Chapter 8: Management Performance Compensation Plan (MPCP)

SEC. 1 ORGANIZATIONAL STRUCTURE

Each Business Development Center (BDC) has two sides. Each side is a sales and distribution organization or network structure in the Market Hong Kong UnFranchise^® Business Development System.

Business Development Center Defined: A Business Development Center is an operational establishment set up within Market Hong Kong’s computerized organization tracking system. Each organization is based upon the assignment of the Independent UnFranchise Owner’s identification number and the BDC’s three-digit extension number (e.g., 001, 002, 003, etc.).
Additional Business Development Centers: Additional BDCs are established either on the left or right side of a previously established BDC according to the policies found in Section 14 of this Chapter.

SEC. 2 INITIAL PARTICIPATION REQUIREMENTS

To participate in Market Hong Kong’s MPCP, an individual (with the assistance of his/her sponsor) must complete the Independent UnFranchise Owner Application and Agreement (the “IUA&A”) and submit it. The IUA&A may be submitted to Market Hong Kong by walk-in or mail (faxes are unacceptable) for entry into the corporate computer database or by completing the sign-up process online, thereby establishing one’s BDC(s). Note: Sponsors should sign up new UnFranchise Owner either by mail or online, but not both, as this could lead to improper entry of the new UnFranchise Owner into the Market Hong Kong computer database.

Sales Representative: Individuals who fail to submit the subscription fee enter Market Hong Kong as Sales Representatives and cannot participate in the MPCP for the purposes of earning commissions and management bonuses. Sales Representatives may begin participating in the MPCP at a later time, if they submit the subscription fee on an order or with a new application (please indicate the appropriate box under “Entry Classification” on the application).
UnFranchise Owner: Individuals must select UnFranchise Owner on the “Entry Classification” and submit the subscription fee in order to participate in the MPCP and earn commissions and management bonuses.
1. An UnFranchise Owner must have attended a Market Hong Kong sponsored New UnFranchise Owner Training (NUOT) within in “NUOT Grace Period” in order to: (1) count as being sponsored and (2) obtain the sponsorship rights toward and/or for activation purposes in the MPCP.
2. If an UnFranchise Owner does not complete the NUOT within the “NUOT Grace Period”, the UnFranchise Owner’s sponsor will lose his/her sponsorship rights for this UnFranchise Owner. The sponsorship rights for this UnFranchise Owner of the UnFranchise Owner’s sponsor may be re-activated once this UnFranchise Owner completes the NUOT at a later date. The sponsorship takes effect on the reactivation date.
3. New UnFranchise Owners may sponsor other new UnFranchise Owners during their “NUOT Grace Period”. This “NUOT Grace Period” shall be defined as 28 calendar days after the Friday following the payment date of the subscription fee. If the sponsoring new UnFranchise Owner does not complete the corporate-sponsored NUOT within the 28 days allowed, then sponsorship rights toward/for activation purposes and rights to commission earned will be forever forfeited.

SEC. 3 HONG KONG IDENTIFICATION CARD REQUIREMENTS

All new applicants must submit a copy of their Hong Kong ID card within 10 calendar days of the application Start Date to avoid cancellation of the UnFranchise Business. If your Hong Kong ID card isn’t received within 10 calendar days, your account will be cancelled and all BV/IBV will be removed (if applicable).

If you wish to reapply within 270 days of cancellation, you must be under the same sponsor and will remain in the same genealogy line as the initial application.

SEC. 4 A PERSON MAY BE INVOLVED IN ONE UNFRANCHISE BUSINESS ONLY

A person may be involved in one Market Hong Kong UnFranchise Business only. If a person is already involved in an UnFranchise Business as an owner, officer, director, shareholder, partner, member, manager, beneficiary, or trustee, or is the spouse of an UnFranchise Owner, or if a person otherwise plays a role in the operation of an UnFranchise Business, then that person may not be involved in any such capacity for another UnFranchise Business regardless of whether his or her name appears in the UnFranchise Business’s official documents or is associated with the UnFranchise Business in any formal way. The use of any device, mechanism or arrangement such as trade names, assumed names, a spouse or family member’s name, Hong Kong Identification Numbers, fabricated Business Development Centers (collectively “Alter Egos”), is unethical and strictly prohibited.

SEC. 5 PLACEMENT OF BUSINESS DEVELOPMENT CENTERS

Business Development Centers of new UnFranchise Owners are placed at the discretion of the sponsoring UnFranchise Owner. Existing UnFranchise Owners under which these new BDCs are being placed should be made knowledgeable of their placement within their organization. The new Independent UnFranchise Owner’s sponsor specifies on the walk-in/mailed Independent UnFranchise Owner Application and Agreement or during the online sign-up process placement of BDCs of new UnFranchise Owners.

New Business Development Centers: New BDCs may be established only in available locations, not previously occupied or linked. All Sales Representatives and UnFranchise Owners start with 3 BDCs when they establish their UnFranchise Businesses.

UnFranchise Owners will also start with one (1) International Re-Entry Center (IRC) (Please see the section entitled Global Unification for details).

All new applicants must submit a copy of their Hong Kong identification card within 10 calendar days of their application start date to avoid cancellation of the UnFranchise Business.
Incorrectly Placed: Improper placement (attempting to place new UnFranchise Owners in positions already occupied in the downline), incomplete placement information, or failure to designate placement information on the IUA&A for newly sponsored UnFranchise Owners will result in unlinked BDC(s). Any BDC(s) linked to an unlinked BDC will also be unlinked.
1. To identify unlinked BDCs, search the Leg Column of the UnFranchise Owner Network Report on the UnFranchise Management System. If there isn’t an L or R in the UnFranchise Owner’s Leg column for BDC-001, then the UnFranchise Owner’s BDCs are unlinked.
2. Corrected linkage of BDCs should be reported as soon as possible to Data Processing using the Placement or Linkage Correction Form via fax or mail. Only the sponsor or the unlinked UnFranchise Owner may sign the linkage correction form.

SEC. 6 INITIAL QUALIFICATION REQUIREMENT

Qualifying a BDC will permit accrual of Group Business Volume (GBV) generated by UnFranchise Owners and Sales Representatives in the respective BDC’s downline. Accrued GBV will be applied toward earning commissions and management bonuses for the qualified BDC.

Personal Business Volume Created: Both UnFranchise Owners and Sales Representatives create Personal Business Volume (PBV) by ordering products at UnFranchise Cost (UC) for retail sale to the end consumer and/or personal consumption.
Qualification: An UnFranchise Owner’s BDCs shall be considered qualified in Market Hong Kong’s MPCP upon meeting three criteria: 1) accumulating 200 PBV credits for product orders assigned to that respective BDC; 2) being linked properly and 3) paying the subscription fee.
1. Personal Business Volume created by Sales Representatives will count towards qualifying their BDC(s) should a Sales Representatives elect to change their status to an UnFranchise Owner by submitting the subscription fee at a later date. All PBV created by Sales Representatives will be recognized as GBV for all qualified UnFranchise Owners in the creating Sales Representative’s upline.
2. A Sales Representative’s BDC(s) will not be considered qualified, even if the BDC has accumulated 200 PBV, until he/she elects to change his/her status to an UnFranchise Owner by submitting the subscription fee.
3. Personal Business Volume created by an UnFranchise Owner will count towards qualifying their BDC(s) as assigned on the product order form.
4. The Personal Business Volume created by UnFranchise Owners will be recognized as GBV for all qualified UnFranchise Owners in the creating UnFranchise Owner’s upline.
Qualification Date (Q-date): The date an UnFranchise Owner’s initial BDC qualifies, the UnFranchise Owner will be assigned a Qualification Date (Q-date). The Q-date is the most critical element in exercising the UnFranchise Owner’s option to accrue GBV from month to month through the entire MPCP compensation cycle.
1. An UnFranchise Owner’s Q-date is the Friday of the week in which the UnFranchise Owner’s initial BDC accumulated 200 PBV credit for product orders assigned to that Center, if the BDC is linked properly and the UnFranchise Owner has paid the subscription fee.
2. A Sales Representative who has accumulated 200 PBV in a BDC and has elected to change his/her status to UnFranchise Owner will receive a Q-date of the Friday of the week in which the subscription fee is received by Market Hong Kong and entered into the corporate data base, if the Sales Representative’s BDC is linked properly.
3. An UnFranchise Owner’s Q-date never changes, unless the UnFranchise Owner does not submit the Annual Renewal fee. (see Annual Renewal).
4. An UnFranchise Owner’s Q-date may be obtained from Hong Kong’s UnFranchise Owner Services Department and the UnFranchise Management System. It is recommended that all sources be checked for verification and validation. The Q-date will not show up in the computer database until the third week after the Friday of the week in which the UnFranchise Owner met all three criteria for qualification and is not considered established until this time.
Q-date Periods Defined:
1. Weekly Commission Cycle: All commission pay cycles are weekly and begin on Saturday and end on Friday.
2. Monthly Q-date Period:
  1. If the original Q-date falls exactly on a Friday in a given month, then that monthly Q-date period ends on that Friday. For example, if the original Q-date is January 12, 2018, then the monthly Q-date for July of 2018 will be July 13, 2018.
  2. If the original Q-date falls any day other than Friday in a given month, then that monthly Q-date period ends on the Friday immediately following that day. For example, if the original Q-date is January 12, 2018, then the monthly Q-date for August of 2018 will be August 17, 2018.
  3. If the original Q-date falls on the 29th, 30th or 31st day of the month and the current month does not contain those dates (e.g. February, April, June, September or November), then the end of that monthly Q-date period is determined by the last day of that month. In this case, if the last day of the month falls exactly on a Friday in a given month, then that monthly Q-date period ends on that Friday. For example, if the original Q-date were August 31, 2018, then the monthly Q-date for November of 2018 would be November 30, 2018. However, in this case, if the last day of the month falls any day other than Friday in a given month, then that monthly Q-date period ends on the Friday immediately following the last day of the month. For example, if the original Q-date were August 31, 2018, the monthly Q-date for September of 2018 would be October 05, 2018.
3. Quarter (Three-Q-date Period or Three-Start-Date Period): Market Hong Kong’s quarterly periods are based on Independent UnFranchise Owners’ initial Q-dates or Sales Representatives’ and unqualified UnFranchise Owners’ start dates. A quarter may also be referred to as a three-Q-date period, or a three-start-date period, because the Market Hong Kong quarter is comprised of three consecutive monthly Q-date periods, or in the case of a Sales Representative or an unqualified UnFranchise Owner, three consecutive monthly periods based on the start date. For example, if the initial Q-date were January 12, 2018, then the first quarter (or three-Q-date period) would have ended on April 13, 2018. The second quarter would have begun April 14, 2018, and ended July 13, 2018.
Unlinked Business Development Center: All assigned Business Volume (BV) to unlinked BDCs shall also be unlinked. The qualifying volume for a BDC will not result in this Center receiving a Q-date until linkage has been corrected, because UnFranchise Owners cannot accrue any GBV until they have met all three criteria for qualification. Upon proper linkage of the unlinked UnFranchise Owner, unlinked BV shall be credited for the date of the original order; however, the BV cannot be credited as accrued GBV for qualified upline UnFranchise Owners until linkage has been properly corrected. Once the placement is corrected, GBV will begin to flow and accrue; however, some UnFranchise Owners’ upline may no longer be able to count the re-linked BV for commissions, if they have earned a commission for reaching the 5,000/5,000 GBV compensation criteria in the meantime.
1. If the unlinked UnFranchise Owner (UnFranchise Owner A) is only unlinked because of an improper linkage situation, then upon being linked correctly UnFranchise Owner A will receive an initial Q-date (assuming all requirements for being qualified are met) of the Friday of the week for which Market Hong Kong is paying commissions at the time of proper linkage (two Fridays previous). Note: This does not apply to the scenario in which the UnFranchise Owner to whom UnFranchise Owner A is linked (UnFranchise Owner B) did not exist in Market Hong Kong’s computer database until a later commission week than UnFranchise Owner A (see below).
2. If the unlinked UnFranchise Owner (UnFranchise Owner A) is unlinked temporarily because the UnFranchise Owner to whom UnFranchise Owner A was intended to be linked (UnFranchise Owner B) did not exist in Market Hong Kong’s data base at the time UnFranchise Owner A was entered into the database, and UnFranchise Owner B is entered into the computer database in a subsequent commission week than UnFranchise Owner A, then UnFranchise Owner A will receive an initial Q-date (assuming all requirements for being qualified are met) of the Friday of the week in which UnFranchise Owner B was entered into the computer database (assuming UnFranchise Owner B is linked properly).

