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TheMelaleucaCompensation PlanMelaleuca’s Compensation Planis designed to reward independentMarketing Executives who developcustomers for Melaleucaproducts. The income you earnfrom your Melaleuca business isdetermined by three factors: thenumber of customers you have,the amount each customerpurchases each month, and youreffectiveness in building amarketing organization thatincludes other MarketingExecutives who help you expandyour customer base as they buildtheir own marketing organizations.The key to understanding theMelaleuca Compensation Plan is toremember that all commissionsand bonuses earned are basedon the sale of products to endconsumers. “End consumers” arecustomers who purchase productsto use in their homes. You do notearn commissions and bonusesfor recruiting or signing upcustomers—but you will be paidcommissions whenever thosecustomers buy products. And thatcan mean monthly residual incomefor years to come.The information in this brochureexplains the Compensation Plan,and is not representative of whatany Marketing Executive will earn.Any representation or guaranteeof specific earnings would bemisleading. Success with anybusiness takes hard work, diligence,perseverance, and leadership.Success with Melaleuca will dependon how effectively a MarketingExecutive exercises those qualities.Frank L. VanderSlootPresident & CEOFrank L. VanderSloot“Melaleuca’s Consumer DirectMarketing program provides theopportunity for people to succeedthrough their own efforts. Tens ofthousands of families are nowcompeting directly with majormanufacturers of nutrition,pharmaceutical, personal care,and home care products—andwinning! When Customers purchaseMelaleuca products each month,profits from those sales go directlyto families across North Americarather than to large corporations.”
Ways to Earn Money withMelaleucaStatusMinimum Number ofActive Personal EnrolleesRequired for This StatusAverage Monthly LeadershipPoint Production Requiredfor This Status(3-Month Rolling Average)Marketing Executive235--Marketing Executive II3352-Marketing Executive III4354-Director7758-Director II77582Director III77583Director IV77584Director V77585Senior Director7752015Executive Director7752015Corporate Director77520-Presidential Director77520-Product Introduction CommissionEarn up to 27% commission on the first 150 Product Points generated bynew Customers’ first month’s purchases (Backup Orders and Select Packsexcluded). The Enroller receives 20% commission on the Customer’s firstmonth’s purchase, and the Customer’s immediate Marketing Executivereceives 7%. If you are the Enroller and the immediate MarketingExecutive, you receive the total 27% commission.Personally Enrolled Customer CommissionOnce you achieve Director status, your 7% Organization Commission growsto 14% (8–11), 17% (12–15), or 20% (16 ) on the product purchases ofyour active personally enrolled Customers. It all depends on the number ofyour active personally enrolled Customers.QualificatMinimum Monthly PersonalProduct Point ProductionRequired for This StatusEach month that you qualify as an active Melaleuca Marketing Executive,you will receive an Organization Commission of 7% on up to 150 ProductPoints purchased from the Melaleuca Catalog by each Customer in yourMarketing Organization. The Organization Commission is paid on all customer purchases after their first month of enrollment.Number of Generations onWhich OrganizationCommission Is PaidOrganization CommissionDevelopment PositionsValue Pack and Career Pack CommissionsMarketing Executives earn 30 on Value Packs and 50 on Career Packswhen their new Customer buys a Value or Career Pack within the first twocalendar months following enrollment. New Customers may purchase a totalof two Value or Career Packs; however, this commission is paid only on thesale of the first Value or Career Pack.Leadership PositionsAssist: A Marketing Executive who helps another to presentMelaleuca products to a new Customer may be designated on theIndependent Marketing Executive Agreement form as the “Assist.”The Marketing Executive designated as the “Assist” receives theValue or Career Pack Commission.Pacesetter Director BonusNew enrollees and their enrollers can each earn a 100 bonus if:The New EnrolleeThe Enroller1. becomes a Preferred Customer, and2. buys a Value or Career Pack, and3. becomes a Director within the firsttwo calendar months following themonth of enrollment.1. has an active status of Directoror above, and2. has, since joining Melaleuca,purchased a Value or Career Pack.New Customer BonusAfter enrolling one Preferred Customer in a month, active Directorsand above earn 25 for every additional Preferred Customer whoenrolls