Qualified Leg: A Qualified Leg is an Enrollee who attains a designated Rank within a Frontline Organization of his Enroller. For purposes of an Enroller s Rank qualification, each Qualified Leg must be within a separate Frontline Organization of the Enroller. Qualified Monthly Auto Reorder (MAR) Orders: A Qualified MAR Order is a single MAR order over 100 PV in the qualifying month for a sponsored Wholesale Associate or Preferred Customer. All Qualified MAR Orders must be paid for by credit card in the name of the Wholesale Associate or Preferred Customer listed on the account, or with cash, and must be shipped to the primary address listed on the account. A Qualified MAR Order that is returned will result in recoupment of the unearned but previously paid bonus earned. Single Team Level: A term used in the Monthly Auto Reorder Bonus. A Single Level Team is made up of Wholesale Associates, retail customers and Preferred Customers who are organizationally on the first level (unilevel) of the Placement Sponsor s Organization. 2. Bonuses Compensation to Wholesale Associates is geared toward rewarding the sustained efforts of everyone from the beginning Wholesale Associate to the seasoned professional Wholesale Associate. elevare360 bonuses include the Retail Sales Bonus, Preferred Customer Bonus, 60-Day Smart Start Bonus, Monthly Auto Reorder Bonus, Team Commissions Bonus and Bonus Pools. 60-Day Smart Start--an Enroller-based bonus. Overview. A 60-Day Smart Start Bonus to Enrollers for all Commissionable Orders placed in the first sixty (60) days by a new Wholesale Associate. The bonus is paid to the new Wholesale Associate s first, second, and third level Enrollers. The first level Enroller receives twenty (20) percent, the second level Enroller receives ten (10) percent, and the third level Enroller receives five (5) percent. To qualify for the 60-Day Smart Start Bonus each Enroller must (1) have a Monthly Auto Reorder Program (MAR) order template set to purchase at least 100 PV for the
3 month, and (2) purchase a Qualified MAR Order. Unearned bonuses do not roll up to any other Enroller. 60-Day Smart Start Bonuses are paid monthly with other bonuses. No Team Commission (see below) is paid on these orders. Monthly Auto Reorder Bonus--a Sponsor-based bonus. Overview. The Monthly Auto Reorder Bonus is a monthly bonus paid to Sponsors of $100, $300, or $900. Any Sponsor with a Qualified MAR Order may participate in the bonus. The $100 Monthly Auto Reorder Bonus. In order to qualify for the $100 bonus, a Wholesale Associate must make a Qualified MAR Order. The Wholesale Associate must also have three personally sponsored Wholesale Associates or Preferred Customers with Qualified MAR Orders, and a minimum Single Team Level Volume (TV) of 500. The $300 Monthly Auto Reorder Bonus. In order to qualify for the $300 bonus, a Wholesale Associate must first qualify for the $100 Bonus. The three personally sponsored Wholesale Associates or Preferred Customers who assisted him to qualify for the $100 Bonus must also qualify for the $100 Bonus. The $900 Monthly Auto Reorder Bonus. In order to qualify for the $900 bonus, a Wholesale Associate must first qualify for the $300 Bonus. The three personally sponsored Wholesale Associates or Preferred Customers who assisted him to qualify for the $300 Bonus must also qualify for the $300 Bonus. Additional Monthly Auto Reorder Structures. Wholesale Associates can have multiple Monthly Auto Reorder structures. When a Wholesale Associate completes a $900 Monthly Auto Reorder structure, the Wholesale Associate can qualify to be paid on an additional structure. The personally sponsored Wholesale Associates and Preferred Customers and volume counted in the first bonus structure cannot be used to qualify a Sponsor for additional bonus structures. Team Commissions--an Sponsor-based bonus. Overview. Team Commissions are paid to Wholesale Associates each month. Team Commissions are based on the monthly volume of the Organization of the Wholesale Associate. A particular month s Team Commissions are dependent upon the monthly Rank for which the Wholesale Associate has qualified and the monthly Organizational Volume of the Wholesale Associate. The Rank and Organizational Volume
4 requirements must be met each month. Purchases on which 60-Day Smart Start Bonuses are paid are not included in Team Commission volume. Achieving Ranks. All Ranks require a minimum 100 PV purchase as well as a minimum Organizational Volume. Ranks and Levels. Each Rank corresponds to the number of organizational levels from which the Wholesale Associate can receive compensation. For example, the Rank of L4 receives compensation from four levels. Generally, as a Wholesale Associate advances in Rank, he is paid from deeper levels in his Organization, until he reaches L7. All ranks from L7 to E12 pay from at least seven levels.the percentage of OV that is paid to a Wholesale Associate also changes from level to level up to the seventh sponsorship level as indicated in the table below. The bonus cumulates levels of payment, so that an L4 will receive two percent (2%) for the first level, plus three percent (3%) for the second level, four percent (4%) for level three and five percent (5%) for level four. LEVEL % PAID RANK 1 2 A1 2 3 A2 3 4 A3 4 5 A4 5 5 L5 6 6 L6 7 7 L7 Qualified Legs and Pin Tiles. To achieve certain Ranks, a Wholesale Associate must have Qualified Legs on the Wholesale Associate s Frontline Organization. For example, a Wholesale Associate wishing to attain the Rank of L7 is required to have three L5 Qualified Legs. Sixth and Seventh Level Conditions. In order to qualify for bonus payments, commissions or other compensation on the sixth and seventh levels, a Wholesale Associate must (1) be Active, and (2) enroll at least one new Person into the business every three months. Bonus Pools a bonus based on rank qualification.
