SILK INTERNATIONAL PTY LTD INCOME & REWARDS PLAN

SILK INTERNATIONAL PTY LTD INCOME & REWARDS PLAN SALES REPRESENTATIVES

DIRECT SELLING METHODS Direct Selling Companies operate according to one, or a combination of the following methods: 1. Party Plan 2. Network Marketing 3. Single Level - loyal users / door-to-door/catalogue (direct marketing) 4. Online Retail Silk International offers Silk Independent Sales Representatives a combination of all direct selling methods along with an exciting business opportunity and a wonderful compensation plan that rewards everyone no matter what method/s they prefer. Party Plan is the most well-known Direct Selling Model. This is where Silk Showcases are used to generate sales of goods and services. Generally a prospective purchaser is invited to the home, workplace, or other setting by a host (who is not the Silk Independent Sales Representative), with products then demonstrated by the Silk Independent Sales Representative and sold to participants. Repeat purchase of goods by party guests by phone or online is not uncommon with this method of Direct Selling. Network Marketing is a process in which Silk Independent Sales Representatives rely on new or established relationships that result in the sale of products. These relationships are not confined to a home or workplace and introductions may be solicited or unsolicited. Silk Independent Sales Representatives earn income through their sale of products and as a percentage of sales for Silk Independent Sales Representatives who they have sponsored (trained and recruited). Loyal Users Door-to-door/Catalogue Selling is the process where Silk Independent Sales Representatives are able to purchase the products they love for themselves, family and friends and enjoy generous discounts on their total purchases. Catalogue selling is a means of servicing both prospective and existing customers. This is particularly useful for consumers living in rural and remote areas. This may involve the Silk Independent Sales Representative mailing or delivering catalogues without any interaction with the consumer, and physical contact between the Silk Independent Sales Representative and consumer might not take place until delivery of the product. Unlike the other direct selling methods it involves little, if any, recruitment activity by Silk Independent Sales Representatives. Online Retail (with an important point of difference) presents a significant opportunity for Silk Independent Sales Representatives to use a range of digital applications, supporting and complementing face-to-face selling with online ordering and payment facilities. To complement the face-to-face relationship selling utilizing online applications can be an important vehicle for enhancing the already powerful retail alternative. The important point of difference is that the online customer still has access to a helpful salesperson who can provide knowledge and advice that just can t be matched in a typical online setting. Having this kind of service is a key benefit to direct selling online. Silk International will offer customers two ways to shop online. The first is through a Silk Independent Sales Representative s own Website. Customers who shop this way are more likely to be introduced to products or services not originally offered by their salesperson. If they don t already have contact with a salesperson, the customer can enter their location or post code on Silk International s main Websites National Stockist Locator and choose an Independent Sales Representative to shop through. The Silk Independent Sales Representative receives commission for sales made online through their website. Page 1 of 23

TYPES OF COMPENSATION PLANS Direct Selling Companies Can Operate as: Single-Level which includes: Party Plan Direct Sales to Consumer via Representative Direct to Consumer (including online marketing) Network/Multi-Level which includes: Party Plan Direct Sales to Consumer via Representative Network Marketing (including online marketing) Sales to Representative via their upline Direct to Consumer (including online marketing) Types of Representatives (Independent Sales Representatives): Home Buyer / Loyal User (Registered Consumer) - Silk CON/VIP MEMBER Seller to Family & Friends (Loves the Products) - Silk CON, SC Seller to Consumers (Services Customer Base) - Silk CON, SC, LDR, SLDR, MGR Sales Manager (Downline Trainers & Motivators) - Silk SMGR, DIR Senior Level (Aspirational Status & Income, Conduit to Company, Success Story) - Silk SDIR, EDIR, PDIR Types of Compensation Plans: 1. Forced Matrix 2. Unilevel Matrix 3. Binary 4. Stairstep/Breakaway 5. Hybrid Unilevel/Unigen Silk International s Compensation Plan is a Hybrid of Stairstep Breakaway/Unigen. Please see below descriptions of each type of Compensation Plan. Matrix plans are typically either Forced Matrix or Unilevel. In a Forced Matrix, you may be limited to, say, 5 people on your front line (if we use an example where you receive commissions on up to 7 levels, this would be called a 5 by 7 matrix. In this case, if you sign a sixth, you must place that person on your second level, under someone who is already on your first level. In a Unilevel system, you can sign up as many people you want on your first level, and everyone under you is free to do the same. Page 2 of 23