and places a minimum product order during that month. Afterenrolling two Preferred Customers in a month, active Directors II and aboveearn 25 for the second, third, fourth, fifth (and so forth) PreferredCustomers enrolled in that month by their personally enrolled Directors orbelow. For purposes of this bonus, new Preferred Customers must place aminimum product order in the month of their enrollment and remain activePreferred Customers for at least four consecutive months.Preferred Customer Services CommissionMarketing Executives can receive additional commissions on allProduct Points produced from MelaCom and other PreferredCustomer services used by Customers in their Marketing Organization.Additional Leadership Bonuses and IncentivesMarketing Executives are eligible for significant bonuses as they buildtheir Melaleuca Businesses.At least one Leadership Point during the last three calendar months must be produced toearn greater than 250 in Organization Commissions during any month. MarketingExecutives earning more than 500 per month in Organization Commissions mustproduce an average of at least two Leadership Points per month during the last threecalendar months.1
Compensation PlancationsMonthly OrganizationProduct Points Requiredfor This StatusMonthly PEG VolumeRequired for This StatusNumber of ActivePersonally EnrolledDirectorsOrganization CommissionPersonally EnrolledCustomer CommissionMaximum OrganizationCommission AvailableFirst GenerationPositions AvailableOne-TimeAdvancement BonusPacesetter BonusLeadershipDevelopment BonusDirector or AboveNew Customer BonusDirector II or AbovePersonal EnrolleeNew Customer BonusMonthly Car BonusIncentives---7%7%-5---------7%7% 1005---------7%7% 1505---------7%14–20% 5005- 100- 25--2,500-17%14–20% 1,0005 250or 50020% 25 25-5,0002,50027%14–20% 2,0005 500or 1,00020% 25 25-10,0005,00037%14–20% 3,0005 1,000or 2,00020% 25 25-15,00010,00047%14–20% 4,0005 1,500or 3,00020% 25 25-20,00015,00057%20%Unlimited6–10 2,000or 4,00040% 25 25 40050,00050,000107%20%Unlimited11 10% of PEG-100% 25 25 1,000250,000250,000107%20%Unlimited11 100,000 10% of PEG-100% 25 25 1,000107%20%Unlimited11 1,000,000-100% 25 25 1,0001,000,000 1,000,000To promote the spirit of Melaleuca’s mission—“Enhancing the Lives of Those We Touch by HelpingPeople Reach Their Goals”—Marketing Executives with a monthly Organization Product Point Volumeof 20,000 or more are required to average at least 15 Leadership Points per month in order to receiveall of the Organization Commission available to them. Those producing fewer Leadership Points willreceive a percentage of the total commission available. (See your Business Kit for details.)orMarketing Executives with an Organization Volume greater than20,000 but with a PEG Volume less than their Organization Volumemay receive an Organization Commission of up to 10% of theirPEG Volume. (See your Business Kit for details.)
Active PersonallyEnrolled DirectorsActive PersonallyEnrolled SeniorDirectorsActive PersonallyEnrolled ExecutiveDirectorsMinimumOrganizationProduct PointsMinimum PEGProduct PointsAdvancementBonusLeadership CompensationSenior Director5--20,00015,000 2,000Senior Director II6--25,00020,00010% of PEGSenior Director III7--30,00025,00010% of PEGSenior Director IV8--35,00030,00010% of PEGSenior Director V9--40,00035,00010% of PEGExecutive Director10--50,00050,00010% of PEGExecutive Director II101-70,00070,00010% of PEGExecutive Director III102-90,00090,00010% of PEGExecutive Director IV103-110,000110,00010% of PEGExecutive Director V104-130,000130,00010% of PEGExecutive Director VI1041150,000150,00010% of PEGExecutive Director VII1032175,000175,00010% of PEGExecutive Director VIII1023200,000200,00010% of PEGExecutive Director IX1014225,000225,00010% of PEGCorporate Director10-5250,000250,00010% of PEGCorporate Director II10-7.5 credits300,000300,00010% of PEGCorporate Director III10-9.5 credits350,000350,00010% of PEGCorporate Director IV10-11.5 credits400,000400,00010% of PEGCorporate Director V10-13.5 credits450,000450,00010% of PEGCorporate Director VI10-15.5 credits525,000525,00010% of PEGCorporate Director VII10-17.5 credits600,000600,00010% of PEGCorporate Director VIII10-20.0 credits700,000700,00010% of PEGCorporate Director IX10-22.5 credits800,000800,00010% of PEGPresidential Director10-25.0 credits1,000,0001,000,000 1,000,000StatusIn addition to all other bonuses, Corporate Directors and above earn a monthly bonus equal to 2% of PEG Volume. They will also earn an annualbonus equal to 1% of their annual Organizational Product Points.All dollar and commission numbers stated herein are in U.S. currency. The commissions ofCanadian Marketing Executives will be converted to and paid in Canadian dollars.
