Policies and Compensation Plan Incorporated into Distributor Agreement
These Policies and Procedures, in their present form and as amended at the sole discretion of Natural 10 Beauty, Inc. (hereafter referred to as Natural 10 Beauty” or the Company”), are incorporated into, and form an integral part of, the Natural 10 Beauty Distributor Agreement. Throughout these Policies, when the term Agreement” is used, it collectively refers to the Natural 10 Beauty Independent Distributor Application and Agreement, these Policies and Procedures, the Natural 10 Beauty Compensation Plan, and the Natural 10 Beauty Business Entity Registration Form (if applicable). These documents are incorporated by reference into the Natural 10 Beauty Distributor Agreement (all in their current form and as amended by Natural 10 Beauty). It is the responsibility of each Distributor to read, understand, adhere to, and ensure that he or she is aware of and operating under the most current version of these Policies and Procedures. When sponsoring or enrolling a new Distributor, it is the responsibility of the sponsoring Distributor to ensure that the applicant is provided with, or has online access to, the most current version of these Policies and Procedures and the Natural 10 Beauty Compensation Plan prior to his or her execution of the Distributor Agreement.
Requirements to Become a Distributor
To become a Natural 10 Beauty Distributor, each applicant must:
a) Be of the age of majority in his or her state of residence;
b) Reside in the United States, a U.S. Territory, or any country that Natural 10 Beauty has officially announced is open for business;
c) Have a valid Social Security or Federal Tax ID number;
d) Purchase a Natural 10 Beauty Distributor Business Kit (optional in North Dakota); and
e) Submit a properly completed Distributor Application and Agreement to Natural 10 Beauty.
The Company reserves the right to reject any applications for a new Distributor or applications for renewal.
Change of Sponsor
To protect the integrity of all Marketing Organizations and safeguard the hard work of all Distributors, Natural 10 Beauty strongly prohibits changes in sponsorship. Maintaining the integrity of sponsorship is critical for the success of every Distributor and Marketing Organization. Accordingly, the transfer of a Natural 10 Beauty business from one sponsor to another is not permitted.
Cancellation and Re-application
A Distributor may legitimately change organizations by voluntarily cancelling his or her Natural 10 Beauty business and remaining inactive (i.e., no purchases of Natural 10 Beauty products for resale, no sales of Natural 10 Beauty products, no sponsoring, no attendance at any Natural 10 Beauty functions, participation in any other form of Distributor activity, or operation of any other Natural 10 Beauty business) for 13 full calendar months. Following the 13 month period of inactivity, the former Distributor may reapply under a new sponsor. Natural 10 Beauty will consider waiving the 13 month waiting period under exceptional circumstances. Such requests for waiver must be submitted to Natural 10 Beauty in writing. If a Distributors utilizes this method to change his or her Sponsor, none of the downline Distributors in the Distributor’s Marketing Organization will be transferred with him or her.
Product Claims
No claims (which include personal testimonials) as to therapeutic, curative or beneficial properties of any products offered by Natural 10 Beauty may be made except those contained in official Natural 10 Beauty literature. In particular, no Distributor may make any claim that Natural 10 Beauty products are useful in the cure, treatment, diagnosis, mitigation or prevention of any diseases. Such statements can be perceived as medical or drug claims. Not only do such claims violate Natural 10 Beauty policies, but they potentially violate federal and state laws and regulations, including the federal Food, Drug, and Cosmetic Act and Federal Trade Commission Act.
Income Claims
In their enthusiasm to enroll prospective Distributors, some Distributors are occasionally tempted to make income claims or earnings representations to demonstrate the inherent power of party plan direct selling. This is counterproductive because new Distributors may become disappointed very quickly if their results are not as extensive or as rapid as the results others have achieved. At Natural 10 Beauty, we firmly believe that the Natural 10 Beauty income potential is great enough to be highly attractive, without reporting the earnings of others.
Moreover, the Federal Trade Commission and several states have laws or regulations that regulate or even prohibit certain types of income claims and testimonials made by persons engaged in direct selling. While Distributors may believe it beneficial to provide copies of checks, or to disclose the earnings of themselves or others, such approaches have legal consequences that can negatively impact Natural 10 Beauty as well as the Distributor making the claim unless appropriate disclosures required by law are also made contemporaneously with the income claim or earnings representation. Because Natural 10 Beauty Distributors do not have the data necessary to comply with the legal requirements for making income claims, a Distributor, when presenting or discussing the Natural 10 Beauty opportunity or Compensation Plan to a prospective Distributor, may not make income projections, income claims, or disclose his or her Natural 10 Beauty income (including the showing of checks, copies of checks, bank statements, or tax records).