SEC. 7 MINIMUM ACTIVITY REQUIREMENTS

The following minimum activity requirements shall apply for the respective status and/or UnFranchise Levels to be considered “active” in the conduct of business. “Activity” shall be defined as any sale and/or order of products/services having BV and an associated retail profit or ongoing BV from an initial sale having a retail profit where the respective UnFranchise ID number is the paying ID number or the purchasing customer is a registered PC of the respective UnFranchise Owner/Sales Representative.

Example: the BV created could be from a UnFranchise Owner/Sales Representative order in their UnFranchise Business Account, an order from a PC on at any of the UnFranchise Owner’s shopping websites which are provided by Market Hong Kong; or be part of a “package” sale where the initial part of the sale has BV value and retail profit; however, the subsequent associated ongoing monthly purchase/payment part of the package has BV but no retail profit.

UnFranchise Owners/Sales Representatives will be considered “inactive” and have accumulated Personal Business Volume (PBV) and Personal Internet Business Volume (PIBV) assigned to any of their personal BDCs purged (erased to 0 and removed from upline qualified UnFranchise Owner accrued Group Business Volume (GBV) and Group Internet Business Volume (GIBV) totals) and any accrued GBV and GIBV flushed (erased to 0) if all requirements listed below are not satisfied.

Sales Representatives and Unqualified UnFranchise Owners (Individuals electing not to earn commissions/bonuses through the MPCP or have not met minimum requirements to earn commissions).
1. Sales Activity: Must have product orders placed through the UnFranchise Business Account or fulfilled by their UnFranchise Autoship totaling 150 BV in activity assigned to their personal BDC-001s (their Independent UnFranchise ID) each quarter (Three-Start-Date Period) based on their start date.
2. Sales Documentation: An UnFranchise Owner Sales Report (Form HK1000) must be submitted to Market Hong Kong each quarter, accompanied by a minimum of two (2) retail sales receipts totaling a minimum of HK$1,500.00. Each Sales Representative or unqualified UnFranchise Owner must personally make the retail sales documented on the Form HK1000 to their registered Preferred Customer(s). Sales to Preferred Customers who are also UnFranchise Owners or Sales Representatives do not qualify for this purpose and is strictly prohibited.
  1. No more than HK$450.00 of products used/consumed by the respective Sales Representative’s or Unqualified UnFranchise Owner’s household may be used as part of the HK$1,500.00 sales total. NOTE: Where volume flows pursuant to the MPCP, the requisite minimum sales documentation establishing sales to end consumers who are not involved in the Market Hong Kong MPCP is of vital importance. The Sales Representative or Unqualified UnFranchise Owner is ultimately responsible to ensure the validity of the sales documentation.
  2. For Sales Representatives and Unqualified UnFranchise Owners, the Form HK1000 is intended to automatically populate with qualifying receipts and automatically submit to Market Hong Kong to meet this requirement for the BDC-001, from sales information recorded by the Sales Representative or Unqualified UnFranchise Owner when a manual receipt is created. All manually entered sales receipts must be personally completed and submitted by the Sales Representative or Unqualified UnFranchise Owner.
  3. Submitted receipts must contain the date of sale, the customer’s first and last name and either their physical address (address of residence) or complete phone number for acceptance (address must include a valid zip/postal code, and phone numbers must include the area code). Receipts not containing complete and accurate information will be considered invalid.
  4. Only sales receipts from products sold in the Sales Representative’ or Unqualified UnFranchise Owner’s “Home Region” are considered valid receipts.
  5. Market Hong Kong will periodically conduct a random audit of retail receipts for authenticity. Invalid receipts will result in corrective actions being initiated and may disqualify the Form HK1000.
3. Contractual Relationship: A Sales Representatives and Unqualified UnFranchise Owner must complete and submit an Annual Renewal Form (Form HK1052) in accordance with the renewal procedure. (see Annual Renewal) Failure to submit the Annual Renewal Form will result in PBV and PIBV being purged (erased to zero), their access to the UnFranchise Business Account (“Back Office”) denied, and continued authorization to sell and represent ma-branded products terminated.
  1. For Non-Qualified UnFranchise Owners who submit the Annual Renewal Form without the renewal fee, their UnFranchise Owner status will be changed to Sales Representative. Their accumulated PBV and PIBV will not be purged (erased to 0).
Qualified UnFranchise Owners (Individuals electing to earn commissions/bonuses through the MPCP).
1. Sales Activity: Must have product orders orders placed through the UnFranchise Business Account or fulfilled by their UnFranchise Autoship totaling a minimum of 150 BV in activity assigned to their personal BDC-001 (their UnFranchise ID and applicable extension number) each quarter (Three-Q-Date Period) based on their Q-Date.
  1. First Three-Q-Date Period (First-Quarter Grace Period): Must have product orders totaling a minimum of 50 BV in addition to the qualifying order(s) assigned to the respective UnFranchise Owner’s BDC-001 within (i.e., prior to the end of) their first Three-Q-Date Period.
  2. Commissions Earned in First Quarter: If a commission has been earned within the first Three-Q-Date Period, the First-Quarter Grace Period is effectively ended (unless a 28-Day Grace Period applies — see 28-Day Grace Period). If no 28-Day Grace Period applies, the UnFranchise Owner must have product orders totaling a minimum of 150 BV in activity assigned to their personal BDC-001 (their UnFranchise ID) within (i.e., prior to the end of) their first Three-Q-Date Period.
2. Sales Documentation: An UnFranchise Owner Sales Report (Form HK1000 must be submitted to Market Hong Kong each quarter, accompanied by a minimum of two retail sales receipts evidencing sales during the quarter totaling a minimum of HK$1,500.00. Each UnFranchise Owner must personally make the retail sales documented on the Form HK1000 to their registered Preferred Customer(s). Sales to Preferred Customers who are also UnFranchise Owners or Sales Representatives do not qualify for this purpose. and is strictly prohibited.
  1. No more than HK$450.00 of products personally used/consumed by the respective UnFranchise Owner’s household may be used as part of the HK$1,500.00 sales total. An UnFranchise Owner’s purchase under their Personal Preferred Customer ID# is considered personal consumption. NOTE: The requisite minimum sales documentation establishing sales to end consumers who are not involved in the Market Hong Kong MPCP is of vital importance. The UnFranchise Owner is ultimately responsible to ensure the validity of the sales documentation.
  2. For UFMS subscribers, the Form HK1000 is intended to automatically populate with qualifying receipts and automatically submit to Market Hong Kong to meet this requirement for the BDC-001, from sales where the paying ID is a Preferred Customer. Sales receipts may also be manually entered and submitted to the Form HK1000. When sales receipts and/or the Form HK1000 is manually submitted, all sales documentation must be personally completed and submitted by the UnFranchise Owner.
  3. A Form HK1000 with accompanying receipts must be submitted one time only, for all other BDCs (i.e., 002, 003, 004, etc.) before those BDCs are eligible to earn commissions, as long as the UnFranchise Owner never purges. The Form 1000 will not auto-populate nor auto-submit to meet this requirement. It must be prepared and submitted on-line or in paper form.
  4. Receipts submitted must contain the date of sale, the customer’s first and last name and either their physical address (address of residence) or complete phone number, (addresses must include a valid postal code). Receipts not containing complete and accurate information will be considered invalid and not accepted.
  5. Only sales receipts from products sold in the UnFranchise Owner’s “Home Region” or through SHOP.COM Global are considered valid receipts.
  6. Market Hong Kong will periodically conduct a random audit of retail receipts for authenticity. Invalid receipts will result in the initiation of a corrective actions procedure and may disqualify the Form HK1000.
3. Contractual Relationship: An UnFranchise Owner must complete and submit an Annual Renewal Form (HK1052) with or without a renewal fee in accordance with the renewal procedure. (see Annual Renewal).
4. Requalification:
  1. If a qualified BDC purges for any reason, any BDC on which the UnFranchise Owner wishes to earn future commissions must be re-qualified with a 200 PBV product order or accumulating 200 PBV in the respective BDC. Any individual BDC will not begin accruing Group Business Volume GBV or Group Internet Business Volume (GIBV) until it has been re-qualified. The original Q-date received shall stay in effect, except for purges due to non-renewal (see Annual Renewal).
  2. If an UnFranchise Owner purges for any reason, valid Form HK1000(s) must be resubmitted for each BDC in order to be eligible to earn commissions for that respective BDC. Only the BDC-001 could requalify through an auto-populated Form HK1000.

