COMPENSATION PLAN ROLLUP PLAN OPTIONAL PLAN BYPASS PROGRAM
UNIQUE OPPORTUNITY HTE's plan supports a highly credible product line, which is in great demand in both retail and commercial markets. HTE's generous Compensation Plan and competitively priced products sets us apart from other Multi-Level Marketing (MLM) companies. Our business opportunity attracts entrepreneurial business leaders, experienced MLM professionals, as well as individuals who are new to MLM. SUCCESS TARGETING (INITIAL GOALS) HTE's program is available to entrepreneurs interested in improving their health and increasing their wealth. All you need to become successful is a desire to promote and sponsor new Entrepreneurs. We provide our family members with an easy-to-follow road map to success. Multiple advancement levels provide different compensation levels...you earn more as you grow your business! Please refer to Section 7 in this chapter for a complete description of the roles and responsibilities for each Distributor level. COMPENSATION PLAN SUMMARY Our Compensation Plan is very easy to understand and is described in detail in Section 6 of this Chapter. Your sponsor will be happy to answer any questions you may have FEATURES AND BENEFITS The Compensation Plan is designed to motivate you to promote our products and to create your own business organization (downline) that provides you with an ongoing income. The program provides several unique features and benefits for you and other entrepreneurs you sponsor. No personal monthly volume required after initial 45 points are accumulated Earn overrides on your organization Earn commissions on your own sales/purchases Qualify once and retain title for life Limited qualifications based on level President’s Growth Bonus Supreme President’s Club Business Fund for purchase or lease of a car or to be used to travel to company related meetings/trainings, for President Level and above. TERMS AND DEFINITIONS Let's review a few key terms: Business Volume Points (BVP) We assign each product a Business Volume Point (BVP) value. By accumulating these points, you qualify for advancement to higher positions in the Compensation Plan. HTE is an international company and this point system coordinates advancement internationally. When computing a commission's monetary value, we apply the commission rate to the CBV (Commission Basis Volume - explained below) for the products. All commissions use BVP for the computation. For purposes of this commission structure, one Total Health Spa sold equals 285 BVP. Commission Basis Volume (CBV) For commission purposes, one BVP equals $15.00. For example, if one Total Health Spa (1 Chi Machine + 3 HotHouses) is sold without the sale of a membership, your Commission Basis Volume (CBV) will be 285 BVP x $15.00 = $4,275.00. The Distributor's commission rate is then applied to this CBV. Personal Business Value Points (PBVP) PBVP is a cumulative total of points based on your personal sales from the time you reached your current level, up to 12 month's time. Personal Group Business Value Points (PGBVP) PGBVP is a cumulative total of points based on your personal sales and those in your direct group (all Distributors lower than your own level. Example: Manager would not include other Managers BVPs in their group, only Distributors, and Supervisors in your personal group, since they are in a lower level. The other Managers would use their own group to calculate their own PGBVP). This is done so the SAME points are not calculated over and over again. Calculation is done on a calendar month basis. As your BVP accumulates, you qualify for advancement in the Compensation Plan and higher commission and bonus levels, while increasing your earning potential. HTE Canada measures Distributors' BVP. It includes all orders placed directly with HTE Canada by the Distributor, and all orders placed directly with HTE Canada by the above-mentioned downline Distributors in the main Distributor's personal group. BVP applies only to products, not sales aids (sales aids are not acknowledged as part of the payout of the Compensation Plan). COMPENSATION PLAN EXPLANATION Important Notice All income examples and illustrations found in the HTE Canada Sales Plan are included for illustration and explanatory purposes only. They are intended to show how the HTE Canada program functions and how payments within the structure of the Sales Plan are calculated. In no way do these explanations and illustrations represent actual, historical examples of specific Distributors or Distributor groups. Nor are they intended to suggest that achievement of this type will be easy, or even possible in all circumstances. No Distributor and/or individual group can be expected to follow precisely any of the diagrams or configurations. A Distributor's group could be higher or lower than the hypothetical cases shown. Each individual's success depends solely on his or her individual efforts. The right to amend the content of the Sales Plan is reserved by HTE Canada and amendments may be published when deemed necessary. Initial Qualification A Distributor's first 45 points earned, plus the purchase of a membership, qualifies them automatically to receive commissions based on performance (i.e. sales or purchase acts count as qualification). Sources of Income It is natural to recognize the exciting business opportunity that HTE Canada offers once being introduced to the products and the program. By sharing the HTE Canada products with others and duplicating your efforts through sponsorship, you can generate additional income through seven sources: Commissions Overrides Growth Bonuses Business Fund President's Growth Bonuses Supreme President's Club Bonuses Personal Commission Distributors sell/purchase their HTE Canada products and receive commissions of 15% to 40% (see below). Commissions Level 15% Distributor's Club 24% Supervisor's Club 32% Manager's Club 40% President's Club 40% Supreme President's Club Override Profit Distributors can also earn from 5% to 25% on the business volume of their personally sponsored Distributors and their groups. This will be discussed in detail later in the Compensation Plan. Leadership Benefits President's Club Distributors and above may qualify for the Business Fund, and Presidents' Growth Bonuses every month. ADVANCEMENT OPPORTUNITIES View Compensation Hierarchy... General Member (GMB)... Distributor Club (DIC)... Supervisor Club (SUC)... Manager Club (MAC)... President Club (PRC) President Club (PRC) / Supreme President Club (SPC) Example of Initial 5 Step Program

General Member (GMB): Go Back Qualification: A General Member is an individual who registers as a Distributor, but does not purchase a product. As a General Member, you will be able to sell HTE products but will not receive commission until you purchase 45 BVP worth of products.

