Patent Abstract:
The sales compensation plan of the present invention is a stair-step compensation plan without a breakaway to promote depth as well as breadth within the distributor&#39;s distribution genealogy. The compensation plan also includes an advanced performance team position that enables qualifying distributors to position themselves within their own frontline of their distribution genealogy to receive additional compensation for their efforts. Yet another feature of the compensation plan is the unique concept of horizontal compression for enabling leg volume requirements to be satisfied by horizontally compressing the leg volume of a plurality of legs.

Full Description:
RELATED APPLICATIONS  
       [0001]    This application claims the benefit of U.S. Provisional Patent Application Serial No. 60/285,508, entitled “Network Marketing Compensation System,” filed Apr. 20, 2001, which is incorporated herein by reference. 
     
    
     
       BACKGROUND OF THE INVENTION  
         [0002]    1. The Field of the Invention  
           [0003]    The present invention is in the field of business methods for compensating distributors in direct sales organizations and, more particularly, to business methods for compensating distributors in multi-level compensation plans.  
           [0004]    2. The Relevant Technology  
           [0005]    In the industry of direct sales organizations, there are several different types of compensation plans. Some of the more popular compensation plans include direct sales, multi-level, and network compensation plans, each having their own advantages and disadvantages.  
           [0006]    Direct sales plans promote direct one-on-one selling by limiting any personal sales organization to one or two pay levels. Each pay level is a level in which the distributor or seller is compensated for sales made directly by the distributor. Although direct sales compensation plans are useful for fostering good personal relationships between the distributor and the buyers, direct sales compensation plans are not very good for developing large sales organizations. In particular, direct sales compensation plans generally provide a disincentive for recruiting new distributors to the company inasmuch as any new distributors become direct competitors of the existing distributors. Further, distributors are generally not compensated for recruiting new distributors into the company.  
           [0007]    Direct sales plans, thus, act to encourage the distributor to emphasize the product and the distributor&#39;s personal sales rather than to promote recruiting, training and managing a personal sales organization that includes other distributors. People who are more comfortable with selling a product rather than recruiting, managing and training other people often prefer direct sales plans. As a consequence of these factors, organizations that utilize direct sales plans tend to develop slowly.  
           [0008]    Multi-level plans such as uni-level and matrix compensation plans reward distributors for developing a large personal sales organization (i.e. “distribution genealogy”), which includes a front line of personally sponsored distributors/representatives (i.e. “frontline distributors”) and one or more legs, where a leg includes a frontline distributor and a genealogy of additional downline distributors that descend from the frontline distributor. A leg is formed, for example, when the frontline distributor sponsors one or more downline distributors, who in turn each sponsor one or more downline distributors, etc. Accordingly, a distributor&#39;s distribution genealogy includes the distributor&#39;s frontline distributors and all downline distributors that descend from the frontline distributors.  
           [0009]    Multi-level plans typically encourage the development of large distribution genealogies by paying commissions and bonuses on the purchases and sales made by certain downline distributors/representatives within the distributor&#39;s distribution genealogy. Multi-level plans are generally useful for encouraging a distributor to develop a deep genealogy or personal sales organization, thereby enabling a distributor to maximize its profits. This feature, generally thought to be an advantage of multi-level plans is also a disadvantage. The disadvantage arises because it is easier for the distributor to manage and train only a few frontline distributors, rather than to train many. Some multi-level plans even limit the number of personally sponsored distributors that can be placed within a distributor&#39;s front line. Accordingly, multi-level plans generally promote deep distribution genealogies. However, this is often done at the expense of developing wide distribution genealogies, which could otherwise accelerate the overall growth of the company.  
           [0010]    Network compensation plans, such as the popular stairstep/breakaway plan, compensate a distributor based on some combination of personal sales volume and the total sales volume of the distributor&#39;s personal sales organization. In most network compensation plans, the distributor achieves rankings based on the performance and qualification of the distributor&#39;s sales organization. Accordingly, the company can modify the behavior of the distributor and the ultimate shape of the distributor&#39;s sales organization by modifying the requirements that are necessary to achieve a ranking.  
           [0011]    In stairstep/breakaway compensation plans, the distributor is generally compensated for developing a deep distribution genealogy because the distributor receives compensation based at least in part on the total sales volume of the distributor&#39;s genealogy. However, when any leg of the distributor&#39;s distribution genealogy becomes independently qualified for a particular ranking then that leg will break away from the distributors network, thereby preventing the distributor from receiving further commissions based on that portion of the distributor&#39;s distribution genealogy. Accordingly, the distributor is thereby encouraged only to develop legs to the extent that they do not become independently qualified to break away from the distributor&#39;s organization. This is a significant problem with stairstep/breakaway plans. In particular, this discourages training and successful development of many downline members, which would otherwise benefit the overall growth and development of the company.  
           [0012]    Accordingly, there currently exists a need in the art to develop a method for compensating distributors in a direct sales organization in which the distributors are encouraged to develop wide and deep distribution genealogy while at the same time promoting the individual success of each leg within the distributor&#39;s distribution genealogy.  
         SUMMARY AND OBJECTS OF THE INVENTION  
         [0013]    The present invention provides a network marketing compensation system for compensating distributors in a distribution network. The network marketing compensation system of the present invention is divided into three general compensation phases.  
           [0014]    In the first phase, a distributor receives a personal rebate based on the distributor&#39;s personal volume, i.e., the unit amount of product the distributor purchases or sells during a month, as defined below in greater detail. The distributor also receives a commission based on the distributor&#39;s team volume, i.e., the distributor&#39;s personal volume combined with the distributor&#39;s front line volume, as further defined below. In the second phase, and upon meeting designated requirements, the distributor receives an override bonus. There are nine override bonus levels that are based on percentages of the personal volume of product that is acquired or sold by members within the distributor&#39;s distribution genealogy. The third phase comprises additional benefits, which are available by satisfying additional requirements. One particular benefit in the third phase includes an additional distributorship, referred to herein as an “additional performance team” position, that the distributor can place on the front line of the distributor&#39;s genealogy to receive additional bonuses. For enabling a distributor to satisfy the requirements of the second and third phases of the compensation plan, the present invention allows horizontal compression of leg volume within the distributor&#39;s genealogy, as explained below in greater detail.  
           [0015]    The present invention is an improved network marketing compensation system over the prior art. The network marketing compensation system of the present invention rewards wide and deep distribution genealogies on various levels, while overcoming many of the problems associated with compensation plans of the prior art.  