SEC. 8 270-DAY RULE AND SALES ACTIVITY

UnFranchise Owners and /Sales Representatives who have been inactive for 270 calendar days CANNOT retain their original/previous BDC position/placement within the organization. An UnFranchise Owner or Sales Representative is considered inactive from the date of the last purge for failure to meet the Minimum Activity Requirements (see Minimum Activity Requirements). The 270 day counter will not restart unless an UnFranchise Owner or Sales Representative places a minimum of 50 PBV in their BDC-001 within a subsequent quarter, where the UnFranchise Owner is the paying ID. If an UnFranchise Owner or Sales Representative purges due to non-renewal, the 270 day counter will not be reset unless a Late Renewal is completed and filed with the company and the UnFranchise Owner or Sales Representative places a minimum of 50 PBV in their BDC 001 within a subsequent quarter, where the UnFranchise Owner is the paying ID. Submission of a Form 1000, Annual Renewal Form, Late Renewal Application or any other form by itself does not constitute activity.

UnFranchise Owners/Sales Representatives Inactive ≥ 270 Days but <1,000 Days Reapplying Same Line: UnFranchise Owners and Sales Representatives who have been inactive for 270 days, but less than 1,000 days (i.e., 270 days plus an additional two years), who want to become an UnFranchise Owner again in the same line of sponsorship as their previous UnFranchise Business, may go through the online UnFranchise Registration and submit an Independent UnFranchise Owner Application and Agreement (IUA&A) for placement at the bottom of the genealogy, or submit a standard hardcopy paper IUA&A. Such IUA&A must be in the same name and under the same tax identification number as their previous UnFranchise Business. The same line of sponsorship means any placement in the genealogy under their previous BDC’s.
UnFranchise Owners and Sales Representatives Inactive ≥ 270 Days but <1,000 Days Reapplying Different Line or Different Name/ID#:
1. All UnFranchise Owner and Sales Representatives who have been inactive for 270 days, but less than 1,000 days, and who want to become a UnFranchise Owner again under a different line of sponsorship, or under a different name or a different tax identification number, must submit a notarized letter, signed by the reapplying UnFranchise Owner, explaining why they want to change their line of sponsorship or name/ID#, to the attention of the Field Compliance Department, by email to hkunfranchiseservices@markethongkong.com.hk, or by fax to (852) 3512-9168.
2. In the sole discretion of Market Hong Kong (or its subsidiaries/affiliated family of international companies) an application of a former UnFranchise Owner or Sales Representative who has been inactive for the 270 days, but less than 1,000 days may be approved to be in a different line of sponsorship. This may be done if the following is found (this list is not all inclusive and inclusion on the list does not guaranty that a change in line of sponsorship will be approved):
  1. The sponsor/upline didn’t fulfill their management responsibilities as defined in the UnFranchise Manual;
  2. A legitimate grievance is filed against the sponsor/upline for activity that undermined the reapplying UnFranchise Owner’s business;
  3. The company determines that there are extenuating circumstances that justify placement in a new line of sponsorship; or
  4. It is determined that the Save An UnFranchise Owner (SAUFO) program was utilized and there were no satisfactory attempts of support made by the upline.
Independent UnFranchise Owners/Sales Representatives Inactive ≥ 1,000 days: UnFranchise Owners and Sales Representatives who have been inactive for 1,000 days or more may go through the online UnFranchise Registration or submit a standard hardcopy paper IUA&A for placement in their previous line of sponsorship, or in any new line of sponsorship, as long as the UnFranchise Owner or Sales Representative has complied with all other policies and procedures regarding the integrity of lines of sponsorship and non-manipulation of the Management Performance Compensation Plan (MPCP).
Unethical Activity: If the Company determines that an UnFranchise Owner has acted unethically by reapplying under a different line of sponsorship, the UnFranchise Owner acting unethically will be subject to having their IUA&A terminated immediately. The organization receiving credit from this unethical reapplication will have all BV and IBV resulting from this activity removed, and all commissions generated from this BV or IBV will be reversed (see Commission Reversal). UnFranchise Owners placed under the Unauthorized UnFranchise Owner will be moved to the original line of sponsorship OR to an appropriate placement determined at the sole discretion of the company. BDCs unrelated to the Unauthorized UnFranchise Owner will remain in their current positions. If it is found that any other active UnFranchise Owner participated in or encouraged this unethical activity, the Corrective Action Procedure will be initiated against the UnFranchise Owner (see Corrective Action policy).
Circumvention of Policy: If it is found that an UnFranchise Owner has circumvented this policy (or any other policy) by using any device, mechanism or arrangement such as trade names, DBAs, assumed names, a spouse or family member’s name, Hong Kong Identification numbers, or fabricated Business Development Centers (collectively “Alter Egos”) to establish an UnFranchise Business in another line of sponsorship, or by arranging for someone to establish an UnFranchise Business to be used as an “alter ego”, the UnFranchise Owner will be subject to immediate termination of their IUA&A, and all BV/IBV resulting from this activity will be removed and commissions reversed. This includes using a passive “alter ego” which is defined as an UnFranchise Owner not engaging in the customary, and in some cases, required activities of legitimate UnFranchise Owner; such activities, include, but are not limited to, retailing, meeting sales requirements, sponsoring, attending meetings, attending training classes, and completing certification requirements. In addition, an UnFranchise Owner paying, with their own credit card or other form of payment, to meet the sales requirements of an alter ego, in order to keep the alter ego active and/or qualified is considered passive alter ego activity. There will be zero tolerance for violations of this section.
New Q-Date: Upon initially qualifying a BDC in the new placement, the UnFranchise Owner will receive a new Q-date and first-quarter grace period, because he/she is effectively a new UnFranchise Owner in terms of the MPCP.
Monthly Service Charge: UnFranchise Owners who have been inactive for 270 days and have a credit on their Market Hong Kong account will be assessed a monthly service charge, either until the UnFranchise Owner establishes a new UnFranchise Business at the bottom of a genealogy line (or as otherwise permitted by this policy) or the balance of the credit account is zero, whichever comes first. This service charge will apply to any credit account the UnFranchise Owner has with Market Hong Kong: U.S., Canada, Taiwan, Australia, United Kingdom, Singapore, Malaysia and Indonesia. The monthly service charge for each country-specific account is as follows: HK$150.00 for accounts in Hong Kong; US$20.00 for accounts in U.S; CAD28.00 for accounts in Canada; NT$640.00 for accounts in Taiwan; AUD30.00 for accounts in Australia; £12.75 for accounts in the United Kingdom; S$25.00 for accounts in Singapore; RM80.00 for accounts in Malaysia and Rp. 300,000 for accounts in Indonesia.

SEC. 9 ANNUAL RENEWAL

Each term of the Independent UnFranchise Owner Application and Agreement (IUA&A) ends on the last business day of a UnFranchise Owner/Sales Representative’s Start Month in the following year. The “Start Month” is the month in which an UnFranchise Owner or Sales Representative’s Start Date falls. In order to extend the term of the IUA&A, UnFranchise Owners and Sales Representatives must renew on an annual basis by submitting an Annual Renewal Form (Form HK1052) by the last business day of the UnFranchise Owner/Sales Representatives’ Start Month.

Sales Representatives: A Sales Representative must complete and mail the paper Form HK1052 before the last business day of the start month.
1. There is no required renewal fee for the Sales Representative status; however, Sales Representatives may not participate in the MPCP.
2. Sales Representatives who do not timely submit Form HK1052 will have their access to the UnFranchise Business Account suspended; however, an IUA&A with “Sales Representative, “late Renewal” selected may be submitted and access to the UnFranchise Business Account will be reinstated.
  
  NOTE: Upline UnFranchise Owners should be aware that if the Annual Renewal Form is not timely received, the Sales Representative’s Personal Business Volume (PBV) and Personal Internet Business Volume (PIBV) will purge (erased to 0). This will impact Group Business Volume (GBV) and Group Internet Business Volume (GIBV) even if other requirements are met for accrual.
UnFranchise Owners: An UnFranchise Owner must complete and mail the paper Form HK1052 along with the fee or enroll in the Auto Renewal Program in the UnFranchise Business Account. Each UnFranchise Owner must pay his or her own Fees.
1. An UnFranchise Owners who does not timely submit a Form HK1052 will have all PBV and PIBV purged (erased to 0), GBV and GIBV flushed (erased to 0), their initial Q-date erased from the computer database, and their access to the UnFranchise Business Account will be suspended.
2. An UnFranchise Owner who submits the paper Form HK1052 without paying the renewal fee will have accrued GBV and GIBV flushed (erased to 0), their initial Q-date erased from the computer database, and their status reduced to Sales Representative. However, the UnFranchise Owner’s PBV and PIBV will not be purged. The reduction to Sales Representative status will cause the quarter (on which quarterly Minimum Activity Requirements due dates are based) to no longer be based on the initial Q-date, but on the Start Date. See Minimum Activity Requirements.
3. An UnFranchise Owner who does not timely renew must submit a Late Form HK1052 and pay the full subscription fee to regain UnFranchise Owner status. A Late Renewal does not alter the UnFranchise Owner’s initial placement and sponsor information but the UnFranchise Owner will need to re-qualify and will receive a new Q-date, after meeting all qualification requirements. Another First-Quarter Grace Period applies. (see Minimum Activity Requirements and Exercising the Monthly Accrual Option).
4. If Form HK1052 is submitted timely but with a payment for renewal fees which cannot be accepted by Market Hong Kong for any reason (e.g. counter or starter checks, checks without the UnFranchise Owner’s name and address printed on them by the bank, etc.), the form and fees will be returned to the UnFranchise Owner unprocessed. In this case the UnFranchise Owner must submit another Form HK1052and the proper renewal fee, by the Annual Renewal deadline.
5. Auto Renewal Program
  1. To use the Auto Renewal Program, an UnFranchise Owner must elect to “Opt In” to the program in the UnFranchise Business Account. An UnFranchise Owner may opt In to the program at initial sign-up or anytime thereafter, except that access to the Auto Renewal Program is blocked five days prior to the first day of the Start Month. During this period, the UnFranchise Owner can neither Opt In or cancel the Auto Renewal Program because the renewal processing has already begun.
  2. Primary and Secondary credit cards can be designated on the credit card screens in the UnFranchise Business Account.
    1. The Primary credit card will be charged the renewal fee on the first business day of the Start Month.
    2. If the first attempt to charge the Primary credit card fails, then the Primary credit card will be charged the annual fee again on the second business day of the Start Month.
    3. If the second attempt to charge the Primary credit card also fails and there is a Secondary credit card selected, then on the third business day of the Start Month the Secondary credit card will be charged the annual renewal fee.
    4. If all of the above attempts to charge the Fee fail, then the UnFranchise Owner will need to manually renew by sending in a paper Form HK1052 along with the Fee, before the last business day of their Start month.
  3. UnFranchise Owners may also set up Auto Renewal for their Americas Region operation on-line as well by going to that country’s UnFranchise Business Account. International Re-entry Center (IRC) operations under Global Unification do not require annual renewal separate from the renewal of the primary UnFranchise Business.
6. Annual Renewal fees are non-refundable.