Distributor Club (DIC): Go Back At the Distributor Club level, you will begin to master several skills: one-on-one promoting, product knowledge, basic compensation plan details and the principles of MLM and the duplication process. As a member of the Distributor Club level, you have the obligation to observe and apply techniques learned from your upline, attend as many meetings as possible (both company sponsored and Distributor sponsored), and start promoting HTE products with the help of your upline organization. Qualification: In order to start receiving commissions, you must register as a Distributor and accumulate 45 BVP from personal purchases within the same calendar month. You will receive your Distributor ID# at the time you register to become a Distributor. Once you receive your Entrepreneur Business Manual, you'll need to read the manual, complete the Distributor Application Form found inside and mail or FAX it back to HTE Canada. If we do not receive your signed Distributor Application Form, we will not be able to release . your commission check. (If you sponsor others in your organization and have not qualified with the 45 BVP from personal purchases - you will accumulate points - but will not receive commissions.) If your 45 BVP were not attained in the same month that you registered as a Distributor, the 45 BVP does not count as your PBVP. Distributor Registration 45 BVP Sign and send in Distributor Application Form Sales Commission: Once qualified as a Distributor and you sell or purchase products, you will receive a commission of 15% of CBV. If you sponsor other Distributors, you will begin to accumulate PGBVP. 15% on all personal sales/purchases *Please note: A Distributor must submit their social security number for HTE to release a full commission check. Without the social security number the company must withhold 28% of the member's holdings. Override Bonus: None Growth Bonus: None Supervisor Club (SUC): Go Back As a Supervisor Club member, you will be required to mentor your downline members and share your knowledge with them. You can begin to master your presentation and public speaking skills by hosting Home Parties. At this level you should continue brushing up on your product knowledge skills and master your knowledge of HTE's Marketing Plan. As you begin to apply the skills you've learned from your upline, continue to attend meetings, and host Home Parties, you will advance quickly if you apply the duplication methods of network marketing. Qualification: If your organization has accumulated 360 BVP within a period of 12 consecutive months after becoming a Distributor, you will immediately be promoted to Supervisor's Club. You also qualify for an Override bonus and Growth Bonus. Accumulate 360 BVP Sales Commission: Once qualified as a Supervisor and you sell or purchase products, you will begin to receive a commission of 24% of CBV. Accumulate PGBVP on all downline Distributor's sales/purchases. 24% on all personal sales/purchases Override bonus: Once qualified as a Supervisor and you purchase products, you will earn 24% of personal sales CBV and 9% of personally sponsored Distributor's club members. 9% (24%-15%) Override Bonus from all downline Distributor1 level Distributor's sales/purchases Growth Bonus: In addition, if one or more of your 1st generation groups has achieved the Supervisor's Club level, you will receive a Growth Bonus of 2%* on their CBV. 2% Growth Bonus from all 1st level downline S sales/purchases within your group *You will receive the BVPs and 2% Growth Bonus on your 1st generation Supervisor's groups, however, you will not receive Growth Bonus from your 2nd or lower generation Supervisor's groups. Manager Club (MAC): Go Back At the Manager's Club level there are several skills to master to succeed. You must continue to mentor and support your downline members and master effective presentation and public speaking skills. You should continue to increase your product knowledge skills and fully understand the Compensation Plan. At this level you will need to apply the skills taught to you by your upline, attend meetings and host Home Parties. Qualifications: If your organization (including your 1st generation Supervisors) has accumulated 2,475 BVP within a period of 12 consecutive months after becoming a Supervisor AND you possess two 1st generation Supervisors, you will be promoted to Manager's Club on the 1st day of the following month. You will also qualify for an Override Bonus and Growth Bonus. Accumulate 2475 BVP 2 1st-level S level downline Distributors Sales Commission: Once qualified as a Manager and you sell or purchase products, you will receive a commission of 32% of CBV. Accumulate PGBVP from members of your organization. 