           [0016]    Additional objects and advantages of the invention will be set forth in the description which follows, and in part will be obvious from the description, or may be readily learned by the practice of the invention. The objects and advantages of the invention may be realized and obtained by means of the instruments and combinations particularly pointed out in the description. These and other objects and features of the present invention will become more fully apparent from the following description, or may be learned by the practice of the invention as set forth hereinafter.  
       
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       [0017]    In order that the manner in which the above-recited and other advantages and objects of the invention are obtained, a more particular description of the invention briefly described above will be rendered by reference to specific embodiments thereof which are illustrated in the appended drawings. Understanding that these drawings depict only typical embodiments of the invention and are not therefore to be considered limiting of its scope, the invention will be described and explained with additional specificity and detail through the use of the accompanying drawings in which:  
         [0018]    [0018]FIG. 1 illustrates one presently preferred table of Phase I requirements and benefits of the compensation system of the present invention that includes minimum personal volume (PV) requirements and rebates;  
         [0019]    [0019]FIG. 2 illustrates an exemplary distributorship genealogy that includes a distributor and seven members;  
         [0020]    [0020]FIG. 3 illustrates presently preferred Phase I requirements and benefits of the compensation system of the present invention that includes minimum team volume (TV) requirements and commissions;  
         [0021]    [0021]FIG. 4 illustrates presently preferred Phase II requirements and benefits of the compensation system of the present invention;  
         [0022]    [0022]FIG. 5 illustrates a sample distributorship genealogy that includes a distributor, eleven downline members, and three generations that are determined according to Phase II compression rules of the present invention;  
         [0023]    [0023]FIG. 6 illustrates presently preferred Phase III requirements and benefits of the compensation system of the present invention;  
         [0024]    [0024]FIG. 7 illustrates a diagram of a distributorship genealogy having seven legs and an additional performance team position (APT); and  
         [0025]    [0025]FIG. 8 illustrates a diagram of the distributorship genealogy of FIG. 7 in which two of the seven legs have been placed under the APT and in which the distributor has occupied the APT.  
     
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS  
       [0026]    The present invention relates to a network marketing compensation system for compensating a distributor within a distribution network. The network marketing compensation system of the present invention is generally described herein in terms of three compensation phases. Qualification for compensation within each of the three phases is based on the personal performance of an individual distributor and upon the results of the distributor&#39;s leadership and management in creating a distribution genealogy. The three general phases of the invention are discussed herein in reference to FIGS.  1 - 8 .  
       PHASE I COMPENSATION  
       [0027]    Phase I of the compensation plan of the present invention comprises a personal rebate and a commission. The personal rebate is based on a percentage of a distributor&#39;s personal volume, hereinafter “PV,” which is defined herein as the total commissionable volume of product that a distributor purchases for personal consumption or resale combined with the commissionable volume of product purchased by retail customers on the distributor&#39;s account within a given volume month. PV is generally equivalent to money spent and may or may not be expressed in units of money. Although in this preferred embodiment, PV is referred to as a monthly quantity, one of skill in the art will readily appreciate that PV could be based on virtually any period of time. The term “product” should be broadly construed to include any good, service, or other benefit that can be marketed by a network marketing company and purchased or sold by a distributor of that company. The term “distributor” should be broadly construed to include any individual, group, corporation, party, or other entity that has contracted with the company to sell products of the company to others or purchase products for personal consumption. Such distributors will generally be independent contractors to the company.  
         [0028]    In a preferred embodiment illustrated in FIG. 1, a table  100  illustrates the relationship between minimum PV  110  and a distributor&#39;s rebate  120 . Thus, a distributor qualifies for a rebate  120  in any month in which the distributor&#39;s PV reaches or exceeds designated PV requirements  110 . For example, if a distributor&#39;s PV is at least 100, then the distributor is qualified to receive a first-level rebate  130  comprising a monetary equivalent of 5% of the distributor&#39;s PV. If a distributor&#39;s PV is at least 350, then the distributor is qualified to receive a second-level rebate  140  comprising a monetary equivalent of 10% of the distributor&#39;s PV. If a distributor&#39;s PV is at least 700 then the distributor is qualified to receive a third-level rebate  150  comprising a monetary equivalent of 15% of the distributor&#39;s PV. If a distributor&#39;s PV is at least 1,000, then the distributor is qualified to receive a fourth-level rebate  160  comprising a monetary equivalent of 20% of the distributor&#39;s PV. If a distributor&#39;s PV is at least 5,000 then the distributor is qualified to receive a fifth-level rebate  170  comprising a monetary equivalent of 25% of the distributor&#39;s PV. It should be appreciated that although PV is expressed in terms of integer units, rebates are paid in units of money. For example, according to the preferred embodiment of FIG. 1, if a distributor has a PV of 2,000 then the distributor will receive a rebate comprising a monetary equivalent of 20% of 2,000, or $400.  
         [0029]    These monthly rebates, as they have been described, are mutually exclusive. In other words, even if a distributor is qualified for every level of monthly rebates, the distributor will only receive a single monthly rebate, which will be the highest rebate that the distributor is qualified to receive. For example, if the distributor has a PV of 5,000, the distributor will only receive a monthly rebate comprising a monetary equivalent of 25% of the PV, which is $1,250. It should be appreciated that the distributor will not receive each of the other rebates that the distributor is qualified to receive. One of skill in the art will appreciate that the minimum PV qualification levels  110  may be set for a variety of different thresholds and that the rebate percentages  120  associated with a particular qualification level may also be set according to a variety of factors to suit the needs of the company implementing the compensation plan of the present invention.  
         [0030]    As mentioned earlier, the distributor can also qualify for a Phase I commission in addition to a rebate. To determine the level of a commission the distributor is eligible to receive, if any, it is first necessary to determine the distributor&#39;s team volume (“TV”), which will be generally described in reference to FIGS. 2 and 3.  
         [0031]    [0031]FIG. 2 shows a distributor genealogy  200  comprising six levels. Distributor  210  is located in the first level and the distributors positioned in levels  2  thru  6  comprise the descendants of distributor  210 . Downline distributors  212  and  214  are distributors that have been personally sponsored by the distributor  210  and are included in the front line  216  of distributor  210 . Thus, distributor  210  is said to be the “sponsor” of distributors  212  and  214 . Distributor  218  is a descendant of distributor  214 , distributor  220  is a descendant of distributor  218 , distributor  222  is a descendant of distributor  220 , and distributor  224  is a descendant of distributor  222 . The various distributors in a genealogy such as that illustrated in FIG. 2 are variously referred to herein as “distributors,” “members,” or “positions.” 