Additional LeadershipIncentives & BonusesDefinitionsProduct Point A value assigned to each Melaleuca product or service upon which commissions and bonuses are calculated.Organization Volume The total Product Points from products and services purchased in a Marketing Executive’sorganization in a calendar month.PEG Volume Personal Enrollee Group (PEG) Volume is the total organization Product Point Volume of a Marketing Executive’sPersonal Enrollees in any given month.Leadership Points Leadership Points measure the level of support a Marketing Executive provides to his or her organization.Melaleuca’s Compensation Plan requires each Director II and above to regularly produce Leadership Points. Up to six LeadershipPoints are available for enrolling a new Preferred Customer. These six Leadership Points are distributed as follows:Lead3 Leadership PointsEarned by the Enroller who is the Marketing Executive who provided thename of the new Preferred Customer.Presenter2 Leadership PointsEarned by the Marketing Executive who gave the majority of thepresentation that resulted in the enrollment of the Preferred Customer.Career/Value Pack1 Leadership PointAwarded to the Presenter if the new Preferred Customer purchases a Careeror Value Pack during the month of enrollment.Road to Executive Director TrainingThis is one of the most informative and effective events forSenior Directors working their way to Executive Directorstatus. When Marketing Executives become Senior Directors,they are invited on an all-expenses-paid trip to Melaleuca’sHome Office in Idaho Falls, Idaho for a three-day trainingsession, with the opportunity to tour Melaleuca’s facilitiesand meet with Management Team members.Leadership Development BonusMarketing Executives who help their Personal Enrolleesadvance to Director II through Senior Director status receivea bonus equal to a percentage of their Personal Enrollees’One-Time Advancement or Pacesetter Bonuses. Directors IIthrough Directors V receive 20% of these bonuses by having arolling 3-month average of 10 Leadership Points. SeniorDirectors receive 40% and Executive and Corporate Directorsreceive 100% by having a rolling 3-month average of 15Leadership Points. To qualify for this bonus, the MarketingExecutive must have an active status equal to or above theiradvancing Personal Enrollees’.Melaleuca retains the right to interpret the provisions of this Compensation Plan.One-Time Advancementand Pacesetter Bonuses1) One-Time Advancement Bonus: As MarketingExecutives advance in status, they can earnOne-Time Advancement Bonuses. This bonus will bepaid out after the Marketing Executive has maintainedthe status for three consecutive months (or byadvancing rapidly to another new high status throughSenior Director within the three-month period).2) Pacesetter Bonuses: Marketing Executives whohave purchased a Career or Value Pack can double theirOne-Time Advancement Bonus by advancing rapidlythrough the Director ranks. If the Marketing Executiveadvances to each status within the specified timeallotted (see below), they will qualify for the PacesetterBonus in place of the One-Time Advancement Bonus.Pacesetter BonusStatusDirectorDirector IIDirector IIIDirector IVDirector VSenior DirectorTime to Qualify (after month of enrollment)2 Months4 Months6 Months8 Months10 Months12 Months
