TEAM COMPENSATION PLAN

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1 TEAM COMPENSATION PLAN MILLION DOLLAR BODY S TEAM COMPENSATION PLAN has been designed to reward Independent Million Dollar Body Coaches for sharing our products, services, and income opportunity with others. The Team Compensation Plan represents an innovation in Business Income Opportunity paid weekly! TABLE OF CONTENTS EARNING OPPORTUNITIES SIMPLE TERMS TO LEARN COACH ACHIEVEMENT RANKS RANKS, QUALIFICATIONS & BENEFITS GLOSSARY

2 EARNING OPPORTUNITIES There are eight ways to earn income with Million Dollar Body s innovative Team Compensation Plan. RETAIL COMMISSIONS When your customer orders an MDB product, you earn a 25% commission. When your Million Dollar Body Club members order, you receive a 15% commission. MDB CLUB MEMBERSHIPS For every Million Dollar Body Club member you enroll, you will continually get paid 50% of their membership dues (paid quarterly). SHOWCASE PACK BONUS (SPB) Like you, your personally sponsored Coaches have a great opportunity to build their personal library of fitness products at a special introductory price. You can earn a $50 Showcase Pack Bonus (SPB) when a personally sponsored Coach orders a Showcase Pack within their first 30 days of their enrollment. SHOWCASE PACK - SPONSORS BONUSES (SPSB) Every time a Showcase Pack is sold by any Coach in the first five levels of your direct line of sponsorship, you earn a $5 Showcase Pack - Sponsors Bonus. TEAM CYCLE BONUSES (TCB) Every time an active and qualified Coach Business Center generates 360 balanced bonus points it cycles and pays a Team Cycle Bonus. MATCHING CHECK BONUSES (MCB) Active and qualified Ruby and Diamond Coaches respectively earn a 5-10% Matching Check Bonus on the weekly Team Cycle Bonus checks of their personally sponsored Coaches. STAR DIAMOND PRODUCTION BONUSES Million Dollar Body sets aside 2% of the total company Bonus Volume (BV) to reward those Coaches who have reached the Star Diamond rank (paid quarterly) and who have qualified to participate in the Star Diamond Production Bonus pools. BUILDING NEW COACH BUSINESS CENTERS (CBC) Star Diamond Coaches who meet the requirements can own up to a total of ten (10) Coach Business Centers in their Million Dollar Body Organization. 2

3 SIMPLE TERMS TO LEARN Bonus Volume (BV) Bonus Volume (BV) is the bonus point value amount the company uses to calculate and paid bonuses. Personal Volume (PV) Personal Volume (PV) represents the BV points earned from your purchases combined with the purchases made by customers through your Web site. Team Volume (TV) Team Volume (TV) is the BV points accumulated by a Coach Business Center s downline team of Coaches. Coach Business Center (CBC) Your Coach Business Center (CBC) is a sales compensation structure provided for all MDB Coaches for the purpose of tracking their Million Dollar Body business activities. Active Status Active status means that you have achieved a minimum of 50 Personal Volume (PV) points within the last 30 days as a Million Dollar Body Coach. Qualified Status Qualified Status means that you have met the requirements for your rank as an Emerald Coach, Ruby Coach, Diamond Coach, or Star Diamond Coach within the previous 30 days. 3

4 COACH ACHIEVEMENT RANKS There are a total of eight (8) Coach achievement ranks in the Team Compensation Plan. COACH EMERALD COACH RUBY COACH DIAMOND COACH DOUBLE STAR DIAMOND COACH FIVE STAR DIAMOND COACH TEN STAR DIAMOND COACH SUPER STAR DIAMOND COACH 4

5 RANKS, QUALIFICATIONS & BENEFITS I) COACH As a new MDB Coach, you will be provided with your own Coach Business Center (CBC). Your Coach Business Center (CBC) is a sales compensation structure provided for all MDB Coaches for the purpose of tracking their Million Dollar Body business activities. Qualifications Enroll online as an Independent MDB Coach for $39.95 and be accepted by the company. There are no personal sales requirements necessary for you to earn commissions on your personal retail sales. Coach Benefits Earn four (4) different ways Retail Commissions (paid weekly) 1. Earn a 25% commission on the retail sales price of most MDB products (paid weekly) and earn a 15% commission on the product sales to personally enrolled MDB Club Members. 2. Million Dollar Body Club Membership Commissions (paid quarterly) Earn a 50% commission on your personal customer sales and renewals of MDB Club online memberships. 3. Showcase Pack Bonus (SPB) (paid weekly) Earn a $50 Showcase Pack Bonus (SPB) when a personally sponsored Coach orders a Showcase Pack within the first 30 days of their enrollment as a new Coach. 4. Showcase Pack Sponsors Bonuses (SPSB) (paid weekly) Every time a Showcase Pack is sold by any Coach in the first five levels of your direct line of sponsorship, you can earn a $5 Showcase Pack - Sponsors Bonus. Note: Active status is a requirement to earn any SPSB. SHOWCASE PACK BONUS $50 $50 PERSONALLY SPONSORED PERSONALLY SPONSORED $50 PERSONALL SPONSORED You can earn $50 each time a personally sponsored Coach buys a Showcase Pack. 5