TYPES OF COMPENSATION PLANS Binary plans are built on a matrix of two. You can sign only two people onto your first level and everyone else goes beneath those people. While forced matrices move people further away from you more quickly, binary systems don t have that problem. They don t pay based on levels at all, but instead pay on a specified, maximum amount of purchases over some period of time, say weekly. They pay on that amount regardless of how many levels down you need to look to reach that total. Therefore, the number of levels between you and a given recruit is not especially relevant, as what determines whether you get a commission from that person is not what level he is on, but rather how much purchase volume is generated in the levels between you and that person. Australian Two-Up plans refer to a structure where the first two people you recruit are given to your sponsor, all the rest of the people you recruit are yours. Each person you recruit will in turn give you the first two people they recruit, keeping the rest for themselves. This does not create a matrix, but only something that resembles a front line. The front line keeps growing, as you recruit new people, and as they people you recruit give you their first two recruits. In order to prevent people from strategically picking weak prospects to give up (keeping subsequent strong prospects for themselves), there may also be an over-ride mechanism, where you get some kind of Commission on whatever structure is built by the people you give up. The Stairstep/Breakaway Plan has a structure like a staircase, in that as the number of representatives in the downline grows, and the amount of product sold increases, the sponsor climbs in status and gains a higher rate of commission. They may also be entitled to commissions on a greater number of levels. The representatives that have been introduced are also climbing the staircase, and when they achieve a certain status, they break away along with their downline. When this happens, the sales of this group no longer count toward the quota of the original sponsor, and the level of commission from this group is often reduced. The majority of companies that have survived in MLM have used this method. Unigen plans refer to Unilevel combined with generational commissions. They are intended to encourage ease of development, and provide the financial return of the Unilevel plan plus the potential for lucrative returns on large organizations through generational payouts as seen in the stair-step breakaway program. The Plan starts with a Commission on a specified number of levels in the downline until a representative becomes a breakaway, at which time they become entitled to a personal group Commission and their upline breakaway becomes entitled to a generation Commission on the new breakaway. Page 3 of 23

DEFINITIONS/RULES BUSINESS VOLUME (BV): Suggested Retail Price (SRP) excluding GST PERSONAL BV SALES REQUIREMENT (PBVR): $500 (exclusing GST) Personal BV per month to qualify for all bonuses other than Personal Sales Rebates. MAINTENANCE OF SMGR GROUP : All SMGRs & DIRs are required to maintain $25,000 Group BV in their personal SMGR Group each month to earn Leadership Bonus. SDIRs and above maintain their own SDIR Groups and are not required to maintain their SMGR Group. SMGR GROUP : Refers to yourself and all Independent Sales Representatives in your downline who are not part of another SMGR Group which has elevated out of your Group TOTAL ORGANISATION: Means Group for that Title Level. Eg. LDR = LDR Group, SLDR = SLDR Group, MGR = MGR Group PERSONAL SALES REBATE Payable to Independent Sales Representatives and above. Rule: Paid on total Personal Business Volume (PBV) for the Calendar Month. PAYABLE TO ALL SILK INDEPENDENT SALES REPRESENTATIVES 0 - $499 When you place an order through your own online store, 20% will be deducted at time of order. The remainder will be paid to you on the 15th of the following month along with any other bonus owed to you. Please note these figures are excluding GST. Page 4 of 23

