It Works Compensation Plan 5b6u5w

Compensation Plan

Introduction: The purpose of any compensation plan is twofold: 1) To define the amount of compensation you, as a distributor, can earn from any given volume of business or level of performance. 2) To serve as a guide for your goals and to help you set realistic, achievable benchmarks for building your business.

At It Works! Marketing, we were not content to stop there. We wanted our compensation plan to do more. We established three specific objectives we wanted to accomplish with our plan: Allow you as a new distributor to make meaningful income immediately. Provide a simple, duplicable system for you to follow that will allow you to stay qualified and “in the money”. Enable you to create a serious business and be rewarded accordingly. We believe the It Works! Compensation Plan, described in the next few pages does all of these things, and more. It represents the latest thinking in compensation plan design, but at the same time, it is based upon principles that been proven in practice over many years. Like our products, we believe the It Works! Compensation Plan is the very best available. We hope you will find it both lucrative and easy to share with others.

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Compensation Plan FAST START BONUSES How can I earn Fast Start Bonuses from It Works! Marketing? It’s very simple....everytime a Fast Start Bonus Qualified Distributor* personally enrolls a new $299 Distributor he/she will receive $100 when the new Distributor completes the following in 30 days.... PERSONALLY SELECTS AUTO-SHIP

The new Distributor can select one of the convenient easy picks or create their own.

ENROLLS TWO NEW LOYAL CUSTOMERS**

The new Distributor can host a Wrap Party as an easy way to find their first two customers. *see glossary (page 15) **must be in Distributor’s first 30 days

FOUR WAYS TO EARN INCOME

1. Residual Income See page 3

2. Car Program See page 4

3. Generation Payouts See pages 5,6

4. CAB Bonuses

See pages 7, 8

“The Next Millionaires”

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Compensation Plan RESIDUAL INCOME

YOU

Millionaires know the secret and power of residual income. With a direct selling business you can create significant residual income that isn’t doesn’t require more effort, but is the result of your earlier effort.

Example of residual building

As a Distributor when you start your organization and begin to promote your number of pay levels will increase and your residual income (commissions) will continue to grow. NOTES:

Thru Infinity (See Page

Leg

Leg

What is a Leg? Each Independent Distributor on your first level is part or your total Downline and is a seperate leg. You and your entire Sales Organization (Downline) are one leg to your immediate upline Distributor. A qualified leg contains at least $400 BV somewhere in the depth of the leg. (yellow shaded area)

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Compensation Plan CAR PROGRAM

=

Is gathering customers your talent? Share the It Works! products with the people that you meet and you will find yourself behind the wheel of a new car! Gather 60 customers and build your personal volume to $3,000 a month and you will earn a $600 monthly car allowance.

Car Program/Customer Loyalty Example YOUR CAR PLAN! 1) Enroll 60 Loyal Customers 2) Earn 60 x $72*= $648 in monthly residual income 3) Enroll five friends and help them do the same!

60 x $72 x 10% = $432

60 x $72 x 10% = $432

60 x $72 x 10% = $432

60 x $72 x 10% = $432

60 x $72 x 10% = $432

$600 (Car Bonus) + $648 (Residual on your customers) + $2,160 (Residual on your downline’s customers) =

$3,408 is your monthly income!

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Compensation Plan GENERATION BONUSES

We all know someone who would be really successful in their own business. The Generation Bonus Program allows you to be a “talent” scout. You can earn up to 9% of the group volume of the leaders that you enroll, and up to 4% of the leaders anywhere in your organization.

Generation Payouts RANK PAYOUT 1st Generation

1

2nd Generation

2

3rd Generation

3

4th Generation

4

5th Generation

5

Diamond

Double Diamond

Triple Diamond

Presidential Diamond

Ambassador Diamond

2% PGBV

2% PGBV

2% PGBV

2% PGBV

2% PGBV

4% PGBV

4% PGBV

4% PGBV

4% PGBV

2% PGBV

2% PGBV

2% PGBV

1% PGBV

1% PGBV 1% PGBV

Diamond Generational Payout Example

NOTES:

*please see glossary for PGBV definition

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Double Diamond Generational Payout Example 2ND GENERATION

Compensation Plan NOTES:

You earn a 4% bonus on the first Diamond (or higher) PGBV in each individual leg.* You earn a 2% 1st Generation bonus (light blue area only) on PGBV.*

Triple Diamond Generational Payout Example 2ND GENERATION You earn a 4% bonus on the first Diamond (or higher) PGBV in each individual leg.*

2ND GENERATION You earn a 4% bonus on the first Diamond (or higher) PGBV in each individual leg.*

QUICK TIPS: You earn a 2% bonus on your 1st Generation PGBV.