6 RANKS, QUALIFICATIONS AND BENEFITS SHOWCASE PACK SPONSOR BONUS $5 $5 B A $5 F $5 $5 E D C Orange Line = Direct Line of Active Sponsorship In this example, you have personally sponsored A, A has personally sponsored B, B has personally sponsored D, D has personally sponsored E, and E has personally sponsored F. This represents the first 5 levels of your Direct Line of Active Sponsorship You earn $5 each time a Coach in the first 5 levels of your Direct Line of Active Sponsorship sells a Showcase Pack. 6

7 RANKS, QUALIFICATIONS & BENEFITS II) EMERALD COACH EARN FIVE DIFFERENT WAYS Become an active and qualified Emerald Coach by activating your Coach Business Center and you will qualify for additional earning opportunities. Qualifications Be a Million Dollar Body Coach. Reach and maintain active status to become and remain an active MDB Coach, you need to have achieved a minimum of 50 Personal Volume (PV) points within the previous 30 days of the pay period being calculated and paid. (Also, see Glossary: Active Status - Grace Period). Activate (and maintain) your Coach Business Center through personally sponsoring and maintaining a minimum of two (2) active Coaches, with one personally sponsored active Coach in your left Coach leg and one (1) personally sponsored active Coach in your right Coach leg. ACTIVATED Benefits Retail Commissions (paid weekly) 1. Earn a 25% commission on the retail sales price of most MDB products (paid weekly) and earn a 15% commission on the product sales to personally enrolled MDB Club members. 2. Million Dollar Body Club Membership Commissions (paid quarterly) Earn a 50% commission on your personal customer sales and renewals of MDB Club online memberships. 3. Showcase Pack Bonus (SPB) (paid weekly) Earn a $50 Showcase Pack Bonus (SPB) when a personally sponsored Coach orders a Showcase Pack within the first 30 days of their enrollment as a Coach. 4. Showcase Pack Sponsors Bonuses (SPSB) (paid weekly) Every time a Showcase Pack is sold by any coach in the first five levels of your direct line of sponsorship, you earn a $5 Showcase Pack - Sponsors Bonus. Note: Active status is a requirement to earn any SPSB. 5. Team Cycle Bonuses As an active and qualified Emerald Coach, your CBC can start accumulating and banking (holding) Team Volume (TV) from your CBC s left and right Coach legs (regardless of depth) and become eligible to start earning Team Cycle Bonuses. As an active and qualified Emerald Coach, you can earn a Team Cycle Bonus of up to $19 each time your CBC cycles by generating 360 TV with a minimum of 1/3 of the TV (120 TV) in one leg and 2/3 of the TV (240 TV) in the other leg. Each time your CBC cycles with 360 TV with the proper balance of 1/3 TV 7

8 RANKS, QUALIFICATIONS & BENEFITS 2/3 TV, the 360 TV will be deducted (120 TV in one Coach leg and 240 TV in the other Coach leg) from your total accumulated CBC - TV and the remaining qualified TV will carry over into the next CBC cycle of 360 TV (per the MDB Team Compensation Plan). 240 TV (2/3) 120 TV (1/3) 360 TV 300 TV -240 TV 60 TV TV TV TV 200 TV -120 TV 80 TV TV In this illustration, a total of 500 TV has been generated, with 300 TV in the left Coach leg and 200 TV in the right Coach leg. 240 TV (2/3) is subtracted from the left Coach leg and 120 TV (1/3) is subtracted from the right Coach leg. This 360 TV generates a Team Cycle Bonus payout. The remaining 60 TV in the left Coach leg and the 80 TV in the right Coach leg are available to be counted towards the next Team Cycle. Team Cycle Bonuses Active and Qualified Emerald Coach up to a $15 Team Cycle Bonus for active and qualified Emerald Coaches with 50 PV up to a $17 Team Cycle Bonus for active and qualified Emerald Coaches with 75 PV up to a $19 Team Cycle Bonus for active and qualified Emerald Coaches with 100 PV (with at least 25 PV generated from Web site retail sales and/or online MDB Club memberships) Allowable Daily Team Cycles for Emerald Coaches Cycles A Emerald Coach can theoretically cycle their CBC and earn Team Cycle Bonuses up to 40 times daily. CBC Master Cycles and Carry Over Team Volume (TV) When a CBC completes 300 consecutive and payable Team Cycle Bonuses, a Master Cycle occurs and a maximum of 5000 TV in the strong leg and the entire TV in the weak leg will carry over to the next cycle, which may occur on the same day. Team Cycle Bonus Account Fund and Team Cycle Bonus Cap Each week, 35% of the total company BV is set aside for Team Cycle Bonus payouts. In order to maintain the profitability required to successfully fund and operate the Million Dollar Body opportunity and to ensure business stability for the Independent Million Dollar Body Coaches, the company has established a cap of 35% of the total accumulated company BV to be paid in Team Cycle Bonuses, and may implement a Team Cycle Bonus payout adjustment, if necessary, which will adjust all Team Cycle Bonus payouts equally in order to maintain the established cap. 8

