Amway/Quixtar Rules

Before you join the business you should at least read the rules. I was not allowed to see the rules until I purchased a kit. Anyone doing their "due diligence" should have access to and ask for the rules associated with any franchise or business opportunity before having to pay any money. Here are some of the more interesting rules from the Amway/Quixtar business. This list is not complete. Ask your sponsor for a complete and up to date list. You will find that most new IBOs haven't even seen such list or even read them for themselves.

"My friend refuted mostly everything you wrote except the rules and there he said they aren't used for Quixtar" Quixtar Prospect - Site Visitor

2. DEFINITIONS

2.1 Corporation as used within these Rules of Conduct shall mean both Amway Corporation and Quixtar, Inc., unless otherwise specified.

2.2 Independent Business (IB) shall refer to an IBO entity operated as either an Amway or Quixtar business, unless otherwise specified.

2.3 Independent Business Owner (IBO) shall refer to the individual(s) operating an IB pursuant to a contractual relationship with either Amway Corporation and/or Quixtar, Inc., unless otherwise specified.

2.4 Prospect shall mean any individual or entity who is not an IBO, including Members and Clients.

2.5 Client is a retail customer.

2.6 Member is a customer entitled to buy products and services at member pricing and to take advantage of any member benefits offered.

2.7 IBOAI Board shall refer to the Independent Business Owners Association International Board of both Amway Corporation and Quixtar, Inc., unless otherwise specified.

2.8 IBOAI shall refer to the Independent Business Owners Association International for both Amway IBOs and Quixtar IBOs.

3.3 Requirements: Without limiting the Corporation's rights, the following are requirements for becoming an IBO or renewing an IB:

3.3.1 Not be in jail or otherwise confined to any correctional institution.

3.3.2 An IBO must be at least 18 years of age.

3.4 Acceptance or Rejection of Registration or Renewal Form: The Corporation reserves the right to accept or reject any IBO Registration Form. Likewise, the Corporation reserves the right to refuse any renewal request and can revoke any IBO's renewal form if the IBO's activities have not been in accordance with the IBO Rules of Conduct.

3.14.2 The sole business purpose of the incorporated IB must be the operation of the IB allowed under these Rules. The incorporated IB may conduct no other business. This condition precludes IBO's from putting their IB into an existing corporation, which they currently use to conduct another business.

4. RESPONSIBILITIES AND OBLIGATIONS OF ALL IBOS

4.1 Abide by the Business Compendium/Amendments: At all times, IBOs must adhere strictly to the guidelines, systems, procedures and policies stated in the Corporationís Business Compendium of which these Rules of Conduct are a part, including the Corporationís IBO Plan, and, in each case, any amendments made from time to time.

4.2 Cross Group Buying or Selling: "Cross group buying and selling" occurs when an IBO sells company distributed or supplied products and/or services to another IBO who is not within his or her Personal Group. No IBO shall engage in cross-group buying or selling.

4.2.1 An IBO in one Line of Sponsorship must only purchase products and literature supplies directly from his or her Sponsor or the Corporation, unless there is a written servicing agreement between two Platinum or above IBOs.

4.2.2 An IBO must not sell the Corporationís products and services to another IBO who is not in his or her Personal Group, unless there is a written servicing agreement between two Platinum or above IBOs.

4.2.3 An IBO cannot be a Member or Client of his or her own IB or any other IB.

4.3 Retail Stores: No IBO shall permit the Corporationís products or services to be sold or displayed in retail stores, schools, fairs, PXs, ships or military stores; nor shall he or she permit any of the Corporationís product to appear in such locations even if the products or services are not for sale. No Corporate literature shall be displayed in retail establishments.

4.3.1 An IBO who works in or owns a retail store must operate his or her IB separate and apart from the retail store. Such IBOs must secure Clients and Members in the same manner as IBOs who have no connection with a retail store. Other types of retail establishments, which are not technically stores, such as barber shops, beauty shops, or professional offices, etc., likewise may not be used to display the Corporationís products, information about the Corporationís services, or literature of the Corporation.

4.3.2 Further, IBOs may not use any broadcast communication methods including mass mailings, telemarketing, national or international advertising, radio, television, facsimile services, computer communication networks including the Internet, or any other means by which personal contact is not present to secure Clients and Members or to solicit the sale of products. However, IBOs may use digital media or maintain a web site to order products or to have their Clients and Members order products provided such media or web site meets the requirements set out in the IBO Prospecting/Product Sales Web Site Bulletin, and otherwise complies with the Rules of Conduct.

4.4 Truthful and Accurate: No IBO shall make any offer to sell any of the Corporationís product which is not accurate and truthful as to price, grade, quality, performance, and availability. IBOs shall not:

4.4.1 make exaggerated product claims or non-guaranteed claims with regards to the Corporationís products or products distributed by the Corporation,

4.4.2 in any way whatsoever, represent the Corporation incorrectly with regard to prices, quality, standards, grades, contents, style or model, place of origin or availability of the Corporationís products or products distributed by the Corporation,

4.4.3 state that the Corporationís products or products distributed by the Corporation are backed, approved, or present any features as regards to yield, accessories, uses or benefits that they do not have,

4.4.4 or act or present in any way whatsoever the Corporation, its products or the products the Corporation distributes, in a fraudulent manner or promote products that do not belong to the Corporation as if they did.

4.5 Repackaging: IBOs may not repackage products or otherwise change or alter any of the packaging labels of the Corporationís products.

4.6 Written Sales Receipt: An IBO who takes and/or delivers an order in person shall deliver to the Client or Member at the time of sale a written and dated order or receipt which shall: (a) describe the product(s) sold, (b) state the price charged, (c) give the name, address, and telephone number of the selling IBO, and (d) include the Corporationís Satisfaction Guarantee.

4.7 Satisfaction Guarantee: Whenever a Client or Member requests Satisfaction Guarantee service within the stated guarantee period, an IBO shall immediately offer the individual his or her choice of a: a) full refund; b) exchange for a like product; or c) full credit for toward the purchase of another product.

4.7.1 IBOs shall advise the Corporation of any complaint regarding the Satisfaction Guarantee from a Client or Member and provide copies of all correspondence and details of all conversations regarding the complaint as requested.