32% on all personal sales/purchases Override Bonus: Earn 17% on the CBV of personally sponsored Distributor's Club members. Earn 8% on the CBV of personally sponsored Supervisor's Club members. If one or more of your downline organization below the 1st level (i.e. 2nd, 3rd, 4th, 5th, etc? has achieved the Supervisor's Club level, you will earn 6% on their CBV. 8% (32%-24%) Override Bonus from all downline Supervisor1 level Distributor's sales/purchases 6% (32%-24%) Override Bonus from all downline Supervisor2 level Distributor's sales/purchases (the other 2% will go to Supervisor1 Growth Bonus) 17% (32%-15%) Override Bonus from all downline Distributor level Distributor's sales/purchases Growth Bonus: If one or more of your 1st generation has achieved the Manager's Club level, you will receive a Growth Bonus of 2%** on their CBV. If one or more of your 2nd generation has achieved the Manager's Club level, you will receive a Growth Bonus of 1%** on their CBV. 2% Growth Bonus from Manager1 level sales within your group 1% Growth Bonus from Manager2 level sales within your group **No Growth Bonus from 3rd generation Manager's groups and down. President Club (PRC): Go Back As a President Club member you will be a mentor for both your downlines and their downlines and continue to share your product knowledge. You will master your knowledge of the marketing plan, host Distributor Training Meetings and Opportunity Presentations independently, and teach your downline Vice Presidents and Managers to host Opportunity Presentations and Distributor Training Meetings. At the President level you will perform product demonstrations, apply your privileges to assist downlines in their development and attend HTE's Train the Trainer Camps. Qualification: If your organization has accumulated a total of 14,760 BVP after making the Manager's Club level within a period of 12 consecutive months AFTER becoming a Manager AND you have four 1st generation Managers OR two 1st generation Managers and four 2nd generation Managers, you will be promoted to the President's Club on the 1st day of the following month. You will also qualify for an Override Bonus and Growth Bonus as well as Leadership Benefits (as discussed herein). Accumulate 14,760 BVP 4 Manager1 OR 2 Manager1 + 4 Manager 2 Sales Commission: Once qualified as a President, sell/purchase products and receive a commission of 40% of CBV. Accumulate PGBVP from members within your organization. 40% on all personal sales/purchases Override Bonus: Earn 25% on the CBV of personally sponsored Distributor's Club members. Earn 16% on the CBV of personally sponsored Supervisor's Club members. Earn 8% on the CBV of personally sponsored Manager's Club members. If one or more of your 2nd generation has achieved the Manager's Club level, you will earn 6% on their CBV. If one of more of your downline organization BELOW the 2nd level (i.e. 3rd, 4th, 5th, etc) has achieved the Manager's Club level, you will earn 5% on their CBV. 5% (40%-32%-2%GB-1%GB) Override Bonus from all downline Manager3 level Distributor's sales/purchases 6% (40%-32%-2%GB) Override Bonus from all downline Manager2 level Distributor's sales/purchases 8% (40%-32%) Override Bonus from all downline Manager1 level Distributor's sales/purchases 16% (40%-24%) Override Bonus from all downline Supervisor1 level Distributor's sales/purchases 25% (40%-15%) Override Bonus from all downline Distributor1 level Distributor's sales/purchases Leadership Benefits: Leadership benefits are automatically awarded to the President Club level and above and can total up to 14% of PGBVP. (Note: PGBVP are calculated from different level downline groups.) These benefits include: President's/Supreme President's Bonus from PGBVP (1%) Business Fund (1.5%) President's Growth Bonus (8%) Supreme President's Bonus (3.5%) President's/Supreme President's Bonus from PGBVP: All Presidents/Supreme Presidents (qualification of 500 PGBVP not required) will receive a 1% bonus on the PGBVP of their group. 1% bonus from PGBVP Business Fund For members of the President’s/Supreme President’s Club, HTE Canada also provides a bonus calculated monthly on 1.5% of PGBVP. This bonus is NOT paid directly to the President’s Club level member, but is kept in a separate account and accumulates until the $3,000 level is reached. At this time, the President/Supreme President may either purchase or lease a vehicle (based on a fair market value of at least $30,000) with the appropriate contracts approved and submitted to the Customer Service Department, or also to fund travel to company sponsored events and personally sponsored trainings and meetings that meet HTE Canada requirements for qualifying individuals. Please contact a Customer Service Representative and request an Automobile Approval Form if you wish to apply the Business Fund towards a car, or request a Travel Form that has appropriate guidelines