9 RANKS, QUALIFICATIONS & BENEFITS III) RUBY COACH EARN SIX DIFFERENT WAYS Qualifications Be a Million Dollar Body Coach. Maintain active status - To become and remain an active active MDB Coach, you need to have earned a minimum of 50 Personal Volume (PV) points within the previous 30 days of the pay period being calculated and paid. (Also, see Glossary: active status - Grace Period) Develop and maintain two (2) personally sponsored active and qualified Emerald Coaches (or higher ranks), with one (1) of these active and qualified Emerald Coaches placed in the left side Coach leg of your CBC, and the other active and qualified Emerald Coach placed in the right Coach side leg of your CBC. Benefits Retail Commissions (paid weekly) 1. Earn a 25% commission on the retail sales price of most MDB products (paid weekly) and earn a 15% commission on the product sales to personally enrolled MDB Club members. 2. Million Dollar Body Club Membership Commissions (paid quarterly) Earn a 50% commission on your personal customer sales and renewals of MDB Club online memberships 3. Showcase Pack Bonus (SPB) (paid weekly) Earn a $50 Showcase Pack Bonus (SPB) when a personally sponsored Coach orders a Showcase Pack within their first 30 days of their enrollment as a Coach. 4. Showcase Pack Sponsors Bonuses (SPSB) (paid weekly) Every time a Showcase Pack is sold by any coach in the first five levels of your direct line of sponsorship, you earn a $5 Showcase Pack - Sponsors Bonus. Note: Active status is a requirement to earn any SPSB. 5. Team Cycle Bonuses As an active and qualified Ruby Coach, your CBC can start accumulating and banking (holding) Team Volume (TV) from your CBC s left and right Coach legs (regardless of depth) and is eligible to start earning Team Cycle Bonuses. Team Cycle Bonuses - Ruby Coach up to a $19 Team Cycle Bonus for active and qualified Ruby Coaches with 50 PV up to a $20 Team Cycle Bonus for active and qualified Ruby Coaches with 75 PV up to a $21 Team Cycle Bonus for active and qualified Ruby Coaches with 100 PV (with at least 25 PV generated from Web site retail sales and/or online MDB Club memberships). up to a $22 Team Cycle Bonus for active and qualified Ruby Coaches with 125 PV (with at least 25 PV generated from Web site retail sales and/or online MDB Club memberships). Allowable Daily Team Cycles for Ruby Coaches A Ruby Coach can theoretically cycle their CBC and earn Team Cycle Bonuses up to 75 times daily. CBC Master Cycles and Carry Over Team Volume (TV) When a CBC completes 300 consecutive and payable Team Cycle Bonuses, a Master Cycle occurs and a maximum of 5000 TV in the strong leg and the entire TV in the weak leg will carry over to the next cycle, which may occur on the same day. 9

10 RANKS, QUALIFICATIONS & BENEFITS Team Cycle Bonus Account Fund and Team Cycle Bonus Cap Each week, 35% of the total company BV is set aside for Team Cycle Bonus payouts. In order to maintain the profitability required to successfully fund and operate the Million Dollar Body opportunity and to ensure business stability for the Independent Million Dollar Body Coaches, the company has established a cap of 35% of the total accumulated company BV to be paid in Team Cycle Bonuses, and may implement a Team Cycle Bonus payout adjustment, if necessary, which will adjust all Team Cycle Bonus payouts equally in order to maintain the established cap. 6. Matching Check Bonus: as an active and qualified Ruby Coach, you can earn 5% of the weekly Team Cycle Bonus check amounts earned by your personally sponsored active and qualified Emerald, Ruby, and Diamond Coaches. 10