         [0032]    The compensation system of the present invention bases a distributor&#39;s compensation on the performance of the distributor and the downline of that distributor. As used herein, the term “top-line distributor” refers to the distributor for which compensation is being calculated. In FIG. 2, the top-line distributor is distributor  210 . It will be appreciated however, that in practice, distributor  210  and its downline may be part of a much larger distributor network.  
         [0033]    A top-line distributor&#39;s TV, which is used to compute the Phase I commission, comprises the sum of (1) the distributor&#39;s PV, and (2) the distributor&#39;s front line volume (“LV”). As used herein, the LV is defined to include the PV of every distributor that is personally sponsored by the top-line distributor, or in other words, those distributors found in the top-line distributor&#39;s first level. Additionally, when a personally sponsored distributor is unqualified, i.e., has a PV of less than 100, then the LV is also defined to include the PV of every distributor that falls downline from that unqualified front line distributor, down to and including the PV of the first qualified position that is encountered in that downline.  
         [0034]    For example, the LV of distributor  210  of FIG. 2 comprises the sum of the PV of every member on the distributor&#39;s front line  216 , which includes the PV of distributor  212  and the PV of distributor  214 . Because distributor  214  is unqualified, having a PV of only 55, the LV of distributor  210  also includes the PV of every distributor that is downline from unqualified distributor  214 , down to and including the first qualified downline distributor that is encountered. In this example, distributor  218  is the first encountered downline distributor that is qualified, having a PV of 150. Accordingly, the LV of distributor  210  includes the PV of distributor  212  (PV=1,100), the PV of distributor  214  (PV=55), and the PV of distributor  218  (PV=150), for a total LV of 1,305.  
         [0035]    The TV of distributor  210  is finally computed by summing the PV of distributor  210  (PV=180) with the LV of distributor  210  (LV=1,305) for a total TV of 1,485. Once the distributor&#39;s TV has been determined, it is possible to calculate the distributor&#39;s Phase I commission according to the teachings of the present invention. In one presently preferred embodiment, shown in FIG. 3, the Phase I commission is computed according to table  300  in which a distributor qualifies for a monthly commission when the distributor&#39;s TV reaches or exceeds designated minimum amounts.  
         [0036]    According to this presently preferred embodiment, the distributor&#39;s Phase I commission comprises a percentage of the PVs that are included in the calculation of the distributor&#39;s LV. The percentage that is paid out to the top-line distributor for each team member&#39;s PV is a function of both the top-line distributor&#39;s TV and the total amount of rebates and commissions that have already been paid out to team members. Team members are front-line distributors that contribute PV to the calculation of the top-line distributor&#39;s LV. For example, with reference to FIG. 2, distributors  212 ,  214 , and  218  are classified as team members because their PV was included in the calculation of the LV of distributor  210 . According to another embodiment, a distributor may also receive a commission on all distributors within the top-line distributor&#39;s first generation, as defined and described below.  
         [0037]    As shown in FIG. 3, there are four different Phase I commission levels  310 ,  320 ,  330 , and  340 , each of which can be obtained by satisfying the minimum team volume requirements  350  and minimum PV requirements  360 . For example, if a distributor has a PV of at least 100 and a TV of at least 100 but less than 350, then the distributor is qualified to receive a first-level, Phase I commission  310  comprising a monetary equivalent of (5%-X%) the PV of each team member, wherein X% comprises the rebate percentage plus the commission percentages, if any, that have already been paid to qualified team members. For example, if a team member has a PV of 100, thereby qualifying for a 5% personal rebate according to table  100  of FIG. 1, then the Phase I commission payable to the top-line distributor will be a monetary equivalent of (5%-5%) of 100, or $0.00. However, according to this present example, since the team member has already received a personal rebate of 5%, then the distributor will qualify to receive a “courtesy bonus” comprising a monetary equivalent of 5% of the PV of that team member. Additional qualifications for entitlement to the courtesy bonus are set forth below.  
         [0038]    If a distributor has a PV of at least 100 and a TV of at least 350 but less than 700, the distributor is qualified to receive a second-level, Phase I commission  320  comprising a monetary equivalent of (10%-X%) of the PV of each team member. Additionally, if a team member has already received a personal rebate of 10%, then the distributor qualifies for a monetary equivalent of 5% courtesy bonus of the PV of that team member.  
         [0039]    If a distributor has a PV of at least 100 and a TV of at least 700 but less than 1,000, the distributor is qualified to receive a third-level, Phase I commission  330  comprising a monetary equivalent of (15%-X%) of the PV of each team member. Additionally, if a team member has already received a personal rebate of 15%, then the distributor qualifies for a courtesy bonus comprising a monetary equivalent of 5% of the PV of that team member.  
         [0040]    Finally, if a distributor has a PV of at least 150 and a TV of at least 1,000 then the distributor is qualified to receive a fourth-level, Phase I commission  340  comprising a monetary equivalent of (20%-X%) of the PV of each team member. If a team member has already received a personal rebate of at least 20%, then the distributor qualifies for a courtesy bonus comprising a monetary equivalent of 5% of the PV of that team member.  
         [0041]    In a presently preferred embodiment, a distributor only qualifies for the courtesy bonuses mentioned above when the distributor is being paid on front-line distributors. In other words, distributors are not eligible to receive the courtesy bonus based on the PV of distributors who are deeper in the genealogy than the front line.  
         [0042]    It should also be pointed out that the Phase I commissions, as they have been described, are mutually exclusive. In other words, a TV of 1,000 would theoretically qualify a distributor for every level of Phase I commissions  310 ,  320 ,  330 , and  340 ; however, the distributor can only receive the commissions from a single qualification level, which will be the highest level of commissions that a distributor is qualified to receive.  
         [0043]    To further illustrate how Phase I commissions are computed, the Phase I commissions for the top-line distributor  210  of FIG. 2 will now be computed. Initially, the TV for distributor  210  must be known in order to identify the level of commissions that the distributor  210  is qualified to receive. As noted previously, the TV of distributor  210  is 1,485. A TV of 1,485 is greater than 1,000, thereby qualifying distributor  210  for a fourth-level, Phase I commission  340 . Accordingly, the total Phase I commission for distributor  210  comprises a monetary equivalent of the sum of (20%-X%) of the PV of each team member and a courtesy bonus of 5% of the PV of each front line team member that has already received a personal rebate of at least 20%. Team members include distributor  212 , distributor  214 , and distributor  218 . To determine the personal rebate for each of the team members, reference is made to table  100  of FIG. 1. In particular, distributor  212 , having a PV of 1,100, qualifies for a 20% personal rebate; distributor  214 , having a PV of only 55, does not qualify for a personal rebate; and distributor  218 , having a PV of 150, qualifies for a 5% personal rebate.  