SEC. 10 EXERCISING THE MONTHLY ACCRUAL OPTION

A qualified BDC will accrue Group Business Volume (GBV) month to month provided (1) the minimum amount of Personal Business Volume (PBV) is ordered and assigned to BDC-001 and (2) an order for the UnFranchise Management System (UFMS) is received by Market Hong Kong, both by the appropriate dates. Using the UnFranchise AutoShip Program or placing manual orders for the minimum amount of PBV and/or the UnFranchise Management System may exercise this Monthly Accrual Option. Note: Independent UnFranchise Owners must pay for their own UFMS.

To Exercise the Monthly Accrual Option: Minimum monthly PBV amounts for exercising the Monthly Accrual Option are as follows: 50 PBV for UnFranchise Owner Level; 100 PBV for Coordinator Level and 150 PBV for Executive Coordinator Level or higher UnFranchise Level. The respective UnFranchise Levels shall be determined based on MPCP pay out criteria satisfied in ANY of the MPCPs (i.e. “Global”) in which the UnFranchise Owner is qualified. Example: if an UnFranchise Owner receives the equivalent of HK$2,300.00 commission for reaching 1,200/1,200, 2,400/2,400, or 3,600/3,600 GBV in a “Global” MPCP, then the UnFranchise Owner shall be considered a “Coordinator” in their “Home Region” MPCP and ALL associated UnFranchise Level requirements for all MPCPs shall apply. UnFranchise Owners placing a product order or orders for the minimum monthly PBV (50, 100 or 150) assigned to their BDC-001 and ordering or renewing their UFMS subscription by their monthly Q-date will satisfy the Monthly Accrual Option for every one of their qualified BDCs regardless of the number (excluding acquired/purchased BDCs).
1. First Three-Q-date Period (First-Quarter Grace Period): A qualified BDC will continue to accrue GBV through the first three-Q-date period provided a minimum of 50 PBV in addition to the qualifying order(s) has been placed and assigned to the respective UnFranchise Owner’s BDC-001 within (i.e., prior to the end of) their first three-Q-date period, and the respective UnFranchise Owner has purchased at least one month’s subscription to the UFMS in the last month of their first Three-Q-Date Period.
  1. No Commissions Earned in First Quarter: If no commissions are earned within the first three-Q-date period, and if both a minimum of 50 PBV and at least one month's subscription to the UFMS is not placed within the first three-Q-date period, then all GBV accrued by the Independent UnFranchise Owner’s qualified BDC(s) will be flushed (erased to zero).
  2. Commissions Earned in First Quarter: If a commission has been earned within the first three-Q-date period, the first-quarter Grace Period is effectively ended (unless a 28-day Grace Period applies – see 28-day Grace Period). If no 28-day Grace Period applies, the UnFranchise Owner must submit the applicable minimum PBV (100 PBV for Coordinator; 150 PBV for Executive Coordinator) and an order for the UnFranchise Management System to exercise the Monthly Accrual Option. This is accomplished by assigning the minimum PBV amount to the UnFranchise Owner’s BDC-001 and purchasing a subscription to the UFMS for the current monthly Q-date period. If a commission is earned by an UnFranchise Owner within the first three-Q-date period, he/she should immediately contact an active upline Certified Executive Coordinator to ensure that appropriate Business Volume (BV) and an order for the UFMSare placed to continue to accrue GBV month to month.
2. After the First Quarter: After the first three-Q-date period, to continue accruing GBV on a month-to-month basis, UnFranchise Owners must place the applicable minimum PBV amount (50, 100 or 150 PBV) assigned to their BDC-001 and order or renew their UnFranchise Management System subscription prior to their Q-date each month. Note: The minimum PBV and order for the UnFranchise Management System must be received by the week ending Friday in which the Q-date falls. To count for a given month, the BV and order for the UFMS must be placed after the end of the previous monthly Q-date period and by the last day of the current monthly Q-date period.
3. 28-Day Grace Period: For any commissions earned that cause UnFranchise Owners’ criteria to change regarding exercising the Monthly Accrual Option, a 28-day Grace Period applies under the following guidelines:
  1. BV-Related: If a commission that will increase an UnFranchise Owner’s minimum monthly PBV amount is earned within 28 days of the upcoming monthly Q-date, then the UnFranchise Owner remains at the current BV level to continue to accrue GBV month to month. The UnFranchise Owner must then submit the applicable PBV (100 PBV for Coordinator; 150 PBV for Executive Coordinator) for the first monthly Q-date period for which the 28-day Grace Period does not apply. However, if a commission that will increase an UnFranchise Owner minimum monthly PBV amount is earned, and the upcoming monthly Q-date is more than 28 days from the date the commission is earned, then the UnFranchise Owner must submit the applicable PBV (100 PBV for Coordinator; 150 PBV for Executive Coordinator) by the next monthly Q-date to continue to accrue GBV month to month. Note: If a commission that will increase an UnFranchise Owner’s minimum monthly PBV amount is earned within 28 days of the upcoming monthly Q-date, and the UnFranchise Owner is in his/her first three-Q-date period, then the rules of the first three-Q-date period still apply as if no commissions have been earned [see ].
  2. UnFranchise Management System-Related: If a commission is earned within 28 days of the upcoming monthly Q-date, and the UnFranchise Owner is in his/her first three-Q-date period, then the rules of the first three-Q-date period still apply as if no commissions have been earned [see First Three-Q-date Period (First-Quarter Grace Period)].
UnFranchise Owners Not Exercising Accrual Option: Exercising the Monthly Accrual Option is not required.
1. If UnFranchise Owners choose not to exercise the Monthly Accrual Option, their accrued GBV through the end of the monthly Q-date period for which the Monthly Accrual Option is not exercised will flush (reset to zero); however, UnFranchise Owners who remain qualified will begin accruing GBV again beginning the commission week directly after the flush.
2. If UnFranchise Owners do not exercise the Monthly Accrual Option by their next monthly Q-date, their accrued GBV will flush (reset to zero) again at the end of that monthly Q-date period, and so on.
Active Life Span of Group Business Volume: Accrued GBV shall have a 365-day life span from the date of the order. The life span of GBV does not extend to the Friday of the week in which the order turns 365 days old, but expires on the 366th day. GBV greater than 365 days old shall no longer count towards the payout of commissions.

SEC. 11 ACTIVATING A BUSINESS DEVELOPMENT CENTER (ACTIVATION)

A BDC must be activated to earn commissions and Management bonuses, which is accomplished by the UnFranchise Owner sponsoring at least one qualified UnFranchise Owner who has completed a corporate sponsored New UnFranchise Owner Training (NUOT) placed in the left downline of the BDC and sponsoring at least one qualified UnFranchise Owner who has completed a corporate sponsored New UnFranchise Owner Training (NUOT) placed in the right downline of the BDC.

Minimum Requirements and Maintenance: For a BDC to earn commissions and management bonuses at least one personally sponsored and qualified UnFranchise Owner who has completed a corporate sponsored New UnFranchise Owner Training (NUOT) must be in the left and right downline. Failure to maintain at least one personally sponsored and qualified UnFranchise Owner who has completed a corporate sponsored New UnFranchise Owner Training (NUOT) on both the left and right side of a BDC will result in the sponsoring UnFranchise Owner forfeiting commission payouts when required volumes are reached. No retroactive commission will be issued.
1. The BDC 002 right side and the BDC 003 left side (inside legs) for all UFOs will be not be available for business development until that UFO earns HK$103,500.00 in commissions in 12 weeks, the equivalent of achieving Professional Coordinator three months in a row.
UnFranchise Owner Eligibility:
1. A newly sponsored and qualified Independent UnFranchise Owner who is not properly linked (unlinked BDC) will not be valid for activating the sponsoring UnFranchise Owner until the date of linkage correction.
2. A newly sponsored and qualified UnFranchise Owner will have 28 days to complete the corporate sponsored New UnFranchise Owner Training (NUOT) or the sponsoring UnFranchise Owner will lose sponsorship rights and the new UnFranchise Owner will not count toward activation. The sponsorship rights for this new UnFranchise Owner of the UnFranchise Owner’s sponsor may be re-activated once this new UnFranchise Owner completes the NUOT at a later date. The sponsorship takes effect on the reactivation date.
3. Qualified UnFranchise Owners operating from the same address as any existing UnFranchise Owner, even if the company has approved the UnFranchise Business, will not count toward meeting the activation requirement for any UnFranchise Owner.
4. BDCs placed from re-entry authorization or other acquired BDCs will not count toward meeting the activation requirement.
5. Non-profit Organization (NPO) UnFranchise Businesses will not count toward meeting the activation requirement.
6. Fraudulent, bogus or fabricated sponsorship in order to satisfy the activation requirement is prohibited and will invalidate activation. Fraudulent, bogus, or fabricated sponsorship includes, without limitation, the use of any of the following to disguise the true identity and/or lack of activity on the part of the UnFranchise Owner being used for activation: (a) trade names, (b) assumed names, (c) identification numbers, (d) agreements to operate an UnFranchise Business, (e) a spouse or significant other, (f) family members, (g) business or non-profit entities, or (h) acting in concert with a third party to satisfy activation, where such third party does not undertake the typical, and in some cases required, activities of bona fide UnFranchise Owners. These activities include, without limitation, retailing, meeting sales requirements, sponsoring, attending meetings, attending any required training classes, and completing certification requirements. If the company discovers such practices, the following consequences may result:
  1. The violating UnFranchise Owner may be required to pay back all unearned commissions paid out as a result of the invalid sponsorship;
  2. The violating UnFranchise Owner may have all accrued volume flushed (erased to zero);
  3. The violating UnFranchise Owner may be subject to the Corrective Action Procedure.

SEC. 12 MINIMUM COMMISSIONS REQUIREMENTS

The following minimum requirements shall apply for UnFranchise Owners to continue to earn commissions and/or bonuses under the MPCP.