3.1.1 - Distributor Participation in Other Direct Selling Programs
If a Distributor is engaged in other non-Natural 10 Beauty direct selling programs, it is the responsibility of the Distributor to ensure that his or her Natural 10 Beauty business is operated entirely separate and apart from any other program in which the Distributor. To this end, the following must be adhered to:
a) The Distributor shall not display Natural 10 Beauty promotional materials, sales aids, or products with or in the same location as any non-Natural 10 Beauty promotional materials, sales aids, products or services.
b) The Distributor may not offer the Natural 10 Beauty opportunity or products to prospective or existing customers or Distributors in conjunction with any non-Natural 10 Beauty program, opportunity, product or service.
c) The Distributor may not offer any non-Natural 10 Beauty opportunity, products, services, or opportunity at any Natural 10 Beauty-related meeting, seminar or convention, or within two hours and a five mile radius of the Natural 10 Beauty event. If the Natural 10 Beauty meeting is held telephonically or via the internet, any non-Natural 10 Beauty meeting must be at least two hours before or after the Natural 10 Beauty meeting, and on a different conference telephone number or internet web address from the Natural 10 Beauty meeting.
Blogs, Chat Rooms, Social Networks, Online Auctions, and other Online Forums
A Distributor may use blogs, chat rooms, social networks, or other online forums to advertise, promote, or discuss Natural 10 Beauty’s products or the Natural 10 Beauty opportunity, provided the Distributor does not make any claims regarding the products or the opportunity that are not contained in the Company’s official promotional literature.
Media and Media Inquiries
Distributors must not attempt to respond to media inquiries regarding Natural 10 Beauty, its products, or their independent Natural 10 Beauty business. All inquiries by any type of media must be immediately referred to the President of Natural 10 Beauty or his designate. This policy is designed to assure that accurate and consistent information is provided to the public as well as a proper public image.
Change of Address or Telephone
To ensure timely delivery of products, support materials, and commission checks, it is critically important that the Natural 10 Beauty’s files are current. Street addresses are required for shipping since UPS cannot deliver to a post office box. Distributors planning to move should update their personal information via the Back Office function of the Distributor’s replicated Natural 10 Beauty website. To guarantee proper delivery, two weeks advance notice must be provided to Natural 10 Beauty on all changes.
Product Sales
The Natural 10 Beauty Compensation Plan is based on the sale of Natural 10 Beauty products to end consumers. Distributors must fulfill personal and Marketing Organization retail sales requirements (as well as meet other responsibilities set forth in the Agreement) to be eligible for bonuses, commissions and advancement to higher levels of achievement. The following sales requirements must be satisfied for Distributors to be eligible for commissions:
a) Distributors must satisfy the Personal Sales Volume and Group Sales Volume requirements to fulfill the requirements associated with their rank as specified in the Natural 10 Beauty Compensation Plan. Personal Sales Volume” includes purchases made by the Distributor and purchases made by the Distributor’s personal customers. Group Sales Volume shall include the total Sales Volume of all Distributors in his or her Marketing Organization, but shall not include the Distributor’s Personal Sales Volume.
b) At least 70% of a Distributor’s total monthly personal sales volume must be sold to the Distributor’s customers (including online customers).
c) Distributors must develop or service at least five customers every month.
Bonus and Commission Qualifications
A Distributor must be active and in compliance with the Agreement to qualify for bonuses and commissions. So long as a Distributor complies with the terms of the Agreement, Natural 10 Beauty shall pay commissions to such Distributor in accordance with the Compensation Plan. The minimum amount for which Natural 10 Beauty will issue a check is $10.00. If a Distributor’s bonuses and commissions do not equal or exceed $10.00, the Company will accrue the commissions and bonuses until they total $10.00. A check will be issued once $10.00 has been accrued.
Returned Checks
All checks returned by a Distributor’s bank for insufficient funds will be re-submitted for payment. A $25.00 returned check fee will be charged to the account of the Distributor. After receiving a returned check from a customer or a Distributor, Natural 10 Beauty reserves the right to require that all future orders must be paid by Credit Card, money order or cashier’s check. Any outstanding balance owed to Natural 10 Beauty by a Distributor for NSF checks and returned check fees will be withheld from subsequent bonus and commission checks.
Restrictions on Third Party Use of Credit Cards and Checking Account Access
A Distributor shall not permit other Distributors or customers to use his or her credit card, or permit debits to his or her checking accounts, to enroll or to make purchases from the Company.
10.1 - Involuntary Cancellation
A Distributor’s violation of any of the terms of the Agreement, including any amendments that may be made by Natural 10 Beauty in its sole discretion, may result in any of the sanctions listed in Section 9.1, including the involuntary cancellation of his or her Distributor Agreement. Cancellation shall be effective on the date on which written notice is mailed, faxed, or delivered to an express courier for delivery to the Distributor’s last known address (or fax number), or to his/her attorney, or when the Distributor receives actual notice of cancellation, whichever occurs first.
Natural 10 Beauty reserves the right to terminate all Distributor Agreements upon thirty (30) days written notice in the event that it elects to: (1) cease business operations; (2) dissolve as a corporate entity; or (3) terminate distribution of its products via direct selling.