4.7.3 IBOs are responsible for claims they make which exceed the terms of the Satisfaction Guarantee.

4.11 Professionalism: An IBO shall at all times conduct himself or herself in a courteous and considerate manner and shall not engage in any high-pressure tactics, but shall make a fair presentation of the Corporationís products, services and/or IBO Plan, when and where appropriate.

4.11.1 An IBO never imposes himself or herself upon prospective IBOs, Members, or Clients. At all times he or she is courteous and considerate of the prospective IBOs, Members, or Clients and, if the prospective IBOs, Members, or Clients indicate a desire to terminate a conversation/presentation, the IBO immediately does so and leaves the premises.

4.11.2 An IBO shall at all times make a fair presentation of the products and services. The IBO will also direct his or her audienceís attention to the use directions and cautions, which may be included on the label for the products.

4.12 IBO Relationship: No IBO shall represent that he or she has any employment relationship with the Corporation or any of its affiliated companies and/or other IBOs.

4.12.1 IBOs shall not give a false representation as to the nature of the relationship between the Corporation and its IBOs, or make any representation, except in accordance with the explanation given in the Business Compendium or other official literature of the Corporation. An IBO is required to indemnify the Corporation for the cost, damage or prejudice stemming from such false representation, including any legal fees the Corporation may have incurred.

4.12.2 IBOs own their Ibs and operate as Independent Contractors as regards to the Corporation. They shall not imply that they are employees of the Corporation, or shall they refer to themselves as "agents," "managers," or "company representatives", or shall they use such terminology or descriptive phrases on their stationary or other printed material. (Sponsors are urged to preserve the independent contractor relationship between themselves and their IBOs. If Sponsors permit an employer-employee relationship to develop, sponsors may find themselves liable for the acts of and injuries to their registered IBOs. The Corporation does not permit any relationship between, or representations by, IBOs, which may impose employee liability on the Corporation.)

4.12.3 IBOs may not use his or her identification card to create the impression that there is an employment relationship with the Corporation.

4.13 Franchises and Territories: No IBO shall represent to anyone that there are exclusive franchises or territories available under the IBO Plan.

4.13.1 No IBO shall represent that he or she, or anyone else has the authority to grant, sell, assign, or transfer such franchises or to assign or designate territories.

4.13.2 No IBO may state or imply that he or she has a given territory, or that any other IBO is operating outside his or her territory.

4.14 Other Selling Activities: No IBO who personally sells products other than the Corporationís products, who personally sells literature or sales aids not produced by the Corporation, or who sells services (e.g., tax services, insurance, investments, etc.) will induce another IBO whom he has not personally registered to sell such products, literature, sales aids, or services, or shall he or she offer to sell such products, literature, sales aids, or services to any IBO except those personally registered by him or her. Induce means persuade (to suggest or attempt to persuade) another IBO whether or not this is done to obtain revenues or for any other reason.

IBOs may engage in other selling activities related to non-Corporation approved or non-Corporation-produced products and services if they personally desire to do so, but they may not take advantage of any activity organized to promote the Corporationís products or the Corporation, or any other IBOís efforts or resources, or of their knowledge of, or association with, other IBOs, especially those not personally registered by them, to promote and expand their other selling activities. To do so constitutes an unwarranted and unreasonable interference in the business of other IBOs. This does not mean, however, that an IBO regularly engaged in the operation of a gasoline station, repair garage, retail establishment, barber or beauty shop, or a professional service (law, medicine, dentistry, or accounting) may not serve clients or customers who are IBOs and have sought them out, but it does mean that such IBOs may not actively solicit the patronage of other IBOs who are not personally registered by him or her.

4.14.1 This section also applies to privately developed Business Support Materials ("BSM").

4.14.2 A husband and wife are deemed to operate their IB as a single entity regardless of whether both names are on the IB. Therefore, each is held accountable for the actions of the other so far as the Rules are concerned. The Corporation reserves the right to terminate the remaining IBOís authorization as a IBO in the event that one partner of husband-wife partnership elects to resign his or her authorization as an IBO and subsequently takes advantage of his or her knowledge of, or association with, other IBOs to promote and expand his or her other business enterprises.

4.15 Enticement to Change Lines of Sponsorship: Under no circumstances shall an IBO solicit, interfere or attempt to induce, suggest, directly or indirectly, another IBO to request a change to another Sponsor or Line of Sponsorship.

4.16 Exporting The Corporationís Products: No IBO may export or import, or knowingly sell to others who import or export, the Corporationís products from the United States or its possessions or territories, or from any other country in which has established operations, into any country regardless of whether or not the Corporation is doing business in that country.

4.16.1 For legal reasons, including trade name and trademark protections; local laws on product registration, packaging, labeling, ingredient content and formulation, product liability; customs and duty laws; and literature content or language requirements, the Corporation must limit the resale of its products by IBOs to only other IBOs, Members and Clients located within the country in which the IBO legally buys the Corporationís products and is authorized to do business.

4.16.2 The term "products" as used in Rule 4.16 includes all services, literature, sales aids, Personal Shoppers© Catalog items, and any other items obtained by an IBO from the Corporation or from his or her Sponsor or Platinum.

4.17 Sound Business Practices: An IBO must operate his or her IB in a financially responsible, solvent, and businesslike manner. The Corporation shall have the right to take action against any IBO or IB that it knows or reasonably believes is operating their IB in a financially irresponsible manner, insolvent or unbusiness like manner.

4.17.2 The Corporation reserves the right to offset bonus payments for amounts an IBO owes to the Corporation.

4.17.2.1 If an IBO or any member partner in his or her IB files a petition for bankruptcy or has bankruptcy proceedings commenced against him or her, or has any assets seized by court order or taken in execution of an unsatisfied judgment debt, the IBO must immediately inform the Corporation.

4.17.2.2 In such cases, the Corporation reserves the right to terminate the IBO, to alter its terms of conducting business with the IBO, or to negotiate with the trustee in bankruptcy or responsible court official concerning arrangements for the disposal of any products belonging to the Corporation which are in the possession of the IBO.