Form HK1000: An UnFranchise Owner shall complete and submit to Market Hong Kong a current, valid Form HK1000, accompanied by a minimum of two sales receipts totaling HK$1,500.00, to receive any commissions, including the UnFranchise Owner’s first commission payment. Failure to comply will result in the commission being held either four consecutive weekly commission cycles from the week the commission would have otherwise been issued or through the end of the current quarter if the commission payment was for BDC-001, whichever comes first. If the Form HK1000 requirement has still not been met by the end of this hold period, the commission will be forfeited. Note: The Form HK1000 for BDC-001 is due by the end of the UnFranchise Owner’s quarter, regardless of commissions. If a valid Form HK1000 is not received for BDC-001 by the UnFranchise Owner’s quarter-ending date, not only will the UnFranchise Owner flush any Group Business Volume (GBV) and purge Personal Business Volume (PBV) totals, but also any commission payments on hold for BDC-001 for failing to meet the Form HK1000 requirement will be forfeited.
Coordinators (UnFranchise Owners Who Have Earned a HK$2,300.00 Commission): In addition to the Form HK1000 requirement, Coordinators shall complete and submit to Market Hong Kong an Executive Coordinator Qualification and Application (Form HK1001) and an Executive Coordinator Acknowledgement and Agreement (Form HK925) within 28 days of qualifying for their first HK$2,300.00 commission. Failure to comply will result in the next commission payment being held for four consecutive weekly commission cycles from the week the commission payment would have otherwise been issued and if the requirement has still not been met by the end of this hold period, the commission will be forfeited. Completion and submission of Form HK1001 and Form HK925 shall be performed initially, and thereafter this requirement shall be satisfied annually by submitting the Annual Renewal Form.
Executive Coordinators (UnFranchise Owners Who Have Earned a HK$4,600.00 Commission for Accruing 5,000 Group Business Volume on Left and Right Sides): In addition to the Form HK1000 requirement and the minimum commissions requirements set forth for Coordinators, Executive Coordinators shall satisfy the following minimum commission requirements: Executive Coordinators must complete a New UnFranchise Owner Training a Basic Five Training and an Executive Coordinator Certification Training and pass the est (passing grade) within 28 days of qualifying for their first Executive Coordinator HK$4,600.00 commission. Failure to comply will result in the next commission payment being held for four consecutive weekly commission cycles from the week the commission payment would have otherwise been issued, and if the requirement has still not been met by the end of this hold period, the commission will be forfeited. This requirement can be completed before an UnFranchise Owner achieves the Executive Coordinator UnFranchise Level.

SEC. 13 MANAGEMENT PERFORMANCE COMPENSATION PLAN (MPCP) PAYOUT CRITERIA

Qualified, active and activated BDCs participating in the MPCP shall be eligible to earn commission and Management bonuses weekly on Group Business Volume (GBV) generated by UnFranchise Owners in their downline organizations.

Weekly Cycle: Weekly commission cycles calculating accrued GBV from product orders placed, correctly assigned and processed shall run from 12:00 a.m. on Saturday to 11:59 p.m. of the following Friday (excluding grace period provided to UnFranchise Management System (UFMS) members using faxed orders, UnFranchise Services Hotline orders, or the online ordering process). Note: The Friday-to-Friday commission cycle only refers to the weekly cycle by which Market Hong Kong determines the qualification of commissions; it does not refer to the time frame in which Market Hong Kong processes those commissions.
1. Orders received by mail prior to 2:00 p.m. Friday will count toward the current week. The 2:00 p.m. deadline pertains to all other mail, such as forms, etc., and for the submission of Form HK1000s online. The only exception to the 2:00 p.m. deadline is if the package was sent in a courier envelope, and Market Hong Kong can confirm the package was given to the courier in time for next-day delivery and simply was not delivered on time. All individual items within a package sent in a courier envelope must be confirmed via the Market Hong Kong Document Assurance Form to be eligible for an exception to the 2:00 p.m. deadline. Note: Delivery times for Hong Kong Post packages are not conclusive; therefore, for Hong Kong Post packages, the official time of delivery is based solely on the actual time of receipt by Market Hong Kong as recorded by Market Hong Kong.
2. Form 1000’s timely filed by the end of the UnFranchise Owner’s quarter and submitted online by 11:59 p.m. on Friday will count toward the current week.
  
  UFMS members will have until 7:59 p.m. on Fridays to fax orders or place orders through the Services hotline by 6:59 p.m., by using an approved and registered credit card or “credit on account” as the method of payment.
  
  Online orders from customer facing sites (HK.SHOP.COM, SHOPGLOBAL.COM, isotonix.com, motivecosmetics.com, getlayered.com, lumieredevie.com, tlsSlim.com, etc.) placed by registered Preferred Customers by 11:59 p.m. on Friday will count towards the current period if the UFO has a current UFMS Subscription. If the UFO does not have a current UFMS Subscription orders placed by 6:59 p.m. will count towards the current period.
3. Online orders placed on UnFranchise.com by UFMS members by 11:59 p.m. on Fridays will count towards the current period if the UFO has a current UFMS Subscription to place orders through the online ordering process. If the UFO does not have a current UFMS Subscription orders placed by 6:59 p.m. will count towards the current period.
  
  Note: If Market Hong Kong determines that the UFMS is not functioning correctly from corporate office for an unacceptable amount of time, UFMS members have until 1:59 p.m. on Saturday to fax orders using an approved and registered credit card or credit on account as the method of payment. The UFMS member must print clearly at the top of the order form “UFMS Problem – please consider for week ending xx/xx/xx.” No other orders will be accepted.
  
  Note: The determination to extend the normal ordering deadline is completely at the discretion of Market Hong Kong. If Market Hong Kong determines that there was not enough downtime to warrant an extension past the 11:59 p.m. deadline for Online Electronic Ordering, then any orders received by Market Hong Kong after 11:59 p.m. will be credited for the following week.
4. Weekly commissions and management bonuses shall be paid on GBV totals, based on final posting and reconciliation figures, two weeks from the week-ending Friday of that particular commission cycle.
Weekly Compensation Criteria and Management Parameters:
1. HK$2,300.00 Commission: for accruing equal to or greater than 1,200 GBV on the left side and 1,200 GBV on the right side of the respective BDC.
2. HK$2,300.00 Commission: for accruing equal to or greater than 2,400 GBV on the left side and 2,400 GBV on the right side of the respective BDC. This includes the previous 1,200 GBV.
3. HK$2,300.00 Commission: for accruing equal to or greater than 3,600 GBV on the left side and 3,600 GBV on the right side of the respective BDC. This includes the previous 2,400 GBV.
4. HK$4,600.00 Commission: for accruing equal to or greater than 5,000 GBV on the left side and 5,000 GBV on the right side of the respective BDC. This includes the previous 3,600 GBV.
5. HK$4,600.00 Management Bonus: When having a BDC on the left side and a BDC on the right side each receive a HK$4,600.00 commission for reaching the 5,000/5,000 GBV compensation criteria, in the same weekly commission cycle that the respective BDC earns a HK$4,600.00 commission for reaching the 5,000/5,000 GBV compensation criteria. Note: All three commission payments must meet all requirements for release at the same time. If any payment that would otherwise contribute to a Management Bonus is held for any reason (see Minimum Commissions Requirements), then that held commission will not be eligible to contribute toward any Management Bonus for the week that the commission would have been earned if not held. Also, only Home Region UnFranchise Owners in the downline that flush in the same weekly pay cycle count toward qualifying for Management Bonuses. All accrued GBV totals are cumulative (i.e., inclusive of the GBV accrued for reaching the previous compensation criteria), until reaching the 5,000/5,000 GBV compensation criteria. Upon reaching the 5,000/5,000 GBV compensation criteria, a BDC flushes (erases GBV to zero), and starts the commission cycle over again the next week.
  
  Any GBV in excess of the 5,000 GBV compensation criteria shall not carry over into the next commission cycle.
  
  All or any part of the compensation criteria met in a given weekly commission cycle shall be paid for that week. The maximum commission and Management bonuses one BDC may earn in a weekly commission cycle shall be HK$16,100.00.
  
  Market Hong Kong reserves the right to limit the maximum allowable payout for any weekly pay cycle under the MPCP to 65 percent of total BV credited for such week.
  
  Commission payments will be made by direct deposit to the bank account on file with Market Hong Kong, as registered at the Independent UnFranchise Owner’s UnFranchise Business Account.
  
  If for any reason a UnFranchise Owner seeks to recall a direct deposit before the time necessary for the bank to reverse the deposit, for example, where the bank account on file has been closed or the account information was input incorrectly, a HK$270.00 service fee will be charged against the funds deposited and another ACH deposit will be made to an account properly registered at the UnFranchise Owner’s UnFranchise Business Account.
  
  If an UnFranchise Owner is to receive a physical commission check for any reason but does not receive it in the mail, the UnFranchise Owner can call UnFranchise Owner Services to request a Stop Payment be placed on the commission check.
  1. The UnFranchise Owner must wait two full weeks from the date the commission was mailed to request a stop payment on commissions. If the check has not been cashed, a replacement check will be issued. There is no charge UnFranchise Owners for stop payments on commission checks as long as the UnFranchise Owner never received the check, and he/she waits the full two weeks before contacting Market Hong Kong.
  2. If an UnFranchise Owner wants to request a stop payment on a commission check before the two-week waiting period is over (e.g., the check was tossed into the trash by mistake) – there will be a service fee of HK$225.00 charged against the funds if sufficient or against the UnFranchise Owner’s credit account.
  3. Once UnFranchise Owners have requested a stop payment, they should not attempt to cash the original check if it arrives. UnFranchise Owners must wait on the replacement check at that point.
  Market Hong Kong will issue a stop payment on any physical commission check that has not cleared the bank within six months of the date the commission was issued. The amount of any such commission, less the current stop-payment fee, will be placed on the Independent UnFranchise Owner's Market Hong Kong credit account.
  
  Commissions earned and any credit account balance may be held and/or disbursed in accordance with the below proceedings. A service fee of HK$225.00 will be charged in cases where Market Hong Kong administers processes to accomplish the hold and/or disbursement.
  1. Court-ordered collections action,
  2. Governmental levy,
  3. To off-set amounts owed to Market Hong Kong, and
  4. As part of certain Corrective Action proceedings.
  Disputes between parties to an UnFranchise Business, including spouses, may require commissions and credit accounts held until resolved. A service fee of HK$225.00 will apply against the UnFranchise Business in this instance as well.

SEC. 14 ADDITIONAL/MULTIPLE BUSINESS DEVELOPMENT CENTERS

Additional BDCs may be placed and/or acquired (other than initial entry) only in the downline of an UnFranchise Owner’s BDC-001 through re-entry authorization or acquisition of a BDC.

