Canada Compensation Plan Overview Effective January 1, 2014 ® CANADA COMPENSATION PLAN OVERVIEW Effective January 1, 2014 Compensation is earned at ACN only when customers are acquired. The ACN Opportunity has been designed to help you build a successful business of your own. ACN Independent Business Owners (IBOs) can earn money in two ways: Access your IBO Back Office for details on ACN’s monthly, promotional bonuses – designed to get new IBOs off to a fast start. • Monthly residual commissions based on their personal and downline customers’ usage of ACN’s services • Weekly and Monthly Bonuses based on customer acquisition Positions & Qualifications STARTING POSITION: Every IBO starts as a Team Trainer (TT) Qualified Team Trainer (QTT) To become a Qualified Team Trainer you must have a minimum of 5 Customer Points and at least 3 Preferred Services. At least one of those Preferred Services must be outside of your household. 5 Customer Points and 3 Preferred Services EARNED POSITIONS: IBOs with a start date prior to January 1, 2014 have until April 1, 2014 to meet the below requirements for all positions. Executive Team Trainer (ETT) Executive Team Leader (ETL) You You 7 Customer Points and 3 Preferred Services** 15 Customer Points and 4 Preferred Services** Team Coordinator (TC) Regional Director (RD) Regional Vice President (RVP)* You You You TC ETT QTT ETT QTT You TC 200 Customer Points 200 200 200 Customer Customer Customer Points Points Points Senior Vice President (SVP) TC TC TC RVP TC QTT RD RVP TC ETT TC TC You acquire 7 Customer Points and 3 Preferred Services and 1 QTT in 2 separate legs at any level You acquire 15 Customer Points and 4 Preferred Services and 1 ETT in 3 separate legs at any level 200 Customer Points in 3 separate legs 1 TC in 2 separate legs at any level and a third leg with 200 Customer Points 1 TC in 4 separate legs at any level Minimum Monthly Downline Billings $150,000 (Limit $75,000 per leg) PLATINUM RVP† Minimum Monthly Downline Billings: $300,000 (Limit $150,000 per leg) TC Must have 1 TC or above in 6 separate legs, including at least 2 RVP legs and 1 RD leg Minimum Monthly Downline Billings: $500,000 (Limit $250,000 per leg) TCS AND ABOVE MUST MAINTAIN 15 CUSTOMER POINTS AND 4 PREFERRED SERVICES** TO RECEIVE EARNED POSITION COMPENSATION. *RVP Qualifications apply to new RVPs promoted beginning April 1, 2014. RVPs as of March 31, 2014, have until January 1, 2015, to meet these qualifications. † Platinum RVP is a designation that applies to North American IBOs only. **At least one of the Preferred Services must be outside of your household. Success as an ACN Independent Business Owner is not guaranteed, but rather influenced by an individual’s specific effort. Not all IBOs make a profit and no one can be guaranteed success as an ACN IBO. ACN’s Compensation Plan is subject to change without notice at ACN’s discretion and for any reason. © ACN Canada 2014_CompPlanOverview_RP_W_010114 1 ® CUSTOMER POINT SYSTEM & COMMISSIONABLE REVENUE The only way to earn income at ACN is through the acquisition of customers; therefore all IBOs must acquire customers in order to meet qualifications and advance through ACN’s earned positions. ACN utilizes a customer point system for each of its products and services. Core Services provide long-term residual income. Product / Service Core Preferred Customers Customer Points YBA counts as 2 POINTS AND 1 PREFERRED CUSTOMER for the life of your subscription! Monthly Commissionable Duration of Points Revenue* and Commissions RESIDENTIAL – Digital Phone Service PHONE SERVICES & BUNDLED Phone Adapter – Transfer Phone Number H 3 3 Points 100% Life of Customer Phone Adapter – New Phone Number H 3 2 Points 100% Life of Customer Video Phone 3 2 Points 100% Life of Customer Life of Customer ACN Advantage Local and Long Distance H 3 3 Points Long Distance – 100%; Local – 50% Long Distance H 3 2 Points 100% Life of Customer 3 1 Additional Point 100% Life of Customer 1 Point Pay As You Go - 0 Points 100% Life of Customer High Speed Internet bundled with ACN Phone Service ACN View BUSINESS – Digital Phone Service DigitalTalk® Express – Digital Phone Service for Home Office & Small Business 3 1st Line = 3 Points 2nd Line = 5 Points 3rd Line = 7 Points 3 1-2 Lines = 3 Points 