4.18 Seventy Per Cent Rule: An IBO must sell at least 70% of the total amount of products purchased during a given month in order to receive the Performance Bonus or recognition due on all the products purchased; if the IBO fails to sell at least 70%, then such IBO may be paid that percentage of Performance Bonus measured by the amount of products actually sold, rather than the amount of products purchased, and recognized accordingly.

4.18.1 Performance Bonuses are intended to be earned on sales volume. However, since the Business Volume during a particular month will, under normal circumstances, approximately equal the sales volume, or retail value, of the products an IBO sells during that month, and since it is cumbersome to administer the payment of Performance Bonuses on the basis of products actually sold (which would involve knowing the product inventory of every IBO), the payment of Performance Bonuses is for convenience based on monthly Business Volume rather than on a monthly sales volume.

4.22 Retail Sales Rule: In order to obtain the right to earn a Performance Bonus during a given month, an IBO must make not less than one sale TO EACH OF 10 DIFFERENT RETAIL CUSTOMERS (e.g., Clients or Members) OR HAVE AT LEAST 50 PV OF SALES TO ANY NUMBER OF RETAIL CUSTOMERS (e.g., Clients or Members) that month, and upon request, produce proof of such sales.

4.22.1 In producing proof of such sales, the IBO should not disclose the prices at which he or she made the retail sales.

4.22.2 If such IBO fails in any month to make said retail sales and/or to produce such proof of making such sales, then he or she shall be denied his or her Performance Bonus that month and may subsequently lose all registration rights if he or she continues to fail to meet this requirement. This Rule shall apply to an IBO until he or she attains the status of Platinum or above.

4.23 Unsolicited E-mail Messages: No IBO shall send, transmit, or otherwise communicate any unsolicited e-mail messages to persons with whom the IBO does not have a pre-existing personal or business relationship. (This includes, but is not limited to, sending e-mails through newsgroups, purchased mailing lists, "safe lists", or other lists of individuals or entities with which the IBO does not have a relationship.)

4.23.1 Employment PostingsóIf an IBO responds to an employment posting for someone seeking an employment opportunity, they shall clearly state within the first paragraph of the response that they are offering a business opportunity and not an employment opportunity. Any materials used with a prospect must be approved by the Corporation in accordance with Rule 7 herein.

4.24 Fundraising: No IBO shall use Corporation products in conjunction with any type of fundraising activity. Fundraising includes the solicitation for the purchase of Corporation products or services based on the representation that all, or some, of the gains, proceeds, bonuses, or profits generated by such sale will benefit a particular group, organization or cause.

4.25 IBO Plan Manipulation: No IBO shall manipulate the IBO Plan or sales volume, in any way which results in the payment of bonuses or other awards and recognition that have not been earned in accordance with the terms of the IBO Plan and/or the Business Compendium.

5. RESPONSIBILITIES AND OBLIGATIONS OF ALL SPONSORS

5.1 Maintain Good Standing/Conform to Rules: In order to register other IBOs, an IBO must be in good standing and meet all requirements as set forth in these Rules.

5.1.1 In the event that a Sponsor fails to personally train and supply his or her IBO, or if suitable arrangements are not made to provide such services, the rights to any IBOs whom he or she may have registered shall pass up to the next Sponsor in his or her Line of Sponsorship in accordance with Rule 15.

5.1.2 An IBO who fails to timely file an Intent to Continue Form in accordance with Rule 3.8 shall be deemed to have violated this Rule and as a result, may lose the registration rights to his or her downline IBOs and any links to his or her registered Members and Clients.

5.2 Prohibited Registration Practices: Neither a prospective IBO, as a condition to becoming a new IBO, nor any currently authorized IBO, as a condition to receiving assistance in the development of their IB from their Sponsor, shall be required to:

5.2.1 Purchase any specified amount of products or services.

5.2.2 Maintain a specified minimum inventory.

5.2.3 Purchase any non-Corporation produced "starter," "decision," or other "pack" or "kit."

5.2.4 Purchase tapes, literature, audio-visual aids, or other materials or participate in any "tape of the month" or "tape of the week" programs.

5.2.5 Purchase tickets for and/or attend or participate in rallies, seminars, or other meetings.

5.2.6 Purchase hardware or software for computers, subscribe to an internet service provider (ISP), or establish a web site.

The only requirements which an IBO can impose upon a prospect whom he or she is willing to register is that the prospective IBO shall possess the literature portion of the Registration Pack (without substitution or alteration in the contents) and sign a completed SA-88 Registration for IBO Authorization Form and submit it to the Corporation.

5.3 Registering other IBOs: In order to register other IBOs, an IBO must be at least 18 full years of age, or the age of majority in the state of his or her residency, whichever is older, and:

5.3.1 Registration Pack: Ensure that all IBOs that he or she registers are provided with the appropriate unaltered Registration Pack.

5.3.2 Order Fulfillment: IBOs must stock sufficient products and sales supplies to enable him or her to service any IBOs whom he has registered with the their normal needs from inventory. In the event that the IBO has registered IBOs who order directly from the Corporation, the IBO is responsible for ensuring that his or her downline IBOs can obtain their products in such manner. If a downline IBO is unable, for any reason, to place an order directly with the Corporation, his or her upline IBO remains responsible for ensuring that the IBO can obtain product and services. This Rule applies only to such products as are normally sold on a cash basis by IBOs. Products that are normally sold on an order basis, such as cookware and large-size products that are sold to commercial users and are delivered directly from the warehouse, need not be stocked.

5.3.3 Training and Motivation: IBOs must be able to train and motivate the IBOs whom he or she has registered with a minimum of assistance from his or her first upline Platinum or above. If the IBO is a member of an established business-building system, he or she may make arrangements for his or her IBOs to be trained and motivated by the activities and BSMs of that system, but under no circumstances may an IBO be forced or coerced to participate in the system. If a downline IBO is unable, for any reason, to access the System or chooses not to use the System, his or her IBO must be able to provide training and motivation.

5.3.4 Servicing Arrangements: If an IBO is unable or unwilling to service his or her downline IBOs with the proper supply of products, training or motivation, he or she must make arrangements, in writing, with his or her first upline Platinum or above to have this done, in which case he or she must be willing to compensate his or her Platinum or above for this service. An IBO who lives at a distance from his or her downline IBOs must also personally supply, train and motivate their new IBOs, or he or she must make arrangements, in writing, with his or her Platinum or above to have this done, in which case he or she must be willing to compensate his or her Platinum or above for this service.

