Disrupt COMPENSATION GUIDE

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1 Disrupt COMPENSATION GUIDE 2015

2 The Disrupt Compensation Plan The Disrupt Compensation plan is unique in the direct sales industry. When designing it, we threw out most of the traditional rules regarding how compensation plans should pay. Rather than picking an off-the-shelf compensation plan, we built this from the ground up, with our distributors in mind. Our compensation plan was designed to achieve a few critical goals: 1. Pay Fairly and Aggressively - Especially at Entry Levels Too often the faces of direct sales become top leaders who make more money in a month than most make in a lifetime. They are on stage with fake tans, gaudy jewelry, and giant cardboard checks telling the audience if I can do it, ANYONE can do it! When they know their seven-figure per month salary comes at the expense of the smaller distributors. Instead, we flipped the script. We want to allow new distributors who are just getting started to tap into commissions that are traditionally reserved for leaders. The plan is designed to pay MORE money at LOWER ranks than virtually anybody in the industry. In ANY industry, the sooner a business owner can make money, the more likely they are to be successful. We want to partner with leaders who find it just as important to make sure their teams are paid fairly as it is for them to be paid fairly. We want leaders who understand that when your team is taken care of, your team takes care of you. While there is significant opportunity for leaders to earn life-changing income, it doesn t have to come at the expense of the majority of distributors. 2. Let Distributors Share in the Company s Success We want to both maximize payouts AND let distributors enjoy additional upside as the company grows and succeeds. Traditionally, company overrides are reserved for a small percentage of top leaders and limited to 1% to 2% of total company volume. Instead, Disrupt has built into the plan a way for distributors at ALL levels to benefit from the overall success and profitability of the entire company - not just their own teams. The plan is designed so that sales volume from all of Disrupt worldwide contributes to

3 commissions for qualified distributors. For example, distributors in the United States can benefit from the growth and profitability of Disrupt in Japan, etc. So if you hear about a team in another country that is on fire with sales growth, YOU should be happy because they can be contributing to YOUR income. 3. Ensure Company Longevity We are building sales organizations that last, using sales principles that are tried and true. We consulted with industry experts to build a one-of-a-kind compensation plan that ensures commissions are fair, payable, and consistent. While it would be easy to center the comp plan around big, flashy, fast-start bonuses, it can t be sustained. We would prefer to build stable, solid, residual income for our distributors and the company. With these goals in mind, we have built a unique and competitive compensation plan. As a Disrupt distributor, you will be eligible to earn two types of commissions: the Global Override Commission and the Generational Commission. Global Override Commission As a company, we reserve 65% of the company s total global volume to pay to distributors as Global Overrides each month. The Global Override Commission is calculated based on your Qualified Volume for each commission period. As your QV grows and you advance through the ranks, you will be able to increase your earning potential each month. Understanding how to qualify for Global Overrides is pretty simple. Each time you make a product sale, you earn volume. You can also earn volume from sales within your sales organization. As a Disrupt distributor, you can build a network of distributors who encourage and support each other in driving product sales. In exchange for your efforts working with your sales organization, you are rewarded with a portion of the sales volume from each product sale within your sales organization. When a distributor sponsors other distributors into subordinate positions in their Sponsorship Structure, this group of distributors becomes your Sales Organization. 2

4 *Note: It s important to remember that no commissions are paid for enrolling or sponsoring additional Disrupt distributors. Becoming a distributor is free. You earn commissions based on the sale of products in your sales organization. Your first step is to make sure you reach the Personal Direct Volume for each rank. Personal Direct Volume (PDV) is the sales volume of products sold to customers who do not appear in the enrollment or sponsorship structure, or your own personal purchases. As you progress through the sales ranks, your PDV requirement will increase. You PDV will always count toward your Qualified Volume. As product sales increase in your organization, your sales volume will increase. Once you hit 200 qualified volume, you will reach the first rank of the compensation plan, Basecamp. Qualified Volume (QV) is the sum of all volume (personal and team sales) in your sales organization, subject to line maximums. *Note: In Disrupt, we don t want the focus to be on what rank you are, we want it to be where you are in your journey. We don t care about fancy titles or rare gems, so we took a different approach. We believe that it s only important that you keep moving up. That each day you move closer to your ultimate goal, whatever it may be. That you Keep Climbing. That s our mantra, and the rank names reflect that. If you would like to know more about what each rank name symbolizes, please visit lifedisrupted.com/ranks. The Global Override commission is calculated by taking the allotted percentage of volume from the entire company worldwide and creating a per-volume share price. In layman s terms, this converts each unit of volume to a dollar amount. After the share price is created, commissions will then be paid by taking your qualified volume and then paying you the equivalent dollar amount, up to the rank maximum. While we re referring to a share price, it s important to understand that we re not talking about traditional shares, as in shares of stock. These shares are simply tokens of value that help us compute the payouts. For example, if the share price had been calculated at $0.55 per share and you had 1,200 in qualified volume, your commission for the month would be $ If a teammate had 300 qualified volume during the same period their pay would $50, based on the max pay for the Basecamp rank. Teamwork is one of the most important aspects in any business. At Disrupt we believe in creating a culture of teamwork through working together to help one another, no