11 RANKS, QUALIFICATIONS & BENEFITS IV) DIAMOND COACH - EARN SIX DIFFERENT WAYS Qualifications Be a Million Dollar Body Club Coach. Maintain active status - To become and remain an active MDB Coach, you need to have achieved a minimum of 50 Personal Volume (PV) points within the previous 30 days of the pay period being calculated and paid. (Also, see Glossary: Active Status - Grace Period) Develop and maintain two (2) personally sponsored active and qualified Emerald Coaches (or higher ranks), with one (1) active and qualified Emerald Coach placed in the left Coach leg of your CBC, and one (1) active and qualified Emerald Coach placed in the right Coach leg of your CBC. Personally sponsor and maintain six additional active MDB Coaches by: (A) placing three active and qualified additional Coaches on the left Coach leg of your CBC (B) placing three additional active and qualified Coaches on the right Coach leg of your CBC Note: To become and maintain an active and qualified Diamond Coach rank, you need to achieve a minimum of three (3) active and qualified Coaches and one (1) active and qualified Emerald Coach in the left Coach leg and a minimum of three (3) active and qualified Coaches and one (1) active and qualified Emerald Coach in the right Coach leg of a qualifying CBC. This represents a combined total of a minimum of eight (8) personally sponsored active Coaches of which two Emerald Coaches (or higher ranks) may be counted towards the eight (8) personally sponsored Coaches minimum requirement. Benefits Retail Commissions (paid weekly) 1. Earn a 25% commission on the retail sales price of most MDB products (paid weekly) and earn a 15% commission on the product sales to personally enrolled MDB Club members. 2. Million Dollar Body Club Membership Commissions (paid quarterly) Earn a 50% commission on your personal customer sales and renewals of MDB Club - online memberships 3. Showcase Pack Bonus (SPB) (paid weekly) Earn a $50 Showcase Pack Bonus (SPB) when a personally sponsored Coach orders a Showcase Pack within their first 30 days of their enrollment as a Coach. 4. Showcase Pack Sponsors Bonuses (SPSB) (paid weekly) Every time a Showcase Pack is sold by any coach in the first five levels of your direct line of sponsorship, you earn a $5 Showcase Pack - Sponsors Bonus. Note: Active status is a requirement to earn any SPSB. 11

12 RANKS, QUALIFICATIONS & BENEFITS 5. Team Cycle Bonuses As an active and qualified Diamond Coach rank, your CBC can start accumulating and banking (holding) Team Volume (TV) from your CBC s left and right Coach legs (regardless of depth) and be eligible to start earning Team Cycle Bonuses. Team Cycle Bonuses You can earn a Team Cycle Bonus of up to $25 each time your CBC cycles by generating 360 TV with a minimum of 1/3 of the TV (120 TV) in one leg and 2/3 of the TV (240 TV) in the other leg. Each time your CBC cycles with 360 TV with the proper balance of 1/3 TV 2/3 TV, the 360 TV will be deducted (120 TV in one leg and 240 TV in the other leg) from your total accumulated CBC - TV and the remaining qualified TV will carry over into the next CBC cycle of 360 TV (per the MDB Team Compensation Plan). Team Cycle Bonuses - Diamond Coach up to a $22 Team Cycle Bonus for active and qualified Diamond Coaches with 50 PV up to a $23 Team Cycle Bonus for active and qualified Diamond Coaches with 75 PV up to a $24 Team Cycle Bonus for active and qualified Diamond Coaches with 100 PV (with at least 25 PV generated from Web site retail sales and/or online MDB Club memberships. up to a $25 Team Cycle Bonus for active and qualified Diamond Coaches with 125 PV (with at least 25 PV generated from Web site retail sales and/or online MDB Club memberships. Allowable Daily Team Cycles for Diamond Coaches A Diamond Coach can theoretically cycle their CBC and earn Team Cycle Bonuses up to 150 times daily. CBC Master Cycles and Carry Over Team Volume (TV) When a CBC completes 300 consecutive and payable Team Cycle Bonuses, a Master Cycle occurs and a maximum of 5000 TV on the strong leg and the entire TV on the weak leg will carry over to the next cycle, which may occur on the same day. Team Cycle Bonus Account Fund and Team Cycle Bonus Cap Each week, 35% of the total company BV is set aside for Team Cycle Bonus payouts. In order to maintain the profitability required to successfully fund and operate the Million Dollar Body opportunity and to ensure business stability for the Independent Million Dollar Body Coaches, the company has established a cap of 35% of the total accumulated company BV to be paid in Team Cycle Bonuses, and may implement a Team Cycle Bonus payout adjustment, if necessary, which will adjust all Team Cycle Bonus payouts equally in order to maintain the established cap. 6. Matching Check Bonus As an active and qualified Diamond Coach, you can earn 10% of the weekly Team Cycle Bonus check amounts earned by your personally sponsored active and qualified Emerald, Ruby and Diamond Coaches. 12