5.3.4.1 If a Servicing Arrangement is used, the full PV/BV, must always be transferred to the serviced IBO so that bonuses are correctly paid.

5.3.5 Distribution of Performance Bonuses: IBOs must promptly process and redistribute, in proper proportion, the monthly Performance Bonus received from their upline Platinum or above or from the Corporation to all downline IBOs to whom a Performance Bonus is due before the end of the month during which the Performance Bonus check is issued, unless his or her registered IBOs are paid directly by the Corporation.

5.3.5.1 Some IBOs receive a Performance Bonus from the Corporation in a fiduciary-like capacity to the extent that a part of it is owed to his or her downline IBOs. The IBO cannot retain any portion to which a downline IBO is entitled, even where the downline IBO owes a private debt to the upline IBO, unless there is a written agreement between the parties permitting such retention. Even with such a written agreement, the upline IBO may retain only the net portion of the Performance Bonus due to the agreeing IBO, and not any portion due other downline IBOs.

5.3.5.2 If the Corporation or the first upline Platinum or above believes an IBO is not in compliance with the Rules of Conduct, his or her Performance Bonus will be sent to the upline Platinum or above for handling. Regardless of whether or not an IBO receives a Performance Bonus check directly from the Corporation or from the upline Platinum or above, the IBOís acceptance of such Performance Bonus shall be deemed an affirmation that he or she is in compliance with the Corporationís Rules of Conduct, including the Retail Sales Rule 4.22.

5.3.5.3 Minimum Bonus Payment Requirements: In order to receive a monthly bonus payment, the amount due from the Corporation must be $3 or greater.

5.3.5.3.1Monthly bonus amounts of less than $3 will be carried forward as an account payable until the end of the year or such time that the $3 monthly threshold is met, whichever is sooner.

5.3.5.3.2 IBOs who at year-end, or upon termination of the IB, have an account payable balance of less than $1 due them from the Corporation will not be entitled to receive such amount.

5.3.6 Buy-Back Rule: IBOs are required to purchase back from any of his or her personally registered IBOs who are resigning their IB, upon their request, any unused, currently marketable products and/or currently marketable literature, and merchandising or business building aids.

5.3.6.1The IBO shall offer to repurchase said products, literature, and merchandising or business building aids at a price mutually agreeable to the departing IBO.

5.3.6.1.1 It may be appropriate to consider a price equal to the published IBO cost at the time of purchase including surcharges, if any, less the Performance Bonus (on the BV associated with the products) paid by the IBO to the purchasing IBO during the month the products being returned were purchased, less a service charge equal to 10% of the BV of the products being returned for handling, F.O.B. sponsorís office.

5.3.6.1.2 This Rule is not intended to prohibit buy-back or exchange of products, literature or merchandising and business building aids upon mutual agreement between an IBO and one of his or her personally registered IBOs under circumstances other than those wherein an IBO has elected to resign.

5.3.6.2 If the departing IBO is unable to secure buy-back of products and/or literature and/or merchandising or business building aids through his or her upline IBO, he or she may then write directly to the Corporation with full details including a list of unused currently marketable products and unused currently marketable literature and merchandising or business building aids.

5.3.6.2.1 After receiving written approval, he or she will be sent a Returned Merchandise Authorization Form (SA-112). He or she may then ship his or her products and/or literature and merchandising or business building aids to the Corporation together with the completed SA-112 form, whereupon the Corporation will remit a refund to him or her directly.

5.3.6.2.2 The Corporation will then make all appropriate Performance Bonus differential and Leadership Bonus charges to those IBís who originally received them.

5.3.6.2.3 The Corporation will also charge freight costs incurred by the resigning IBO if the net reimbursement includes same.

5.3.6.2.4 The Corporation will also charge a service charge equal to 10% of the BV of the products being returned to cover handling and processing charges.

5.3.6.3 IBOs purchasing BSM not produced by the Corporation must understand that the source from which they acquired such materials is responsible for honoring any buy-back agreement. IBOs who elect to purchase BSM not produced by the Corporation are encouraged to negotiate an understanding regarding any buy-back guarantee at the time of purchase. The Corporation can not assist in procuring such refund.

5.3.7 Independent Relationship: IBOs shall not represent or imply, either directly or indirectly, that there is an employment relationship between himself or herself and the IBOs whom he or she has registered.

5.3.9 Instruct Compliance with the Rules: An IBO shall use his or her best efforts to encourage each of his or her personally registered IBOs to fully comply with these Rules and to conduct their IB in accordance with the law and official literature of the Corporation.

5.4 Responsibilities of an IBO at the Platinum Level or Above

5.4.1 Requalification: To attain and retain the title and privileges of an IBO at the Platinum level or above, an IBO must initially qualify and then requalify each fiscal year (September 1 to August 31). The requirements of qualification and requalification are specified in the Business Compendium.

5.4.2 Responsibilities: Included among the responsibilities and functions of a Platinum or above are the duties to:

5.4.2.1 Maintain adequate stocks of products, literature, and sales aids or assure that IBOs in his or her Personal Group have alternative methods by which to obtain their business needs.

5.4.2.2 See that any Performance Bonus which is received monthly from the Corporation, but not paid directly to an IBO by the Corporation, is promptly processed and redistributed.

5.4.2.3 Conduct or provide access to periodic sales meetings for the purpose of training and inspiring the IBOs who are in his or her Personal Group and maintain frequent mail or phone contact with all IBOs in his or her Personal Group.

5.4.2.4 Enforce the Rules of Conduct, as described herein and in other Corporation manuals, in his or her Personal Group.

5.4.2.5 Protect the registration rights of each IBO in the Group.

5.4.2.6 Obtain properly completed IBO Registration Forms from all persons in his or her Personal Group. This responsibility also applies to annual Intent to Continue Forms.

5.4.2.7 Train the IBOs in his or her Personal Group in the operation of the Satisfaction Guarantee on products and services sold to Clients and Members as stated in the Business Compendium and Rule 4.7.