5 Overview. Leader Bonus Pools. The Leader Bonus Pools are earned and paid each month to Leader 5 through Leader 9 Rank Qualifying Wholesale Associates. The Leader Bonus Pools collectively represent three (3) percent of the Company Volume the Leader Bonus Pool (1%), and the Advanced Leader Bonus Pool (2%). A Wholesale Associate qualifies to be paid from these pools when the Wholesale Associate meets the Rank requirements in a particular month. A share s monthly bonus is equal to the designated pool s percentage (1% or 2%), multiplied by the Company Volume for the same month, and divided by the number of shares of Wholesale Associates who have qualified for a share or shares in the month. Shares in the Leader Bonus Pool. A Wholesale Associate that qualifies as an L5 or L6 and that enrolls one new Wholesale Associate or Preferred Customer with 100 PV or more in a month, will receive one share and two shares respectively in the Leader Pool. Shares do not cumulate from one Rank to the next. A share s monthly bonus is equal to the designated pool s percentage (1% or 2%) multiplied by the Company Volume for the same month, and divided by the number of shares of Wholesale Associates who have qualified for a share in the month. Shares in the Advanced Leader Bonus Pool. A Wholesale Associate that qualifies as an L7, L8, or L9 receives shares in the Advanced Leader Bonus Pool. Each L7 receives one share, each L8 receives 2 shares, and each L9 receives 3 shares in this Bonus Pool. Shares do not cumulate from one Rank to the next. For example, a Wholesale Associate who moves from L7 to L8 is entitled to two shares, and not one share from the L7 pool and two from the L8 pool. A share s monthly bonus is equal to the designated pool s percentage (2%) multiplied by the Company Volume for the same month, and divided by the number of shares of Wholesale Associates who have qualified for a share in the month. Executive Bonus Pools. The Executive Bonus Pools are earned and paid each month to Executive 10 through Executive 12 Rank qualifying Wholesale Associates. The Executive Bonus Pools collectively represent four (4) percent of the Company Volume the Executive Bonus Pool (1%), the Executive 10 Bonus Pool, (1%), the Executive 11 Bonus Pool (1%) and the Executive 12 Bonus Pool (1%). A Wholesale Associate qualifies to be paid from these pools when the Wholesale Associate meets the Rank requirements in a particular
6 month. A share s monthly bonus is equal to the designated pool s percentage (1%), multiplied by the Company Volume for the same month, and divided by the number of shares of Wholesale Associates who have qualified for a share or shares in the month. Shares in the Executive Bonus Pools. Executive Bonus Pool: Each E10 Rank qualifying Associate receives one share in the Executive Bonus Pool, each E11 receives two shares in this pool, and each E12 receives three shares in the pool. Again, shares do not cumulate from one Rank to the next. A share s monthly bonus is equal to the designated pool s percentage (1%), multiplied by the Company Volume for the same month, and divided by the number of shares of Wholesale Associates who have qualified for a share or shares in the month. Executive 10 Bonus Pool: E10 Bonus pool shares are earned and paid to each qualifying Executive 10 Rank Associate each month. The E10 Bonus Pool is paid in addition to the shares earned in the Executive Bonus Pool at the rate of one (1) share per qualified E10. A share s monthly bonus is equal to the designated pool s percentage (1%), multiplied by the Company Volume for the same month, and divided by the number of shares of Wholesale Associates who have qualified for a share or shares in the month. Executive 11 Bonus Pool: E11 Bonus pool shares are earned and paid to each qualifying Executive 11 Rank Associate each month. The E11 Bonus Pool is paid in addition to the shares earned in the Executive Bonus Pool at the rate of one (1) share per qualified E11. A share s monthly bonus is equal to the designated pool s percentage (1%), multiplied by the Company Volume for the same month, and divided by the number of shares of Wholesale Associates who have qualified for a share or shares in the month. Executive 12 Bonus Pool: E12 Bonus pool shares are earned and paid to each qualifying Executive 12 Rank Associate each month. The E12 Bonus Pool is paid in addition to the shares earned in the Executive Bonus Pool at the rate of one (1) share per qualified E12. A share s monthly bonus is equal to the designated pool s percentage (1%), multiplied by the Company Volume for the same month, and divided by the number of shares of Wholesale Associates who have qualified for a share or shares in the month. Special or Promotional Bonuses or Rewards