13 RANKS, QUALIFICATIONS & BENEFITS V. STAR DIAMOND COACHES Qualifications DOUBLE STAR DIAMOND COACH Only a Coach s CBC#1 can earn this rank To become a Double Star Diamond Coach, a CBC must have accomplished the following for four (4) consecutive weekly bonus- pay periods (a rolling 5 -week qualification period): A) Must be a Diamond Coach (i.e., Must have achieved the qualifications to become a Diamond Coach) B) Must have at least 1 personally sponsored active Diamond Coach in the left Coach leg of CBC#1 and at least 1 personally sponsored active Diamond Coach in the right Coach leg of CBC#1. Both Active Diamonds must be personally sponsored by CBC#1. FIVE STAR DIAMOND COACH Only a Coach s CBC#1 can earn this rank To become a Five Star Diamond Coach, a CBC must have accomplished the following for four (4) consecutive weekly bonus- pay periods (a rolling 5-week qualification period): A) Must be a Double Star Diamond Coach (i.e., Must have achieved the qualifications to become a Double Star Diamond Coach) B) Must have at least 3 additional personally sponsored active Diamond Coaches with at least 1 in one Coach leg of CBC#1 and at least 2 in the other Coach leg of CBC#1. The 3 additional active Diamond Coaches can be personally sponsored by any of the Coach s CBCs. TEN STAR DIAMOND COACH Only a Coach s CBC#1 can earn this rank To become a Ten Star Diamond Coach, a CBC must have accomplished the following for four (4) consecutive weekly bonus- pay periods (a rolling 5-week qualification period): A) Must be a Five Star Diamond Coach (i.e., Must have achieved the qualifications to become a Five Star Diamond Coach) B) Must have at least 5 additional personally sponsored active Diamond Coaches. The 5 additional active Diamond Coaches can be personally sponsored by any of the Coach s CBCs. A Ten Star Diamond Coach will have at least 10 personally sponsored active Diamond Coaches of which, at least 5 must be in one Coach leg of CBC#1 and at least 5 must be in the other Coach leg of CBC#1. SUPER STAR DIAMOND COACH Only a Coach s CBC#1 can earn this rank To become a Super Star Diamond Coach, a CBC must have accomplished the following for four (4) consecutive weekly bonus- pay periods (a rolling 5 -week qualification period): A) Must be a Ten Star Diamond Coach (i.e., Must have achieved the qualifications to become a Ten Star Diamond Coach) B) Must have at least 5 additional personally sponsored Active Diamond Coaches anywhere in the downline. The 5 additional Active Diamond Coaches can be personally sponsored by any of the Coach s CBCs. 13

14 RANKS, QUALIFICATIONS & BENEFITS Note: In order for a Diamond Coach to qualify for Star Diamond ranks, the active and qualified Diamond Coach and all of their personally sponsored active and qualified Diamond Coaches used to qualify for Star Diamond rank must have achieved active and qualified status for a minimum of four (4) consecutive weekly bonus pay periods in the quarterly bonus pool period being calculated (in order to qualify for each particular quarterly Star Diamond Bonus Pool). Benefits 1. Star Diamond Production Bonus Paid Quarterly Million Dollar Body sets aside 2% of the total company BV, which is paid quarterly to top producing qualified Star Diamond Coaches. Each of the Star Diamond ranks share equally in each Star Diamond Production bonus pools in which they are qualified to participate in. Each of the four (4) different Star Diamond Production bonus pools is funded with 1/2% of the total company BV. All qualified Double Star Diamond Coaches share in the 1/2% Double Star Diamond bonus pool. All qualified Five Star Diamond Coaches share in the 1/2% Double Star Diamond bonus pool and in the 1/2% Five Star Diamond bonus pool. All qualified Ten Star Diamond Coaches share in the 1/2% Double Star Diamond bonus pool, in the 1/2% Five Star Diamond bonus pool, and in the 1/2% Ten Star Diamond bonus pool. All qualified Double Star Diamond Coaches share in the 1/2% Double Star Diamond bonus pool, in the 1/2% Five Star Diamond bonus pool, in the 1/2% Ten Star Diamond bonus pool, and in the 1/2% Super Star Diamond bonus pool. Any unpaid accumulated Star Diamond Development bonuses will roll over into the next quarterly qualification period until they are paid. 2. Additional Coach Business Center(s) Once a Coach s CBC#1 achieves the Double Star Diamond Coach rank, it can optionally request to open up one additional CBC (CBC#2) downline from CBC#1. CBC#2 can then start the process of building and qualifying CBC#2 to achieve the active and qualified Emerald Coach, Ruby Coach, and Diamond Coach ranks. Once CBC#2 has achieved an active and qualified Diamond Coach rank and has personally sponsored two (2) other active and qualified Diamond Coaches, with one (1) of these active and qualified Diamond Coaches in their left Coach leg and one (1) of these active and qualified Diamond Coaches in their right Coach leg of CBC#2 for four (4) consecutive weekly bonus- pay periods, then CBC#2 can (optionally) request to open up one additional CBC (CBC#3) downline from CBC#2. CBC#2 can then start the process of building and qualifying CBC#3 to achieve the active and qualified Emerald Coach, Ruby Coach, and Diamond Coach ranks. This process of qualifying for additional Coach Business Centers may be repeated until a Coach has a maximum total of ten (10) Coach Business Centers. Retail sales requirements for all additional Coach Business Centers For each additional downline CBC that a Coach opens, 100 % of the PV (which determines the Team Cycle Bonus eligibility amounts for each rank for a specific pay period) needs to be generated through retail sales (i.e., non-coach orders) generated from Web site retail sales and online MDB Club memberships. 14

