LGN International, Inc. – Compensation Plan SECTION 1 – INTRODUCTION1.1 - Marketing StrategyJust like many other parts of our day to day lives have changed with the Internet, so has theway we book travel. Previously travel agents were traveler’s only access to airline tickets,hotels, rental cars, and cruises. Now travelers have access to all of these travel options with aclick of a mouse.At LGN International we pride ourselves in providing cutting edge ways for people to book travelfor discounted prices and go see the world. Our mission is “Freedom to choose your ownDestiny and Destination”. We believe that the best compliment someone can give you is areferral, and that word-of-mouth advertising is the most powerful advertising in the world. LGNInternational believes that with the power of the Internet; word-of mouth advertising is the bestopportunity for us to grow our travel business.1.2 - GenealogyLGN International thrives on the opportunity to financially reward our Independent Associatesfor driving our growth. Our motto can best be described on the quote below."You can have everything in life you want, if you will just help other people get what they want." Zig ZiglarWe have created a template that rewards our Independent Associates for the following: 1)Successfully selling our LGN Travel Products. 2) Demonstrating leadership qualities to build asuccessful organization and assisting your team by training and motivating them to do thesame.Giving Independent Associates the opportunity to build an organization by referring others andfinancially rewarding them for their efforts has proven to be a win-win for both the IndependentAssociate and LGN International. For those who are motivated to build an organization, they aregiven the opportunity to share in the profits generated by their team for the purchase of productsand membership fees. LGN International tracks all referral through our sophisticated marketingsystem to the Independent Associate who referred them to the LGN International products.Those individuals who are tracked into the marketing system are referred to as Genealogy orDownline.1.2.1 - Marketing OrganizationWhen an Independent Associate refers someone to LGN International and they choose tobecome an Independent Associate as well this is called sponsoring. There is not a limit to theamount of people an Independent Associate can add to their marketing organization. Eachpersonally sponsored Independent Associate is referred to as a “Direct Referral”. Each DirectReferral is independent of each other, and will be responsible for building their own LGNInternational business that can be made up of both Independent Associates and RetailCustomers. A Marketing Organization refers to Independent Associates and Retail Customerswho were Direct Referrals of all members of their organization.
LGN International, Inc. – Compensation Plan SECTION 2 - THE DIFFERENCE BETWEEN INDEPENDENTASSOCIATES AND CUSTOMERS2.1 - DescriptionTo understand the LGN International Compensation Plan, it is important to understand thedistinction between Independent Associates and Customers. LGN International is in thebusiness of acquiring new customers who purchase our retail products (Either the LGNInternational Membership, Grand Vacations, or purchase products through our Travel BookingPortal). Independent Associates are compensated strictly on the sale of LGN Internationalproducts (both their personal sales, and the sales made by their team). No commissions arepaid out for recruiting new Associates.2.2 - Associate Business System (ABS) Purchase RequirementIn order to familiarize new Associates with LGN International products, services, salestechniques, sales aids, and other matters, the Company requires that Associates purchase anAssociate Business System (ABS) for $50.00 and then $29.95/month moving forward. Exceptfor the purchase of the Associate Business System, no person is required to purchase LGNInternational products, services or sales aids, or to pay any charge or fee to become anAssociate. The Associate Business System (ABS) is an online tool that includes a PersonalizedMarketing Website and Back Office System as well as an online Training Program with essentialSales and Marketing tools to help Associates build their LGN International business. ABSpurchases are not commissionable.Enrollment as an Associate, through the purchase of the ABS, creates a “Business System” inthe LGN International Marketing Organization which tracks the sales generated by you and yourteam. Associates can also be, and often are, Customers.2.3 - Personal Retail Customer Only SalesWhen an Associate makes an LGN International Membership sale to a Retail Customer whodoes NOT purchase the RBS, the Customer will be listed in the Associate’s back office under“My Downline” and will fill a position in the Associate’s Matrix.Customer