19. Transfer from Original Organization
(b) During the period that the Independent Marketing Executive
constitute one of Melaleuca’s most valuable assets. In order to protect the efforts of all Marketing Executives in building and maintaining their individual Marketing Organizations and Customer bases, and in order to protect Melaleuca’s business interests including its interest in the overall Customer base, a Marketing Executive and his/ her spouse are required to refrain from performing any acts that may be deemed prejudicial to Melaleuca’s business interests and to abide by the following policies: (a) Solicitation of Melaleuca Customers and Marketing Executives: (i) During the period that his/her Independent Marketing Executive Agreement is in force, a Marketing Executive and his/her spouse are prohibited from directly, indirectly or through a third party Recruiting any Customers or Marketing Executives to participate in any Competing Business Venture; and (ii) For a period of twelve months after cancellation or termination for any reason of a Marketing Executive’s Independent Marketing Executive Agreement, the Marketing Executive and his/her spouse are prohibited from directly, indirectly or through a third party Recruiting to participate in any other Competing Business Venture any Customers or Marketing Executives: (1) who were in the Marketing Organization or Support Team at any time during the term of his/her association with Melaleuca; or (2) with whom the Marketing Executive had contact in conjunction with the operation of his/her Melaleuca business; or whose contact information (name, address, phone number or email address, etc.) the Marketing Executive has obtained at any time during the term of his/her association with Melaleuca; or (3) whose contact information (name, address, phone number or email address, etc.) the Marketing Executive or his/her spouse obtained at any time from another person who obtained the information because of any other person’s association with Melaleuca. It is a violation of this policy to Recruit a Member or Marketing Executive to participate in a Competing Business Venture, even if the Marketing Executive is not aware that the prospect is also a Member or Marketing Executive. It is the Marketing Executive’s responsibility to first determine whether the prospect is a Member or Marketing Executive before Recruiting the prospect to participate in any Competing Business Venture.
20 excuses Melaleuca from the payment of any bonuses, commissions or other payments to the Marketing Executive for the calendar month in which the violation occurred and any and all subsequent months. Should Melaleuca be unaware of the breach and continue by mistake to pay commissions, bonuses or other payments to the Marketing Executive after the breach, those subsequent payments will be deemed to have been made in error, and upon notice, the Marketing Executive shall immediately return all such payments. (iii) Violation of any provision of this Policy 20 shall result in the cancellation of the Marketing Executive’s Independent Marketing Executive Agreement, effective as of the date of the violation, and the forfeiture from the Marketing Executive of all commissions or bonuses payable for and after the calendar month in which the violation occurred. (iv) In addition to being entitled to a refund of bonuses and commissions and to damages as described above, in the event a person or entity violates this Policy 20, Melaleuca and any Marketing Executive who experiences an adverse financial impact as a result of such person’s or entity’s violation of this Policy 20 shall be entitled to an accounting and repayment of all profits, compensation, commissions, remunerations or other benefits which the person or entity directly or indirectly receives and/or may receive as a result of, growing out of, or in connection with any violation of this Policy. Such remedy shall be in addition to and not in limitation of any damages or injunctive relief or other rights or remedies to which Melaleuca is or may be entitled at law or in equity. (d) Violations of this Policy 20 are especially detrimental to the growth and success of other Marketing Executives’ Independent Melaleuca Businesses and to Melaleuca’s business. Consequently, Marketing Executives who have knowledge that any Marketing Executive has violated this Policy must immediately (and confidentially) report that information to Melaleuca’s Policy Administration Department. The failure of a Marketing Executive to report such information to Melaleuca will also constitute a violation of this Policy. The names of those reporting violations of this Policy 20 will be held in confidence. 21. Proprietary Information and Trade Secrets By executing the Independent Marketing Executive Agreement, the Marketing Executive acknowledges that all
information which is contained in the Marketing Executive’s Monthly Business Report, including, but not limited to, names, addresses and telephone numbers of Marketing Executives and Customers, and all identifying information relating to other Marketing Executives or Customers that the Marketing Executive became aware of while conducting Melaleuca business in any way or while attending Melaleuca related events, is Melaleuca’s proprietary trade secret information. The Marketing Executive shall ensure that all the relevant consents for the disclosure of the personal information of Customers have been obtained. The Marketing Executive agrees to protect and not to disclose such information to any third party (except to existing or prospective Melaleuca Marketing Executives or Customers for the purpose of promoting Melaleuca products and business opportunity) or to utilize such information for the purpose of promoting any other business opportunity at any time, whether during the term of his/her association with Melaleuca or thereafter. The Marketing Executive acknowledges that such proprietary information is of such character as to render it unique and that disclosure or use thereof in violation of this provision will result in irreparable damage to Melaleuca and to Independent Melaleuca Businesses. Melaleuca and its Marketing Executives will be entitled to injunctive relief to prevent violation of this policy. If litigation is required to obtain injunctive relief or to recover damages, the prevailing party shall be entitled to an award of attorney’s fees and expenses. 22. The Enroller and Presenter (a) A Marketing Executive who is the Enroller of a new Customer or Marketing Executive may not list another Marketing Executive who did not participate in the contact or the presentation as either the Enroller or Presenter of such new Customer or Marketing Executive. Regardless of where a Customer or Marketing Executive is placed in a Marketing Organization, the actual Enroller of such Customer or Marketing Executive must be listed as the Enroller on the Customer Membership Agreement. (b) The Enroller and any other Marketing Executives involved in the Recruiting and enrollment process may use only Melaleuca’s products and its Compensation Plan and their personal commitment to help the new Marketing Executive build his/her business as an inducement to enroll. Marketing Executives are prohibited to enter into
