Qualifications & Rules 2008 Mark Hughes Bonus Award - Herbalife

2008 Mark HughesBonus AwardQualifications & RulesBonus Qualification PeriodThe qualification period is twelve (12) months, beginning January 2008 through December 2008 volume months.Bonus AmountHerbalife sets aside up to 1% of total worldwide companyproduct sales to be paid as a Mark Hughes Bonus Award(hereafter referred to as “MH Bonus”) to President’s Teammembers who meet certain requirements.• The total “MH Bonus Pool” amount will be established oncecompany sales results are final.• The MH Bonus is paid based on production andperformance.• This is in addition to the established monthly marketing plancompensation.• All President’s Team members are reviewed to determinethe final group of President’s Team members who have metall requirements for eligibility to earn the MH Bonus.QualificationsThere are two qualifications for the MH Bonus: the qualificationto “Earn” the Mark Hughes Bonus Award and the qualification to“Contribute” to the upline President’s Team member todetermine his/her eligibility to “Earn.” Note: hereafter RoyaltyOverrides points are referred to as R/O points.Qualifications to EarnEligibility to participate in earning the MH Bonus is determined bymeeting all the following qualifications:• Be a Fully Qualified President’s Team member.• Have at least one (1) first downline President’s Teammember who meets the qualifications to contribute.• Achieve 10,000 or more R/O points in at least nine (9)months during the qualification period, of which three (3)months must be consecutive.President’s Team with only one contributing downlinePresident’s Team memberThere is an additional requirement for MH Bonus qualifiers whomeet all the requirements to “Earn” but have only one (1)qualified contributing downline President’s Team member.In addition to all other requirements, they must also achieve aminimum of 48,000 accumulated R/O points during the MHBonus qualification period on all supervisor organizations otherthan the organization of the contributing downline President'sTeam member. MH Bonus earners who do not achieve this willbe eligible to participate in the Bonus but will earn a maximumBonus of U.S. $10,000.Qualifications to ContributeTo qualify as “contributing” to the first “Earning” uplinePresident’s Team member for the MH Bonus period, a Distributormust achieve one of the following qualifications, whichever isapplicable.Fully Qualified President’s Team members• Achieve 10,000 or more R/O points in at least six (6)months during the qualification period, of which three (3)months must be consecutive.Newly Qualified President’s Team members in 2008• Newly qualified President’s Team members who becomefully qualified in 2008, with an effective qualification dateof February 1, 2008, through January 1, 2009, will qualifyto “contribute” to their “Earning” upline President’s Teammember.New President’s Team members qualified in 2008President’s Team members who become fully qualified in 2008,with an effective qualification date of February 1, 2008, throughApril 1, 2008, must achieve nine (9) months of 10,000 R/Opoints, in addition to the three (3) months used to complete theirPresident’s Team qualification.

President’s Team members who did not qualify tocontribute upline in the 2007 MH Bonus periodPresident’s Team members who became fully qualified byJanuary 1, 2007 (ending December 2006 volume month) butdid not qualify to contribute to the upline in the 2007 Bonusperiod, must achieve the following during the 2008 Bonusperiod to qualify to “contribute” to their upline President's Teammember:• Three (3) consecutive months of 10,000 R/O points.Determination of Final BonusAmounts & Bonus PoolsEach Bonus participant eligible to “Earn” competes in the TotalMH Bonus Pool.• Separate Bonus Pools are established based on thenumber of qualified, contributing downline President’s Teammembers. Pools with 1, 2, 3, 4, 5 and more contributors areestablished.• Within each Pool, several factors are considered.• Each participant in each pool receives a percentage of theirshare of each factor in comparison to all other participantsin their Pool.• The primary factors for each Pool are:ooTotal Royalty Override points for the Bonusperiod.The number of months each qualified President’sTeam member was blocked on their monthly 6%Production Bonus by the contributing President’sTeam member. For example, a new President’sTeam member, who qualifies to contribute butdoes not block the upline on the 6% in any monthduring the qualification period, will only qualify theupline for a minimum MH Bonus amount on thatline compared to President’s Team members whowere blocked for all twelve (12) months.These primary factors determine the Base BonusAmount for each Bonus participant within their PoolEach MH Bonus participant is then reviewed for his or herpersonal production (above the minimum requirement) in thecategories listed. MH Bonus finalists may earn an extra Bonusamount for personal production above the minimumrequirement.The production factors, which are reviewed to determineadditional MH Bonus amounts, are listed below in order ofimportance to determine final MH Bonus:• An increase or decrease in R/O points for the year 2008 over2007. A decrease over the prior year may cause the baseBonus amount to be reduced. An increase may earn anextra Bonus amount compared to increases of otherparticipants. Since R/O points are one of the primary factorsfor determining the base MH Bonus amount, a Royaltyincrease will generally move a qualifier higher in the MHBonus Pool, which increases the base MH Bonus amount,plus the potential to qualify to earn an extra MH Bonusamount.• The number of months the Bonus participant personallyachieved 10,000 Royalty Override points during the year.• Total personal sales production (Personal + Group Volume)above 30,000 Total Volume Points for the qualificationperiod.• Total downline organizational production (Production Bonus(P/B) Points) compared to other Bonus Pool participants.Discretionary BonusThe final MH Bonus consideration is discretionary and mayinclude the following:• Demonstrate leadership and company spirit – This is areflection of the way each President’s Team member conductshis business, the integrity of his business practices, the spiritof support and sharing with his colleagues and the company,other organizations as well as his own, his dedication toCompany programs and his efforts to enhance the image,reputation and overall business of the Company.• Support, promotion and participation in Company efforts,including Company meetings and other efforts such asconference calls, HBN, video/audiotapes, promotions,marketing and sales projects, suggestions and working withthe company to develop strategic plans and leading the effortto enhance the Company’s overall business.

