“With self-disciplinemost anything ispossible.”Theodore Roosevelt26th Presidentof the United StatesSALES & MARKETING PLAN. . 3U.S. SUPPLEMENTAL RULES OF CONDUCT:ORDERING PROCEDURES. . . 24CERTAIN WAYS OF DOING THE BUSINESS. . 89SAMPLE FORMS. 36ENFORCEMENT PROCEDURES. . 122U.S. RULES OF CONDUCT AND DISTRIBUTOR POLICIES. 54PRIVACY AND DATA PROTECTION. . . 124Sales &Marketing Planand Business Rules

Sales & Marketing PlanOverviewHerbalife’s Marketing Plan offers you unique opportunitieswhich can lead to higher levels of success and to greatachievement. The plan was developed for Distributors byHerbalife’s first Distributor and founder, Mark Hughes. Theresult is arguably the best Marketing Plan in the industry.Herbalife’s Marketing Plan pays out up to 73% of productrevenues to Distributors in the form of Retail and WholesaleProfits, Royalty and bonus income and incentives. This tested,proven business plan is designed to maximize rewards foreffort and provide substantial and ongoing income.The Herbalife opportunity and the Marketing Plan are identicalfor every Distributor. Each Distributor’s success is dependenton two primary factors: The time, effort and commitment a Distributor puts intotheir Herbalife business and The product sales made by a Distributor and theirdownline organization.These two factors raise the importance of a Distributor’sIncome OpportunitiesThe Herbalife Marketing Plan provides many opportunities toearn income and other rewards.Immediate Retail Profit25% to 50%The profit from direct sales to customers.Daily Wholesale ProfitUp to 25%The difference between what you pay for products and whatDistributors in your personal organization pay for products.Monthly Royalty Override IncomeUp to 5% on three levels of downlineAs a Supervisor, you earn up to 5% on the Personal Volume ofall of your Supervisors, three active levels of downline.Monthly Production BonusesTAB Team members can earn an extra 2% to 7%Organizational Production Bonus.responsibility to train, support and motivate their downlineorganization.The following pages describe the different levels of Herbalife’sSales & Marketing Plan. Each level has specific qualificationsand associated benefits to reward Distributors for their effortsand enhance their success.Becoming a Distributor – The Important First StepThe only required purchase in order to become an HerbalifeIndependent Distributor is the Herbalife Mini IBP (thesmaller version of our official Distributor Kit). The Mini IBPAnnual BonusesA bonus to Top Achievers in recognition of outstandingperformance.Qualify for Special Vacations and Training EventsDistributors who qualify are rewarded for consistentperformance and efforts in building their business.Plus other special promotions and bonusesthroughout the year.(as well as the larger version) contains the Application forInternational Distributorship, which you must completeand submit in order to receive an Herbalife IdentificationNumber and purchase products.RegistrationYou officially become an Herbalife Distributor when yourproperly completed Application has been processed andaccepted by the Herbalife World Operations Home Office.This process takes only a few days, but in the meantime,you are entitled to buy Herbalife products from or throughyour Sponsor, first upline Fully Qualified Supervisor or theHerbalife Sales Order Department at the applicable discount.Once your Application has been accepted, your contract withHerbalife becomes effective immediately, giving you all therights, responsibilities and privileges of a Distributor.3



Understanding VolumeThroughout this manual, we use the term volume extensively.3. Full payment must be received by Herbalife no later thanVolume is a key element in the Marketing Plan and is the basisthe 5th day of the following month. If the 5th of the monthfor qualifying and working your way to higher levels.falls on a Sunday or a holiday, then the payment must beEach Herbalife product has a Volume Point value assignedreceived by the 4th of the following it that is equal in all countries (see order forms and priceIf for any reason, a payment is not approved for acceptance,lists for exact information). Official Herbalife Distributorsuch as with a credit card, personal check or APS, then theKits (IBPs), literature items and sales tools do not count asorder will be canceled and the Volume will not be appliedvolume. As you order products, you accumulate credit for theunless another order was placed and paid within the timeamount of Volume Points that