15 GLOSSARY Accumulating Team Volume (TV) Commencing with the active and qualified Emerald Coach rank, a CBC can start accumulating and banking (holding) Team Volume (TV) from it s left and right Coach legs (regardless of depth) and become eligible to start earning Team Cycle Bonuses and other bonuses per the MDB Team Compensation Plan. Active Status To become and remain an active MDB Coach, you need to have generated a minimum of 50 Personal Volume (PV) points within the previous 30 days of the pay period being calculated and paid. (Also, see Glossary: Active Status - Grace Period). Active Status - Grace Period A period of five (5) days added to the 30 days used to determine active status. This makes the period for active status a rolling five (5) weeks. Note: Because 30 days is two (2) days more than four weeks (28 days), active status will be calculated using a rolling five (5) week period. The additional 5 days added to the 30-days active status requirement is called the Grace Period. Active and Qualified Means that a Coach with the rank of Emerald Coach, Ruby Coach or Diamond Coach has generated a minimum of 50 PV within the previous 30 days to ensure active status and has met all the qualifications commensurate to their rank according to the MDB Team Compensation Plan. Achieved Rank The rank which a Coach has reached within the MDB Team Compensation Plan. Activate - Activated - Activating a CBC This describes the process that is accomplished when an Coach becomes an active and qualified Emerald Coach by developing a team of two (2) personally sponsored active Coaches (with a minimum of 50 PV each), with one active Coach placed in the left Coach leg of their Coach Business Center and one other active Coach placed in the right Coach leg of their Coach Business Center. Once activated, a CBC starts accumulating and banking (holding) ALL DOWNLINE TV from that CBC so that Team Cycle Bonuses and other bonuses can be earned and paid to active and qualified Emerald, Ruby and Diamond Coaches. Agreement The contract between the company and each Independent Million Dollar Body Coach includes the Independent Million Dollar Body Coach Application and Agreement, the Million Dollar Body Policies and Procedures, and the Million Dollar Body Compensation Plan, all in their current form and as may be amended by Million Dollar Body in its sole discretion. These documents are collectively referred to as the Agreement. Accumulating CBC Team Volume Team Volume (TV) starts accumulating once a CBC becomes activated. 15

16 GLOSSARY Bonus(es) A bonus paid per the Million Dollar Body Career Compensation Plan. There are five different bonuses. They are: 1) the Showcase Pack Bonus (SPB); 2) the Showcase Pack Sponsors Bonuses (SPSB); 3) the Team Cycle Bonuses (TCB); 4) the Matching Check Bonuses, and 5) the Star Diamond Production Bonuses. Bonus Compression (Showcase Pack Sponsors Bonuses (SPSB) If a SPSB payment cannot be paid to a Coach because that Coach is inactive in a given bonus pay period, then the SPSB payment will compress up to the next active and qualified Coach upline. (i.e. if a Coach sells a Showcase Pack to a new Coach, then any SPSB payments will be paid through the direct line of sponsorship of the selling Coach to active Coaches only. BV (Bonus Volume) This is the bonus point value amount the company uses to calculate and paid bonuses.(also, see Personal Volume (PV) and Team Volume (TV). Coach Business Center (CBC) A Million Dollar Body compensation structure used to track a Coach s retail sales and any TV generated by a Coach s downline team sales organization. When activated, a CBC has two active legs that start to accumulate TV. A right Coach leg and a left Coach leg. Once 360 TV has accumulated within the Coach Business Center with the proper balance of 1/3 (120 TV) in one Coach leg and 2/3 (240 TV) in the other Coach leg, the CBC cycles and pays active and qualified Emerald Coaches (and higher ranks) a Team Cycle Bonus and then immediately carries over any qualified residual TV to begin another CBC cycle of 360 TV. CBC TV Counter Zero Reset The removal of all the Team Volume (TV) from the left Coach leg (LV) and the right Coach leg (RV) of a Coach Business Center (CBC). Once a CBC - TV Counter Zero Reset occurs, the TV that was removed is no longer available to be counted in calculating Team Cycle Bonuses. The CBC TV Counter Zero Reset occurs at the end of any day that a Coach (all ranks) does not maintain their active status. Commission This is compensation paid on the retail selling price of the MDB products and online Million Dollar Body Club membership services. Cycle (Cycling) Once 360 BV has accumulated within a Coach s Business Center with the proper balance of 1/3 (120 TV) in one Coach leg and 2/3 (240 TV) in the other Coach leg, the CBC cycles and pays active and qualified Emerald Coaches (and higher ranks) a Team Cycle Bonus and then immediately carries over any residual qualified TV to commence another CBC cycle. Note: The MDB software system determines which leg is the weak leg between the cycles in a week. For instance if a CBC has 260 TV in the left Coach leg and 200 TV in the right Coach leg before cycle 1 (360 TV with 240 TV 120 TV balance is deducted from the total of both legs), the system determines that the left Coach leg is the strong leg in cycle 1 (260 TV) and the right Coach leg (200 TV) is the weak Coach leg in cycle 1. After cycle 1 is complete, the right Coach leg (with 80 TV carried over i.e., 200 TV 120 TV = 80 TV) becomes the strong Coach leg and the left Coach leg (with 20 TV carried over i.e., 260 TV 240 TV = 20 TV) becomes the weak Coach leg. In other words, the swapping of strong and weak leg determination often occurs between Team Cycle Bonus cycles. This is standard binary compensation plan methodology. 16