3RD GENERATION You earn a 2% bonus on all third generation Diamonds (or higher) PGBV*

2ND GENERATION

You earn a 4% bonus on the first Diamond (or higher) PGBV in each individual leg.*

*Earn an additional 5% on personally enrolled Diamonds (or higher) PGBV

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Compensation Plan CAB BONUS

YOU

Walk Away Income! As a Diamond Distributor or above you can earn a CAB (Customer Acquisition Bonus) of up to $150 on EVERY Distributor who s your team witha $299 package plus auto-ship and gathers two Loyal Customers in their first 30 days.

$150

That’s EVERY Distributor - though unlimited levels on an infinite number of people. Imagine the potential of earning bonuses on new Distributors five or six - even ten levels deep!

$150

$150

$150

Example of CAB Bonuses

Customer Acquistion Bonus Table*

LEVEL CAB Bonus You Enroll 1 Your Team 2 3 4 5 6

Diamond

$80

Double Diamond

$40

$180** $80 $80 $80 $80 $80

$220** $80 + $40 $80 + $40 $80 + $40 $80 + $40 $80 + $40

Thru Infinity

Thru Infinity

Triple Diamond

$15

$235** $80 + $40 + $15 $80 + $40 + $15 $80 + $40 + $15 $80 + $40 + $15 $80 + $40 + $15 Thru Infinity

Presidential Diamond

$10

$245** $80 + $40 + $15 + 10 $80 + $40 + $15 + 10 $80 + $40 + $15 + 10 $80 + $40 + $15 + 10 $80 + $40 + $15 + 10 Thru Infinity

Ambassador Diamond

$5

$250** $80 + $40 + $15 + 10 + 5 $80 + $40 + $15 + 10 + 5 $80 + $40 + $15 + 10 + 5 $80 + $40 + $15 + 10 + 5 $80 + $40 + $15 + 10 + 5 Thru Infinity

Diamond Distributor Example NOTES:

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Compensation Plan CAB Bonus Payout Examples NOTES: CAB Diamond $80 Example

(new leg created after reaching Diamond status)

$80 $80 $80 $80

$80

Generation Payouts

*CAB payouts start when new Distributor is on auto-ship and has enrolled two new loyal customers in their first 30 days.

CAB Diamond $120 Example (new leg created after reaching Diamond status)

$120 $120

$120

$80

$120

$80 *CAB payouts start when new Distributor is on auto-ship and has enrolled two new loyal customers in their first 30 days. Pre-Diamond Status No CAB Bonuses

$120

$80 $80

Post-Diamond Leg $80 CAB Bonuses

Please note: Up to $150 in CAB bonuses will be paid on any new $299 Distributor.

$80 Post-Double Diamond Leg $120 CAB Bonuses

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Compensation Plan MANAGEMENT BONUSES

EXECUTIVE

RUBY EXECUTIVE

DISTRIBUTOR

Initial/Monthly Qualification Requirements

$150 PBV

$150 PBV or $80 Auto-ship

or

+

$80 Auto-ship*

2 Qualified Legs**

$150 PBV or $80 Auto-ship + 3 Qualified Legs** 1 of which is an Executive

EMERALD EXECUTIVE

$150 PBV or $80 Auto-ship + 4 Qualified Legs** 2 of which are Ruby Executives or Monthly Maintenance $8,000 GBV***

Level 1 You Earn!

10%

10%

10%

10%

Level 2 You Earn!

10%

10%

10%

10%

5%

5%

5%

5%

5%

Level 3 You Earn! Level 4 You Earn! Level 5 You Earn! Level 5 You Earn!