DEFINITIONS/RULES SPONSOR BONUS Payable to Senior Independent Sales Representatives and above. Paid for only 24 months of a registered Downline level 1 and 2. BUSINESS VOLUME (BV) SALES Level 1 Level 2 RATE 3% 3% Please note this is paid when a Independent Sales Representative reaches their PBV (Personal Business Volume) of $500 (excluding GST) TEAM BONUS Payable to Leaders (LDRs) and above. Paid to uplines on their own total downline group within a Senior Director (SDIR) Group. Total Organisation Business Volume (TBV) Sales for qualifying Leaders (LDRs) and above includes their total downline within their Senior Director (SDIR) Group. TOTAL ORGANISATION BUSINESS VOLUME (TBV) SALES $5,000 to $19,999 $20,000 to $24,999 $25,000 and above RATE 3% 4% 5% Page 5 of 23

LEADERSHIP BONUS Payable to Senior Managers (SMGRs), Directors (DIRs), Senior Directors (SDIRs) and above. Paid on downline Senior Managers (SMGRs) (compressed) within Senior Director (SDIR) Group. Condition: Personal Senior Manager (SMGR) Group maintenance for Senior Manager (SMGR) and Director (DIR) only ($25,000 Group Business Volume BV) SMGR DEVELOPMENT BONUS Payable to Senior Managers (SMGRs), Directors (DIRs), Senior Directors (SDIRs) and above. Elevation occurs from within Senior Manager (SMGR) Group. Paid only once each Silk Independent Sales Representative. If elevation is from Silk Independent Sales Representative (CON)/Leader (LDR) to Senior Leader (SLDR), both elevation bonuses are paid i.e. $500 *DIRs must maintain their SMGR Group Page 6 of 23

GROWTH BONUS Payable to Senior Directors (SDIRs) and above. Paid on Sales Growth within Senior Director (SDIR) Group. Condition: Paid twice yearly on Growth measured Jan/Jul - Year on Year and Jul/Dec - Year on Year. SDIR GROWTH 1% growth 2% growth 3% growth or more growth %s rounded up 1% of growth 1% of growth 3% of growth.5% or more SDIR ELEVATION BONUS Payable to Senior Directors (SDIRs) and above. Condition: Maintenance of Senior Director (SDIR) Group. After the first 24 months following elevation (past flowback period), each Senior Director (SDIR) elevation earns their immediate (maintaining) upline Senior Director (SDIR) 2% on the total sales of the elevated Senior Director (SDIR). SDIR GROUP BUSINESS VOLUME (BV) SALES RATE of elevated SDIR 2% Page 7 of 23

TITLE ACHIEVEMENT & MAINTENANCE SALES/SPONSORING REQUIREMENTS FOR EACH REWARDS LEVEL: There are 10 Levels - 9 Elevation Levels SALES REP SENIOR SALES REP Page 8 of 23

Please note: PBV & TBV figures all exclude GST Reward Level 1 - SILK INDEPENDENT SALES REPRESENTATIVE Receive 20-35% rebate on Customer orders (excluding non bonusable items) SALES REP Reward Level 2 - SILK INDEPENDENT SALES REPRESENTATIVE Receive 20-35% rebate on Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume (PBV) $500 + 2 Active VIPs/ Independent Sales Representatives/ITPs SENIOR SALES REP To Maintain Title: Total of two personally sponsored Downlines (Level 1) One order every 6 months to remain active BLACK LEVEL 2 SENIOR SALES REP YOU AT THE TOP OF YOUR TEAM (SENIOR SALES REP) MINIMUM 2 SALES REPS Level 1 Please Note Diagram above is an example of how you could achieve/maintain Senior Independent Sales Representative Level status. Page 9 of 23

Reward Level 3 - LEADER Receive 20-35% rebate on Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume (PBV) $500 To receive Team Bonus minimum monthly Personal Business Volume (PBV) $500 and Team Business Volume (TBV) $5,000 + 3 Active VIPs/Independent Sales Reps/ITPs To Maintain Title: Leaders (LDRs) require a minimum 1 month in 4 (rolling) at $5,000 Group Business Volume (TBV) Sales with 3 Active Level 1 s in downline Automatic reassignment to Level 1 Title after 4 consecutive months of non-maintenance BLUE LEVEL 3 LEADER YOU AT THE TOP OF YOUR TEAM (LEADER) MINIMUM 3 LEVEL 1 S LEVEL 1 LEVEL 1 LEVEL 2 LEVEL 2 TBV Please Note Diagram above is an example of how you could achieve/maintain Leader Level status. Page 10 of 23