7. BUSINESS SUPPORT MATERIALS

Some IBOs offer for sale to other IBOs in their Personal Group a variety of business building, training, and merchandising aids such as books, magazines, flip charts and other printed materials, online literature, Internet web sites, audio and video tapes, rallies, meetings and educational seminars, and other types of materials designed to assist IBOs in building their businesses, which are not produced by the Corporation ("Business Support Materials" or "BSM"). BSM are entirely optional and IBOs who choose to sell, purchase, or utilize such BSM must comply with this Rule. IBOs who choose to sell or distribute BSM must emphasize that the purchase of BSM is strictly voluntary; no IBO may ever require another IBO to purchase any BSM. IBOs may not offer to sell BSM to prospects (including Clients and Members) nor require the purchase of BSM as a precondition to becoming a Client, Member or IBO.

The Corporation does not endorse the representations made in any BSM. The Corporation's review is solely for the determination of compliance with its Rules of Conduct and business practices and policies. IBOs are responsible for compliance with all laws regarding the content, production, distribution, and sale or use of BSM.

7.1 Prospects: BSMs may be used with prospects only in accordance with the following:

7.1.1 IBOs must not use with prospects, sell or distribute to prospects, or say, suggest, or imply that any BSM have been authorized for use with prospects without the prior written authorization of the Corporation. All BSM shall display the dates they were published or recorded, and the name of the publisher/producer.

7.1.2 IBOs must not use with prospects or distribute to prospects BSM which suggest, imply, promise or guarantee, either directly or indirectly, that any specific level or amount of sales, income, profit or earnings may be derived from an IB, or from selling any specific line or lines of the Corporation's products.

7.1.3 IBOs who have received authorization to use BSM from the Corporation in accordance with these Rules of Conduct shall place on the BSM the following legend or its equivalent: "Content Reviewed," followed by the content review identification number. The Corporation reserves the right to limit the duration of such authorization, provided however, that should the BSM be revised before the expiration of such authorization, the revised BSM must be resubmitted for authorization prior to republishing.

7.2 Existing IBOs: BSM may be used with existing IBOs only in accordance with the following:

7.2.1 IBOs shall not use or distribute any BSMs which contain any presentation, explanation, or illustration of the IBO Plan, or any part thereof unless expressly authorized by the Corporation as provided herein. The content of BSMs must comply with the Rules of Conduct and shall not infringe in any way on the Corporation's copyrights, trademarks, or other intellectual property rights.

7.2.2 BSMs relating to the uses of products offered by the Corporation, characteristics of the products offered by the Corporation, and/or performance of products offered by the Corporation, shall not be produced, sold or distributed by IBOs unless expressly authorized by the Corporation. IBOs may incorporate into their newsletters or include in their recorded or written presentations full and exact reproduction(s) of materials set forth in literature produced and distributed by the Corporation, provided however, such reproductions may only utilize dated materials for the time period specified in the Corporation's materials.

7.2.3 IBOs may produce BSMs dealing with general subjects of a "how-to" nature, including "how to sell products," "how to conduct training meetings," "how to manage inventory," "how to motivate people," and "motivational success stories", etc. However, BSM dealing with "how to show the IBO Plan" must be expressly authorized by the Corporation. In addition to the requirements set forth in 7.2.5 below, such BSM shall bear the legend "For Existing IBOs Only."

7.2.4 No IBO may produce, sell and/or distribute any BSMs which are deceptively similar to literature or material published and distributed by the Corporation to its IBOs or which could create the impression in a reasonable mind that such literature or material emanated from the Corporation or that its publication or distribution was authorized by the Corporation.

7.2.5 IBOs who have received authorization to use BSM from the Corporation in accordance with these Rules of Conduct shall place on the BSM the following legend or its equivalent: "Content Reviewed," followed by the content review identification number. The Corporation reserves the right to limit the duration of such authorization, provided however, that should the BSM be revised before the expiration of such authorization, the revised BSM must be resubmitted for authorization prior to republishing.

7.4 Remedial Action: The Corporation may require the submission for review of BSM intended for use with existing IBOs which are not specifically addressed by this Rule, but which are inconsistent with the Rules of Conduct or the goals and purposes of the IBO Plan. As a result of such review, the Corporation may require that such BSM be modified, or take other appropriate action(s) as it deems necessary to protect the goals and purposes of the IBO Plan.

7.5 Distribution of BSM: The distribution of BSMs to IBOs shall be in accordance with the following procedures:

7.5.1 IBOs who agree to make future purchases of BSMs through standing order or similar arrangements (i.e., arrangements which do not require the affirmative request for each future purchase) shall have the right to cancel or change their order at any time. Each IBO who sells BSMs under such arrangements shall provide to each purchaser at least twice a year, during the months of September and March, the following or substantially equivalent language conspicuously printed on a postcard:

"We have a continuing interest in you and your business. This special message is to help you evaluate expenses which relate to BSMs available to you. Your expenditures on these items should be reasonable compared to your business volume and profits. You should review your business expenses and decide whether you wish to continue purchasing BSMs. The use of BSMs in connection with your business is voluntary and must always be in compliance with the Rules of Conduct. If you wish to discontinue receiving future [tape or book, etc.] please return this postcard. IF WE DO NOT RECEIVE THIS POSTCARD BY (_______________) YOU WILL CONTINUE TO RECEIVE FUTURE ISSUES OF [tape or book]."

7.5.2 IBOs who choose to sell BSMs and do so in a method other than standing order (i.e., a method which requires the affirmative request for each purchase), shall include with the sale of such items during the month of September each year the following or substantially equivalent language:

"We have a continuing interest in you and your business. This special message is to help you evaluate expenses which relate to BSMs available to you. Your expenditures on these items should be reasonable compared to your business volume and profits. You should review your business expenses and decide whether you wish to continue purchasing future BSMs. The use of BSMs in connection with your business is voluntary and should always be in compliance with the Corporation's Rules of Conduct."

7.5.3 IBOs who choose to sell BSMs shall not say, suggest, or imply that the use of any such Materials will guarantee success or that the Corporation requires the use of any BSM. BSMs shall contain the following or substantially equivalent language:

"While the techniques and approaches suggested have worked for others, no one can guarantee that these techniques and approaches will work for you. We hope, however, that the ideas presented here will assist you in developing a strong and profitable business. These materials have been published independently of the Corporation."