5% EMERALD INFINITY BONUS LEVEL****

2%

QUALIFICATIONS FOR MANAGEMENT BONUSES Bonus paid based on the bonus volume created by those in your organization. *To be qualified in any pay period you must maintain $150 PBV or subscribe to $80 auto-ship. **A Qualified Leg is on that contains at least $400 in GBV somewhere in the depth of the Leg. ***No more than 50% Group Bonus Volume (GBV) applied from any one Leg may be used for qualification. You (as an Emerald Executive or higher) are eligilble to receive a 2% bonus of the PBV generated by your entire organization, from your 6th level through unlimited depth.

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Compensation Plan LEADERSHIP BONUSES

AMBASSADOR PRESIDENTIAL

DIAMOND

Initial Qualification Requirements

Monthly Maintenance 1st Generation You Earn! 2nd Generation You Earn! 3rd Generation You Earn! 4th Generation You Earn! 5th Generation You Earn!

CAB BONUS

Qualified* + 5 Qualified Legs** with 1 Ruby Leg and 1 Emerald Leg

DOUBLE DIAMOND Qualified* + 5 Qualified Legs** with 1 Emerald Executive Leg + 1 Diamond

TRIPLE DIAMOND Qualified* + 5 Qualified Legs** with 2 Diamond Legs + 1 Double Diamond Leg

DIAMOND

DIAMOND

Qualified* + 5 Qualified Legs** with 2 Diamond Legs + 1 Double Diamond Leg + 1 Triple Diamond Leg

Qualified* + 5 Qualified Legs** with 2 Diamond Legs + 2 Triple Diamond Legs + 1 Presidential Leg

Same as above or $10,000 GBV***

Same as above or $25,000 GBV***

Same as above or $50,000 GBV***

Same as above or $100,000 GBV***

Same as above or $250,000 GBV***

2% PGBV

2% PGBV

2% PGBV

2% PGBV

2% PGBV

4% PGBV

4% PGBV

4% PGBV

4% PGBV

2% PGBV

2% PGBV

2% PGBV

1% PGBV

1% PGBV 1% PGBV

$80

$40

$15

$10

QUALIFICATIONS FOR LEADERSHIP BONUSES Bonus paid based on the bonus volume created by those in your organization. *To be qualified in any pay period you must maintain $150 PBV or subscribe to $80 auto-ship. **A Qualified Leg is on that contains at least $400 in GBV somewhere in the depth of the Leg. ***No more than 50% Group Bonus Volume (GBV) applied from any one Leg may be used for qualification.

$5

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Compensation Plan How to become an Executive Distributor EXECUTIVE DISTRIBUTOR

QUALIFIED LEG*

QUALIFIED LEG*

EXECUTIVE BENEFITS 1) You are now paid through three levels of uni-level pay. 2) You receive full compression on the levels you qualify for. 3) You add a 5% bonus on personally enrolled Distributors POV and personally enrolled Customer Loyalty Bonus Volume.

*Must have $400 minimum GBV in the depth of each qualified leg.

How to become a Ruby Executive Distributor RUBY EXECUTIVE DISTRIBUTOR

FOUR WAYS TO EARN INCOME QUALIFIED LEG*

QUALIFIED LEG*

EXECUTIVE**

RUBY EXECUTIVE BENEFITS 2) You receive full compression on the levels you qualify for.

*Must have $400 minimum GBV in the depth of each qualified leg.

3) You add a 5% bonus on personally enrolled Distributors POV and personally enrolled Customer Loyalty Bonus Volume.

**Must have an Executive somewhere in the depth of the leg.

1) You are now paid through three levels of uni-level pay.

How to become an Executive Distributor EMERALD EXECUTIVE DISTRIBUTOR

QUALIFIED LEG*

RUBY**

RUBY**

QUALIFIED LEG*

EMERALD EXECUTIVE BENEFITS 1) You are now paid through three levels of uni-level pay. 2) You receive full compression on the levels you qualify for. 3) You add a 5% bonus on personally enrolled Distributors POV and personally enrolled Customer Loyalty Bonus Volume.

*Must have $400 minimum GBV in the depth of each qualified leg. **Must have a Ruby somewhere in the depth of the leg.