Reward Level 4 - SENIOR LEADER Receive 20-35% rebate on Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume, (PBV) $500 To receive Team Bonus minimum monthly Personal Business Volume, (PBV) $500 and Team Business Volume, (TBV) $10,000 + 10 Active Level 1 s To Maintain Title: Senior Leaders (SLDRs) require 1 month in 4 (rolling) at $10,000 Team Business Volume (TBV) Sales with 10 Active Level 1 s Automatic reassignment after 4 consecutive months of non-maintenance After 4th consecutive month of non-maintenance, reassignment to Title level relative to activity GREEN LEVEL 4 SENIOR LEADER YOU AT THE TOP OF YOUR TEAM (SENIOR LEADER) MINIMUM 10 LEVEL 1 S LEVEL 1 LEVEL 2 LEVEL 3 TBV Please Note Diagram above is an example of how you could achieve/maintain Senior Leader Level status. Page 11 of 23

Reward Level 5 - MANAGER Receive 20-35% rebate on Personal/Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume (PBV) $500 To receive Team Bonus minimum monthly Personal Business Volume (PBV) $500 and Team Business Volume (TBV) $20,000 + 15 Active Level 1 s + 1 x Senior Leader To Maintain Title: 2 months in 4 (rolling) at $20,000 Team Business Volume (TBV) with 1 Senior Leader (SLDR) Reassignment occurs when $20,000 Team Volume (TBV) has not been met for 3 out of the last 4 completed months TEAL LEVEL 5 MANAGER YOU AT THE TOP OF YOUR TEAM MINIMUM 15 LEVEL 1 S (MANAGER) LEVEL 1 Senior Leader 10 Independent Sales Representatives x $500 LEVEL 2 LEVEL 3 = $ 20,000 TBV Please Note Diagram above is an example of how you could achieve/maintain Manager Level status. Page 12 of 23

Reward Level 6 - SENIOR MANAGER Receive 20-35% rebate on Personal/Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume (PBV) $500 To receive Team Bonus, Leadership Bonus, Development Bonus & $800 Car Bonus minimum monthly Personal Business Volume (PBV) $500 and Team Business Volume (TBV) $100,000 + 2 x Senior Leaders To Maintain Title: 2 months in 4 (rolling) at $25,000 Team Business Volume (TBV) (Senior Manager (SMGR) Group ) - plus flowback where applicable with 2 Senior Leaders (SLDRs) Reassignment occurs when $25,000 Business Volume has not been met for 3 out of the last 4 completed months RED LEVEL 6 SENIOR MANAGER YOU AT THE TOP OF YOUR TEAM (SENIOR MANAGER) MINIMUM 2 SENIOR LEADERS Senior Leader Senior Leader Page 13 of 23

Reward Level 7 - DIRECTOR Receive 20-35% rebate on Personal/Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume (PBV) $500 To receive Team Bonus, Leadership Bonus, Development Bonus, $1000 Car Bonus & Growth Bonus minimum monthly Personal Business Volume (PBV) $500 and Team Business Volume (TBV) $50,000 + 2 x Senior Managers To Maintain Title: 3 months in 6 at $50,000 Monthly Group Business Volume (BV) (Director (DIR) Group ) - plus flowback where applicable with 1 Senior Manager (SMGR) Reassignment occurs when $50,000 Business Volume (BV) has not been met for 4 out of the last 6 completed months PURPLE LEVEL 7 DIRECTOR YOU AT THE TOP OF YOUR TEAM (DIRECTOR) MINIMUM 2 SENIOR MANAGERS Senior Manager Senior Manager Page 14 of 23