are applicable to the productsperiods indicated.ordered. These accumulated Volume Points become yoursales production and are used for purposes of qualificationsand benefits.There are a number of ways volume is credited in the HerbalifeMarketing Plan. The following definitions and examplesillustrate these:Volume is credited to you in various ways depending on whopurchased the volume, their status and discount, your ownPersonally Purchased Volumestatus as a Distributor and other factors of the Herbalife SalesPersonally Purchased Volume is the volume on orders& Marketing Plan. Volume is calculated on the accumulatedpurchased directly from Herbalife using your HerbalifeVolume Point value of products ordered in a Volume Month.Identification Number.Explanation of Sales Volume MonthDownline VolumeDefinition of Volume MonthAs a non-Supervisor, Downline Volume is based on volumeSales Volume is credited to and accumulated by a Supervisorwhich is placed by your downline Distributors directly fromon a Volume Month basis. The Volume Month begins on theHerbalife who are ordering between 25% to 42% discount.first business day of the month and ends on the last business*For Fully Qualified Supervisors, Downline Volume is creditedday of the month. If the last day is Sunday, the Volume Monthas Personal Volume or Group Volume.will be extended to Monday. Likewise, if the last day of themonth is considered a holiday, the month may be extended toDownline Volume Examplethe first business day after the holiday. Herbalife reserves thePurchases/Discount %DownlineVolumeASupervisor2,500 Volume Points @ 50% Discount*BDistributor500 Volume [email protected] 35% Discount 900 Volume Points(C & D’s Volume)CDistributor500 Volume [email protected] 35% Discount 400 Volume Points(D’s Volume)DDistributor400 Volume Points @25% Discount 0right to modify the Volume Month as it deems appropriate.Determination of Volume MonthSales Volume is credited to the Volume Month in which theorder is both placed and full payment is received by Herbalife,except for orders that meet the rules and conditions that applyto Add-On Sales Volume.Under no circumstances can volume be placed for a prior ordermonth, with the exception of a Matching Volume order.Add-On Sales VolumeAll of the following conditions must be met for an order to beaccepted as Add-On Sales volume:1. Order must be placed no later than the designated last orderday of a Volume Month, plusAs a Fully Qualified Supervisor, Personal Volume is the volume2. Full payment must be made, or initiated, by the samepurchased using your Herbalife Identification Number, as welllast order day of the month. If payment is mailed, then theas the volume purchased by your non-Supervisor downline,postmark must be stamped the designated last day. If thedown to your first Fully Qualified Supervisor.payment is a wire transfer, direct deposit or other banktransaction, a receipt must be supplied to verify the transactiondate was on, or prior to, the last designated order day of the6Personal Volumemonth, plusNon-Supervisor Distributors may purchase only from theirSponsor, first upline Supervisor (only if their Sponsor is not aFully Qualified Supervisor) or directly from Herbalife.

Therefore, if you are a Fully Qualified Supervisor, all of yourTotal Volumeown orders purchased at 50% – as well as all orders purchasedTotal Volume is the combined total of a Supervisor’s Personalby your downline Distributors, Senior Consultants, SuccessVolume plus Group Volume. (See “Group Volume Example”Builders and Qualified Producers at 25% to 42% discount –for Supervisor A’s Total Volume.) Total Volume is the factorcount as your Personal Volume.on which some qualifications are based.Personal Volume ExampleOrganizational VolumePersonalVolumePurchases/Discount %Organizational Volume is the accumulated Volume amounton which a Supervisor earns Royalty Overrides. (See the“Organizational Volume Example” on the following page.)1,500 PersonalVolume Points B, C & D’s Volume 3,500Personal VolumeBDistributor1,400 Volume Points C & D’s [email protected] 42% Discount 2,000Personal VolumeEncumbered Volume is all volume produced by any DistributorCDistributor200 Volume Points D’s [email protected] 35% Discount 600Personal VolumeUnencumbered VolumeDDistributor400 Volume [email protected] 25% Discount 400Personal VolumeASupervisorEncumbered and Unencumbered VolumeEncumbered Volumequalifying for Supervisor in your personal organization.Unencumbered Volume is all volume produced by anyonein your personal