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Compensation Plan How to become a Diamond Distributor DIAMOND DISTRIBUTOR

QUALIFIED LEG*

RUBY**

EMERALD***

QUALIFIED LEG*

QUALIFIED LEG*

*Must have $400 minimum GBV in the depth of each qualified leg. **Must have a “Paid as” Ruby somewhere in the depth of the leg. ***Must have a “Paid as” Emerald somewhere in the depth of the leg.

DIAMOND BENEFITS You receive all management bonuses (see page 9) plus the following: 1) You earn a 2% 1st Generation override on PGBV (see glossary). 2) You earn a 5% Special Enroller Bonus of the PGBV of every directly enrolled Diamond (or higher). 3) You start CAB Bonuses on new personally enrolled $299 Distributors* to unlimited depths ($80 Bonus per Distributor). *Must have personally selected auto-ship and enrolled two new loyal customers in your first 30 days.

How to become a Double Diamond Distributor DOUBLE DIAMOND

QUALIFIED LEG*

RUBY**

EMERALD***

DIAMOND****

QUALIFIED LEG*

*Must have $400 minimum GBV in the depth of each qualified leg. **Must have a “Paid as” Ruby somewhere in the depth of the leg. ***Must have a “Paid as” Emerald somewhere in the depth of the leg. ****Must have a “Paid as” Diamond somewhere in the depth of the leg.

DOUBLE DIAMOND BENEFITS You receive all management bonuses (see page 9) plus the following: 1) You earn a 2% 1st Generation override on PGBV (see glossary). 2) You earn a 4% 2nd Generation override on the first “paid as” Diamond (or higher) PGBV in each individual leg. Earn 9% on personally enrolled Diamonds (or higher). 3) After attaining Double Diamond status, you start a new CAB Bonus on new personally enrolled $299 Distributor* legs to unlimited depths $120 Bonus per Distributor (see page 7). *Must have personally selected auto-ship and enrolled two new loyal customers in your first 30 days.

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Compensation Plan How to become a Triple Diamond Distributor TRIPLE DIAMOND

QUALIFIED LEG*

DIAMOND**

DIAMOND**

DOUBLE DIAMOND***

QUALIFIED LEG*

*Must have $400 minimum GBV in the depth of each qualified leg. **Must have a “Paid as” Diamond somewhere in the depth of the leg. ***Must have a “Paid as” Double Diamond somewhere in the depth of the leg.

TRIPLE DIAMOND BENEFITS You receive all management bonuses (see page 9) plus the following: 1) You earn a 2% 1st Generation override on PGBV (see glossary). 2) You earn a 4% 2nd Generation override on the first “paid as” Diamond (or higher) PGBV in each individual leg. Earn 9% on personally enrolled Diamonds (or higher). 3) You earn a 2% 3rd Generation overrided on any Diamond (or higher) under each “Paid as” Diamond (or higher) in a leg. 4) After attaining Triple Diamond status, you start a new CAB Bonus on new personally enrolled $299 Distributor* legs to unlimited depths $135 Bonus per Distributor (see page 7). *Must have personally selected auto-ship and enrolled two new loyal customers in your first 30 days.

How to become a Presidential Diamond Distributor PRESIDENTIAL DIAMOND

QUALIFIED LEG*

DIAMOND**

PRESIDENTIAL DIAMOND BENEFITS

DIAMOND**

DOUBLE DIAMOND***

TRIPLE DIAMOND****

*Must have $400 minimum GBV in the depth of each qualified leg. **Must have a “Paid as” Diamond somewhere in the depth of the leg. ***Must have an “Paid as” Double Diamond somewhere in the depth of the leg. ****Must have a “Paid as” Triple Diamond somewhere in the depth of the leg.

You receive all management bonuses (see page 9) plus the following: 1) You earn a 2% 1st Generation override on PGBV (see glossary). 2) You earn a 4% 2nd Generation override on the first “paid as” Diamond (or higher) PGBV in each individual leg. Earn 9% on personally enrolled Diamonds (or higher). 3) You earn a 2% 3rd Generation overrided on any Diamond (or higher) under each “Paid as” Diamond (or higher) in a leg. 4) You earn a 1% 4th Generation overrided on any Diamond (or higher) under each “Paid as” Diamond (or higher) in a leg. 5) After attaining Presidential Diamond status, you start a new CAB Bonus on new personally enrolled $299 Distributor* legs to unlimited depths $145 Bonus per Distributor (see page 7). *Must have personally selected auto-ship and enrolled two new loyal customers in your first 30 days.