person owns an Independent Melaleuca Business, the other person may not own, operate or have a financial interest in a separate Independent Melaleuca Business. Additionally, if the couple jointly owns an Independent Melaleuca Business, neither person may own, operate or have a financial interest in a separate Independent Melaleuca Business. However, if two people who own separate Independent Melaleuca Businesses marry, they may, at Melaleuca’s sole discretion, each retain ownership of their businesses. Unless approved in writing in advance by Melaleuca, only one Independent Melaleuca Business is permitted in any Immediate Household. 16. Conduct of Household Members If any member of the Marketing Executive’s Immediate Household engages in any activity which, if performed by the Marketing Executive, would violate any Melaleuca policy or any provision of the Independent Marketing Executive Agreement, such activity will be deemed a violation by the Marketing Executive. 17. Inheritance of a Business Upon the death of a person who is a Marketing Executive, or the death of any owner, manager or any other person with an interest in an Independent Melaleuca Business pursuant to Policy 3, the Independent Marketing Executive Agreement will automatically be cancelled, unless the Independent Melaleuca Business is inherited in accordance with this Policy 17, subject to Melaleuca’s sole discretion. An Independent Melaleuca Business may only be inherited by a single person, a married couple or a corporation which complies with Melaleuca’s guidelines, pursuant to a valid will or other appropriate document, or in accordance with the testacy or intestacy laws of the Philippines. A person who inherits an Independent Melaleuca Business must furnish Melaleuca with proper documentation that he/she is the beneficiary and is authorized to represent the estate. He/she must also execute an Independent Marketing Executive Agreement, fulfill all of the functions of a Marketing Executive and abide by the terms of Melaleuca’s Statement of Policies. 18. Sale or Transfer of Business A Marketing Executive cannot sell or transfer his/her Independent Melaleuca Business or his/her rights to compensation from Melaleuca (except for transfers by inheritance pursuant to Policy 17).
Agreement is in force, and for a period of twelve months after the cancellation or termination thereof for any reason, a Marketing Executive and his/her spouse are further prohibited from the following: (i) Producing any literature, audio or video recording or promotional material of any nature (including but not limited to websites and emails) which is used by the Marketing Executive or any third person to recruit Member or Marketing
Marketing Executives and Customers may transfer from one Marketing Organization to another only upon fulfillment of all of the following requirements: (a) The Marketing Executive or Customer seeking the organization change has submitted an Organization Change form with the original signatures of the Enroller and the other Support Team Marketing Executives in the immediate seven generations above the Marketing Executive or Customer being moved. All Support Team Marketing Executives who have earned 3 or more Leadership Points in the previous 6 months must sign off on the move. (b) A Marketing Executive or Customer to be moved has no more than 10 Customers in his/her existing Marketing Organization and is not being moved to an open position above any other Marketing Executives or Customers. (c) The Marketing Executive or Customer seeking the organization change has paid to Melaleuca the applicable fee charged by Melaleuca for organization changes. (d) Melaleuca has approved the change in writing, which approval Melaleuca may withhold in its sole discretion. 20. Non-Solicitation and Conflicts of Interest Marketing Executives are independent contractors and may be active in other business ventures while they are Marketing Executives for Melaleuca. However, to qualify for compensation under Melaleuca’s Compensation Plan, Marketing Executives have the ongoing responsibility to service, supervise, motivate, train and assist other Marketing Executives in building their Marketing Organizations. They also have the responsibility to promote Melaleuca products and the Melaleuca income opportunity and to consistently encourage and influence other Marketing Executives to invest their time in building their Marketing Organizations. All compensation paid by Melaleuca each month to each Marketing Executive is based on the understanding and expectation that the Marketing Executive is reliably and consistently involved in the crucial ongoing endeavor of promoting Melaleuca products and in consistently encouraging and influencing other Marketing Executives to invest their time in building their Marketing Organizations. Melaleuca and its Marketing Executives have made a significant investment in the establishment of organizations consisting of Customers and Marketing Executives. Those organizations
Executives to participate in any Competing Business Venture;
(ii) Selling, offering to sell, or promoting any competing products or services to Members; and (iii) Offering any non-Melaleuca product, service or Competing Business Venture in conjunction with the presentation of any Melaleuca product, service or income opportunity or at any Melaleuca meeting, seminar, launch, convention, or other Melaleuca function. (c) Each Marketing Executive agrees that any violation of this Policy 20(a) or (b) constitutes a failure of his/her responsibility to service, supervise, motivate, train and assist Marketing Executives in building their Marketing Organizations; to promote Melaleuca’s products and the Melaleuca income opportunity; and to consistently encourage and influence other Marketing Executives to invest their time in building their Marketing Organizations. Each Marketing Executive further agrees that such failure constitutes a material breach of the Independent Marketing Executive Agreement. Melaleuca’s remedies for such a breach include, but are not limited to, the following: (i) Melaleuca may seek and obtain from the violating Marketing Executive (and others who assisted with the violation) both injunctive relief and damages, and Melaleuca may, at its option, elect to enforce this Policy 20 by lawsuit or action in a court of competent jurisdiction rather than by arbitration. Damages for violating Policy 20 shall include the amount of lost present and future sales of Melaleuca products; harm from the departure of Marketing Executives and Customers; financial impacts to Marketing Organizations due to the Recruitment of Marketing Executives and Customers; and all other damages (including punitive and exemplary) allowed by law. (ii) In addition to (or, at Melaleuca’s option, in lieu of) the damages set forth in Policy 20(c)(i), the violation of Policy
36 WELCOME TO MELALEUCA
SIMPLE STEPS TO SUCCESS 37
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