This same message shall also appear in the audio portion of any audiotape, BSM or be communicated through a substantially equivalent means.

7.6 BSM Buy-Back Policy: The Corporation's Satisfaction Guarantee and Buy-Back Rule DO NOT APPLY to any BSMs. The Corporation will only honor the Satisfaction Guarantee with respect to its own materials. Upon request, an IBO who sells BSMs must buy them back from the original purchaser on commercially reasonable terms for a period of 180 days after the sale thereof; the purchaser must, upon request, provide proof of purchase if a buy-back of BSMs is demanded. The terms of the refund policy adopted by an IBO selling BSMs, including terms regarding procedures for the resolution of disputes and the responsible person for returns, must be clearly communicated to the purchaser prior to any such sale. In the event such terms do not include the responsible person for returns, the seller and the purchaser's Platinum or above IBO shall be responsible for handling returns. Selling IBOs shall ensure that the terms and conditions of any refund policy adopted comply with all applicable lawst.

7.7 Limiting Expenditures: Each IBO who chooses to purchase or sell BSMs must ensure that the quantity and cost of BSM are reasonably related to the sales volume and profits of that IB.

7.8 Seminars/Rallies: Business support offered in the form of seminars, rallies and other meetings conducted by IBOs shall adhere to the following procedures:

7.8.1 Tickets to seminars, rallies and other meetings shall contain the same statement as in 7.5.3 above.

7.8.2 Each IBO who chooses to sell tickets to seminars, rallies and other meetings is obligated to buy-back tickets purchased for the purchaser's personal use for a period of 30 days after the event, provided the IBO attended the event. Such refund shall be for that portion of the cost of the affair related to admission to the meeting, exclusive of the cost of travel, meals or hotel accommodations. The terms of the refund policy adopted by an IBO selling such tickets shall conform with 7.6 above.

7.9 No Recordings: No IBO may record or make a recording of, the talks and presentations made by an employee of the Corporation at any meeting, corporation sponsored or otherwise, except upon the prior specific written consent of the Corporation. An IBO may make a single recording of the talks and presentations made by non-Corporation employees at any company sponsored meeting, provided such recording is for his or her personal use only and is not reproduced for any purpose.

8. PRESENTATION OF THE IBO PLAN

8.1 Must not Give False Impression: When inviting a prospect to hear a presentation of the IBO Plan, an IBO shall neither directly nor indirectly through another IBO:

8.1.1 give the impression that the IBO Plan relates to an employment opportunity,

8.1.2 imply that the invitation is to a social event,

8.1.3 disguise the invitation as a "market survey,"

8.1.4 promote the event as a "tax seminar,"

8.1.5 misrepresent the relationship between the IBO/IB and the Corporation.

8.1.6 directly or indirectly indicate that such products are merely one line of products distributed through or as a part of a brokerage operated by a person, company or organization other than the Corporation,

8.1.7 directly or indirectly indicate that the Corporation's business, IBOs or products and services produced by the Corporation are part of any business other than the Corporation's business,

8.1.8 deny, if asked, that the presentation is about the IBO Plan, or

8.1.9 imply that it is anything other than a business event

8.3 Registration Guidelines: In seeking participation of a prospective IBO in the IBO Plan, the registering IBO must comply with the following guidelines:

8.3.1 Must disclose the average profits, earnings, and sales figures and percentages as published from time to time by the Corporation.

8.3.2 Must use only Corporation produced and Corporation authorized literature. The Corporation authorizes for use privately produced Business Support Materials which have been submitted to the Corporation through a qualified EDC member or other corporate designee. For further information on how to submit materials, please contact the Business Relations Department.

8.3.3 Must verbally state the following at the beginning of the presentation:
"The examples I will use are simply to show you how the Plan works. They are not intended to project or promise any actual earnings. I'm giving you a brochure that fully describes the Plan and contains average profits, earnings, and sales figures and percentages. You should read this brochure to learn the average monthly gross income earned by an active IBO."

8.3.4 Must give each prospect a copy of the latest edition of The Independent Business Ownership Plan (SA-4400) and show the Business Support Materials Arbitration Agreement from the Registration Pack to each prospect before signing the IBO Registration Form (SA-88).

8.3.5 May use only those earnings and/or bonus representations based on their own personal experiences, provided that they at the same time disclose the average profits, earnings, and sales figures and percentages as published from time to time by the Corporation.

8.3.6 May cite lifestyle examples, e.g., travel, automobile, homes of successful IBOs, and contributions to charitable causes, provided such benefits were actually accrued as the result of building a successful IB.

8.3.7 Must not say that a successful IB can be built in the form of a "wholesale buying club", where the only products bought and sold are those transferred to other IBOs for their personal use.

8.3.8 Must not say that there is no requirement for the retail sale or marketing of products by IBOs.

8.3.9 Must not promote the enjoyment of tax benefits as the best or principal reason for becoming an IBO.

8.3.10 Must not say that the business is a "get-rich-quick" opportunity in which it is easy to achieve success with little or no expenditure of effort or time.

8.3.11 Must not present the IBO Plan or solicit participation in the IBO Plan through any broadcast communication methods including mass mailings, telemarketing, national or international advertising, radio, television, facsimile services, computer communication networks including the Internet, or any other means by which personal contact with a prospect is not present. However, IBOs may use digital media or maintain an Internet web site for use with prospects, provided the contents of such media or web site meets the requirements set out in the IBO Prospecting/Client Product Web Site Bulletin, and otherwise complies with the Rules of Conduct.

8.3.12 Must not criticize, degrade, de-emphasize or otherwise portray negatively the Client, Member or IBO status. IBOs shall refrain from pressuring or otherwise forcing a prospect into becoming a Client, Member or IBO. IBO's shall recognize the importance of Members and Clients in establishing a retail business. IBO's shall at all times, fairly present the categories of Clients, Members and IBOs, and permit the prospect to freely decide what level of involvement they desire.

.8.3.13. An IBO must not misrepresent the relationship between Quixtar and the other companies affiliated with Quixtar. Recent changes to the Corporationís structure have caused confusion for some IBOs when seeking the participation of a prospective IBO in the IBO Plan. In some cases, the opportunity is being incorrectly portrayed as the "Alticor Opportunity" or that an IBO is affiliated with Alticor or one its subsidiaries such as Access Business Group or Pyxis Innovations. This would be a misrepresentation because the IBOís affiliation is with Quixtar or Amway and not Alticor or one its other subsidiaries. Such misrepresentation could subject the IBO to sanctions provided in the Rules of Conduct.