3-4 Lines = 5 Points 5-6 Lines = 7 Points 7+ Lines = 1 Additional Point Per Line Excludes Data/Fax Line 100% High Speed Internet bundled with ACN Phone Service 3 1 Additional Point 100% Life of Customer Telus Wireless with MRC Greater than $35/month New Accounts (Individual or Air Card) 3 Single Line – Monthly Plan 2 Points $40 2-3 years BusinessTalk Local and Long Distance WIRELESS Telus Wireless with MRC Less than $35/month New Accounts (Individual or Air Card) Renewals/Upgrades (Customers initially acquired by an ACN IBO) Renewals/Upgrades (Customers not initially acquired by an ACN IBO) H H 100% Life of Customer Life of Customer Single Line - Monthly Plan 1 Point $15 1 Point $15 100% Commissionable 1 year $15 50% Commissionable 1 year 0 Points 2-3 years *Commissionable revenue is billed revenue less taxes, surcharges and an allowance for bad debt. ACN reserves the right to reduce commissionable revenue by a percentage factor for promotional plans, products, negotiated pricing or certain services. Commissionable Billing for some products is a fixed amount. IBOs receive a percentage of these amounts each month depending on where they fall in the Compensation Plan. 1 If a Your Business Assistant subscription was used for CAB or TCAB qualifications and is cancelled within the first 60 days, the bonus will be retracted. 2 © ACN Canada 2014_CompPlanOverview_RP_W_010114 ® CUSTOMER POINT SYSTEM & COMMISSIONABLE REVENUE The only way to earn income at ACN is through the acquisition of customers; therefore all IBOs must acquire customers in order to meet qualifications and advance through ACN’s earned positions. ACN utilizes a customer point system for each of its products and services. Product / Service MERCHANT SERVICES TELEVISION SECURITY & AUTOMATION ENERGY – NATURAL GAS OR ELECTRICITY Anovia Merchant Sevices with Over $3,000 Processing/month Core Preferred Customers Customer Points H 3 3 Points Anovia Merchant Services - New Merchants/ Merchants Processing Less Than $3,000/month New & Up to $1,500/month = 1 Point $1,500 to $3,000/month = 2 Points Bell TV Vivint Home Security & Automation (Residential) H Reliance Protectron - Home Security & Automation Duration of Points and Commissions 100% Paid on Anovia Revenue for the Life of Customer 3 2 Points $35 2 years2 3 3 Points 100% 42 months 3 2 Points Residential Basic or Takeover = $30 Stay Connected or Home Automation = $40 Business Plan =$40 3 years 50%** Life of Customer Planet Energy Residential H 3 Ontario Natural Gas & Electricity = 2 Points Ontario Natural Gas or Electricity = 1 Point per Service British Columbia Natural Gas = 2 Points Manitoba Natural Gas = 2 Points Planet Energy Small Business (All Provinces) H 3 2 Points per Service 50%** Life of Customer Planet Energy Big Business (All Provinces) H 3 2 Points per Service up to 50%** Life of Customer 1 Point per Service 50%** Life of Customer 100% Life of Customer Reliance Water Heater Rental (Ontario) PREMIUM TECHNICAL SUPPORT Monthly Commissionable Revenue* Premium Technical Support (Residential or Business) Residential: 1 PC = 1 Point Up to 3 and up to 5 PCs = 2 Points Business: 1 PC = 1 Point Up to 3 and up to 5 PCs = 2 Points Up to 7 and up to 10 PCs = 3 Points *Commissionable revenue is billed revenue less taxes, surcharges and an allowance for bad debt. ACN reserves the right to reduce commissionable revenue by a percentage factor for promotional plans, products, negotiated pricing or certain services. Commissionable Billing for some products is a fixed amount. IBOs receive a percentage of these amounts each month depending on where they fall in the Compensation Plan. **IBOs will receive commissions on 50% of the customers’ actual energy usage, excluding bad debt, taxes and surcharges. Energy rates subject to fluctuation. ACN reserves the right to cap commissionable billing at $1/therm and 13.5¢/kilowatt hour. Commissionable revenue percentage may be lower for Large Business accounts depending on rates and terms offered to customers. When combined with another energy product, Water Heater Rentals are 100% commissionable. IBOs will receive commissions on 50% of the customers’ actual usage excluding taxes and surcharges. 