Sales Volume is credited in the Marketing Organization starting with the Associatewho personally generated the volume and moving upwards. If Associate X makes a CustomerOnly sale, the credit for the sale would count towards Associate X’s numbers, but would notbenefit any team members below Associate X in the Marketing Organization.In the event that the Customer later elects to become an Associate and purchase the ABS, theywill be assigned a business system and any sales they make after that point would add to theUpline Associate’s Marketing Organization.SECTION 3 - ACTIVE STATUS REQUIREMENT3.1 - DescriptionLGN International Associate must be “Active” to be eligible to accumulate sales credits or toearn commissions and bonuses. An Associate becomes/remains Active by:a) Paying their Monthly ABS Fee, and;
LGN International, Inc. – Compensation Plan b) Activating their Associate Business System by making two LGN International membershipsales.Once the Associate becomes Active, he/she begins to accumulate sales credits toward earningcommissions and bonuses.3.2 - Limitationsa) If an Associate remains Inactive (not paying monthly business center fee) for more than four(4) weekly pay periods, the commissions and or bonuses they have accumulated but notqualified for will irrevocably expire.SECTION 4 - DIRECT SALES COMMISSIONS4.1 - DescriptionLGN International pays our Independent Associates a $30 Direct Sales Commission for everyinitial sale of a LGN International Membership. Whether the new customer is (1) a RetailCustomer or (2) a Customer and an Associate, the Direct Commission is paid to the newCustomer’s Enroller. This Commission is calculated at the end of the month and is paid thefollowing month per the monthly pay schedule shown in section 6.44.2 - Active Status RequirementThe Independent Associate must be active by paying their LGN International monthlymembership fee.4.3 - QualificationLGN International Associates must activate their business system by making two (2) qualifyingmembership sales. This is a onetime qualification and once achieved the business system willremain active as long as the Associate is paying their LGN International monthly membershipfee.*No Direct sales commission is earned on the two (2) qualifying membership sales required toactivate the business system.4.4 - LimitationsLGN International will recover Direct Commissions paid to Associates any time an initial productpurchase is refunded to the Customer.SECTION 5 - WEEKLY CYCLE BONUS5.1 - DescriptionLGN International Associates earn Weekly Cycle Bonuses based on initial product sales. A 2x2matrix system is used to illustrate this bonus. Each time six (6) membership sales are made byan Independent Associate (Directly or Indirectly) that fills a matrix, a cycle is created. When acycle is created the following bonuses are generated: $600.00 USD to Matrix Owner $125.00 USD to Tier 1 $37.00 USD to Tier 2
LGN International, Inc. – Compensation Plan $15.00 USD to Tier 3A “cycle” is generated for every six (6) sales in the Associates matrix. Each Weekly Bonuscycle pays a total bonus commission of $777 (per the totals listed above).5.2 – 2x2 MatrixWhen a retail customer purchases a LGN International Membership through your affiliatewebsite, they become your PERSONAL Retail Customer. When interested business customerspurchase a LGN International Membership and Business System through your affiliate website,they become your PERSONAL LGN International Associate. The names of your new RetailCustomers and/or new Associates will start filling the empty slots in your 2x2 matrix in the orderthat they purchase from your website as illustrated below.When Six (6) Retail Customers and/or Independent Associates (who also purchased a LGNInternational membership package) completely fill your 2x2 Matrix, you will earn a commissionof $600.00. A completely filled 2x2 Matrix consisting of 6 Retail Customers and/or IndependentAssociates is commonly referred to as one “Cycle”, you will earn a bonus of $600.00 for every“Cycle” you generate. Your 2x2 Matrix can be filled with YOUR Retail Customers and PersonalIndependent Associates; in addition, your 2x2 Matrix can be filled with the Retail Customersand/or Independent Associates of OTHERS as well.5.2 .1 – Matrix Re-entryOne Cycle = Automatic Re-Entry into A Brand New 2x2 MatrixEvery time you generate a completely filled 2x2 Matrix consisting of a total of 6 RetailCustomers and/or Independent Associates, you will automatically get assigned a brand newempty 2x2 Matrix. You can build an unlimited customer base with an unlimited number of 2x2matrixes.5.2 .2 – Matrix Follow Me SystemWhen one of your Personal Independent Associates in any of your 2x2 Matrixes cycle and earntheir own Cycle Bonus, this Personal Independent Associate will “Follow You” into the nextavailable slot in your current matrix.