7 From time to time, special bonuses or promotions are offered to Wholesale Associates and Customers. The products offered in this way may or may not have any PV and may not qualify a Wholesale Associate for bonuses resulting from the purchase of these products. The details of each of these offerings will be made available at elevare360.com. General and Miscellaneous Compensation Provisions No Compensation Solely for Enrolling Another. While Wholesale Associates are paid for product sales, a Wholesale Associate receives no compensation for enrolling or sponsoring other Wholesale Associates. No Guaranteed Compensation. As with any other sales opportunity, the compensation earned by Wholesale Associates varies significantly. The cost to become a Wholesale Associate is very low. People become Wholesale Associates for various reasons. Most who wish to simply to enjoy the Company's products at wholesale prices will sign up as a Preferred Customer, but may also sign up as a Wholesale Associate. Some join the business to improve their skills or to experience the management of their own business. Others become Wholesale Associates, but for various reasons, never purchase products from the Company. Consequently, many Wholesale Associates never qualify to receive bonuses. Wholesale Associates are neither guaranteed a specific income nor assured any level of profit or success. The profit and success of a Wholesale Associate can come only through the successful sale of products and the sales of other Wholesale Associates within the Organization of the Wholesale Associate. All success is based primarily on the efforts of each Wholesale Associate. Effort. Generating meaningful compensation as a Wholesale Associate requires considerable time, effort, and commitment. The Company makes no guarantees of financial success. Inclusion in a Period s Bonus. A Person must become an approved Wholesale Associate by the last day of the bonus period in order to be included in that period s bonus and qualification computations. Products must be purchased, and payment received, by the last day of the bonus period in order to be paid or qualify for a Rank for that period. Preconditions to Bonus Payments. Wholesale Associates can receive a bonus only if they fulfill all requirements of the elevare360 Sales Compensation Plan and are not in default of any material obligations under the Contract.
8 Payment of Bonus. A bonus is paid to the primary applicant on the Wholesale Associate Agreement Form. Concentrated Legs. In the event the volume from one leg of a Wholesale Associate s Organization exceeds eighty percent (80%) of the Wholesale Associate s total Organization volume, the total Primary Bonus of the Wholesale Associate shall not exceed $5,000.00 if the Wholesale Associate holds the Rank of L5; $9,000.00 if the Wholesale Associate holds a Rank of L6; $13,000.00 if the Wholesale Associate holds a Rank of L7; and $18,000.00 if the Wholesale Associate holds a Rank of L8. Once the Rank of L9 is achieved, there is no cap on the Primary Bonus. Redemption of Company Credit. If a Company Credit is issued on products ordered but not available that month, Personal Volume for those products will only be included in Bonus and Rank qualification computations for the month in which that credit is redeemed. Duty to Retain Documents. Each Wholesale Associate receiving a bonus agrees to retain documentation, for at least six years, which evidences retail sale of products and services in the month for which the bonus was paid. Wholesale Associate agree to make this documentation available to the Company at the Company's request. Failure to do so constitutes a breach of the Contract and entitles the Company to recoup any bonus paid for orders in a month for which retail sales documentation is not maintained. Recoupment of Bonuses. In addition to any recoupment rights otherwise set forth in the Contract, the Company reserves the right to recoup any bonuses paid to Wholesale Associates on products: 1. returned under the Company's Return Policy; 2. returned to the Company under any applicable law; 3. returned in relation to any incident of Wholesale Associate misconduct, including but not limited to, unauthorized or misleading representations regarding an offer or sale of any product or service, or an elevare360 Sales Compensation Plan opportunity; or 4. purchased in an amount which unreasonably exceeds that which can be expected to be resold and/or consumed within a reasonable period of time.