         [0044]    Accordingly, the Phase I commission for distributor  210 , in monetary equivalence, comprises the sum of (20%-20%) of the PV of distributor  212  (PV=1,100), or $0.00; (20%-0%) of the PV of distributor  214  ( 55 ), or $11.00; (20%-5%) of the PV of distributor  218  (PV=150), or $22.50; and a 5% courtesy bonus of the PV of front line distributor  212  (PV=1,100), or $55.00; thereby resulting in a grand total Phase I commission of $85.50.  
         [0045]    As noted above, a distributor may also receive a commission on the PV of every distributor that is included in the distributor&#39;s “first generation.” The distributor&#39;s first generation includes: (1) all distributors on the top-line distributor&#39;s first line and (2) when a first line distributor is not “team qualified,” e.g., does not have a TV of at least 1,000, every downline distributor below any front-line distributor that is not team qualified, down to and including the first team qualified distributor encountered in that downline. A generation is delimited only by team qualified distributors, such that a generation includes all distributors located between the top-line distributor down to and including the first team qualified distributors encountered in each downline of the top-line distributor.  
         [0046]    For example, according to this embodiment, top-line distributor  210  of FIG. 2 has a first generation that includes every downline distributor down to and including the first team qualified distributor encountered in each downline. In the present embodiment, distributor  210  has two downlines. The first comprises distributor  212  which is team qualified with a PV and TV of 1,100. The second downline comprises distributors  214 ,  218 ,  220 ,  222 , and  224 . To determine which of these distributors are included in the first generation, it is necessary to find the first team qualified distributor encountered in the downline.  
         [0047]    Using the rules for computing TV discussed above, it is determined that distributor  214  has a TV that includes (1) the PV of distributor  214  (PV=55) and (2) the PV of every personally sponsored distributor of distributor  214 , which includes distributor  218  (PV=150), for a total TV of 205, and is therefore inadequate for team qualification. Next, distributor  218  is found to have a TV that includes (1) the PV of distributor  218  (PV=150) and (2) the PV of personally sponsored distributor  220  (PV=40). Because distributor  220  is not personally qualified, e.g., does not have a PV of at least 100, the TV of distributor  218  also includes (3) the PV of downline distributor  222  (PV=160), resulting in a total TV of  350 , which is inadequate for team qualification. Next, the TV of distributor  220  is computed, which includes (1) the PV of distributor  220  (PV=40) and (2) the PV of distributor  222  (PV=160), for a total TV of 200, which is inadequate for team qualification. Finally, the TV of distributor  222  is determined, which includes: (1) the PV of distributor  222  (PV=160) and (2) the PV of distributor  224  (PV=1,300), for a total TV of 1,460, which is adequate for team qualification. Hence, distributor  222  is the first team qualified distributor in the downline of first level distributor  214 . Accordingly, the first generation of distributor  210  includes distributors  212 ,  214 ,  218 ,  220 , and  222 .  
         [0048]    Phase I commissions will now be computed for top-line distributor  210  according to this embodiment in which commissions are paid to all distributors within the top-line distributor&#39;s first generation, as described above. According to this embodiment, distributor  210  will receive the commissions described above, totaling $85.50, plus additional commissions on the PV of distributors  220  and  222  because they are part of the first generation of distributor  210 , as described above.  
         [0049]    To determine how much of a commission distributor  210  will receive on the PV of distributor  220  and  222 , it is necessary to determine the percentage of rebates and commissions paid out on the PV of distributors  220  and  222 . To do this, it must first be considered that distributor  218  has a PV of 150 and TV of 350, as noted above, and is therefore qualified to receive a second-level commission  320  comprising a monetary equivalent of (10%-X) of the PV of distributor  220 . Distributor  220  only has a PV of 40, and therefore is not qualified for a personal rebate, such that distributor  218  will receive a 10% payout on the PV of distributor  220 . The next upline distributor, distributor  214  has a PV of only 55, and is therefore not qualified to receive a commission on distributor  220 , Accordingly, the total percentage that is already paid out on the PV of distributor  220  is 10%. Therefore, distributor  210  will receive a commission comprising a monetary equivalent of (20%-10%) of the PV of distributor  220  (PV=40), which equals $4.00.  
         [0050]    Next, it is necessary to determine the percentage of rebates and commissions that have already been paid out on the PV of distributor  222 . Distributor  222  has a PV of 160 and is therefore qualified for a personal rebate of 5%. Distributors  214  and  220  are not qualified to receive a commission on the PV of distributor  222  because they each have a PV of less than 100, as noted above. Distributor  218 , however, does qualify for a second-level rebate  320 , having a TV of at least 350 and a PV of at least 150, and is therefore qualified for a commission of 10% minus the 5% rebate already paid to distributor  222 . Accordingly, a total of 10% has been paid out on the PV of distributor  222 . Therefore, distributor  210  is qualified to receive a commission comprising a monetary equivalent of (20%-10%) of the PV of distributor  222  (PV=160), or $16.00. Accordingly, the total Phase I commissions payable to distributor  210  on all first generation members comprises $85.50+$4.00+$16.00=$105.50.  
         [0051]    It will be appreciated by one of skill in the art that the minimum team volumes to qualify for the various levels of Phase I commissions may be set at a variety of levels according to the desires and economics of the company implementing the plan of the present invention. Additionally, the percentages of PV of the team members utilized in calculating the Phase I commissions may also be varied according to the needs of the company implementing this plan, although it is generally preferred that a greater percentage be paid out for team members having a lower PV than for team members with a higher PV. In this embodiment, it is preferred that the total payout of Phase I commissions and rebates based on the PV of a single position not exceed 20 percent (excluding courtesy bonuses). In other words, the present plan permits a number of upline distributors to receive a Phase I commission based on the PV of a single downline distributor. The combination of these Phase I commissions plus the rebate received by the downline distributor should preferably not exceed 20 percent, excluding courtesy bonuses.  
         [0052]    One feature of the present invention that is an advantage over the prior art is that the distributor is not penalized for the individual successes of the downline distributors. More particularly, there is no breakaway when a frontline or downline distributor becomes so successful so as to independently qualify for personal rebates, commissions, or other bonuses as described herein. Rather, the distributor&#39;s distribution genealogy remains intact, such that the frontline and downline distributors remain within the distributor&#39;s distribution genealogy so as to enable the distributor to receive the rebates and commissions the distributor is entitled to.  