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Compensation Plan How to become a Ambassador Diamond Distributor AMBASSADOR DIAMOND

DOUBLE DIAMOND**

DOUBLE DIAMOND**

TRIPLE DIAMOND***

TRIPLE DIAMOND***

PRESIDENTIAL DIAMOND****

*Must have $400 minimum GBV in the depth of each qualified leg. **Must have a “Paid as” Double Diamond somewhere in the depth of the leg. ***Must have an “Paid as” Triple Diamond somewhere in the depth of the leg. ****Must have a “Paid as” Presidential Diamond somewhere in the depth of the leg.

AMBASSADOR DIAMOND BENEFITS You receive all management bonuses (see page 9) plus the following: 1) You earn a 2% 1st Generation override on PGBV (see glossary). 2) You earn a 4% 2nd Generation override on the first “paid as” Diamond (or higher) PGBV in each individual leg. Earn 9% on personally enrolled Diamonds (or higher). 3) You earn a 2% 3rd Generation overrided on any Diamond (or higher) under each “Paid as” Diamond (or higher) in a leg. 4) You earn a 1% 4th Generation overrided on any Diamond (or higher) under each “Paid as” Diamond (or higher) in a leg. 5) You earn a 1% 5th Generation override on any Diamond (or higher) under three “Paid as” Diamonds (or higher) in a leg. 6) After attaining Ambassador Diamond status, you start a new CAB Bonus on new personally enrolled $299 Distributor* legs to unlimited depths $150 Bonus per Distributor (see page 7). *Must have personally selected auto-ship and enrolled two new loyal customers in your first 30 days.

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Compensation Plan GLOSSARY

ACTIVE: (See Bonus Qualified) An Independent Distributor is considered “Active” in a particular pay period that they maintain the minimum Personal Bonus Volume requirement applicable to the rank that they are qualifying for.

APPLICATION AND/OR AGREEMENT FORM: This is a legal binding agreement between you and It Works Marketing, which covers your rights, duties, and responsibilities and those of the Company. This is vital and necessary information. The Policies & Procedures manual is an extension of this Agreement and should be read carefully. AUTOSHIP PLAN: This plan provides for an uninterrupted monthly supply of the fine It Works Marketing products of

your choice while creating enough personal volume to meet the personal qualification requirements for bonuses on your downline. The Autoship Plan provides for products to be automatically shipped and billed against a credit card or drafted on a checking . There are no hassles with placing monthly orders. Just enroll for an automatic $80 Bonus Volume (BV) shipment each pay period to guarantee a continuous supply of the company’s fine quality products.

BONUS: Not to be confused with Commissions. This is the remuneration that is based on the percentage of sales volume of others, downline of the payee, in accordance with the respective provisions of the Compensation Plan.

BONUS QUALIFIED: You are Bonus Qualified when you are an Independent Distributor in good standing and have met the minimum personal sales requirements for your titled position in the applicable pay period. (See Paid As rule) BUSINESS KIT: Tools, forms, tapes, brochures, manuals and application forms, relative to It Works Marketing business opportunity, needed to begin your new business.

COMMISSION: Although it is profit, the difference for money that an Independent Distributor earns when a product is sold at retail but purchased at wholesale is Commission. This should not to be mistaken as a Bonus. Some companies call a bonus a commission. It is important to understand the difference. COMPENSATION PLAN: (Sometimes called the “Marketing Plan”) The official set of definitions and performance requirements, as published in It Works Marketing Independent Distributor Manual by which It Works Marketing pays Distributors. COMPRESSION: Bonuses are earned by, and paid to, Independent Distributors that are Bonus Qualified. When an

Independent Distributor fails to meet the minimum maintenance requirements for earning bonuses at his titled position, the Company's computer searches downline until it finds an Active Independent Distributor who is Qualified for that position or higher, no matter how far downline it has to search. The volume then “Compresses” past all non-active Independent Distributor’s in the Downline until it has satisfied its payout requirements with qualified Independent Distributor levels or Generations. The term “Compression” is used to describe the temporary condition that occurs when someone fails to meet the maintenance requirements for a particular pay period and the term. (See also “Rollup”)