Reward Level 8 - SENIOR DIRECTOR Receive 20-35% rebate on Personal/Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume (PBV) $500 To receive Team Bonus, Leadership Bonus, Development Bonus & $800 Car Bonus & Growth Bonus minimum monthly Personal Business Volume (PBV) $500 minimum monthly Team Business Volume (TBV) $150,000 4 ot of 5 consecutive months + 5 Senior Managers/Directors To Maintain Title: 6 months in 12 at $150,000 Monthly Team Business Volume (TBV) (Senior Director (SDIR) Group ) - plus flowback where applicable with 4 Senior Managers (SMGRs) or Directors (DIRs) Reassignment occurs when $150,000 Team Business Volume (TBV) has not been met for 6 out of the last 12 completed months BRONZE LEVEL 8 SENIOR DIRECTOR YOU AT THE TOP OF YOUR TEAM (SENIOR DIRECTOR) MIN 5 SENIOR MANAGERS/DIRECTORS Senior Manager Director Senior Manager Director Senior Manager Page 15 of 23

Reward Level 9 - EXECUTIVE DIRECTOR Receive 20-35% rebate on Personal/Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume (PBV) $500 To receive Team Bonus, Leadership Bonus, Development Bonus & $1,000 Car Bonus & Growth Bonus minimum monthly Personal Business Volume (PBV) $500 minimum monthly Team Business Volume (TBV) $300,000 4 out of 5 consecutive months + 10 Senior Managers/Directors To Maintain Title: 6 months in 12 at $300,000 Monthly Team BusinessVolume (TBV) (Executive Director (EDIR) Group ) with 8 Downlines headed by a Senior Manager (SMGR) or Director (DIR) OR 6 months in 12 at $150,000 Monthly Group Business Volume (BV) (Senior Director (SDIR) Group ) PLUS one immediate Downline Senior Director (SDIR) who maintains their own Senior Director (SDIR) Group Reassignment occurs when neither of these methods have been met for 6 out of the last 12 completed months SILVER LEVEL 9 EXECUTIVE DIRECTOR YOU AT THE TOP OF YOUR TEAM (EXEC DIRECTOR) MIN 10 SENIOR MANAGERS/DIRECTORS Senior Manager Director Senior Manager Director Senior Manager Senior Manager Director Senior Manager Director Senior Manager Page 16 of 23

Reward Level 10 - PRESIDENTIAL DIRECTOR Receive 20-35% rebate on Personal/Customer orders (excluding non bonusable items) To receive Sponsor Bonus minimum monthly Personal Business Volume (PBV) $500 To receive Team Bonus, Leadership Bonus, Development Bonus & $1,000 Car Bonus & Growth Bonus minimum monthly Personal Business Volume (PBV) $500 minimum monthly Team Business Volume (TBV) $10,000,000 4 ot of 5 consecutive months + 2 Executive Directors To Maintain Title: Monthly BOP Organisation Business Volume (BV) Sales of $833,000 in 6 of 12 consecutive monthswith 2 downline Executive Directors (EDIRs) Own Senior Director (SDIR) Group must produce $333,000 in the same 6 of 12 consecutive months PLUS rolling 12 months of $10 million. Minimum of 2 immediate Downline Executive Directors (EDIRs) must produce minimum of $6 million. Remainder from own Executive Director (EDIR) Group (min. $3 million) GOLD LEVEL 10 EXECUTIVE DIRECTOR YOU AT THE TOP OF YOUR TEAM (PRESIDENTIAL DIRECTOR) MIN 2 EXECUTIVE DIRECTORS Executive Director Executive Director Page 17 of 23

CAR PROGRAMME Notes: Senior Managers (SMGRs) - the minimum sales required for car maintenance can come from your personal Senior Manager (SMGR) Group down to the next Senior Manager (SMGR) Group or above. Directors (DIRs) - the eligible sales for car maintenance can come from your total group down to the next Director (DIR) or above. Directors (DIRs) must also maintain personal Senior Manager (SMGR) Group. Senior Directors (SDIRs)/Executive Directors (EDIRs)/Presidential Directors (PDIRs) - the eligible sales for car maintenance can come from your total group down to the next Senior Director (SDIR) or above. Page 18 of 23