2 © ACN Canada 2014_CompPlanOverview_RP_W_010114 3 ® MONTHLY RESIDUAL COMMISSIONS Over time, the majority of your compensation will come from the residual income of your customers’ monthly billings. Customer acquisition is the fuel for your business, creating long-term lasting income and by teaching other people how to do the same thing, you will build residual income for yourself. Personal Commissions As you acquire your own, personal customers, you qualify to earn between 1% and 10% of their monthly bills. This percentage is based on your total number of Customer Points: 1-29 Customer Points = 1% Example: 30-39 Customer Points = 3% 40 Customer Points = $40/month personal commission 40-49 Customer Points = 5% 50+ Customer Points* = 10% (Average $40 Monthly Bill) 20 Customers (totaling 40 Customer Points) x $40 bill x 5% = $40/month personal commission 60 Customer Points = $120/month personal commission 30 Customers (totaling 60 Customer Points) x $40 bill x 10% = $120/month personal commission * 60+ Customer Points will be required starting July 1, 2014 Overriding Residual Commissions Schedule of commissions earned from customer acquisition in your organization and Personal Customer Points required: Platinum RVP is a designation that applies to North American IBOs only. Commissions by Service † Complete customers must be received by 2:00pm ET on the first Friday of the month in order for IBOs to qualify for commissions. Commissions are released on the first business day following the third Friday of each month. Commissions are paid the third month after the close of the month the customer is billed. Energy for Large Business QUALIFICATIONS FOR EACH COMMISSION LEVEL 1-10 % 2% See box above 1/4 % 1/4 % 1/2 % 1/4 % 10 3 4 1/4 % 1/2 % 1/4 % ------ 20 Commissions on large commercial accounts and customers acquired by Affinity programs (such as not-for-profit organizations) may be paid according to a custom commission schedule that will be determined at the time the program/contract is completed. 5 6 7 3% 5% 8% ---------------- 40 Starting July 1, 2014, IBOs will need to maintain 60 Customer Points to earn 7th Level Commissions. Platinum RVP† 3% 2% 1/2% 1/2% ----------- A Platinum RVP and RVP earn commissions on all customers below 7th level to an unlimited number of levels to the next RVP’s 7th level. For energy large business, this applies for customers below the 4th level. 2% 1% 1/2 % ------ A SVP earns commissions on all customers below 7th level to an unlimited number of levels to the next SVP’s 7th level. For energy large business, this applies for customers below the 4th level. Levels Telecommunications and Essential Services Personal 1 2 Open Line RVP 1st Generation RVP 2nd Generation RVP Open Line SVP 1st Generation SVP RVP 1 1/2% 1% 1/2% © ACN Canada 2014_CompPlanOverview_RP_W_010114 Personal Customer Points 4 ® WEEKLY AND MONTHLY BONUSES The second way IBOs can earn compensation is through weekly Customer Acquisition Bonuses (CABs) and monthly Team Customer Acquisition Bonuses (TCABs). Customer Acquisition Bonuses – CABs Customer Acquisition Bonuses (CABs) are paid when your newly sponsored Team Trainers become qualified within 30 days of their start date. In order to count for qualifications, all new customers must show a “complete” status on the IBO’s Personal Customer List. A customer will show a “complete” status when all the necessary information has been received and processed by ACN. CABs will be paid 14 days following the new TT’s start date once they qualify within their first 30 days. TC and Above CABs: Team Coordinators and above can earn CABs on all the new QTTs in their open line – and not just the QTTs they directly sponsor. Beginning April 1, 2014: In order to earn CAB and TCAB Bonuses, TCs and above need to maintain 15 Customer Points and 4 Preferred Services. TIP: An IBO’s open line consists of all the IBOs in their organization down to the next IBO at their same earned position or higher. Customer Acquisition Bonus Schedule TC RVP SVP Open Line = $50 1st generation = $20 Open Line = $30 1st generation = $15 Open Line = $30 1st generation = $10 RDs, RVPs and SVPs can earn TC CABs on newly Qualified Team Trainers in their TC open line. Remember: Compensation is earned at ACN only when customers are acquired. ACN reserves the right to retract the payment of any bonus or commis­sion if it is found that a customer used to qualify for a bonus or a certain commission level was not a valid billing customer. © ACN Canada 2014_CompPlanOverview_RP_W_010114 5 ® TEAM CUSTOMER ACQUISITION BONUSES (TCABS) Monthly Team Acquisition Bonuses (TCABs) are paid to ETTs and above for helping new TTs in your open line get qualified within their first 30 days and vary from $100 to $50,000 depending on your earned position and the number of new, open line, QTTs in a calendar month. Beginning April 1, 2014: In order to receive earned position compensation, TCs and above need to maintain 15 Customer Points and 4 Preferred Services.