CUSTOMER LOYALTY PROGRAM: The Customer Loyalty program is an auto-ship program that guarantees you a minimum of 20% all retail prices. Here’s how it works: Simply place an order and commit to the Customer Loyalty program for 3 months. Every month you will receive a new supply of the It Works products that you choose at the special Customer Loyalty price. DIRECT: Refers to an Independent Distributor that you have personally and directly enrolled. (See “Leg”)

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Compensation Plan DISTRIBUTOR: The generic name for an independent contractor who has signed a Distributor Application and

Agreement form with the Company, and whose Distributor Application and Agreement has been accepted by the Company. Upon acceptance of such Agreement by the Company, a Distributor is eligible to purchase the Company's products at a wholesale price for resale and can enroll and mentor other people into their Downline retail Sales Organization. A Distributor is eligible to earn Commissions and Bonuses in accordance with the and provisions of the Compensation Plan.

DISTRIBUTOR WHOLESALE PRICE: The price charged to Distributors by It Works Marketing for the Company's products. When a product is purchased at Distributor Wholesale and sold at Suggested Retail, the Distributor earns a profit.

DOWNLINE: Those people directly mentored by an Independent Distributor, plus all the people whose line of placement mentorship resulted from and came through that Independent Distributor. Your Downline consists of all Independent Distributors on your Level 1, Level 2, Level 3, etc, through unlimited depth. (See “Level”) ENROLL: To sign and submit an Independent Distributor Application and Agreement form to It Works Marketing for the purpose of becoming an Independent Distributor for the Company. ENROLLEE: An enrolling or newly enrolled Independent Distributor. ENROLLER: It Works Marketing Independent Distributor who introduces a New Independent Distributor to the opportunity, explains the program, assists in the enrollment, and provides preliminary training to the Distributor. ENROLLER FAST START BONUS QUALIFIED: When you purchase a Business Builder Kit by the end of your first full calendar month or create or accumulate $500 in Bonus Volume, and enroll two new Loyal Customers in your first thirty days, you are qualified to earn a Fast Start Bonuses. ENROLLER GENERATIONAL BONUS: When you are a Diamond or higher, and someone that you have personally enrolled becomes Diamond Qualified or higher, you are eligible to earn a 5% Enroller Generation Bonus on that Enrollees entire Group Bonus Volume. This is over and above all other bonuses and commissions that you might earn in relation to that person or the people in her or his downline. ENROLLER RELATIONSHIP LEVEL BONUS: When you are a qualified Distributor or higher and you enroll a qualified Distributor or higher, you earn a 5% Enroller Relationship Level Bonus on that Enrollees entire Personal Bonus Volume.

FRONT LINE: Refers to all Independent Distributors that are personally enrolled and/or placed (Level 1) by a particular Distributor or by the Company. (See also “Direct”) GENEALOGY: The complete set of relationships (as defined by “Levels” and “Legs”) between an Independent Distributor and his or her upline and Downline. It is the “family tree” of any Independent Distributor. GENEALOGY REPORT: A computer printout of your Downline. GENERATION: Once promoted to Diamond you may now qualify for the special Generational Bonuses based on an override commission of 2% BV of all your personal Diamond Organization Bonus Volume. This is known as the “You 1st Generation”. This includes your personal customer volume and that of all Distributors, Executives, Ruby Executives, and Emerald Executives in your organization through unlimited depth down to the first Diamond or higher titled position.

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Compensation Plan position. This ends at the first Diamond in that leg. This is defined as your first (1st) Generation. Beginning with the Diamond or higher titled position in a leg, that person becomes your second (2nd) Generation and the same calculation continues down to the third Diamond or higher, etc. through up to 5 Fully Qualified Generations.

GROUP BONUS VOLUME (GBV): The combined PBV (Personal Bonus Volume) of everyone in a Downline,

including the PBV of the Independent Distributor at the head of that Downline. I.D.#: The identification number used by the Company to identify each Independent Distributor for Compensation Plan purposes.