17 GLOSSARY In the Million Dollar Body back-office software, left and right Team Volume is denoted as LV (Left Volume) and RV (Right Volume). Cycling Example - Four Complete Cycles Left Team Volume (LV) Right Team Volume (RV) Cycles cycles complete Carryover to the next cycle Customer A customer or retail customer is associated with an MDB Coach. However, a customer can not signup other Coaches or customers and cannot receive commissions or bonuses. A customer is not placed in any genealogy. Day Period A day is calculated from 12:00 AM to 11:59 EST. Daily Cycles Per Rank (Team Cycle Bonuses) An Emerald Coach can cycle their CBC and earn Team Cycle Bonuses up to 40 times daily, a Ruby Coach can cycle their CBC and earn Team Cycle Bonuses up to 75 times daily, and a Diamond Coach can cycle their CBC and earn Team Cycle Bonuses up to 150 times daily. Downline Binary Placement The MDB Coaches personally sponsored by an MDB Coach, as well as any MDB Coaches that may be sponsored by any MDB upline Coaches and placed in the downline binary genealogy of any Coach Business Center owned by another MDB Coach Downline Direct Line of Sponsorship The MDB Coaches personally sponsored by an MDB Coach, as well as all the MDB Coaches they sponsor, etc. Example: Chris (A) sponsors Bill (B) and Bill sponsors Mary (C), who sponsors Careen (D), who then sponsors Bob (E). All the MDB Coaches (B through E) are in a downline - direct line of sponsorship from Chris (A). Conversely, starting with Bob (E) the upline - direct line of sponsorship from him would be Careen (D), Mary (C), Bill (B), and Chris (A). 17

18 GLOSSARY Genealogy The company s overall structure that indicates how and where MDB Coaches with their CBCs are placed. company supports a single Binary genealogy in which there are a maximum of two (2) MDB Coach Business Centers per level (i.e., two (2) MDB Coaches and their CBCs on any MDB Coaches CBC first level). The binary genealogy is used to determine the payout amounts of retail commissions as well as bonus qualifications. Inactive Status TV Counter Reset To Zero To become and remain an active MDB Coach, you need to have generated a minimum of 50 Personal Volume (PV) points within the previous 30 days of the current pay period (or for the pay period being calculated and paid). (See, Active Status - Grace Period). Failure to remain active results in an Inactive status. Since bonuses and cycles are calculated daily, on any day that a Coach becomes inactive, their CBC will lose any accumulated TV (see CBC - TV Counter Zero Reset) and their CBC - TV is reset to zero TV. Once active status is again established by the Coach whose CBC has been previously activated, their CBC immediately starts to accumulate and bank (hold) new TV again (based upon the MDB Team Compensation Plan) and the CBC can start earning Team Cycle Bonuses and other bonuses again. Leadership Ranks Refers to the Million Dollar Body active and qualified Emerald Coaches, active and qualified Ruby Coaches and active and qualified Diamond Coaches, active and qualified Double Star Diamond Coaches, active and qualified Five Star Diamond Coaches, active and qualified Ten Star Diamond Coaches, and active and qualified Super Star Diamond Coaches. Left Team Volume (LV) LV - represents a Coach Business Center s downline Team Volume for their left Coach leg. Master Cycles When a CBC completes 300 consecutive and payable Team Cycle Bonuses, a Master Cycle occurs and a maximum of 5000 TV on the strong leg and the entire TV on the weak leg will be carry-over to the next cycle, which may occur on the same day. MDB Million Dollar Body Official Rank The rank which an MDB coach has achieved in the MDB Career Compensation Plan. Once an Official MDB rank has been achieved, it is permanent. Paid-As-Rank The rank which an MDB Coach is paid based upon their actual weekly bonus pay period status and qualifications versus their achieved Official rank. Pay Period The MDB weekly time frame period for totaling all sales, commissions and bonuses commences each Monday morning at 12:00 AM, EST to the next following Sunday night at 11:59 PM, EST. Commissions and Bonuses are calculated daily and paid weekly two weeks in arrears. 18