       PHASE II COMPENSATION  
       [0053]    In accordance with the teachings of the present invention, Phase II compensation of the present invention generally includes an override commission that is paid to a distributor that satisfies a minimum TV requirement and a minimum leg requirement. According to one presently preferred embodiment of the invention, as illustrated in FIG. 4, there are nine override commission levels for which a distributor can qualify that are set forth in table  400 , namely, Manager  410 , Senior Manager  420 , Executive Manager  430 , Director  440 , Senior Director  450 , Executive Director  460 , Vice President  470 , Senior Vice President  480 , and Executive Vice President  490 . All of the override commission levels  410 - 490  are associated with corresponding requirements  492  and benefits  494 .  
         [0054]    The PV requirement for Phase II override commissions requires that the distributor have PV of at least 150. It should be appreciated that this requirement may be set at a variety of levels, according to the desires of those implementing this invention. The TV requirement for the Phase II override commission requires that the distributor have a TV of at least 1,000. A distributor&#39;s TV is computed the same way for Phase II as it is for Phase  1 , as described above in reference to FIGS.  2 - 3 . It should be appreciated, however, that the TV requirement can vary in amount or be eliminated entirely. For example, in one embodiment, Manager  410  does not have a minimum TV requirement.  
         [0055]    The leg requirement of the Phase II override commission is generally described in terms of a required minimum number of legs with a minimum total PV requirement for each such leg. A leg is generally defined as the top-line distributor&#39;s personally sponsored distributors, in combination with the descendants (or downline distributors) of that position. For example, in FIG. 2 distributor  210  has two legs, a first leg comprising member  212  and a second leg that comprises distributor  214  in combination with distributors  218 ,  220 ,  222 , and  224 . A leg may comprise any number of descendent positions or alternatively, a leg may be limited in terms of levels or generations from the top-line distributor. According to a presently preferred embodiment, a leg includes all existing distributor descendents within the downline of a personally sponsored distributor. “Phase II generations,” as that term is used herein, refers to a “team qualified generation” and is determined according to Phase II compression rules, which will be described below.  
         [0056]    The leg requirements to qualify for the various Phase II override commissions of the present invention are quantified in FIG. 4. These requirements are defined in terms of Organization Volume, or OV, requirements. The Organization Volume comprises the total leg volume of a single leg or, in other words, the total PV produced in a single leg of the top-line distributors distribution genealogy, as defined above. OV is thus computed by adding together the PV of every member within a given leg. For example, in FIG. 2, a first leg comprising distributor  212  has an OV of 1,100, which is the PV of distributor  212 , the only distributor in the first leg. A second leg, comprising distributors  214 ,  218 ,  222 , and  224 , has an OV of 1,705, which is the sum total of the PV of every member in the second leg (e.g., 55+150+40+160+1,300).  
         [0057]    As illustrated in FIG. 4, a top-line distributor having at least one leg with an OV of at least 1,000 qualifies for the Senior Manager override commission. A distributor having at least one leg with an OV of at least 1,000, and a second leg with an OV of at least 3,000 qualifies for the Executive Manager override commission. A distributor having at least one leg with an OV of at least 1,000, a second leg with an OV of at least 3,000, and a third leg with an OV of at least 5,000 qualifies for the Director override commission. A distributor having at least one leg with an OV of at least 2,000, one leg with an OV of at least 5,000, and a leg with an OV of at least 10,000 qualifies for the Senior Director override bonus. A distributor having at least one leg with an OV of at least 5,000, one leg with an OV of at least 10,000, and a leg with an OV of at least 15,000 qualifies for the Executive Director override commission.  
         [0058]    A distributor having at least three legs, each with an OV of at least 15,000 qualifies for the Vice President override commission. In a presently preferred embodiment of the invention, a distributor can alternatively qualify for the Vice President override commission by having at least three legs, each with an OV of at least 10,000, and a personal organizational volume (“POV”) of at least 75,000, where the POV is computed by adding together the PV of every member of the distributor&#39;s distribution genealogy. Notably, in this preferred embodiment, POV includes the top-line distributor&#39;s own PV.  
         [0059]    A distributor qualifies for the Senior Vice President override commission by having at least three legs, with each leg having an OV of at least 20,000, or alternatively by having at least three legs, with each leg having an OV of at least 15,000, and a POV of at least 100,000. Finally, a distributor qualifies for the Executive Vice President override commission by having at least three legs, with each leg having an OV of at least 30,000, or alternatively, by having at least three legs, with each leg having an OV of 20,000, and a POV of at least 200,000.  
         [0060]    It will be appreciated that the magnitude of the OV and POV required to achieve the various levels of Phase II override commissions may be varied according to the needs of the company implementing this plan. Various qualification requirements may be imposed with greater benefits available as higher requirements are met. The specific numbers provided herein are merely exemplary and not intended to limit the scope of the present invention.  
         [0061]    According to the preferred embodiment, the invention allows horizontal compression to be used to satisfy specific leg requirements. According to one embodiment of horizontal compression of the present invention, a distributor&#39;s largest leg is applied to the largest leg requirement, the distributors second largest leg is applied to the second largest requirement, and any remaining legs are horizontally compressed, or summed together, and applied to the last leg requirement. For example, if a distributor has (1) one leg comprising 16,000 OV, (2) one leg comprising 12,000 OV, and (3) four legs that each comprise 2,000 OV, the distributor qualifies for the leadership rank of Executive Director  460 , assuming the distributor also has a PV of at least 150 and a TV of at least 1,000. The distributor qualifies for the rank of Executive Director  460  because its 16,000 OV leg satisfies the 15,000 leg OV requirement, its 12,000 OV leg satisfies the 10,000 leg OV requirement, and its remaining four 2,000 OV legs are horizontally compressed to equate 8,000 OV, thereby satisfying the 5,000 leg OV requirement.  
         [0062]    To compute Phase II override commissions, it is first necessary to determine the Phase II generations for the top-line distributor, which are determined by performing compression of the distributor&#39;s genealogy. Generations under Phase II compensation are determined by analyzing each distributor&#39;s TV and determining, as a function of that TV, whether a generation break occurs between the distributor and the distributor&#39;s front line. If the TV of a distributor is less than 1,000, the distributor is not team qualified and no generation break occurs between that distributor and its front line. If the TV of a distributor is greater than or equal to 1,000 and the distributor has a PV of at least 150, the distributor is said to be team qualified and there is a generation break between the distributor and its front line. The TV of a distributor is determined, as discussed above, by summing the distributor&#39;s PV and the distributor&#39;s LV.  