5 matter where you are in the world. You will benefit as other members of disrupt achieve success through the Global Override Commission, since your earning potential increases as their sales volume increases. The following chart is designed to help give you a quick reference of the requirements for each rank. If you would like to see the averages of what each rank pays out, you can do so at lifedisrupted.com/pay. It s important to remember two things about the Global Override Commission: 1. This compensation plan is unique and gives opportunity to the average marketer that doesn t exist elsewhere in the industry. As the company continues to grow, the compensation plan will scale with it. We wanted to make sure that when we win as a company, you win as a distributor. 2. This per-share dollar amount can increase significantly with a heavy-retail focus from distributors. The more sales made to customers who do not occupy a spot in the enrollment or sponsorship structure, the more the per-share dollar amount can increase. This is why Disrupt has been built on an easy-share affiliate system that will allow you to easily share thousands of products with customers, and why we have brought together products that have real value outside of the direct selling industry. With the Global Override Commission you have the potential to reach your goals, no matter what they are. Generational Commission The Generational Commission gives every distributor an opportunity to earn commissions from sales in their organization - even if they haven t qualified for a sales rank yet! Every product sold has a Generational Pay amount associated with it ( Gen Pay for short). Using the Enrollment Structure, the Generational Commission pays on the sales from one or more generations based on what you unlock as you advance through the ranks. A generation is defined as the group of distributors in your enrollment structure, including your personal enrollments and all of their enrollment legs all the way down to the next distributor with the rank of Ascent or higher. As you progress through sales ranks, you unlock additional generations on which you get paid. 4

6 *Note: Don t confuse generation with level. A generation can go 20+ levels deep, but it starts with your personal enrollments, goes down each of those legs, and stops at the first distributor with a rank of Ascent or higher. The distributors from that Ascent (or higher) down to the next Ascent (or higher) would be considered another generation. As Distributors in your organization advance to the rank of Ascent, new generations are created. You earn generational commissions on the additional generations up to seven generations, depending on your rank level. The Generational Pay amount listed for each product is divided up and paid according to the following chart. GENERATION Personal Enrollments % OF GENERATION PAY PAID OUT 30%

7

8 Glossary There may be some terminology you are unfamiliar with if you are new to Direct Selling. We have tried to simplify everything and give you a quick reference to look up any terms you may need a refresher on. Base Pay: Each rank has a Base Pay amount. You will never earn less than this amount at any given rank. As you continue advancing through the ranks Max Pay potential and overall payout will increase along the way. Commission Cycle: Commission cycles are the calendar months (Mountain Time) for which commissions are calculated. Commission payments are based on the requirements met at the close of the month. Enrollment Structure: The Enrollment Structure, sometimes referred to as the Enrollment Tree, illustrates the relationships between a distributor and the distributors they directly enroll into their sales organization. The Enrollment Structure is used to determine the correct Generational Commissions, based on where the sale occurs. Line: A line is the sales team built under your front line in either the sponsorship or enrollment structure. Line Maximum: When calculating QV for rank advancement, a Line Maximum percentage is applied, which corresponds to each rank. For example, the Andes rank requires 15,000 QV with a Line Maximum of 35%. That means no more than 5,250 QV (35% of 15,000) can be counted from any one line as Qualifying Volume for reaching rank. Max Pay: Max Pay is the most you can earn from the Global Override commission in any single month at a given rank. With each rank advancement, the Max Pay is increased, increasing your earning potential. The Generational Commission has no maximum. Having the Max Pay allows us to ensure the company has predictability as to what we pay at all levels to make sure everyone gets paid fairly. Per Share Dollar Amount: The Global Override commission is calculated by taking the allotted percentage of volume from the entire company and creating a per-volume share price. In layman s terms, this converts each unit of volume to a dollar amount. After the share price is created, commissions will be paid by taking your qualified volume and then paying you the equivalent dollar amount, up to the rank maximum.

9 Personal Direct Volume: Personal Direct Volume (PDV) is the volume of products sold to customers who do not appear in the Enrollment or Sponsorship structure, or your own personal purchases. PDV is not subject to line maximums. PDV can be generated from customers who buy through the easy-share affiliate system or through the direct resale of physical products to customers. Qualified Volume: Qualified Volume (QV) is the volume that will be used to calculate your bonuses. QV is the sum of all volume in your organization, subject line maximums. Rank: The Disrupt Compensation Plan includes requirements for various sales Ranks based on product sales within your Sales Organization. In Disrupt, we don t want the focus to be on what rank you are; we want it to be where you are in your journey. We don t care about fancy titles or rare gems, so we took a different approach. We believe that it s only important that you keep moving up. That each day you move closer to your ultimate goal, whatever it may be. That you Keep Climbing. That s our mantra, and the rank names reflect that. If you would like to know more about what each rank name symbolizes, please visit lifedisrupted.com/ranks. Sponsorship Structure: The Sponsorship Structure, sometimes referred to as the Sponsorship Tree, illustrates the relationships between Sponsors and the distributors subordinate to them in their sales organization (whether they were enrolled by you or placed their by an upline member of your organization). The Sponsorship Structure is used to determine the correct Global Override Commissions. Volume: Anytime a product is sold through your organization it produces Volume. Each product has Volume attached, and it differs by product. Waiting Room: The waiting room allows you to place distributors you have enrolled into your sponsorship structure. The waiting room is designed to help you build intelligent sales teams. Consider how each distributor will fit in the organization you place them in. Remember, your goal is to build teams that, by working together, produce maximum product sales. You have seven days from the time of enrollment to place a distributor in your structure before they are automatically placed. If you enroll a distributor near the end of the month, be mindful that at midnight on the first of each month the distributors are automatically placed. When a distributor is automatically placed, they are sponsored directly to you. 8

10 #LEARNLIFE LIFEDISRUPTED.COM

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