1. Teach their friends and acquaintances the basics of good health
2. Make these individuals aware of the wide range of quality products available from NSP
3. Instruct the individuals regarding the most effective use of the products.

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Explanation of Terms

Network (Multi-Level) Marketing

An effective form of direct selling in which independent distributors are financially compensated for their efforts in:

• Selling products to consumers.
• Recruiting and training other salespeople to likewise distribute products among their own contacts.

An NSP Distributor's earnings depend on:

1. The individual's personal sales volume.
2. The size and scope of the individual's downline sponsorship group.
3. The sales volume generated by the downline group.

In the case of Nature's Sunshine Products, salespeople can earn overrides on up to four levels of sponsorship.

Retail Customer

Any person who purchases product for their own personal use.

Distributor

A person who has completed a Distributor Application form and has been personally sponsored by an NSP authorized representative. Distributors receive a business start-up kit and are eligible for discounts on product orders as well as QV bonuses as outlined by the NSP Compensation Plan.

Manager

A specific rank in the Compensation Plan but also a term used to refer to all District, Area, Regional, Divisional, and National Managers as a group. To qualify for the Manager rank, a person must simply achieve a monthly purchase volume of 1,000.

Downline/Upline

Terms used by Managers to describe their position in the sponsorship "genealogy". If Manager A sponsors Manager B, B sponsors Manager C, C sponsors Manager D, and so on, then Managers B, C, and D are in the downline of Manager A. Managers A, B, and C are in the upline of Manager D.

Purchase Volume (QV)

An arbitrary value assigned to each product for the purpose of calculating QV bonuses as outlined in the Compensation Plan. In most cases, QV is equal to or greater than a product's wholesale price.

QV Bonus

A rebate (commission) paid to NSP Distributors or Managers based on their purchase volume.

QV Equivalents

A special provision for Managers with high monthly QV, especially retail store owners. Since an individual's advancement within the Compensation Plan is tied to the number of 1st-level Managers in the sponsorship group, Nature's Sunshine has adopted a policy that rewards Managers who have contributed to the success of the company through significant purchase volume levels. A "QV Equivalent" is calculated by means of the following formula:

(Monthly QV* - 1,000) / 2,000 = # of QV Equivalents

* Figured on a 6-month average

The total of 1st-level Managers based on the sales volume of their downline Managers and QV Equivalents (each Mgr. Equiv. counted as 1 regular Mgr.) are added together to determine qualification for various Manager levels.

Manager Override

A commission paid to Managers based on the sales volume of their downline Managers. As individuals advance through the Manager ranks outlined in the Compensation Plan, they are eligible to receive overrides on an increasing segment of their downline Managers' volume. (See chart above.)

NSP Group Insurance

Comprehensive group medical and dental insurance programs available to all NSP Managers at reasonable rates. Beginning at the Regional Manager level, monthly premiums are subsidized by Nature's Sunshine. The coverage is unique in that it provides for the services of licensed chiropractors, naturopathic physicians, reflexologists, and other holistic health professionals.

New Car Allowance Program

Nature's Sunshine offers one of the most flexible and valuable new car programs available in the network marketing industry. Regional Managers and above receive a monthly car allowance towards the purchase or lease of a new car.

National Convention

NSP's annual get-together for Managers from all regions of the country. National Conventions incorporate a unique blend of natural health lectures, business workshops, entertainment, and sightseeing. Managers may earn the costs of attending the convention through special sales incentives.

Top Achiever's Club (TAC)

Exclusive, luxury vacations awarded to Managers who achieve certain QV qualifications. Past TAC trips have included excursions to Hong Kong, Spain, Australia, Jamaica, and Hawaii.

Leaders' Conference

A special training seminar held each year to provide product information, business skills, and motivation to Area Managers and above.