The following are some examples:

Inappropriate depiction of relationships Appropriate alternative

Appropriate alternative

Alticor developed Quixtar. Quixtar is a subsidiary of Alticor.

Quixtar is a subsidiary of Alticor.

Positioning an open meeting as an Alticor opportunity meeting.

Position an open meeting as a Quixtar opportunity meeting.

Alticor is a new business opportunity that has acquired the rights to market products and services offered through Quixtar.

IBOs have the right to market products and services through their own independent businesses affiliated with Quixtar.

IBOs take advantage of the Quixtar business opportunity to market products and services offered through Quixtar.

8.4 No Exclusive Territories: No IBO shall represent that there are exclusive territories available.

8.5 No Obligation to Purchase: An IBO shall not require a prospective IBO to purchase anything but the literature portion of the Registration Pack in order to become an IBO.

9. TRADE NAMES, TRADEMARKS, AND COPYRIGHTS

The Corporation's trade names, trademarks, and service marks are important and valuable business assets. They help identify the source and reputation of the Corporation's, products, and services worldwide, and distinguish them from those of competitors.

Others must protect trademarks from misuse and infringement, or they can be lost. Each time a trademark or symbol is used improperly or is used by someone other than its owner, the value and importance of the trademark can be greatly diminished. Once a trademark is weakened or lost, it is impossible to regain its full value and importance. Therefore, the Corporation makes every effort to protect its trademarks, its corporate logotype, label designs, and various product names so that others cannot use them

The rules set forth below have been developed to maintain the integrity of the Corporation trade name and trademark and to ensure that the Corporation's name and marks WILL be available exclusively for the Corporation's business. In addition, the Corporation has implemented a corporate identity program that requires the correct and consistent use of its logotype, no matter where it appears. Therefore, no alterations to the approved logotype are allowed. Upon request, the Corporation will provide an example of the approved logotype and color specifications.

9.1 Permission Prior to use Required: The Corporation will not allow use of its trade name (company name), trademarks (product names), designs, or symbols by any person, including an IBO, without its prior permission. The Corporation will issue cease-and-desist orders to any persons using its trade name, trademarks, designs, and symbols without its permission and will, if necessary, follow with appropriate legal action for failure to comply with a cease-and-desist order. If the Corporation did not do this, IBOs would soon find the market flooded with the Corporation's products not produced by the Corporation or sold by its IBOs. Obviously, the IBOs would be greatly harmed by such unfair competition.

9.2 Office Sign: If an IBO desires to operate and maintain an office in which the Corporation name is displayed to the public on the exterior of the office or in the interior in such a way that it can be seen from the outside, the IBO must first obtain prior written approval from the Corporation for such use of the Corporation's name by a written request to the Corporation, including a description of the proposed signs, their size, location of installation, and method of installation.

To gain authorization for displaying the Corporation's name, the following conditions must be met:

9.2.1 The office must be in a commercial building. Display of the name from offices in homes is not permitted.

9.2.2 The office must be used exclusively for the business; it cannot be a section or part of an office devoted to another type of business.

9.2.3 If the office has a show window, no product displays will appear in the window, nor will displays be set up inside so as to be readily visible through the window. If interior product displays are to be used, draperies or other methods of obscuring vision from the outside shall be used in the show windows.

9.2.4 The door leading to the office must bear the notice "Wholesale-IBOs Only."

9.2.5 The building shall present, as much as possible, the appearance of a business office, not a retail store.

9.2.6 An IBO who operates an office shall not service any retail Clients from the office since to do so would convert the office into a store. If prospective retail Clients come into the office, they are to be informed that the office is for wholesale only and an appointment made to call on them later at their homes.

9.3 Vehicle Sign: No IBO may use the Corporation trade names, trademarks, logotype, designs, or symbols on any vehicle except by express prior written consent from the Corporation

9.4 Remedial Telephone Listing under the Corporation in Telephone Directoryn: IBOs are permitted to list under the Corporation's name in the telephone directory. Written permission to do so must first be requested in writing and secured from the Corporation. Telephone listings will be approved for one year; if a listing is to be renewed for the following year, a renewal approval must be obtained from the Business Conduct and Rules Department prior to reordering those listings.

9.5 Booth Displays: Booth displays of products and services must be approved individually prior to IBO participation at a business event. No sale of product or services is to take place at the function. IBOs may only display products at non-selling business events. They may not use booths for fundraising, bazaars, Las Vegas nights, arts/craft shows, Fourth of July celebrations, flea markets, etc. These events or any similar events are aimed to promote on-the-spot sales of services and/or merchandise. Likewise, IBOs may not set up booths at a shopping mall or other typical selling venue. If however, the shopping mall is promoting a specific event which is limited in duration (i.e., Builders' Expo, May 10-12th), for then such approval may be granted.

9.7 Promotional Literature, Stationery, Premiums, Business Cards, etc.: No IBO may produce or procure from any source other than the Corporation any premium, giveaway item, stationery, business cards, or promotional literature of any kind upon which the Corporation's names or logotypes or any of its trade names or trademarks are imprinted without securing prior, written approval from the Corporation.

9.7.1 No IBO may print, or cause to be printed, any stationery which bears the Corporation's logotypes or any of the Corporation's trade names or trademarks without the prior, written consent of the Corporation. The precise copy to be used must be forwarded to the Corporation before the printing is begun. When approval is given by the Corporation, there shall be no deviation whatsoever from the approved copy.

9.7.2 No cloth Corporation logotypes shall be affixed to any sports uniforms, shirts, or other garments.

9.8 IBO Advertising: IBOs wishing to use advertising media must submit their proposal in writing, along with a copy of the proposed advertisement, to the Corporation for approval. The Corporation's approval is for one (1) year only. Except as provided in Rules 4.3.2 and 8.3.11, under no circumstances may IBOs advertise or promote the Corporation's products and services or the Corporation's business opportunity through the use of mass communication methods such as radio, television, facsimile services, computer communication networks, including the internet, national or international advertising, or any other form of promotion where the person-to-person nature of the business is not present.

