A New Policy Regarding "Stacking" has been announced by Quixtar.

To pin Diamonds and above, LOA heads, and business managers

One of the fundamental principles for achieving success with Quixtar is to build a knowledgeable and successful sales force that features, as its foundation, a personal relationship between each Independent Business Owner (IBO) and his or her sponsor. That relationship is the building block for every line of sponsorship and affects the potential awards and rewards obtained through the Quixtar IBO Compensation Plan.

It would be a serious violation of an IBO's contract and Quixtar Rules to circumvent this principle by manipulating the Plan through the practice of "stacking." Stacking occurs when an upline IBO places a new IBO under another IBO in their Quixtar line of sponsorship without regard for whether the IBO knows and has a relationship with their frontline sponsor. Accordingly, stacking is deemed to take place when a new IBO doesn't know their sponsor or doesn't agree with whom their registered sponsor is. In all such cases, stacking is a serious violation of Rule 4.25, the Plan Manipulation Rule (see below*). Moreover, our complaint history confirms that the absence of a relationship often is accompanied by high-risk representations that trigger pyramid and securities law issues.

Quixtar wishes to make sure that all leaders know and understand that "stacking" is not acceptable and to further communicate this to their downlines.

Please understand that not all depth-building is stacking. If prospective IBOs wish to align vertically and they know their sponsor and approve of the arrangement, it is acceptable. In such instances, however, Quixtar wants to make sure IBOs understand that this choice is optional, and that an IBO with only one leg will not be as profitable as an IBO with multiple legs. In fact, the concern over potential profitability is why Quixtar encourages the building of balanced businesses that include the retail sale of product to customers and sponsoring that results in both depth and width in the line of sponsorship.

To further deter and stop the practice of stacking, effective September 1, 2007, Quixtar will initiate the following policy:

POLICY - Effective September 1, 2007 whenever Quixtar becomes aware of (i) a new IBO that either does not know their sponsor or who sponsored someone they do not know or (ii) a new IBO that does not agree with whom their sponsor is, Quixtar will immediately flag that Platinum group and will begin an internal review of the situation which may include but not be limited to calling all new IBOs of the group after they register to ask them to verify their sponsor. As the Rules of Conduct hold qualified Platinums responsible for compliance within their personal groups, if the internal review reveals cases of stacking, Quixtar will take the following steps:

First Occurrence: Quixtar will place a freeze on all sponsoring within that Platinum's group until all IBOs in that group receive training communication from Quixtar on acceptable sponsoring practices.

Second Occurrence: Quixtar will suspend the Platinum business for a minimum of 30 days, including forfeiture of bonuses.

Third Occurrence: Further action up to, and including, termination of the Platinum's contract with Quixtar.

** As with all Quixtar enforcement actions, an IBO can appeal company action through the dispute resolution procedures described by the Rules of Conduct.** Because Quixtar is extremely serious about prohibiting the practice of stacking, Quixtar will notify all qualified Platinums in North America by email by July 23, 2007, and this policy will become effective beginning September 1, 2007.


Your assistance in ensuring that your group fully understands and abides by the rules against stacking is appreciated.

Thanks for your help with this.

Sincerely,

Jim Payne
Executive Vice President and Managing Director Quixtar Inc.

*4.25. IBO Plan Manipulation: No IBO shall manipulate the IBO Plan or sales volume, in any way which results in the payment of bonuses or other awards and recognition that have not been earned in accordance with the terms of the IBO Plan and/or the Business Reference Guide.