LGN International, Inc. – Compensation Plan In other words, ALL of your Personal Independent Associates have the ability to “Follow You”into the next available slot of your current matrix at any time. This accelerates the rate at whichyou can earn your own Weekly Cycle Bonuses5.3 – Tier StructureLGN International rewards you for the business-building efforts of your Independent Associatebase up to 3 tiers below you: Tier 1 Bonus = $125.00 to You. When any of your Personal Independent Associates “Follow You” by cycling back into your current matrix, you will earn a $125.00 bonus. Tier 2 Bonus = $37.00 to You. When an Independent Associate cycles back into the current matrix of one of your Personal Independent Associates, you will earn a $37.00 bonus. Tier 3 Bonus = $15.00 to You. When an Independent Associate cycles back into the current matrix of an Independent Associate of one of YOUR Personal Independent Associates, you will earn a $15.00 bonus.5.4 - Active Status RequirementThe Independent Associate must be active by paying their LGN International monthlymembership fee.5.5 - QualificationLGN International Associates must activate their business system by making two (2) qualifyingmembership sales. This is a onetime qualification and once achieved the business system willremain active as long as the Associate is paying their LGN International monthly membershipfee.*The qualifying memberships sales needed to activate your business system will each fill aposition in your matrix.**LGN International will hold Weekly Cycle Bonus commissions in Pending Indefinitely if theIndependent Associate earning the commission has not made his/her first two qualifying sales.However, if the Independent Associate is not active due to an unpaid monthly membership feeany matrix commission earned would be forfeited after one month.5.6 - Weekly Pay PeriodWeekly Bonuses are paid every Friday, with a two week delay. The weekly pay period beginsSaturday 12:00:00 AM Central Time and ends Friday 11:59:59 PM(Midnight) Central Time (See Fig. 1). Example Week Sunday Monday Tuesday Wednesday Thursday Friday Saturday Begins Ends Holding Holding Holding Holding Holding Holding Holding Pending Pending Pending Pending Pending Pending Payday
LGN International, Inc. – Compensation Plan 5.7 – LimitationsLGN International will recover a portion of the earned Matrix Bonus paid to Associates any timean initial product purchase is refunded to the Customer.SECTION 6 - MONTHLY RESIDUAL BONUS6.1 - DescriptionLGN International Associates at the District Manager rank or higher earn Monthly ResidualBonuses based on the monthly billing generated by their entire sales organization. TheAssociate accumulates Sales credits based on the monthly fees each customer pays: Product Customer Pays Sales CreditLGN International Membership $25.95 1LGN International Membership + $29.95 1Business SystemOne “cycle” is generated for every six (6) sales credits of the Associate’s sales organization.Each Monthly Residual Bonus cycle pays up to $10* depending on the Independent AssociatesRank. 6 sales credits = 1 cycle = up to $10*Example: You are an International Manager with LGN International. Your entire organizationconsists of 6000 Memberships. Of these 6000 memberships, 5000 are ACTIVELY paying theirmonthly LGN International Membership fee of $25.95 5000 Sales Credits / 6 (amount it takes to create a cycle) = 833 Cycles 833 Cycles x $10 per Cycle Bonus = $8333.00 USD Monthly Residual BonusPlease note that a Customer’s first monthly fees are charged at the time of purchase, however,the initial month’s fees, do not generate credits toward Monthly Residual Bonuses.*Customers enrolled prior to May 1, 2011 have monthly fees of $19.95 for the LGN InternationalMembership package. They are still worth one sales credit each in the monthly compensationplan.6.2 - Active Status RequirementThe Independent Associate must be active by paying their LGN International monthlymembership fee.6.3 - Qualification6.3.1 – Recognition Level QualificationAssociates must have reached the status of District Manager or higher to qualify for the MonthlyResidual Bonus.6.3.2 – Active Direct Membership Qualification