         [0063]    This analysis is best explained by reference to the sample distributor network illustrated in FIG. 5. At the bottom of the distributor network  500  in FIG. 5 is distributor  568 . Because distributor  568  has sponsored no other distributors into the organization, it has no downline and therefore has no possibility of Phase II compression. Thus, the Phase II compression analysis begins with the lowest distributor to have a front line. In FIG. 5, this is distributor  566 .  
         [0064]    The first step in the Phase II compression analysis with respect to distributor  566  is to determine the TV of distributor  566  to ascertain whether distributor  566  is team qualified. This is done by adding the PV of distributor  566  to the LV of distributor  566 . In this example, this calculation is simple because the LV of distributor  566  comprises the PV of only one distributor—distributor  568 , with a PV of 3,000; thus, there are no other distributors in that generation to consider when calculating the TV of distributor  566 . Hence, the TV of distributor  566  is the sum of the PV of distributor  566  (2,000) and the LV of distributor  566  (3,000), or 5,000.  
         [0065]    Because 5,000 is above the threshold qualification level for team qualification (1,000) and because distributor  566  has 150 PV, distributor  566  is team qualified. Consequently, a generation break  570  occurs directly beneath distributor  566 , thereby placing distributor  566  in a different generation from its front line (distributor  568 ).  
         [0066]    Moving up the distribution network, the Phase II compression analysis can now be performed for distributor  560  by calculating the TV of distributor  560 . The front line of distributor  560  includes only a single distributor, distributor  566 . Having previously performed the Phase II compression analysis for distributor  566 , it is known that a generation break  570  exists directly beneath distributor  566 ; hence, the only distributor in the generation that includes distributor  566  is distributor  566  itself. Adding the PV of distributor  566  (PV=2,000) and the PV of distributor  560  (PV=200) yields a TV for distributor  560  of 2,200, which is sufficient to render distributor  560  team qualified. Thus, a generation break  572  occurs beneath distributor  560 , separating it from its downline distributor  566 .  
         [0067]    Continuing up the distributor network, the TV for distributor  550  may now be ascertained. This is done by first identifying the distributors in the front line of distributor  550 . These include distributor  560 , distributor  562 , and distributor  564 . The TV of distributor  550  is now determined by summing the PV of distributor  550  (PV=200) and the LV of distributor  550 , which comprises the sum of the PV of distributor  560  (PV=200), distributor  562  (PV=200), and distributor  564  (PV=200), for a total TV of 800. This is below the amount necessary to team qualify distributor  550 ; thus, no generation break occurs between distributor  550  and its front line (distributors  560 ,  562 , and  564 ).  
         [0068]    Proceeding up the left hand side of the distribution network chart of FIG. 5, the Phase II compression analysis is now done for distributor  520 . The front line of distributor  520  is identified, and includes distributor  550 , distributor  552 , and distributor  554 . Because each of the front line distributors  550 ,  552 , and  554  have a PV greater than 100, they are each personally qualified and no compression is required to compute the LV of distributor  520 , which comprises the sum of the PV of distributor  550  (PV=200), distributor  552  (PV=200), and distributor  554  (PV=200), for a total LV of 600. Summing the PV of distributor  520  (PV=200) with the LV of distributor  520  (LV=600) yields a TV for distributor  520  of 800. This is insufficient to team qualify distributor  520 ; thus, no generation break occurs between distributor  520  and its front line (distributors  550 ,  552 , and  554 ).  
         [0069]    Continuing up the distribution network, it is now possible to compute the TV for distributor  510 . As shown, distributor  510  has a front line that includes distributor  520  (PV=200), distributor  530  (PV=5,000), and distributor  540  (PV=2,500), for a LV of (200+5,000+2,500=7,700). Summing the PV of distributor  510  (PV=180) with the LV of distributor  510  (LV=7,700) yields 7,880, well above the threshold to team qualify distributor  510 ; thus, a generation break  574  occurs between distributor  510  and its front line (distributors  520 ,  530  and  540 ).  
         [0070]    It should be noted that it is not necessary to conduct compression analysis for distributors  562 ,  564 ,  552 ,  554 ,  530 , or  540 , as none of these distributors has any downline. Consequently, like distributor  568 , they have no possibility of Phase II compression. The generation calculation may be calculated working up the distribution organization as detailed in this example, or alternatively, by working down the organization, as described above in reference to FIG. 2, wherein it was shown how a generation includes the PV of all distributors located between the top-line distributor down to and including the first team qualified distributors encountered in each downline of the top-line distributor.  
         [0071]    Once the Phase II generations have been identified according to the compression described above, it is possible to compute the override commissions for each leadership rank according to table  400  of FIG. 4. As shown in FIG. 4, each of the leadership ranks qualify for a “Phase I 20%” bonus for generation  1 , which comprises all Phase I payments as previously described. Accordingly, the rank of Manager  400  is only qualified for Phase I rebates and commissions described above. A Senior Manager  420  qualifies for the override commission of a Manager  400  and an additional override commission comprising the monetary equivalent of 5% of the PV of every member in generation  2 . An Executive Manager  430  qualifies for the override commission of a Senior Manager  420  plus an override commission comprising the monetary equivalent of 5% of the PV of every member in generation  3 . A Director  440  qualifies for the override commission of an Executive Manger  430  plus an override commission comprising the monetary equivalent of 5% of the PV of every member in generation  4 . A Senior Director  450  qualifies for the override commission of a Director  440  plus an override commission comprising the monetary equivalent of 5% of the PV of every member in generation  5 . An Executive Director  460  qualifies for the override commission of a Senior Director  450  plus an override commission comprising the monetary equivalent of 5% of the PV of every member in generation  6 . A Vice President  470  qualifies for the override commission of an Executive Director  460  plus an override commission comprising the monetary equivalent of 3% of the PV of every member in generation  7 . A Senior Vice President  480  qualifies for the override commission of a Vice President  470  plus an override commission comprising the monetary equivalent of 3% of the PV of every member in generation  8 . Finally, an Executive Vice President  490  qualifies for the override commission of a Senior Vice President  480  plus an override commission comprising the monetary equivalent of 3% of the PV of every member in generation  9 .  
         [0072]    Returning now to FIG. 5, the computation of the Phase II override commission for distributor  510  is explained. Initially, the leadership rank for which distributor  510  has qualified must be determined so that the corresponding benefits  494  distributor  510  is qualified to receive are known. As shown, top-line distributor  510  has three legs, one leg comprising only member  540  has an OV of 2,500, a second leg comprising only member  530  has an OV of 5,000, and a third leg comprising members  520 ,  550 ,  552 ,  554 ,  560 ,  562 ,  564 ,  566 , and  568  has an OV of 6,400, which is the sum of the PV of every member of the leg. Accordingly, distributor  510  has three legs, having OVs of 2,500, 5,000, and 6,400, thereby qualifying for the Phase II rank and override bonus of Director  440  which requires that the distributor have a PV of 150, a TV of 1,000, one leg with an OV of at least 1,000, a second leg with an OV of at least 3,000, and a third leg with an OV of at least 5,000.  
