More Great News About Sales Director Compensation!

Great news! In addition to the exciting enhancements you learned about with your Dec. 27 Directors Memo, Id like to announce three additional earnings opportunities for Sales Directors!

1. Effective Dec. 31, 2004, through June 30, 2006, a Senior Sales Director can earn $500 bonuses when her new offspring Sales Director achieves any one or more of the following:
   • On the Write Track
   • Fabulous 50s
   • Honors Society
     
     
   The Senior Sales Director MUST have a minimum unit size of 50 at the time her offspring Sales Director qualifies for each challenge to receive the bonus. (If a Senior Sales Director debuts one or more additional offspring Sales Directors 1 3 months prior to her offspring Sales Director reaching one of these achievements, her unit must have at least 30 unit members at the time the offspring Sales Director qualifies to receive the bonus.)
   
   
2. The new, unlimited Personal Team-Building Bonus of $100 for each new personal team member will begin Jan. 1, 2005, instead of April 1, 2005, as originally announced. (This is in addition to the current Unit Development Bonus which will remain in place through March 31, 2005.)
   
   Accordingly, effective January 1, 2005, Section I.B.2 (SALES DIRECTOR BONUS SCHEDULE) of the Schedule of Commissions and Bonuses to your Independent Sales Director Agreement will be revised to include:

3. Effective April 1, 2005, the current Unit Development Bonus will be replaced in its entirety with a new $500 Unit Development Bonus that rewards Sales Directors for five or more new qualified unit members (i.e., team members added to the Sales Directors sales unit). This is in addition to the unlimited $100 Personal Team-Building Bonus. Heres how it works:
   • A Sales Director will earn $500 for five or more new qualified unit members added in one month. A qualified unit member is one whose initial order with the Company is $600 or more in wholesale Section 1 products, and it is received and accepted by the Company in the same or following calendar month that her Independent Beauty Consultant Agreement is received and accepted by the Company.
     
     For example: In April you have two new qualified personal team members, resulting in a $200 Personal Team-Building Bonus. Also in April, three members of your sales unit each add a new qualified personal team member. Thats a total of five new qualified unit members, so youll also earn a $500 Unit Development Bonus thats a total of $700!

   Accordingly, effective April 1, 2005, Section I.B.2.b. (SALES DIRECTOR UNIT DEVELOPMENT BONUS) of the Schedule of Commissions and Bonuses to your Independent Sales Director Agreement will be deleted in its entirety and replaced with:

   I.B.2.b.: SALES DIRECTOR UNIT DEVELOPMENT BONUS

   A Sales Director is entitled to a Sales Director Unit Development Bonus of $500 for each month 5 or more qualified new team members are added to her Sales Unit. A qualified new team member is one whose initial order with the Company is $600 or more in wholesale Section 1 products, and it is received and accepted by the Company in the same or following calendar month that her Independent Beauty Consultant Agreement is received and accepted by the Company.

   The $500 Sales Director Unit Development Bonus is earned in the month in which at least five new qualified unit members initial minimum $600 wholesale Section 1 orders are received and accepted by the Company. The Sales Director Unit Development Bonus will be paid on the basis of wholesale orders and Agreements received and accepted by the Company by the close of business on the last working day of each month.

Now, lets take another look at the enhancements we announced with the Dec. 27 Directors Memo.

• Sales Director Unit Volume Bonus
  In this newly designed Unit Volume Bonus Program, when your unit achieves from $5,000 - $5,999.99 in monthly Section 1 wholesale production, you will earn a bonus of $500. Then, with each additional $1,000 in monthly Section 1 wholesale production, that bonus will increase by $100. Plus, theres no limit on your monthly bonus opportunity.

Accordingly, effective January 1, 2005, Section I.B.2.a. (SALES DIRECTOR UNIT VOLUME BONUS) of the Schedule of Commissions and Bonuses to your Independent Sales Director Agreement is deleted in its entirety and replaced with the following:

I.B.2.a.: SALES DIRECTOR UNIT VOLUME BONUS

A Sales Director is entitled to a Sales Director Unit Volume Bonus of ten percent (10%) of the monthly Wholesale Purchase Volume of Sales Directors Sales Unit, calculated based on the starting point of the applicable $1,000 tier, beginning at the $5,000 tier. For example:

• Cadillac qualification or requalification
• Higher Circle of Achievement or Circle of Excellence than the previous year (payable with July commissions). For example, if your 2005 unit circle level is higher than your 2004 unit circle level, youll earn the bonus. If your 2006 unit circle level is higher than your 2005 unit circle level, youll earn the bonus. And if 2005 or 2006 is your first time to achieve a unit circle, youll earn the bonus.
• On the Write Track
• Fabulous 50s
• Honors Society

You will receive a letter in the mail next week that will serve as written notice that your Independent Sales Director Agreement, Schedule of Commissions and Bonuses, is amended as set forth above where indicated. Please keep that letter for your records.

Are you excited about the potential these enhancements can bring to your business and your earnings potential? You CAN make this the year youve always dreamed it could be. No truer words were spoken when Mary Kay said, The speed of the leader is the speed of the gang. Just watch your unit come alive in 2005 with you leading the way!