LGN International, Inc. – Compensation Plan Associates must have at least 12 DIRECT ACTIVE members in their personal directorganization. A direct active member is a member that is paying the monthly LGN Internationalmembership fee that you PERSONALLY REFERRED. *All twelve (12) personally referred Customers must remain Active during the month the bonus is calculated for the Associate to maintain qualified to receive the bonus.6.3.3 – Monthly Sales QualificationAssociates must personally make a minimum of one  LGN International Membership sale inthe month in which the monthly residual bonus is earned.*ALL Qualifications listed above must be met in order to receive the monthly residual bonus. Ifall requirements are not met, the bonus will not be generated.6.4 - Monthly Pay PeriodMonthly Residual Bonuses are placed in the Associate’s pending account on the 15th of themonth following when the bonus was earned and will be paid on the next regular commissionpayout following that date. The Monthly Residual Bonus pay period begins on the first day ofeach month at 12:00:00 AM Central Time and ends on the last day of each month at 11:59:59PM (Midnight) Central Time (See Fig. 1). EXAMPLE MONTH Sunday Monday Tuesday Wednesday Thursday Friday Saturday1 2 3 4 5 6 7 Begins8 9 10 11 12 13 1415 16 17 18 19 20 2122 23 24 25 26 27 2829 30 31 1 2 3 4 Ends5 6 7 8 9 10 1112 14 15 16 17 18 19 Pending20 21 22 23 24 25 26 Payday6.5 – Limitations6.5.1 - Cycle Bonus by RankOne cycle is created for 6 Sales Credits generated from an Independent Associate’s salesorganization. Each monthly bonus pays up to $10.00 USD per cycle depending on theIndependent Associates Rank. District Manager $2.00 USD per Cycle Regional Manager $5.00 USD per cycle Executive Manager $7.00 USD per Cycle International Manager $10.00 USD per Cycle6.5.2 - Maximum Payout by RankThere is a maximum amount that an Associate may earn each month at each promotion rank.Associates will not be paid more than the maximum amount, regardless of the number of cycles
LGN International, Inc. – Compensation Plan completed for the pay period. If the 65% rule comes into play in a given month, Associates willbe able to use all of their completed cycles for that month, up to the point where the maximummonthly commissions are met. The limits are: Rank Maximum Amount District Manager $500 Regional Manager $2,000 Executive Manager $10,000 International Manager $25,000Example: Mary is a Regional Manager. She has 3000 sales credits in monthly sales volume onthe last day of the month at 11:59:59 PM. When the bonus process runs, 500 cycles arecalculated (3000 ÷ 6 = 500). Since she is a Regional Manager, she earns $5 per cycle ($5 x500 cycles = $2500), due to the Maximum Payout by Rank she is limited to $2,000 per month(in this case 400 cycles), so her Monthly Residual Commission this month is up to $2000,subject to the 65% Payout Rule.6.5.3 - Monthly Residual Commission Sales Volume ExpiresAll Monthly Residual Sales Volume that does not create cycles expires and does not carry overto the following monthly pay period.6.5.4 - *65% Cap RuleThe Monthly Residual Bonus program is subject to the 65% Cap Rule. For details, please seeSection 9.SECTION 7 – LIFESTYLE BONUS7.1 - DescriptionAssociates who are District Manager rank and higher are eligible to earn a monthly lifestylebonus. Lifestyle bonuses are placed in the Associate’s pending account on the 15th of the monthfollowing when the bonus was earned and will be paid on the next regular commission payoutfollowing that date. (For Example: The February Lifestyle Bonus will be paid in March). TheLifestyle Bonus pay period begins on the first day of each month at 12:00:00 AM Central Timeand ends on the last day of each month at 11:59:59 PM (Midnight) Central Time7.2 – Lifestyle Bonus CriteriaWhen an Associate generates: 1 Weekly Cycle Bonus Per Week (or 4 cycles within a calendar month total) – The Associate will receive a life-style bonus of $250.00 USD for the month of qualification. 2 Weekly Cycle Bonuses Per Week (or 8 cycles within a calendar month total) - The Associate will receive a life-style bonus of $500.00 USD for the month of qualification. 3 Weekly Cycle Bonuses Per Week (or 12 cycles within a calendar month total) - The Associate will receive a life-style bonus of $750.00 USD for the month of qualification.