Re-Entry Business Development Centers:
1. An UnFranchise Owner is granted a re-entry authorization the first time and only ONE time per BDC upon receiving a commission for reaching the 5,000/5,000 GBV compensation criteria for the respective BDC within their “Home Region” MPCP. A re-entry shall NOT be awarded for reaching the 5000/5000 GBV compensation criteria in a “Global” MPCP (refer to Chapter 8, Section 17 to learn how to earn additional “Global” BDCs). The re-entry will not be considered valid by Market Hong Kong until after the UnFranchise Owner receives the commission payment. Subsequent attainment of the 5,000/5,000 GBV compensation criteria will not authorize another “re-entry” unless accomplished by an additional BDC (e.g., 002, 003, 004 etc.). An invalid re-entry qualification order will have BV automatically assigned to the UnFranchise Owner’s BDC-001.
2. The “re-entry” of an additional BDC must be exercised in accordance with(a) OR (b) below
  1. There must be at least five (5) UnFranchise Businesses inclusive of all their BDCs (established during enrollment) between the re-entering UnFranchise Owners’ initial BDCs and the placement of the “re-entry”; or
  2. The “re-entry” must be placed below a BDC in your organization (excluding one of your personal BDCs) that has completed the pay cycle (5,000 BV on the left and 5,000 BV on the right, earning the final HK$4,600.00 commission) within the MPCP.
  3. The reentry BDC-004 may only be placed in the left leg of the BDC 002 and the right leg of BDC 003 in accordance with all other re-entry placement rules until the UnFranchise Owner meets the HK$103,500.00 commission criteria in 12-consecutive weekly pay cycles, the equivalent of achieving Professional Coordinator three months in a row. Moreover, the inner leg of the BDC-004 will not be eligible for new UnFranchise Owner placement until the HK$103,500.00 commission criteria in 12-consecutive weekly pay cycles has been met.
3. Additional BDCs from re-entry must be qualified (200 PBV) at the time the re-entry BDC is placed. An Independent UnFranchise Owner Sales Report (Form HK1000) must be completed and submitted accompanied by a minimum of two retail receipts totaling HK$1,500.00 prior to earning a commission (this is a one-time-only requirement unless at some point the UnFranchise Owner purges).
Acquired Business Development Centers: Acquiring additional BDCs in an UnFranchise Owner’s downline is approved only in very rare, extenuating circumstances and begins with obtaining written approval from the company. UnFranchise Owners may not sell, assign, or otherwise transfer their BDC(s), marketing position or other UnFranchise Owner rights and obligations without written authorization from the company. UnFranchise Owners must first submit a letter to the Compliance Department requesting approval to purchase the BDC(s) and explaining in detail the extenuating circumstances.
1. Limitations:
  1. The prospective buyer must be the equivalent or higher UnFranchise Level as the selling UnFranchise Owner and must have been an UnFranchise Owner with Market Hong Kong for at least (12) months prior to acquisition.
  2. UnFranchise Owners may only acquire a BDC in their downline and the selling UnFranchise Owner cannot have been inactive more than 270 days.
  3. UnFranchise Owners relinquishing rights and obligations to a BDC shall not be eligible to be re-sponsored as an UnFranchise Owner for a period of 270 days from the date of sale and/or transfer.
2. Approval:
  1. Upon written approval by the company, UnFranchise Owners must submit a notarized purchase agreement, signed by both the terminating and the purchasing UnFranchise Owners, along with a HK$75.00 per BDC processing fee, attention of the Compliance Department.
  2. Each acquired UnFranchise Business shall be assigned a separate and distinct identification number from the UnFranchise Owner’s original BDC(s), of which the company will notify the acquiring UnFranchise Owner by telephone, letter or fax.
  3. Upon receiving the new identification number, the acquiring UnFranchise Owner must re-qualify each acquired BDC in order to begin accruing GBV in the respective Center. Note: The original Q-date of the BDC shall remain the same as when originally qualified. There is not another initial first-quarter Grace Period. UnFranchise Owners must meet the PBV based on the UnFranchise Level attained by the previous UnFranchise Owner to continue to accrue GBV month to month.
  4. Each acquired BDC must reactivate to be eligible to earn commission and Management bonuses. Original sponsorship rights to downline UnFranchise Owners from the acquired BDCs for activation requirements terminate upon acquisition.
  5. An UnFranchise Owner Sales Report (Form HK1000) must be completed and submitted accompanied by a minimum of two retail receipts totaling HK$1,500.00 within 90 days of qualification.
  6. The company must enroll the acquired BDC-001 in the UnFranchise AutoShip Program within 28 days from the issuance of the new ID number.
  7. All activity requirements shall apply to each acquired BDC or groups of BDCs (in the case of acquiring an UnFranchise Business) separate and distinct from BDCs owned by initial entry or owned through re-entry authorization. This shall include requirements relative to qualification, activation, management, Annual Renewal, UFMS membership, etc.
  8. Please allow 10 to 15 business days from the date of written company approval for Market Hong Kong to set up an acquired BDC. Do not place UnFranchise Owners downline until this process has been completed in the computer system.

SEC. 15 MARKET HONG KONG’S LADDER SYSTEM OF ACHIEVEMENT

Field management levels (UnFranchise Levels) may be earned through participation in the Management Performance Compensation Program. UnFranchise Owners attaining new field management UnFranchise Levels will be recognized in Market Hong Kong’s UnFranchise Owner Magazine. Field management Pin Level requirements are as follows.

Level 1 — UNFRANCHISE OWNER

Complete Independent UnFranchise Owner Application and Agreement
Submit subscription fee
Submit a copy of your Hong Kong ID card

Level 2 — QUALIFIED UNFRANCHISE OWNER

Complete Level 1
Place and accumulate 200 PBV in orders in BDC-001
Maintain proper linkage in the Market Hong Kong genealogy

Level 3 — COORDINATOR (Blue Pin)

Complete Level 2
Develop two sales and distribution organizations, one on the left and one on the right side of a BDC, each accruing 1,200 GBV in a weekly commission cycle
Receive HK$2,300.00 commission payment

Level 4 — EXECUTIVE COORDINATOR (Blue Pin with One Diamond)

Complete Level 3
Develop two sales and distribution organizations, one on the left and one on the right side of a BDC, each accruing 5,000 GBV in a weekly commission cycle
Receive HK$4,600.00 commission payment

Level 5 — SENIOR EXECUTIVE COORDINATOR (Blue Pin with One Diamond and One Sapphire)

Complete Level 4;
Receive HK$11,500.00 in commissions within four consecutive weekly commission cycles

Level 6 — MASTER COORDINATOR (Blue Pin with Two Diamonds)

Complete Level 5
Receive HK$4,600.00 Management Bonus

Level 7 — SENIOR MASTER COORDINATOR (Blue Pin with Two Diamonds and One Sapphire)

Complete Level 6
Received HK$23,000.00 in commissions and management bonuses within 4 consecutive weekly commission cycles

Level 8 — PROFESSIONAL COORDINATOR (Blue Pin with Three Diamonds)

Complete Level 6
Receive HK$34,500.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 9 — SUPERVISING COORDINATOR (Blue Pin with Four Diamonds)

Complete Level 6
Receive HK$57,500.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 10 — NATIONAL SUPERVISING COORDINATOR (Blue Pin with Five Diamonds)

Complete Level 6
Receive HK$76,600.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 11 — EXECUTIVE SUPERVISING COORDINATOR (Blue Pin with Six Diamonds)

Complete Level 6
Receive HK$115,000.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 12 — DIRECTOR (Onyx with One Diamond)

Complete Level 6
Receive HK$138,000.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 13 — EXECUTIVE DIRECTOR (Onyx with Two Diamonds)

Complete Level 6
Receive HK$191,600.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 14 — FIELD VICE PRESIDENT (Onyx with Three Diamonds)

Complete Level 6
Receive HK$276,000.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 15 — EXECUTIVE FIELD VICE PRESIDENT (Onyx with Four Diamonds)

Complete Level 6
Receive HK$345,000.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 16 — SENIOR EXECUTIVE FIELD VICE PRESIDENT (Onyx with Five Diamonds)

Complete Level 6
Receive HK$483,000.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 17 — FIELD PRESIDENT (Onyx with Six Diamonds)

Complete Level 6
Receive HK$613,200.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 18 — INTERNATIONAL FIELD PRESIDENT (Platinum with One Diamond)

Complete Level 6
Receive HK$766,000.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 19 — INTERNATIONAL FIELD CHAIRMAN (Platinum with Two Diamonds)

Complete Level 6
Receive HK$957,600.00 in commissions and management bonuses within four consecutive weekly commission cycles

Level 20 — SENIOR INTERNATIONAL FIELD CHAIRMAN (Platinum with Three Diamonds)

Complete Level 6
Receive HK$1,150,000.00 in commissions and management bonuses within four consecutive weekly commission cycles

SEC. 16 INTERNET BUSINESS VOLUME COMPENSATION PLAN (IBVCP)

The Internet Business Volume (IBV) program provides an opportunity for Market Hong Kong Independent UnFranchise Owners to earn an additional HK$11,500.00 per BDC per week, in addition to the standard MPCP, while maximizing and leveraging the same sales and distribution organization. IBV is generated from the purchase of products and services from Market Hong Kong and its Affiliate Partners, these transactions include ordering products and services from HK.SHOP.COM, purchasing products having IBV through Market Hong Kong’s online partner stores that link to HK.SHOP.COM, and shopping at walk-in Partner Stores. IBV will accrue toward generating a second tier of commissions (IBV commissions) that complement the first tier of commissions generated by accruing standard BV. With the introduction of the supplemental IBV compensation, Market Hong Kong’s MPCP results in a potential total payout per BDC of HK$27,600.00 per week.

Note: UnFranchise Owners will not earn IBV on their own purchases nor on their Preferred Customer’s purchases when (a) the purchaser’s browser is not configured to accept cookies; (b) the order is later canceled, or the goods or services are later returned; (c) the Partner Store does not report the purchase to Market Hong Kong; (d) the purchaser conducts “sham” transactions or otherwise colludes with merchants, makes any misrepresentation in connection with a purchase, maintains multiple accounts or does not otherwise comply with Market Hong Kong’s policies; (e) a particular Partner Store changes or discontinues its affiliate relationship with Market Hong Kong; or (f) a Partner Store decides to withhold payment does not pay commissions to Market Hong Kong for any reason, including but not limited to the use of coupon codes.; or (g) Orders with IBV from Partner Stores will be awarded as per guidelines in Chapter 15.

Ordering IBV Products: All products, goods and services having IBV will be promoted and marketed via HK.SHOP.COM. Products, goods and services having IBV that are sold directly by Market Hong Kong will appear in Market Hong Kong price list and may be ordered by fax, manual order, phone and online.