         [0073]    Now, using table  400  from FIG. 4, the distributor&#39;s Director bonus can be calculated, which is the monetary equivalent of the sum of 5% of the PV of all distributors in its second generation (distributor  566 ) and 5% of the PV of all distributors in its third generation (distributor  568 ), or (0.05×2,000)+(0.05×3,000) $250.00. Although distributor  510  as a Director is entitled to also receive a 5% bonus for the PV of any distributors in its fourth generation, in this example there are no fourth generation distributors.  
         [0074]    According to this presently preferred embodiment of the Phase II compensation of the present invention, a Senior Director qualifies for an additional bonus of $200 for having a POV of at least 25,000. An Executive Director qualifies for an additional bonus of $300 for having a POV of at least 35,000. A Vice President qualifies for an additional bonus of $400 for having a POV of at least 50,000. A Senior Vice President qualifies for an additional bonus of $500 for having a POV of at least 90,000. An Executive Vice President qualifies for an additional bonus of $750 for having a POV of at least 110,000.  
         [0075]    Although specific dollar amounts have been given regarding POV requirements and additional bonus amounts, it should be appreciated that different dollar amounts can be used. The additional bonus can also include other perks, such as airfare, vacation packages, dinner vouchers, entertainment vouchers, etc. This bonus may also be accrued for use at a later time for company-sponsored events or other purposes approved by the company.  
         [0076]    According to another embodiment, the additional bonus comprises money that must be spent on a car purchase or a car lease payment. To ensure the additional bonus is used as required, the distributor may be required to submit documentation of a car purchase or lease.  
         [0077]    According to yet another embodiment, distributors that qualify for a leadership rank may also receive shares in a global bonus pool. The global bonus pool comprises a percentage of the total PV of all distributors in the company&#39;s entire sales organization. In one presently preferred embodiment of the invention, the global bonus pool comprises a monetary equivalent of 2% of the PV of all distributors of the organization. Thus, a share in the global bonus pool entitles the owner of that share to a portion of the pool equal to the number of shares earned by the distributor divided by the total shares in the global bonus pool held by all distributors.  
         [0078]    According to one implementation of the present embodiment, an Executive Director  460  is granted one share in the global bonus pool, a Vice President  470  is granted two shares in the global bonus pool, a Senior Vice President  480  is granted three shares in the global bonus pool, and an Executive Vice President  490  is granted one share in the global bonus pool. When paying bonuses out of the global bonus pool, one dollar is preferably paid out for each point of PV in the pool.  
       PHASE III COMPENSATION  
       [0079]    The compensation plan of the present invention also preferably includes a component of what is referred to herein as Phase III compensation. In accordance with the teachings of the present invention, there are four general Phase III compensation levels, which are referred to herein as “clubs.” As illustrated in table  700  of FIG. 7, these Phase III clubs include the Royal Executive Club  710 , the Royal Sapphire Club  720 , the Royal Ruby Club  730 , and the Royal Diamond Club  740 . The compensation levels along with the corresponding requirements  750  and benefits  760  are also shown in table  700  of FIG. 7.  
         [0080]    In a presently preferred embodiment of the invention, a distributor must satisfy one of two requirements to qualify for the Royal Executive Club  710  in conjunction with having 150 PV and 1000 TV. The first requirement is to have three legs, with each leg having an OV of at least 40,000. The second requirement is to have a POV of at least 250,000 and three legs each having an OV of at least 25,000. It should be appreciated, however, that other requirements can also be imposed, such as, for example, requiring compliance with either of the first two requirements for a period of three consecutive months.  
         [0081]    A distributor that is qualified for the Royal Executive Club is entitled to four shares of the Global Bonus Pool. The distributor is also entitled to create one additional performance team (“APT”) position. An APT position is a position on the top-line distributor&#39;s front line that is occupied by the top-line distributor. In one embodiment, the APT position also includes an option for the distributor to transfer up to three existing legs beneath the newly created APT position. The APT position is particularly beneficial for a distributor that chooses to occupy the APT position by itself because the distributor can then receive double Phase II and Phase III override commissions on certain members of the distributor&#39;s genealogy that descend from the APT position. The benefits associated with an APT position and the methods for establishing an APT position will be more fully explained in reference to FIGS.  7 - 8 .  
         [0082]    [0082]FIG. 7 illustrates a sample genealogy  800 A in which a distributor  810  has seven legs  820 ,  830 ,  840 ,  850 ,  860 ,  870 , and  880 . In this example, the POV of distributor  810  is 257,000, which is calculated by summing the OVs of each of the legs of distributor  810  (50,000+160,000+25,000+10,000+3,000+5,000+4,000). Because the POV of distributor  810  exceeds 250,000 and three of those legs have an OV of at least 25,000, distributor  810  is qualified for the Royal Executive Club  710 , and hence is entitled to an APT position.  
         [0083]    In FIG. 7, APT position  890  is drawn in broken lines, indicating that the position is available to be filled, along with these potential transfer leg positions  892 ,  894 , and  896 . In this example, the distributor  810  fills the APT position  890  with itself, as shown in FIG. 8. Also shown in FIG. 8, the distributor  810  has transferred two existing legs  860  and  880  to occupy two of the transfer leg positions  892  and  894 . The total leg OV between legs  860  and  880  is 7,000 (e.g. 3,000+4,000). Distributor  810  may also build other positions on the front line of APT  890  by sponsoring additional distributors into the company.  
         [0084]    According to the new genealogy  800 B illustrated in FIG. 8, the distributor  810  is now eligible to receive two sets of Phase II override commissions on legs  870  and  880 , one from the distributor&#39;s original position  892  and one from the APT position  890 . Accordingly, it is beneficial for the distributor  810  to fill the APT descendent leg positions  892 ,  894 , and  896  with those existing legs that have the highest OV, thereby maximizing the OV on which distributor  810  will earn double bonus commissions.  
         [0085]    According to one embodiment of the present invention, the distributor can only fill the APT transfer leg positions  892 ,  894 ,  896  with legs that have a combined leg OV of 10,000 or less. According to this embodiment, APT transfer leg position  896  cannot be filled with leg  870  because the result would be a total leg OV of 12,000 (i.e., 3,000+4,000+5,000). According to another embodiment, the distributor can transfer any number of legs under the APT position.  