LGN International, Inc. – Compensation Plan 4 Weekly Cycle Bonuses Per Week (or 16 cycles within a calendar month total) - The Associate will receive a life-style bonus of $1,200.00 USD for the month of qualification.7.3 - Active Status RequirementThe Independent Associate must be active by paying their LGN International monthlymembership fee.7.4 - Qualification7.4.1 – Recognition Level QualificationAssociates must have reached the status of District Manager or higher to qualify for the MonthlyResidual Bonus.7.4.2 – Monthly Sales QualificationAssociates must personally make a minimum of one  LGN International Membership sale inthe month in which the monthly residual bonus is earned.*ALL Qualifications listed above must be met in order to receive the monthly Lifestyle bonus. Ifall requirements are not met, the bonus will not be generated.7.5 - Payment FrequencyLifestyle bonuses are placed in the Associate’s pending account on the 15th of the monthfollowing when the bonus was earned and will be paid on the next regular commission payoutfollowing that date.SECTION 8 – INDEPENDENT ASSOCIATE RANKS8.1 - Independent Associate8.1.1 - RequirementsEntry-level position; An Associate who has enrolled, and is current with their business systemfee8.1.2 - Commissions & Bonuses Direct Sales Commissions8.2 - Manager8.2.1 - RequirementsAn Associate who is Active, and has completed one (1) matrix cycle and two (2) DirectMembership sales.8.2.2 - Commissions & Bonuses Direct Sales Commissions Weekly Cycle Bonus8.3 – District Manager8.3.1 - RequirementsAn Associate who is Active, and has completed two (2) matrix cycles and six (6) DirectMembership sales.8.3.2 - Commissions & Bonuses
LGN International, Inc. – Compensation Plan Direct Sales Commissions Weekly Cycle Bonus Residual Monthly Bonus Lifestyle Bonus8.4 – Regional Manager8.4.1 - RequirementsAn Associate who is Active, and has completed five (5) matrix cycles and eighteen (18) DirectMembership sales.8.4.2 - Commissions & Bonuses Direct Sales Commissions Weekly Cycle Bonus Residual Monthly Bonus Lifestyle Bonus8.5 – Executive Manager8.5.1 - RequirementsAn Associate who is Active, and has completed eight (8) matrix cycles and thirty (30) DirectMembership sales.8.5.2 - Commissions & Bonuses Direct Sales Commissions Weekly Cycle Bonus Residual Monthly Bonus Lifestyle Bonus8.6 – International Manager8.6.1 - RequirementsAn Associate who is Active, and has completed twelve (12) matrix cycles and fifty (50) DirectMembership sales.8.6.2 - Commissions & Bonuses Direct Sales Commissions Weekly Cycle Bonus Residual Monthly Bonus Lifestyle BonusSECTION 9 - 65% PAYOUT CAP RULELGN International commits to pay up to 65% of all sales revenue generated by our Associatesback to the field, and sets these amounts aside into separate commission accounts. To ensurethe long term viability of LGN International and protect the future opportunity for our Associates,the Company must limit the percentage of total commission payout to this percentage. This65% maximum is called the 65% Payout Cap.Here is an example of how it works. If monthly sales volume for a given month were $1,000,000companywide, then LGN International would pay a maximum of $650,000 in commissions to ourAssociates. If the monthly bonus process generated $700,000, or 70%, then all bonus checkswould be "shaved" an equal percentage to bring the total payout back to 65%. This would cause
LGN International, Inc. – Compensation Plan the Monthly Residual bonuses to payout less than what was generated. The 65% Payout Capis necessary to insure the long-term health and continued growth of LGN International and toprovide long-term opportunity for our Associates. We all want a company that will be profitableand secure for many years to come.Any surplus funds from commission runs will be used to cover any shortfall before commissionchecks will be shaved, within each of the commission programs.Travel commissions are paid by LGN Destinations and are unrelated to this compensation plan.SECTION 10 – MISCELLANEOUS10.1 - Charge Backs & RefundsLGN International reserves the right to recover sales volume credited or commissions paid to anAssociate any time a commissionable purchase of any kind is refunded to a Customer.10.2 – Associate Business System Owner OnlyLGN International does not require Associates to purchase LGN Membership products. If anAssociate Business System Owner Only sells LGN International Membership products theywould be qualified to earn commissions only after the following qualifications are met. Active by paying their monthly business system monthly fee Personally making 6 direct membership sales as a onetime qualification – these 6 qualifying sales would be passed up to the first active sponsor above them.*this only applies to Business System Only Associates and not those Associates who purchaseda combination of both LGN International Membership Product package and Business SystemPackage. After the onetime qualification is met the Associate would be eligible for the samecompensation structure as those Associates who are classified as Independent Associates.Until the qualification is met no commissions are earned. This type of associate will not appearin a matrix until they have completed the 6 qualifying sales. An Associate Business SystemOwner only will not have any access to Membership products at any time unless they purchasea product package.**an Associate Business System Only purchase is only available for purchase by contactingLGN International Corporate Offices directly and is not offered through an affiliate marketingsystem as this application must be processed manually.APPENDIX A: GLOSSARY OF TERMSActive Membership — a customer who has an active and paid-up LGN InternationalMembership for the subject calendar month.Active Associate —an Associate who has an active and paid-up LGN International BusinessSystem Membership for the subject calendar month.Active Rank — The term “Active Rank” refers to the current rank of an Associate, asdetermined by the LGN International Compensation Plan, for any calendar month OR volumeperiod. To be considered “Active” relative to a particular rank, an Associate must meet thecriteria set forth in the LGN International Compensation Plan for his or her respective rank. (Seethe definition of “Rank” below.)