International Sponsoring

International sponsoring is the opportunity to sponsor prospects, to become Amway distributors/IBOs in other countries where Amway does business. You, as an International Sponsor, interest prospective distributors/IBOs in an Amway authorized foreign country. They in turn, are directed to a foster sponsor in their country who will sponsor and train them just as you would if you had personally sponsored them. The Amway Sales and Marketing Plan provides benefits to both the International Line of Sponsorship and the Foster Line of Sponsorship.

Amway Rules of Conduct prohibits sending materials from one market to another market. In fact, one country's materials may be illegal in another country. Due to potential legal issues you have to be an authorized Amway distributor/IBO in that market to show the Amway Sales and Marketing Plan. As a North American IBO, you would be considered a customer in that market. Literature and business kits that have been specifically designed for each market will be supplied by the Foster Sponsor. Once your prospect becomes an Amway distributor/IBO, you will receive a letter of congratulations from Amway Corporation stating that you have successfully internationally sponsored.

The Foster Sponsor is responsible for training, motivating, and assuring the new distributor/IBO has access to product. Therefore, the Foster Sponsor receives the same benefits as a personal sponsor for all Amway awards and bonuses up to the point when the Foster Sponsored distributor/IBO reaches the maximum Performance Bonus level* and a 4% Leadership Bonus is generated. Once the new distributor/IBO reaches the maximum Performance Bonus level, the Foster Sponsor 's Performance Bonus percentage is determined solely by how own Personal Group PV (i.e., the Foster Sponsorship of a maximum Performance Bonus level group will not automatically entitle the Foster Sponsor to a maximum Performance Bonus).

The 4% Leadership Bonus generated by the new maximum Performance Bonus level distributor/IBO will be divided into two equal payments - 2% to the International Line of Sponsorship and 2% to the Foster Line of Sponsorship.**

*The maximum Performance Bonus level for the U.S., U.S. Territories, and Canada is 25%. It is 21% for all other countries.

The International Sponsor of one maximum Performance Bonus level group receives the International Leadership Bonus generated, provided that the International Sponsor is also at the maximum performance Bonus level (3% for distributors/IBOs internationally sponsored before September 1, 1991, 2% for distributors/IBOs internationally sponsored after September 1, 1991). If the International Sponsor is not at the maximum Performance Bonus level, the bonus passes up to the International Sponsor's next qualified upline.

Also, an International Sponsor who is a Direct Distributor/Platinum may count a maximum Performance Bonus international group for all pin awards at Emerald and above level. If you are eligible for the Emerald or Diamond Bonus by virtue of your domestic legs, you may also count the qualified Business Volume of your maximum Performance Bonus level international legs toward these two bonuses. Qualified international legs may also count toward the one-time cash awards at Double Diamond, Triple Diamond, Crown, and Crown Ambassador level.

If you are not at maximum Performance Bonus level but two or more of your internationally sponsored legs are producing International Sponsor bonuses in the same month, your first upline sponsor at the maximum Performance Bonus level will receive the average of the bonus, not to exceed the minimum guarantee of his country. You will receive the remaining International Sponsor bonus monies generated by your qualified international legs.

**Internationally sponsored qualified Distributors/IBOs who signed up before September 1, 1991 (except in Korea and Hungary) generate a 3% Bonus to the International Line and a 1% Bonus to the Foster Line of Sponsorship. If the International Sponsor was not at the maximum Performance Bonus level and had a combination of International 3% and International 2% Bonuses flowing to him/her, then the first upline qualified Distributor/IBO would received either the average 3% or the average 2% and 3% generated P whichever is higher - not to exceed the 3% Leadership Bonus Adjustment amount of the International Sponsor's country, and the International Sponsor would receive the rest.

Leadership Bonus

The Leadership Bonus is paid each month by the Corporation to a qualified Platinum or Silver Producer according to the calculation rules. This bonus is computed on the Group BV of each qualified 25% group you register.

Under this system, you can receive the Leader-ship Bonus as long as the Platinum or Silver Producer qualifies and as long as you maintain your own Group Volume (as explained in "Rules Governing the Calculation of the North American Leadership Bonus," which follows).

Rules Governing the Calculation of the North American Leadership Bonus

A. A Leadership Bonus is paid on every dollar of BV each month by the Corporation, which computes and pays all Leadership Bonuses.

B. The Leadership Bonus is computed from the bottom up Ė never from the top down.

C. You must have at least 2,500 Group Volume to receive any Leadership Bonus if you register one qualified group. The 2,500 Group Volume does not include any downline qualified volume (25%). However, it will include pass-up volume.

D. Once the Leadership Bonus Adjustment has been generated, at least that amount of Leadership Bonus must continue to pass up the line of sponsorship.

E. Each leader of a qualified group may be entitled to a Leadership Bonus based on the following rules:

1. You will keep all of the Leadership Bonus generated by your group:

a. If you register one qualified group and the Leadership Bonus generated by your BV is equal to or exceeds the Leadership Bonus Adjustment or the amount of Leadership Bonus generated to you, or...

b. If you register two or more qualified groups and the Leadership Bonus generated by your BV is equal to or exceeds the Leadership Bonus Adjustment or the average of the Leadership Bonus generated to you by your qualified groups if the published Leadership Bonus Adjustment hasnít been generated.

2. You will keep some of the Leadership Bonus generated to you:

a. If you register one qualified group and the Leadership Bonus generated by your BV is less than the Leadership Bonus Adjustment or the amount of Leadership Bonus generated to you, or ...

b. If you register two or more qualified groups and the Leadership Bonus generated by your BV is less than the Leader-ship Bonus Adjustment or the average Leadership Bonus generated to you if the Leadership Bonus Adjustment hasnít been generated.

3. You will keep none of the Leadership Bonus generated by your group if you register one qualified group and your Group Volume is less than 2,500.

Pass-Up Volume

An IBO can also receive the Performance Bonus differential on pass-up volume, which is any volume below the 25% Performance Bonus level developed by a 25% sponsor, Silver or Platinum. This volume passes up the line until it reaches an IBO who has attained 7,500 Group Volume.

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