and approval for reimbursement from the fund. After approval of the car application, a check will be mailed for the applied fund directly to the qualifying President or Supreme President. Payment of balances in an account can be made in a single (1 month), 2 or 3-month payout. The following is the breakdown that determines the number of payout requirements: $3,000 to 7,499 account balance requires a 1-month payout $7,500 to14,999 account balance requires a 2-month payout $15,000 and over requires a 3-month payout Unless appropriate paperwork is submitted, funds will remain in the account. A Distributor can only apply for the fund if the account is over the $3,000 benchmark, and the amount withdrawn will leave the account still above the $3,000 benchmark. The 2nd payout can be used for a motor home, boat and/or vehicle with proper contract approval (a company tag/logo will be made available for Presidents/Supreme Presidents). Cash cannot be drawn out of this account. The Business Fund Bonus is the property of HTE Canada and is not granted to a Distributor until the $3,000 benchmark is achieved and the proper paperwork is approved by HTE Canada. Accumulated 1.5% monthly from PGBVP Accumulates in a separate account until a minimum of $3,000 is reached Used for down payment and/or monthly payments towards a vehicle of your choice or any travel expenses that are business related Every time the fund is applied for, the Distributor must have a minimum benchmark of $3,000. The applicant must also only apply for such an amount that the remaining fund will still be above the $3,000 benchmark, unless in the circumstance of applying for travel to a company sponsored event or purchase/lease of a car. $75,000 maximum accumulation per vehicle Cash cannot be withdrawn from this account For members of the Presidents/Supreme Presidents Club, wishing to apply the Business fund for travel to company sponsored events and personally sponsored trainings and meetings that meet HTE Canada requirements for qualifying individuals, a Travel Form has been created that will be submitted (with guidelines) and approved for reimbursement from the fund. For example, when the Company holds an annual convention for the Independent Distributors, as a President/Supreme President – you can use your fund for travel expenses. Payouts will only occur as money is accumulated above the $3,000 benchmark. Distributors can not apply if the account is under $3,000 or if the amount you apply for will bring the balance of the account below the $3,000 benchmark, unless applying for travel to a company sponsored event, however, cash cannot be drawn out of this account. The Business Fund Bonus is the property of HTE Canada and Distributors will receive earned funds after a Travel Reimbursement Form is submitted, along with a copy of the meeting agenda, travel receipts and a photo of the event. Please contact a Customer Service Representative to obtain a copy of this form. If a Distributor is terminated, all rights and benefits are forfeited. If a suspension occurs, all monies accumulated to that point will be paid on schedule, but at that point, monthly accumulation will cease until the suspension is removed. Any monies accrued during the suspension period will be forfeited and will not be issued. Accumulated 1.5% monthly from PGBVP Accumulates in a separate account Used for business expenses Cash cannot be withdrawn from this account President Growth* Bonus: As a special reward for Presidents who qualify with 500 PGBVP that have Presidents that breakaway, HTE Canada has created a President Growth Bonus Program. In the program, you receive a bonus from your 1st to 4th generation downline Presidents who have “broken away” from your organization. This program rewards you for building other leaders in your organization. The percentage is paid on President’s Club level PGBVP. There will be a 30-day grace period on monthly requirements (500 PGBVP) for each President Breakaway on the 1st generation in the same month. (Example: 2 President Breakaways on the 1st generation in the same month = 60-day grace period from monthly requirements of 500 PGBVP.) Each bonus below is measured PER LEG. (Example: Sally has 5 generations of Presidents in one of her legs, and in her other legs, she has no President’s Club level Distributors. The leg with Presidents would pay out the percentage bonus on that particular leg.) 4.0%     1st generation President and their group 2.5%     2nd generation President and their group 1.0%     3rd generation President and their group 0.5%     4th generation President and their group The President's Growth Bonus is distributed through means of the Roll-up Program. (Click here for more details on the Roll-up Program) *A President's Breakaway is someone in your organization (downline) who has been