INVENTORY: A supply of It Works Marketing products and merchandise in sufficient quantities to supply your customers and your personal needs. (NOTE: It Works Marketing Policies & Procedures Handbook defines specific guidelines as to appropriate inventory levels. You should not exceed these guidelines.) INDIRECT: All Independent Distributor’s in your Downline that are not directly enrolled by you. (See also “Down-

line”).

INFINITY BONUS - SIXTH LEVEL THROUGH UNLIMITED DEPTH: When you achieve the rank of Emerald Executive or higher, you become eligible to receive a special Emerald Infinity Bonus of 2% of the Personal Bonus Volume generated by your entire organization, from your sixth level through unlimited depth. The Company computer system will calculate this bonus by adding up all of the PBV of every distributor in your downline, from your 6th level on, through every Leg, until it finds another distributor with the rank of Emerald Executive or higher. When this blockage occurs on a particular leg, you will continue to receive your full rate for any other Legs in which no downline distributor has qualified to receive Emerald Infinity Bonuses, as well as for the PBV of any distributors between your level 6 and any qualifying distributor. LEG: Each Independent Distributor on your first level is part of your total Downline and is a separate “Leg.” You and your entire Sales Organization (Downline) are one “Leg” to your immediate upline distributor.

LEVEL: The people you personally enroll and/or mentor are your first level. The ones they enroll and/or mentor are your second level. The ones your second level mentors are your third level, etc. MAINTENANCE: The standard of performance involving an Independent Distributor that is required for that

Independent Distributor to continue being “Paid As” a particular rank after meeting the initial qualification requirements for that rank.

MARKETING PLAN: In MLM this is also known as the Compensation Plan. It is usually depicted in a graphic manner in a promotional brochure and in detail in the Company's manual.

MENTOR: An Independent Distributor who agrees to be responsible for helping and developing another Independent

Distributor with his business by teaching the new Distributor how to do the business, and by assisting, encouraging and ing him or her. Every Distributor must be mentored, either by another Distributor in good standing with It Works Marketing, or by It Works Marketing itself. As consideration for being a mentor, the Independent Distributor may earn bonuses based on the PBV of Independent Distributors in their Downline, to the extent that the mentor is considered Active and Bonus Qualified. It is important to note that in some other MLM companies, the term “Mentor” may include the act of introducing prospective new Independent Distributors to the opportunity and helping them sign up as new Independent Distributors. In It Works Marketing, this is called “enrolling.” While bonuses may be earned for being a Mentor based on product purchased, no payment is ever made for recruiting or enrolling. (See “Enroll”). While and Enroller can also be the Mentor of a new recruit, the Enroller has the option of placing a newly enrolled Distributor under another downline Distributor who becomes know as the Placement Mentor.

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Compensation Plan MULTI-LEVEL MARKETING (MLM): Another name for network marketing. (See “Network Marketing”) NETWORK MARKETING: A non-storefront type of selling where a manufacturer, or its Distributor (a network marketing company) sells directly to the consumer through a “network” of independent contractors rather than through conventional outlets. Independent Distributors multiply themselves directly and indirectly by placing other Independent Distributors and are paid accordingly on multiple levels. OPPORTUNITY MEETING: a periodic meeting or gathering of MLM Independent Distributors for the purpose of introducing and explaining the business opportunities to prospects. PAID AS: Independent Distributors that have earned the various title designations according to their mentoring and sales performance will retain those titles indefinitely even if they do not meet the specified bonus qualifications in a pay period. However, they will be PAID AS the titled rank at which they meet bonus qualifications for the pay period. PERSONAL BONUS VOLUME: The assigned dollar volume for qualification and calculation of bonuses on the products purchased or sold by an Independent Distributor during a particular pay period.

PERSONAL GROUP BONUS VOLUME (PGBV): For purposes of this Compensation Plan, a Personal Group consists of a Distributor at the top of a Sales Organization and every Distributor downline of him or her, through each and every Leg, until a Distributor with the rank of Diamond or higher ends each particular Leg. The sum of all Distributors sales within these Legs, and the Distributors sales at the top, makes up the Personal Group of that Distributor.