Leadership PoolsActive Directors II through Directors V participate in a monthly Leadership Pool equal to 1% of total company Product Points; SeniorDirectors participate in a pool equal to 1.2% of total company Product Points; and Executive Directors and Corporate Directors participatein a pool equal to 2.6% of total company Product Points. Directors II through Directors V with growth in the number of Preferred Customersshare in the Director Pool according to “The Pool Formula.” Senior and Executive Directors with growth in the number of PreferredCustomers in their organization (over a rolling 3-month average) earn a Leadership Growth Bonus, plus share in the remaining pool dollarsaccording to “The Pool Formula.”Leadership Growth BonusMonthly BonusActive StatusSr Director–Sr Director V . . . . . . . . 500Exec Director . . . . . . . . . . . . . . . . 1,000Exec Director II . . . . . . . . . . . . . . . 1,200Exec Director III . . . . . . . . . . . . . . 1,300Active StatusMonthly BonusExec Director IV . . . . . . . . . . . . . . 1,400Exec Director V . . . . . . . . . . . . . . . 1,500Exec Director VI . . . . . . . . . . . . . . 1,600Exec Director VII . . . . . . . . . . . . . . 1,700Active StatusMonthly BonusExec Director VIII . . . . . . . . . . . . . 1,800Exec Director IX . . . . . . . . . . . . . . 1,900Corp Director . . . . . . . . . . . . . . . . 2,000“The Pool Formula” AVERAGE NET PREFERRED CUSTOMER GROWTH XAVERAGE LEADERSHIP POINTSPOOL POINTS2X ACTIVE STATUS FACTOR(USED TO CALCULATE YOUR SHARE OF THE TOTAL POOL)Formula Components1) Average Net Preferred Customer Growth:Calculated by taking the greater of the average2) Active Status FactorDir II . . . . . . . . .1.2Exec Dir . . . . . . . . .2.00organization net Preferred Customer (PC) growthfor the previous three months or the currentmonth’s PC growth divided by three (excludingDir III . . . . . . . . .1.3Exec Dir II . . . . . . . .2.25Dir IV . . . . . . . . .1.4Exec Dir III . . . . . . .2.50Dir V . . . . . . . . .1.5Exec Dir IV . . . . . . .2.75rollups). Participants in the Director andSenior Director pools must have PC growth toparticipate in the pools. Executive and CorporateDirectors can participate in the Leadership Poolwithout Preferred Customer growth, but willSr Dir . . . . . . . .1.0Exec Dir V . . . . . . . .3.00Sr Dir II . . . . . . .1.2Exec Dir VI . . . . . . .3.25receive a maximum payout of 500.3) Average Leadership Points: Any MarketingSr Dir III . . . . . .1.3Exec Dir VII . . . . . . .3.50Sr Dir IV . . . . . .1.4Exec Dir VIII . . . . . .3.75Sr Dir V . . . . . . .1.5Exec Dir IX . . . . . . .4.00Executive who earns a 3-month average of 40–69Leadership Points in the applicable month willreceive two times the Leadership Point credit forthat month. Any Marketing Executive who earns a3-month average of 70 or more Leadership Pointsin the applicable month will receive 210Leadership Points for their Bonus Poolcalculation. Leadership Points earned fromthe Marketing Executive’s personal enrollmentsare limited to 40 for the pool formula.Corp Dir . . . . . . . . .5.00Additional IncentivesCertificates of Achievement and Recognition Each time Marketing Executives advance to a new status, they receive a Certificate ofAchievement, a gold pin signifying the status achievement, and are recognized in the Leadership in Action magazine.Circle of Influence Marketing Executives who enroll four Preferred Customers during one calendar month earn the Circle of Influenceaward, and by enrolling eight they earn the Expanded Circle of Influence award. Upon qualifying, Marketing Executives receive the uniquelydesigned Circle or Expanded Circle of Influence pin and recognition in Leadership in Action magazine.20/20 Club Marketing Executives who develop 20 personally enrolled Preferred Customers earn the 20/20 Club award. 2003 Melaleuca, Inc.Printed in USA Rev. 10/03N
Melaleuca’s Compensation Plan is designed to reward independent . (Backup Orders and Select Packs excluded). The Enroller receives 20% commission on the Customer’s first month’s purchase, and the Customer’s immediate Marketing Executive . minimum product order in the month of their enrollment and remain active