* EXECUTIVE TEAM TRAINER (ETT) TCAB EXECUTIVE TEAM LEADER (ETL) TCAB Anyone who is an ETT during a month of this promotion is eligible. An ETT who has at least 2 open line TTs, whose start dates are during a calendar month of this promotion, and each of those TTs are qualified(1) within 30 days of their start date will receive a $100 BONUS! Anyone who is an ETL during a month of this promotion is eligible. An ETL who has at least 3 open line TTs, whose start dates are during a calendar month of this promotion, and each of those TTs are qualified(1) within 30 days of their vstart date will receive a $200 BONUS! Amount of TCAB Compensation Amount of TCAB Compensation $100 2 QTTs $500 4 QTTs $1,000 6 QTTs $1,500 9 QTTs $2,500 12 QTTs $3,000 $200 3 QTTs 15 QTTs $750 5 QTTs $1,500 10 QTTs $2,500 15 QTTs $3,000 20 QTTs $4,000 25 QTTs $5,000 30 QTTs TEAM COORDINATOR (TC) TCAB REGIONAL DIRECTOR (RD) TCAB Anyone who is a TC, RD, RVP or SVP during a month of this promotion is eligible. A TC who has at least 5 open line TTs, whose start dates are during a calendar month of this promotion, and each of those TTs are qualified(1) within 30 days of their start date will receive a $500 BONUS! Anyone who is a Regional Director during a month of this promotion is eligible. A RD who has at least 10 open line TTs whose start dates are during a calendar month of this promotion, and each of those TTs are qualified(1) within 30 days of their start date will receive a $1,000 bonus! $500 5 QTTs $1,500 10 QTTs 35 QTTs $7,000 40 QTTs The number of new open line TTs who become qualified within their first 30 days. The number of new open line TTs who become qualified within their first 30 days. Amount of TCAB Compensation $6,000 Amount of TCAB Compensation $3,000 15 QTTs $5,000 20 QTTs $6,500 25 QTTs $1,000 $8,000 $10,000 $12,000 $25,000 30 QTTs 40 QTTs 50 QTTs 10 QTTs 100 QTTs The number of new open line TTs who become qualified within their first 30 days. REGIONAL VICE PRESIDENT (RVP) TCAB $2,500 20 QTTs $4,000 30 QTTs $6,000 40 QTTs $10,000 $15,000 $20,000 $30,000 50 QTTs 75 QTTs 100 QTTs 150 QTTs The number of new open line TTs who become qualified within their first 30 days. RVPs will earn the higher of the RVP TCABS or RD TCABs each month. RVP TCABS will continue to be calculated weekly and any adjustment for RD TCABS will occur at least every two weeks. For Example: An RVP with an RVP open line of 100 QTTs ($10,000 TCAB) and RD open line of 75 QTTs ($15,000 TCAB) would get paid on the RD open line of $15,000 as this is the higher TCABs. Anyone who is a RVP or SVP during a month of this promotion is eligible. A RVP who has at least 25 open line TTs, whose start dates are during a calendar month of this promotion, and each of those TTs are qualified(1) within 30 days of their start date will receive a $2,000 BONUS! TCs and above with QTTs in other countries will earn TCABs prorated by the number of QTTs in each country. Amount of TCAB Compensation TCABs will be paid 14 days following the new Team Trainer’s start date, once they qualify within their first 30 days. Bonus payments will be calculated and paid weekly and reconciled after the close of the applicable calendar month. In order to receive TCABs, ETTs and ETLs must maintain the minimum number of personal customers to be qualified as a Team Trainer. 1 $2,000 25 QTTs $5,000 50 QTTs $7,500 75 QTTs $10,000 $15,000 $25,000 $50,000 100 QTTs 150 QTTs 250 QTTs 500 QTTs *At least one of the Preferred Services must be outside of your household. The number of new open line TTs who become qualified within their first 30 days. © ACN Canada 2014_CompPlanOverview_RP_W_010114 6