LGN International, Inc. – Compensation Plan Agreement — The contract between the Company and each Associate includes the AssociateAgreement, the LGN International Policies and Procedures, the LGN InternationalCompensation Plan, and the Business Entity Registration Form (where appropriate), all in theircurrent form and as amended by LGN International in its sole discretion. These documents arecollectively referred to as the “Agreement.”Associate Business System (ABS) — The ABS is an online tool that includes a PersonalizedWebsite and Back Office System as well as online Training and access to essential Sales andMarketing tools to help Associates build their LGN International business. The Companyrequires that Associates purchase an Associate Business System (RBS) for $50.00 and then$29.95/month moving forward. If an Associate chooses to purchase a Product MembershipPackage along with their Associate Business System, LGN International grants a discountedrate of $30 for the Associate Business System and a monthly fee of $4.Associate Business System Owner Only – This is an Associate who purchased only the LGNAssociate Business System and not a LGN International Membership package Combination.Special qualifications are required to earn commissions.Business System — tracks the sales generated by the Associate and the Associate’s team.Cancel — the termination of an Associate’s business.Commissionable Products/Services — All LGN International products and services on whichcommissions and bonuses are paid. Associate Business Systems and sales aids are notcommissionable products.Company — The term “Company” as it is used throughout the Agreement means LGNInternational, Inc.Downline — See “Marketing Organization” below.Downline Leg — Each one of the individuals enrolled immediately underneath an Associateand their respective Marketing Organizations represents one “leg” in the Associate’s MarketingOrganization.End Consumer — A person who purchases LGN International products for personal useEnroller — An Associate who sales a membership or membership and business systemcombination to a new customer. The Enroller is typically also the Sponsor of the new Associateor customer.Group Sales Volume — The commissionable value of LGN International products generatedby an Associate’s Marketing Organization.
LGN International, Inc. – Compensation Plan Immediate Household — Heads of household and dependent family members residing in thesame house.Independent Associate – An Associate who has purchased both a LGN InternationalMembership package along with the Associate Business System.Lineage — The legs in the Associate’s marketing structure that were initially started by theAssociate sponsoring a personal Associate, and then extended by them sponsoringAssociates personally and that process duplicating. An Associate’s lineage is like his or hersponsorship family tree. It comes from those whom the Associate personally sponsored andwho they personally sponsored, etc. Spillover will not add to lineage.Marketing Organization — The Associates sponsored below a particular Associate down toInfinity.Official LGN International Material — Literature, audio or video tapes, and other materialsdeveloped, printed, published and distributed by LGN International to Associates.Personal Production — Direct sales of an LGN International membership to an end consumer.Rank — The “title” that an Associate has achieved pursuant to the LGN InternationalCompensation PlanSponsor — The Associate to whom front-line lineage is credited when a new Associate isenrolled into the CompanyTier — The layers of downline Associates in a particular Associate’s Marketing Organization.This term refers to the relationship of an Associate relative to a particular upline Associate,determined by the number of Associates between them who are related by sponsorship. Forexample, if A sponsors B, who sponsors C, who sponsors D, who sponsors E, then E is on A’sfourth level.Upline — This term refers to the Associate or Associates above a particular Associate in asponsorship line up to the Company. Conversely stated, it is the line of sponsors that links anyparticular Associate to the Company."