         [0086]    According to yet another embodiment of Phase III compensation, the distributor is only eligible for an APT position if the distributor can qualify for the APT position without considering the OV of the legs it transfers beneath the APT position  890 . In accordance with this alternative embodiment of the invention, distributor  810  in FIG. 7 cannot fill any of the APT transfer legs  892 ,  894 , or  896  with any leg having an OV of $7,000 or more. Thus, for example, distributor  810  would be precluded from transferring leg  850  below the APT position  890  because that would reduce the distributor&#39;s POV (excluding the OV of the APT position) to only 247,000 (i.e., 50,000+160,000+25,000+3,000+5,000+4,000). With a POV of only 247,000, the distributor would fail to qualify for the Royal Executive Club and would not be entitled to the corresponding APT bonus position.  
         [0087]    It should also be appreciated that there are various limits and requirements that can be placed on an APT position. The foregoing embodiments are only given as a matter of illustration and should not be construed as limiting the scope of the present invention, Once an APT position is established on a distributor&#39;s genealogy, it is possible for the occupant of the APT position to independently qualify for an APT position of its own by satisfying the designated requirements of a corresponding Phase III compensation level.  
         [0088]    To qualify for the Royal Sapphire Club  720  a distributor must satisfy one of two requirements in conjunction with having 150 PV and 1,000 TV. The first requirement is to have at least three legs, with each leg having an OV of at least 50,000. The second, alternative, requirement is that the distributor must have a POV of at least 300,000 and at least three legs that each leg have an OV of at least 30,000. When a distributor qualifies for the Royal Sapphire Club  720 , the distributor is eligible to maintain its APT position, as described above, an override commission comprising the monetary equivalent of 1% of the PV of every member in generation  10  of the Phase II compression, and four shares in the global bonus pool.  
         [0089]    To qualify for the Royal Ruby Club  730 , a distributor must have 150 PV, 1,000 TV, and one of either three legs, each having an OV of at least 100,000, or, alternatively, a POV of 500,000 and three legs, each of which has an OV of at least 50,000. When a distributor qualifies for the Royal Ruby Club  730 , the distributor is eligible to maintain its APT position, an override commission comprising the monetary equivalent of 1% of the PV of every member in generation  10  and generation  11  of the distributor&#39;s Phase II genealogy, and four shares in the global bonus pool.  
         [0090]    To qualify for the Royal Diamond Club  740 , a distributor must have either three legs, with each leg having an OV of at least 250,000, or, alternatively, the distributor must have a POV of 1,000,000 and three legs, with each leg having an OV of at least 100,000. When a distributor qualifies for the Royal Diamond Club  740 , the distributor is eligible to maintain its APT position, an override bonus comprising the monetary equivalent of 1% of the PV of every member in the distributor&#39;s Phase II generations  10 ,  11 , and  12 , and four shares in the global bonus pool.  
         [0091]    In an alternative embodiment of Phase III compensation, the alternative requirements for club membership that require three legs each having a predetermined OV and a POV of a specified amount is modified. In this alternative embodiment, the POV requirements must be reached exclusive of the TV of the three legs used in meeting the other portion of the club qualification requirement. Thus, for example, to qualify for Royal Executive Club  710 , illustrated in FIG. 7, under the alternative requirements of three legs each having an OV of at least 25,000 and a POV of at least 250,000, this requirement would be interpreted as requiring that the POV component of the requirement be satisfied independently of the three legs used to satisfy the other component of the requirement.  
         [0092]    According to another embodiment, the leg requirements for any of the aforementioned Phase III club levels can be satisfied by using horizontal compression, as described above in reference to FIG. 4. However, according to one presently preferred embodiment, if an APT position is required to be used during horizontal compression to qualify a distributor for a Phase III club level because the distributor would not otherwise qualify for a Phase III club level, then that distributor is not eligible to receive the benefit of the APT position for other than qualification to the corresponding club level. In particular, an APT position that is required to be used during horizontal compression to maintain a distributor&#39;s qualification for a particular club level is not eligible to receive any earnings.  
         [0093]    Qualifying for any of the aforementioned Phase III compensation levels can also be contingent on a distributor satisfying the designated requirements over a period of time, such as three or six consecutive months. According to other embodiments, a distributor that qualifies for membership in a phase III leadership club will receive a one-year membership in the designated club. For example, if a distributor qualifies for the Royal Executive Club  710  by satisfying the corresponding requirements, then the distributor will be granted a one-year membership in the Royal Executive Club  710 , entitling the distributor to all of the benefits that are associated with the Royal Executive Club  710  for the one-year membership period.  
         [0094]    According to another embodiment, however, a distributor is required to continue satisfying all of the requirements of a leadership club in order to receive all of the benefits of the club. For example, even with membership to the Royal Executive Club  710 , a distributor must satisfy the corresponding Royal Executive Club requirements  750  each month in order to receive and maintain an APT.  
         [0095]    According to yet another embodiment, entitlement to the 1% override bonuses and shares in the Global Bonus Pool is contingent on satisfying corresponding club requirements on a discrete monthly basis (i.e., the corresponding club requirements must be met for the month in which the override bonus and Global Bonus Pool shares are earned), while entitlement to official recognition and APT positions is contingent on having satisfied their corresponding requirements over a period of three consecutive months.  
         [0096]    Qualification to a designated Phase III compensation level can also be predicated upon a sliding scale. To illustrate this point, an example will be given in which a distributor receives a one-year membership for satisfying the requirements of a designated compensation level for three consecutive months, as required. According to this example, the distributor qualifies for club membership by satisfying the designated requirements from month one to month three, such that the membership will expire in month fifteen. However, if the distributor also satisfies the designated requirements in months four and five, then the effective starting date of the membership will slide to month five, such that the membership will not expire until month seventeen.  
         [0097]    Although numerous examples have been given, in which great detail is provided, it should be appreciated that the examples, as they have been provided, should be construed as illustrative and not limiting of the invention. In particular, the present invention can be embodied in other specific forms without departing from its spirit or essential characteristics. For example, the names, requirements and benefits associated with each of the three phases of the network marketing compensation system can vary. In particular, it should be appreciated that each of the aforementioned Phase III compensation levels can also be configured to include special recognition and other perks.  
         [0098]    It should also be appreciated that the present invention may be embodied in other forms without departing from its spirit or essential characteristics. As properly understood, the preceding description of specific embodiments is illustrative only and in no way restrictive. The scope of the invention is, therefore, indicated by the appended claims as follows.

Technology Classification (CPC): 6