Rules, Terms and ConditionsAs well as all other rules and conditions the companypublishes from time to time, the following apply to allPresident’s Team members for eligibility to earn orcontribute to the Mark Hughes Bonus Award.1. Contributing Rules• Anyone with 9 months or more at 10,000 Royalty Points isconsidered a ‘Contributing Earner.’• Anyone with 6 – 8 months at 10,000 Royalty Points isconsidered a ‘Contributor.’• Anyone with 3 – 5 months of 10,000 Royalty Points isconsidered a ‘Partial Contributor.’• A Contributor who also earns will always contribute to anupline Earner.• Within a line, the Earner will count the contributor with themost months blocking.• When Earner has an Inactive downline (0 – 2 months @10,000 royalties) or Partial Contributor (3 – 5 months @10,000 royalties) the downline below the inactive / partialContributor will count as the contributing legs.2. Divorced/Separated PartnersThe following rules will apply to divorced/separated partners whoare President’s Team members, in order to qualify to earn in theMH Bonus. Both parties are able to count the Royalty Points onthe original Distributorship. In addition, each individual maycount the Royalty Points in their own, separate Distributorship,which has been approved by the Company, but may not countthe Royalty Points in their former spouse/partner's own separateDistributorship. Any President’s Team members that qualify tocontribute in the original joint distributorship will count for bothparties. Any President’s Team members that qualify tocontribute in one individual's separate Distributorship will onlycount for that individual.3. Qualification of Spouse/PartnerA President's Team member, who is the spouse or partner of anupline President's Team member, will not qualify to contribute tothat upline President's Team member as a qualifying leg in theMH Bonus.4. Compliance with Rules & RegulationsAll qualifying President’s Team members, both earning andcontributing, must be in full compliance with all rules andregulations of the company, as published in the Herbalife CareerBook and other company literature, and as determined at thesole discretion of Herbalife.Distributors may not provide payment for product orders inanother Distributor’s name, unless a Supervisor is ordering for anon-Supervisor, which is considered the Supervisor’s ownPersonal Volume. Attempts to purchase products in anotherDistributor’s name could be interpreted as attempts to improperlyadvance in the Marketing Plan. If Herbalife determines such aviolation has occurred, Herbalife will have sole discretion on theapplication of penalty; of which the minimum would bedisqualification from participating in the MH Bonus either tocontribute or to earn.5. Royalty Override AdjustmentsAdjustments to Royalty Overrides after the regular scheduledprocess, including but not limited to, matching volume orders,may not necessarily be applied to the R/O point requirements forqualifying to earn or contribute to the MH Bonus, the monthlyTab Team Bonus or other qualifications of the company.6. Audit of Business ActivityHerbalife reserves the right to audit all business activity in theDistributor’s organization prior to final approval for President'sTeam qualification and for MH Bonus qualification. Distributorsmust fully cooperate with the company on any inquiries into thebusiness activity of themselves or their downline. Failure to doso will result in disqualification from the participation in the MHBonus.7. Requirements for TAB Team Production BonusPresident’s Team members must be qualified, eligible and meetall requirements to participate in the monthly TAB TeamProduction Bonus in order to participate in the 2008 MarkHughes Bonus Award, and have a signed, accepted the TABTeam Production Bonus Agreement on file with the company.8. Right to Alter, Change or Suspend BonusHerbalife maintains the right to change, alter, modify, suspend ordiscontinue the MH Bonus program at any time, without priornotice.9. Distribution of FundsHerbalife has sole discretion in the distribution of funds, indetermining the amount of the total MH Bonus Pool, indetermining eligibility of participants, both contributors andearners and in determining each distributors bonus amount.10. Disqualification from the BonusHerbalife reserves the right to disqualify any distributor fromparticipation in the MH Bonus if the company deems that thedistributor has violated any of the company rules and regulationsor has in any way caused harm to the business of thecorporation or to business of distributors of the company.11. BuybacksHerbalife reserves the right to analyze all buyback transactionsin your downline organization and may apply a penaltydeduction in the final MH Bonus payout.12. Non-AttendanceThe presence of your Distributorship at major events is afactor which is taken into consideration during the calculationof the Mark Hughes bonus. If your Mark Hughes Bonusearning status is above $10,000, non-attendance at theannual bonus awards payout may result in a reduction toyour final bonus amount. Discretionary elements taken intoconsideration are medical, bereavement or Visa issues.Supporting documentation may be requested.