promoted and qualified as a President, and has become equal to you. Supreme President's Club level receives the same bonus structure on their Presidents. Supreme President Club: Go Back The Supreme President's club level has four levels to be complete, they are as follows: Pearl President, Jade President, Diamond President, and Crown President. An explanation of each level follows. Pearl President's Club Qualification 2 ways: If the PRC has 500 PGBVPs and has 3 direct downline PRCs who qualify with 500 PGBVP for the month. OR If the PRC has 500 PGBVPs and any of the 3 required direct downline PRCs do not qualify with 500 PGBVPs, then the subordinate downline PRCs who have 500 PGBVPs in their direct downline's PRC's group can be used. The PRC will promote to Pearl PRC and will receive 1.5% of his/her own PGBVP and the % difference between downline PRC's Supreme Bonus %. Jade President's Club Qualification 2 ways: If the PRC has 500 PGBVPs and has 6 direct downline PRCs who qualify with 500 PGBVP for the month. OR If the PRC has 500 PGBVPs and any the 6 required direct downline PRCs do not qualify with 500 PGBVPs, then the subordinate downline PRCs who have 500 PGBVPs in their direct downline's PRC's group can be used. The PRC will promote to Jade PRC and will receive 2.0% of his/her own PGBVP and the % difference between downline PRC's Supreme Bonus %. Diamond President's Club Qualification 2 ways: If the PRC has 500 PGBVPs and has 9 direct downline PRCs who qualify with 500 PGBVP for the month. OR If the PRC has 500 PGBVPs and any the 9 required direct downline PRCs do not qualify with 500 PGBVPs, then the subordinate downline PRCs who have 500 PGBVPs in their direct downline's PRC's group can be used. The PRC will promote to Diamond PRC and will receive 2.5% of his/her own PGBVP and the % difference between downline PRC's Supreme Bonus %. Crown President's Club Qualification 2 ways: If the PRC has 500 PGBVPs and has 12 direct downline PRCs who qualify with 500 PGBVP for the month. OR If the PRC has 500 PGBVPs and any of the 12 required direct downline PRCs do not qualify with 500 PGBVPs, then the subordinate downline PRCs who have 500 PGBVPs in their direct downline's PRC's group can be used. The PRC will promote to Crown PRC and will receive 3.5% of his/her own PGBVP and the % difference between downline PRC's Supreme Bonus %. President Club (PRC) / Supreme President Club : Go Back Requirements for Success: Each President’s Club/Supreme President’s Club member must be prepared to assume additional responsibilities. As a source of leadership, training and motivation for their personal group, the President’s Club/Supreme President’s Club member should follow the following important requirements for success: Become an HTE Canada expert. Master HTE’s Compensation Plan and Policies and Procedures and become a source of information for your personal group. Lead by example. If you sell our products, your Distributors will do likewise. Of those Distributors you sponsor, they will sponsor and build a solid foundation for their own businesses, built up through retailing and sponsoring. Provide training for your group. If you sponsor members long-distance, you need to explain all of the resources available to your Distributors and help them complete their training. Local meetings, conference calls and opportunity meetings, as well as brochures, tapes and the Entrepreneur Business Manual are excellent sources for training. Communicate and follow-up with your personal group. Keep your group informed of any change of address, e-mail address and phone numbers so they can stay in contact with you without difficulty or interruption. Remain available to your personal group for consultation and support. Use your Genealogy Report to closely monitor the progress of your personal group. Be prepared to enforce and report violations of the Policies and Procedures. Always attempt to settle basic policy disputes in the field. If you require assistance, report the situation immediately to HTE Canada. Example Business/Income Initial 5-Step Program Go Back (Examples based on The Chi Machine? 1) Sign up as a new Distributor -$ 35.00 2) Place a qualifying order with HTE to start collecting commissions as well as being able to demo product (by having the product you have first-hand experience as well as a chance to demo products with others for future sales and/or recruiting potential Distributors) -$ 720.00 3) Order sales aids to promote your business and/or watch for company specials to earn them FREE 4) Sell 8 or more Chi Machines (or sponsor 8 and PAY FOR YOUR INITIAL UP-FRONT COST! EARN IN COMMISSIONS... +$ 810.00 5) Earn promotion to Supervisor (9 machines) and start earning $108 per machine! Grand total to start business ?ZERO! You’re ahead by $55.00 and on your way to profit $$!