19 GLOSSARY Personally Sponsored MDB Coaches directly sponsored by another MDB Coach. PV (Personal Volume) This is your Personal Volume produced through your personal orders and sales. It is used to determine your active Coach status and is also part of the active and qualified requirement for achieving and maintaining the active and qualified Emerald, Ruby and Diamond Coaches ranks. PV is also used to determine the amount of Team Cycle Bonuses that may be earned by eligible Emerald, Ruby and Diamond Coaches in each bonus pay period week. Qualified Refers to when an active Coach activates and then maintains a minimum of two (2) other active Coaches in their downline CBC organization: with one active Coach in their left Coach leg and one active Coach in their right Coach leg. If a CBC is not qualified due to the Coach being inactive or by not maintaining two other active Coaches with one active Coach in each leg, then that CBC has not met the minimum qualifications for it s rank and therefore is not eligible (qualified) to earn Team Cycle Bonuses, Matching Bonuses or Production Bonuses. Additionally, if an active Coach becomes inactive (even though they may have active Coaches in their left Coach leg and active Coaches in their right Coach leg) then their CBC does not retain any accumulated TV and the TV counter is reset to zero. (See, Glossary: CBC TV Counter Zero Reset) Ranks There are eight (8) ranks of Million Dollar Body Coaches. They are: I. Coach II. Emerald Coach III. Ruby Coach IV. Diamond Coach V. Double Star Diamond Coach VI. Five Star Diamond Coach VII. Ten Star Diamond Coach VIII. Super Star Diamond Coach Ranks, as well as commissions, and bonuses are calculated daily because daily active Status and Rank Qualifications determine the eligibility for different bonuses. Resalable Sales aids shall be deemed resalable if each of the following elements is satisfied: 1) they are unopened and unused; 2) packaging and labeling has not been altered or damaged: 3) the product and packaging are in a condition such that it is a commercially reasonable practice within the trade to sell the merchandise at full price; 4) products are returned to the MDB company within one year from the date of purchase; and 5) the product contains current MDB labeling. Any merchandise that is clearly identified at the time of sale as non-returnable, discontinued, or as a seasonal item, shall not be resalable. Retail Sales Retail Sales are purchases made by an individual who is not an MDB Coach. Right Team Volume (RV) RV - represents a Coach Business Center downline Team Volume for their tight Coach leg. 19

20 GLOSSARY Sponsor An MDB Coach who enrolls another MDB Coach into the Company. The act of enrolling others and training them to become MDB Coaches is called sponsoring. Strong Team Leg It is the Coach leg with the most total amount of TV between an MDB Coach Business Center s left Coach leg and right Coach leg. Team Cycle Bonuses and Carryover TV Bonuses earned by active and qualified (paid as) Emerald, Ruby, or Diamond Coaches based upon the cumulative TV of their two teams of Coaches: called the left Coach leg and the right Coach leg. When an active and qualified Coach Business Center generates a total of 360 cumulative TV, with a minimum of 1/3 of the TV (120 TV) in one Coach leg and 2/3 of the TV (240 TV) in the other Coach leg, the CBC completes a 360 TV Team Cycle Bonus Cycle and the Coach is paid as they are qualified and eligible to be paid per the MDB Team Compensation Plan. Once a CBC completes a Team Cycle Bonus Cycle, the appropriate amount of the 360 TV is subtracted from the Coaches CBC left Coach leg and right Coach leg and any remaining accumulated TV can carryover in each leg to commence another cycle of accumulating 360 TV to be credited towards earning more bonuses based upon the MDB Team Compensation Plan. Team Volume (TV) This is the sum total of all the individual PV generated by the downline Coaches of an MDB Coach s Business Center in the MDB Team Compensation Plan. In the Coaches back-office management system, a CBC s TV is referred to as Left Volume (LV) and Right Volume (RV). Upline This term refers to the MDB Coach or MDB Coaches above a particular MDB CBC directly up to the company. Weak Team Leg It is the Coach leg with the least total amount of TV between a MDB Coach Business Center s - left Coach leg and right Coach leg. Revised

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