Products, goods, and services having IBV from online Partner Stores may only be ordered and sold through these Partner Stores’ links to HK.SHOP.COM. When an UnFranchise Owner or his/her preferred customers shop at a Market Hong Kong’s walk-in Partner Store, the UnFranchise Owner will be able to earn his/her IBV based on his/her purchases, and his/her preferred customers will be able to earn their Cashback.
Prerequisite to Participation: UnFranchise Owners must be qualified and active in the standard MPCP in accordance with policy and procedure in the UnFranchise Manual in order to participate in the IBV program.
Designation of Initial Participating Internet Business Development Center (IBDC): To participate in the IBV program, qualified and active UnFranchise Owners must designate a currently existing personal BDC to participate in the accrual of Group IBV (GIBV) generated from the purchase of products by UnFranchise Owners and their customer base within the left and right organizations of this designated personal BDC. Initially UnFranchise Owners may only designate one personal BDC to participate in the IBVCP. UnFranchise Owners must visit their UnFranchise Business Account and register to designate their initial personal BDC for participation in the IBVCP.
Designation of Initial Participating Internet Business Development Center (IBDC): To participate in the IBV program, qualified and active UnFranchise Owners must designate a currently existing personal BDC to participate in the accrual of Group IBV (GIBV) generated from the purchase of products by UnFranchise Owners and their customer base within the left and right organizations of this designated personal BDC. Initially UnFranchise Owners may only designate one personal BDC to participate in the IBVCP. UnFranchise Owners must visit their UnFranchise Business Account and register to designate their initial personal BDC for participation in the IBVCP.
Designation of Additional Participating IBDCs: UnFranchise Owners will earn the right to designate additional personal IBDCs to participate in the IBVCP through an additional IBDC designation process. It works exactly like the Re-Entry Authorization process within the standard MPCP, with the only difference being that instead of earning the right to create a new BDC, eligible UnFranchise Owners will simply designate an additional existing personal IBDC within their organization in which to accrue GIBV for additional potential IBV commissions. The first time a personal IBDC designated to participate in the IBVCP completes the entire IBV Compensation Pay out Cycle (i.e. earns an IBV commission payment for accruing at least 5,000 GIBV from the left organization and 5,000 GIBV from the right organization), UnFranchise Owners are authorized to designate one additional existing personal BDC to participate in the IBVCP. No BDC will accrue IBV towards earning IBV commissions until it is designated as an IBDC to participate in the IBVCP.
Automatic IBV Assignment: When UnFranchise Owners register their personal BDC for initial participation, they need to register two BDCs for automatic assignment of IBV for orders placed online. Eligible BDCs for downline assignment of IBV is governed by current policy and procedure for the placement of BV downline in the standard MPCP. IBV generated from these orders will be alternately assigned to the UnFranchise Owner’s designated BDCs by order as they are generated.
Accrual of IBV: Accrual of GIBV begins for the week ending Friday in which UnFranchise Owners first designate their personal BDC for participation in the IBVCP. To continue accruing GIBV toward IBV commission payout criteria, UnFranchise Owners must meet the minimum activity requirements of the standard MPCP and exercise the IBV Monthly Accrual Option. A purge in the standard MPCP for not meeting the minimum activity requirements or a bad flush in the standard MPCP for not exercising the BV Monthly Accrual Option will result in the same within the IBVCP; however, a bad flush in the IBVCP will not affect GBV in the standard MPCP.
Exercising the IBV Monthly Accrual Option: A qualified BDC will accrue group internet business volume month to month provided (1) an order and payment for the UnFranchise Management System (UFMS) is received by Market Hong Kong for the BDC by the appropriate monthly Q-date and (2) the following minimum IBV Monthly Accrual requirements are met by the appropriate monthly Q-date:
1. The UnFranchise Owner must order the UnFranchise^® Management System (UFMS) monthly by the appropriate monthly Q-date.
2. The UnFranchise Owner must place product orders monthly or participate in AutoShip for the following minimum IBV amounts: 10 IBV for Level 1 (UnFranchise Owners who have not yet earned an IBV commission); 20 IBV for Level 2 (UnFranchise Owners who have earned their first IBV commission); and 30 IBV for Level 3 (UnFranchise Owners who have earned an IBV commission for completing the IBV commission cycle at 5,000/5,000 IBV), and all such amounts are assigned to BDC-001. The respective IBV Levels shall be determined based on IBVCP pay out criteria satisfied in ANY of the IBVCPs (i.e. “Global”) in which the UnFranchise Owner is qualified. Example: if a UnFranchise Owner receives the equivalent of HKD2,300.00 commission for reaching 1,200/1,200, 2,400/2,400, or 3,600/3,600 GIBV in a “Global” IBVCP, then the UnFranchise Owner shall be considered a “Level 2” in their “Home Country” IBVCP and ALL associated IBV Level requirements for all IBVCPs shall apply.
3. The cap of 500 IBV per monthly Q-date period on select exclusive products and Shopping Annuity^® Brand products. Any amount in excess of 500 IBV will not be awarded.
The UnFranchise Owner must complete the UnFranchise Setup in order to receive an IBV commission payment: The UnFranchise Owner must be activated in accordance with the standard MPCP requirement.
28-Day Grace Period: For any change in status that causes UnFranchise Owners’ minimum IBV monthly amount to change regarding exercising the IBV Monthly Accrual Option, a 28-day Grace Period applies under the following guidelines:
1. Initial Designation: If the date of the initial designation of a BDC as participating in the IBVCP is within 28 days of the upcoming monthly Q-date, then the UnFranchise Owner is not required to submit the minimum IBV amount by that next monthly Q-date to continue to accrue GIBV month to month. The UnFranchise Owner must then submit the applicable IBV for the first monthly Q-date period for which the 28-day Grace Period does not apply. However, if a BDC is designated as participating in the IBVCP, and the upcoming monthly Q-date is more than 28 days from the date the BDC is designated, then the UnFranchise Owner must submit the applicable IBV by the next monthly Q-date to continue to accrue GIBV month to month.
2. Earned Commissions: If a commission that will increase an UnFranchise Owner’s minimum monthly IBV amount is earned within 28 days of the upcoming monthly Q-date, then the UnFranchise Owner remains at the current IBV level to continue to accrue GIBV month to month. The UnFranchise Owner must then submit the applicable IBV (20 IBV for Level 2; 30 IBV for Level 3) for the first monthly Q-date period for which the 28-day Grace Period does not apply. However, if a commission that will increase an UnFranchise Owner’s minimum monthly IBV amount is earned, and the upcoming monthly Q-date is more than 28 days from the date the commission is earned, then the UnFranchise Owner must submit the applicable IBV (20 IBV for Level 2; 30 IBV for Level 3) by the next monthly Q-date to continue to accrue GIBV month to month.
UnFranchise Owners Not Exercising IBV Accrual Option: Exercising the IBV Monthly Accrual Option is not required.
1. If UnFranchise Owners choose not to exercise the IBV Monthly Accrual Option, their accrued GIBV through the end of the monthly Q-date period for which the IBV Monthly Accrual Option is not exercised will flush (reset to zero); however, UnFranchise Owners who remain active in the standard MPCP will begin accruing GIBV again beginning the commission week directly after the flush.
2. If UnFranchise Owners do not exercise the IBV Monthly Accrual Option by their next monthly Q-date, their accrued GIBV will flush (reset to zero) again at the end of that monthly Q-date period, and so on.
Active Life Span of Group Internet Business Volume: Accrued GIBV shall have a 548-day life span from the date of the order. The life span of GIBV does not extend to the Friday of the week in which the order turns 548 days old, but expires on the 549th day. GIBV greater than 365 days old shall no longer count towards the pay out of commissions.

SEC. 17 GLOBAL MANAGEMENT PERFORMANCE COMPENSATION PLAN

The following are requirements for UnFranchise Owners wishing to expand to the Americas Region, as defined in the Regions Unification section, to be eligible to participate in the Global MPCP. Expansion into the Europe Region is explained under Global Unification.

The following are guidelines for UnFranchise Owners to be eligible to participate in the Global MPCP:

Application: UnFranchise Owners must log on to their UnFranchise Business Country’s Account and complete and submit the Global UnFranchise Owner’ Agreement and the Americas Region’ Application & Agreement.
1. In order to activate your Taiwan UnFranchise Business, you must submit the original completed Taiwan Nonresident Agreement, via regular mail to the corporate office. Retail Profit and/or commissions will be awarded from the date we receive your Taiwan Nonresident agreement.
2. If you select “Taiwan” as your entry country in the United Asia-Pacific Markets, we must receive your Taiwan Nonresident Agreement to activate your access into the UAP Markets.
Designation of Initial Participating BDC: UnFranchise Owners must designate a currently existing personal BDC to participate in the accrual of global group BV generated from the purchase of products by Americas Region UnFranchise Owners and their customer base within the left and right organizations of this designated personal BDC. Initially UnFranchise Owners may only designate one personal BDC to participate in the global MPCP. UnFranchise Owners must log on to their UnFranchise Business Account and register to designate their initial personal BDC for participation in the global MPCP.
Designation of Additional Participating BDCs: UnFranchise Owners will earn the right to designate additional personal BDCs to participate in the global MPCP through an additional BDC designation process. It works exactly like the re-entry authorization process within the standard MPCP, with the only difference being that instead of earning the right to create a new BDC, eligible UnFranchise Owners will simply designate an additional existing personal BDC within their organization in which to accrue global GBV for additional potential global commissions. The first time a personal BDC designated to participate in the global MPCP completes the entire Compensation Payout Cycle (i.e. earns a commission for accruing at least 5,000 global GBV from the left organization and 5,000 global GBV from the right organization), UnFranchise Owners are authorized to designate one additional existing personal BDC to participate in the global MPCP.
Placement of Personally Sponsored Global UnFranchise Owner BDCs: Global UnFranchise Owner must be linked/placed on either the left or right side of the sponsoring UnFranchise Owner’s designated BDC(s) currently existing in the UnFranchise Business Development System. These Global UnFranchise Owner can only be linked/placed on the left leg of the BDC-002 and the right leg of the BDC-003 of the UnFranchise Owner with the Master UnFranchise Owner level until such UnFranchise Owner has earned not less than HK$103,500.00 in 12-consecutive weekly pay cycles. All BDCs, home region and global, are placed within the same genealogical or organizational system.
Accrual of Global GBV: To make the designated BDC eligible to accrue global GBV, UnFranchise Owners must order a Americas Region subscription kit (this is done during the initial sign-up process) and place an order for 200 PBV worth of “Home Region” products and assign BV placement to the designated BDC (this is done during the initial sign-up process once the UnFranchise Owner has designated his/her global BDC). To continue accruing global GBV towards commission payout criteria, UnFranchise Owners must meet the minimum activity requirements of the standard MPCP and exercise the Monthly Accrual Option in accordance with the standard requirements of the MPCP. A bad flush and/or purge in the standard MPCP for not meeting the minimum activity requirements or executing the Monthly Accrual Option will result in the same within the Global MPCP. If a purge occurs in the Home Region MPCP, the Home Region BDCs must be requalified before requalifying any global BDCs. Note: Independent UnFranchise Owner will not accrue any global GBV from orders generated prior to qualifying their own global BDC.
Minimum Global GBV Commissions Requirements: In order to be eligible to earn and receive global commissions UnFranchise Owners must:
1. Be activated in accordance with the standard MPCP requirement in their Home Region.
2. Activate their designated global BDC by personally sponsoring at least one qualified Americas Region UnFranchise Owner into the left organization of your designated global BDC and at least one qualified Americas Region UnFranchise Owner into the right organization of your designated global BDC.
3. Have a current UnFranchise Management System subscription.
4. Maintain minimum activity requirements in their Home Region MPCP.
Assignment of BV: Home-Region UnFranchise Owners ordering products having home- region BV may only assign BV downline to original BDCs of personally sponsored home- region UnFranchise Owners who meet the volume placement criteria (see Assignment of BV and IBV, and these products must be shipped to a home- region address. Home-region UnFranchise Owners ordering products having Americas Region BV may only assign BV downline to original BDCs of personally sponsored Americas Region UnFranchise Owners who meet the volume placement criteria (see Assignment of BV and IBV).
Global Management Bonuses: A global Management bonus is earned in the same manner as in the Home Region MPCP; however, to qualify for a global Management bonus, an UnFranchise Owner must have a BDC of a particular Americas Home Region on the left side of its organization and a BDC of the same Americas Home Region on the right side of its organization reach 5,000/5,000 in Business Volume generated in that particular Americas Region and receive the respective commission in the same weekly commission cycle that the UnFranchise Owner reaches 5,000/5,000 Business Volume in the same Americas Region and receives the respective commission. Only Americas Home Region UnFranchise Owners in the downline that flush in the same weekly pay cycle count toward qualifying for the global Management Bonus.