PLACEMENT MENTOR: See Mentor POLICIES & PROCEDURES: The governing rules of It Works Marketing that define the relationship between the Company and its Independent Distributors, as well as between Independent Distributors and other Independent Distributors. The Policies & Procedures are specifically incorporated into and made a part of the Independent Distributor’s Agreement, which each Independent Distributor must sign in order to enroll. PREFERRED CUSTOMER: Customers may choose to our Preferred Customer Club and receive a discount on their future purchases. hip is FREE with any $100 or higher purchase and you have opportunity to purchase It Works Marketing products at a special 10% discount off suggested retail. In addition as a Preferred Customer Member, on their subsequent orders made directly from the company by phone order, mail order or on the company website, they will be authorized to receive a 20% retail discount of suggested retail. PRINTOUT: A computer report containing names, addresses, phone numbers, and linkage to the mentor of the Downline. Sometimes called a genealogy report. PROSPECT: A person to whom you want to offer It Works Marketing business opportunity. PYRAMID: A term used by government regulators to describe an illegal sales scheme. A simplified legal definition is "selling the right to sell" where one is paid for recruiting or placing others. This is usually accomplished when one will pay a fee to a company for the right to sell its products or services, or there are substantial inventory purchases required up front. Legitimate MLM is not a pyramid.

QUALIFIED: An Independent Distributor that is “Active” and “Bonus Qualified” for their titled positions during a pay period to be PAID AS his or her titled rank in It Works Marketing compensation plan is known as Fully Qualified. (See “Active” and “Bonus Qualified”)

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Compensation Plan QUALIFIED LEG: A Qualified Leg is one that contains at least $400 in BV somewhere in the depth of the leg. RANK: A new title or rank is claimed at each level with increased percentages of bonus participation. You will always carry the title of the highest rank you reach, but are paid at the rank for which you qualify each month.

RECORDS: This is an ing or the descriptions of purchases, gas mileage, meals, trips, meetings attended, training, etc. usually to be used a proof of the tax deductions available for the home based business.

RECRUITING: Inviting others to your organization to share the same opportunity. RENEWAL: It Works Marketing Independent Distributors must renew their Distributor Agreement each year no later

than the anniversary date of their ing It Works Marketing. If a Distributor does not renew their relationship with It Works Marketing, they will be dropped from the computer files and any placement mentors or enrolled Distributors will be moved up to the next active Distributor. If they wish to re It Works Marketing at a later date, they may not reclaim their previous rank or Downline, but must at the standard entry level in the program. (See “Roll-up”)

RETAIL: Sales of It Works Marketing products to the end s of those products. Retail sales are the foundation of your It Works Marketing business, and the ultimate purpose of all other activities within the business, including enrolling, placing, training, etc. RETAIL COMMISSION: Regardless of your rank, you have the opportunity to purchase and sell products and services and receive a retail commission on all of It Works Marketing’s products and services. ROLL-UP: The permanent form of Compression. When an Independent Distributor terminates his Distributor

Agreement or does not exercise his yearly renewal, his entire Downline rolls upline to his mentor or the next qualified person and his name is deleted from the Company records. (See “Compression”).

SALES ORGANIZATION: Your Sales Organization consists of you and the people that you directly enroll as

Independent Distributors or Preferred Customers, and the people that they enroll as Independent Distributors or Preferred Customers, and so on, and so on, and so on. There is no limit to how wide or deep that your Sales Organization can grow. (See “Downline” and “Leg”)

SUGGESTED RETAIL PRICE: The retail price as suggested by the Company. An Independent Distributor may sell the product or service for whatever price he or she chooses. UNILEVEL: The part of the Compensation Plan that is based on fixed Placement Mentoring genealogical relationships, i.e. Management Bonuses.

UNLIMITED DEPTH: As used in this Compensation Plan, the term “unlimited depth” describes any number of levels in depth that is not blocked by another Independent Distributor or higher rank.

UPLINE: The term “upline” refers to that portion of either your Enroller or Mentor genealogy that precedes you. Your upline consists of the Independent Distributor who is your Enroller and/or Placement Mentor, and his Enroller and/or Placement Mentor, and his Enroller and/or Placement Mentor, etc., all the way to the Company. (See also “Enroller” and “Mentor”)