organization, down to the first qualifiedSupervisor, who achieves less than 2,500 Volume Pointsin one Volume Month, plus all your own Personal Volume.Therefore, this is volume that is not used by anyone forGroup VolumeGroup Volume is the volume on orders purchased at aSupervisor qualification purposes.temporary 50% discount by Qualifying Supervisor(s) in theirThe example on the following page illustrates the usequalifying month.of Encumbered and Unencumbered Volume for each ofThis Temporary 50% Volume is accumulated as PersonalVolume for the Qualifying Supervisor who purchased it, butis Group Volume for the Fully Qualified Supervisor. The FullyQualified Supervisor may earn Royalty Overrides on their GroupVolume if all other Royalty Override requirements are met.(Refer to the “Qualifying as a Supervisor” and “Temporary50%” sections of this book for complete details.)Purchases/Discount %2,500 Volume Points B & C’s VolumePersonalVolume6,500Personal Volume 1,000 Group Volume7,500 Total VolumeBDistributor1,000 Volume [email protected] Temporary50% Discount C’s VolumeMatching VolumeMatching Volume is the volume a sponsoring Supervisormust have through personal orders, or by Distributors in theirpersonal organization in a given month, to equal or exceedthe volume achieved by their downline Distributor(s) who arequalifying for Supervisor.Matching Volume is how Herbalife verifies and validates theGroup Volume ExampleASupervisorthe Distributors.qualification of new Supervisors. Whenever a Supervisorsponsors a Distributor to the Supervisor position, the sponsoringSupervisor’s Total Volume must be at least the same as theTotal Volume of their downline Distributor(s) qualifying withinthat same month. Without adequate Matching Volume, thenew Supervisor will go to the next upline Supervisor.The Matching Volume example on the following page illustratesthe amount of Personal Volume and Total Volume that must 5,000Personal Volumebe achieved by the sponsoring Supervisor for the downlineDistributors who are qualifying for Supervisor. In this example,“A” (the sponsoring Supervisor) must have at least 4,000Personal Volume Points and at least 1,000 Group Volume PointsCDistributor4,000 Volume [email protected] 42% Discount 4,000Personal Volumein the month that “B” and “C” are qualifying for Supervisor, inorder to confirm the volume they report on their SupervisorQualification Form. This volume obligation for the Supervisor isconsidered to be their Matching Volume requirement.7

Distributor BenefitsRetail ProfitOrganizational Volume ExampleASupervisor1st LevelSupervisorAs a Distributor, you may purchase Herbalife products at awholesale discount of 25% to 50%. As your volume increases,2,500Volume Pointsthis discount will increase up to a maximum of 50% when youqualify as a Supervisor. You earn an immediate Retail Profit of 25%to 50% when you sell these products to customers, depending10,000 TotalVolume Pointson volume. The difference between the discounted product pricepaid by you and the retail price paid by your customer is yourRetail Profit. (See the “Retail Profit Example.”)2nd LevelSupervisor3rd LevelSupervisor30,000 OrganizationalVolume10,000 TotalVolume Points10,000 PersonalVolume PointsRetail Profit ExampleFull RetailCost(at 25% discount)Profit 100 75 25Wholesale Profit (Commissions)In addition to Retail Profit, as an Herbalife Distributor, you canalso earn Wholesale Profit on products purchased by yourEncumbered and Unencumbered DistributorQualifyingSupervisor2,500Total Volume Points B & C’s Volume1,000Total Volume Points C’s Volume4,000Total Volume Points 2,500Unencumbered5,000Encumbered to A1,000Unencumbered4,000Encumbered to BDistributors. Your Wholesale Profit, also called Commissions,is the difference between the discounted price you pay forproducts and the discounted price paid by your Distributors.If you sell products directly to your Distributors, you can earnup to 25% Wholesale Profit immediately. If your Distributorspurchase their product directly from Herbalife, then Herbalifepays the difference in discount percentage to the QualifiedProducer and/or Fully Qualified Supervisor on the order duringthe monthly Royalty Override process. These payments4,000Unencumbered to Care called Commissions and are Wholesale Profit. (See the“Wholesale Profit [Commissions] Example” below.)Wholesale Profit (Commissions) ExampleRetailMatching Volume ExampleMatching Volume Requirementfor Supervisor QualifyingSupervisor84,000 Personal Volume 1,000 Group Volume 5,000 Total Volume1,00