SEC. 18 MASTER UNFRANCHISE OWNER PROGRAM

A Master UnFranchise Owner is a qualified and active UnFranchise Owner who has made the commitment to master the UnFranchise Business System by implementing the established tasks, activities, and practices.

Qualifications:
1. Complete the Shopping Annuity assessment;
2. Have a subscription for the UnFranchise Management System (UFMS);
3. Purchase a total of 1,500 BV of product for the respective quarter;
4. Generate a minimum of 250 IBV of Shopping Annuity IBV, and/or Partner Store purchases for the respective quarter;
5. Personally sponsor a minimum of one (1) qualified and active UnFranchise Owner;
6. For the respective quarter, attend or conduct:
  1. One (1) New UnFranchise Owner Training; and
  2. One (1) Basic Five Training;
7. Attend one (1) Executive Coordinator Certification Training per year;
8. Purchase a minimum of three (3) tickets to the next Market Hong Kong Annual Convention or Leadership School; and
9. Earn a minimum of HK$6,900.00 in BV commissions per quarter and/or complete a Basic 5 Diagnostic Test, in which the UnFranchise Owner scores greater than or equal to 50 percent.
The only information that UnFranchise Owner must fill out manually is training information. All other criteria will populate automatically. Once the UFOs have entered your training information, they must click “save”. At the end of the quarter, Master UFO Form will be auto-submitted and enter the 90-day reconciliation period. Any IBV that is created in a given quarter in excess of the IBV criterion is carried over for one (1) quarter and added to UFO’s IBV created in the next quarter to help UFO satisfy the criterion. IBV Rollover applies within the Master UFO program only if you completed all Master UFO criteria (qualified) for the quarter. For the Master UFO program, IBV can be created by the UnFranchise Owner’s purchases and/or their Preferred Customers’ purchases. All qualification criteria must be satisfied within the calendar quarter in which the UnFranchise Owner is applying. UnFranchise Owners must submit their Qualification Verification and Validation Form by the 28th day following the end of the quarter. Any IBV that is created in a given quarter in excess of the IBV criterion is carried over for one (1) quarter and added to your IBV created in the next quarter to help you satisfy the criterion. IBV Rollover applies within the Master UFO program only if you completed all Master UFO criteria (qualified) for the quarter. For the Master UFO program, IBV can be created by the UnFranchise^® Owner’s purchases and/or their Preferred Customers’ purchases.
A Master UFO automatically requalifies for recognition purposes when they earn a minimum of HK$11,500 in BV/IBV commissions 10 of the 13 weeks in a calendar quarter. They do not receive any additional benefits unless they also complete all of the above qualifications.
When an UnFranchise Owner satisfies the Master UnFranchise Owner qualifications, the UnFranchise Owner will be eligible to designate a second UnFranchise Owner for volume placement for the quarter after the reconciliation/verification quarter subject to the downline placement policy. For example: An UnFranchise Owner who completes the Master UnFranchise Owner criteria during the second quarter of 2019 will be eligible to designate a second UnFranchise Owner for volume placement for the fourth quarter. The second placement will be awarded for each quarter in which the UnFranchise Owner qualifies as a Master UnFranchise Owner. If the qualifications are not met for a subsequent quarter, the second designated placement will be removed.
After the respective reconciliation/verification quarter, UFOs who satisfy the Master UFO criteria will be awarded two calendar quarters (six months) of free shipping, one calendar quarter (three months) of the Customer Acquisition Program, and one calendar quarter (three months) of an additional BV and IBV Designated Placement.

SEC. 19 REGION UNIFICATION

In order to simplify the international expansion, countries have been grouped in Regions.

Regions:
1. Americas Region: The United States, Canada and EMP countries in Latin America are unified in one single region, the Americas Region.
2. Asia-Pacific Region: Hong Kong, Taiwan, Australia, Singapore, Malaysia and EMP countries in the Asia-Pacific Region are unified in one single region, the Asia-Pacific Region.
3. Europe Region: The United Kingdom and other EMP countries in the European Union are unified in one single region, the Europe Region.
Home Region: Home Region is the region in which an UnFranchise Owner registered his/her UnFranchise Business.
Unified Accounts: BV and IBV accrued by UnFranchise Owners doing business in two or more countries within a Region count toward a unified account (“Unified Account”). Note: All UnFranchise Owners who have expanded their business to Taiwan, Hong Kong, Singapore and/or Australia will have their accounts in those countries unified.
Commission: Commissions shall be calculated based on BV and IBV accrued in the Unified Account. The commissions will be paid in the currency of the UnFranchise Owner’s “home country,” i.e. for a Market Hong Kong UnFranchise Owner, commissions will be paid in Hong Kong Dollars.
Compliance with local rules and regulations: In order to comply with the different laws and regulations of the countries in which Market Hong Kong and/or its affiliates operate, the UnFranchise Manual varies from country to country according to applicable laws and regulations. UnFranchise Owners expanding within a certain Region and into other Regions must conduct their activities and manage their organizations’ activities in those countries in accordance with the UnFranchise Manual of the particular country or region and in accordance with the laws and regulations which govern their business operations in that particular country or region.

SEC. 20 GLOBAL UNIFICATION

IRC
1. Every Market Hong Kong UnFranchise Owner receives an International Re-Entry Center (IRC) to expand into the Europe Region. Market Hong Kong UnFranchise Owner expanding into the Europe Region do not have to follow the Global MPCP requirements. It suffices that the IRC is qualified.
2. IRC qualification: An IRC is qualified by the placement of a 200 BV Home Region order into the IRC.
3. IRC placement: IRCs can be placed anywhere within a Market Hong Kong UnFranchise Owner’s organization (subject to any applicable inside leg restrictions). It is recommended that IRCs be placed in the weak leg of the organization.
4. Activity Requirements: An UnFranchise Owner Sales Report (Form HK1000) must be completed and submitted, accompanied by a minimum of two retail receipts totaling HK$1,500.00 prior to earning a commission (this is a one-time only requirement unless at some point the IRC purges).
5. Earning Commission: In order to earn commission, the IRC must be activated by personally sponsoring one qualified Europe Home Region UnFranchise Owner on the IRC left leg and one qualified Europe Home Region UnFranchise Owner on the IRC right leg. The IRC will be paid commissions on the BV/IBV accrued in the region where the IRC is placed only. Note: Home Region BV/IBV placed below the Europe Region IRC, will not accrue in the Europe Region BV/IBV banks. However, the BV/IBV will flow upline in the Home Region genealogy above the Europe IRC. To better illustrate this, please see below:
6. BV/IBV Accrual: BV/IBV accruing in the IRC is converted and flows upward as Home Region BV/IBV at the connection point in the Home Region genealogy. The converted BV/IBV from the IRC combines with Home Region BV/IBV to accumulate up through the genealogy line. It accrues in all qualified Home Region BDCs. Please see illustration below.
7. IRC Management Bonuses: An IRC Management Bonus is earned in the same manner as in the Home Region MPCP. However, to qualify for an IRC Management Bonus, an UnFranchise Owner must have a Europe Home Region BDC on the left side of its IRC organization and a Europe Home Region BDC on the right side of its IRC organization reach 5,000/5,000 in Business Volume generated in the Europe Region and receive the respective commission in the same weekly commission cycle that the UnFranchise Owner ’s IRC reaches 5,000/5,000 Business Volume in the Europe Region and receive the respective commission. Only Europe Home Region UnFranchise Owners in the downline that flush in the same weekly pay cycle count toward qualifying for the IRC Management Bonus.
8. Additional IRCs: Additional IRCs for the Europe Region will be granted when any IRC initially reaches 5,000/5,000 accrued BV.
9. Additional IRCs may only be placed in the left leg of the BDC 002 and the right leg of BDC 003 in accordance with all other re-entry placement rules until the UnFranchise Owner earns HK$103,500.00 in commissions in 12 weeks, the equivalent of achieving Professional Coordinator three months in a row. Moreover, the inner leg of the additional IRC will not be eligible for new UnFranchise Owner placement until the UnFranchise Owner meets the HK$103,500.00 commission criteria in 12-consecutive weekly pay cycles, the equivalent of achieving Professional Coordinator three months in a row.
UGC
1. A Unified Global Center (UGC) is designated when an UnFranchise Owner has qualified his/her IRC and accumulates 1,200/1,200 BV/IBV in Home Region volume. Note: For those UnFranchise Owner who have already expanded internationally to the Europe Region, UGC replaces the designated global business center.
2. When the combined BV/IBV reaches and exceeds 5,000/5,000 in a weekly pay cycle, the excess originated exclusively from the IRC is transferred to the UGC. Only IRC-converted volume exceeding 5,000/5,000 in a weekly pay cycle is accrued to the UGC. Note: Home Region BV/IBV never accrues to the UGC and the UGC does not earn Management Bonus.
3. All IRC-originated BV/IBV exceeding 5,000/5,000 in a weekly pay cycle accumulates in the UGC. UGC commissions are calculated and paid as per the standard MPCP.