JUMP START PROGRAM The Silk International Jump Start Program has been set up to reward you for your efforts. If you make it to Senior Leader (Rewards Level 4) within three months of registration, we will send you a Silk Starter Kit (valued at $300+) completely free of charge. WHAT DOES THIS MEAN? A new Starter Kit means you could have access to new products you may not have received on registration. This gives you the opportunity to show and demonstrate a larger range of products to your clients. This also gives you the opportunity to hand out samples to potential customers and/or sponsors. Level 1 CONSULTANT SALES REP Level 4 SENIOR LEADER Level 2 SENIOR CONSULTANT SALES REP Level 3 LEADER Page 19 of 23

FLOWBACK & PIGGY BACK RULES TITLE SALES FLOWBACK PIGGY BACK RULES When applying Piggy Back rule, Title = Title elevating to For Title maintenance, Car maintenance all Uplines receive the following allowance: When an Upline (A) and a Downline from their Personal Group (B) are running for elevation to the same Title during the same period. Leader (LDR) Senior Leader (SLDR) n/a n/a A can count B as one of their personally sponsored Downlines. Sales must stand alone for their own group. A can count B as one of their personally sponsored Downlines Sales must stand alone for their own group. Manager (MGR) n/a A can count B as one of their personally sponsored Downlines Sales must stand alone for their own group. Senior Manager (SMGR) Eligible sales must come from their own SMGR group NEW SMGR: Upon elevation of a new SMGR in immediate downline, the upline SMGR may count the sales of the new group for a period of 8 months, provided their own SMGR Group maintains at $20,000 A and B must stand alone for car qualification. Director (DIR) DIRs may count new DIR elevations for the first 12 months. Upon reassignment of a downline DIR, the DIR has a delayed flowback period of 6 months A can count B s sales for the first qualifying month only. Then A can count B as a downline leg for the remaining months of qualification, but cannot count the downline sales. Senior Director (SDIR) and above (SDIR, EDIR & PDIR) SDIRs may count new SDIR elevations for the first 24 months - This also applies to Income : during the first 24 months, the upline SDIR gets paid SDIR benefits as if no elevation had occurred. Upon reassignment of a downline SDIR there is a delayed flowback period of 12 months A can count B s sales for the first qualifying month only. Then A can count B as a downline leg for the remaining months of qualification, but cannot count the downline sales. Page 20 of 23

INCOME & REWARDS PLAN FAQ S Q. HOW DOES THE INCOME AND REWARDS PLAN (IRP) WORK? The Silk International Income and Rewards Plan (IRP) rewards you for selling products and for sponsoring other Independent Sales Representatives/ITP s who do the same. You earn bonuses based on the overall sales Business Volume (BV) generated through both the customers you serve and through the business organisation you develop by introducing others to your team. Each Independent Sales Representative/ITP is an Independent Business Person whose individual success depends on his or her own selling efforts and the selling efforts of those they sponsor. Your income is a combination of immediate income on sales to customers plus other bonuses earned on your overall Sales Business Volume. The income and rewards under the Silk International IRP increase as you advance through the 9 levels of Title achievement. Q. WHO IS A SPONSOR? The sponsor is the person who introduces a VIP/Sales Rep/ITP to Silk International Pty Ltd. The new VIP Member/Sales Rep/ITP must register through the website of their sponsor. Q. WHAT IS THE INDEPENDENT PROFESSIONAL SALES REPRESENTATIVE AGREEMENT? The Independent Professional Sales Representative Agreement is read when sponsored into the business and contains the terms pursuant to which the Independent Sales Representative purchases products from Silk International and sells products to consumers. Q. WHAT SALES AM I PAID ON? Products which carry a Business Volume (BV) are used to calculate the Bonus payable. BV equals the Suggested Retail Price (SRP), excluding GST, on which Personal Sales Rebates and other Bonuses are paid. Q. WHAT SALES AM I NOT PAID ON? Some products do not carry a Business Volume (BV) and are provided to Independent Sales Representatives to support their business. Products such as literature, samples and other sales support items are provided at or near cost and do not attract Personal Sales Rebates or other Bonuses. Q. WHAT IS SUGGESTED RETAIL PRICE (SRP)? Refers to the price at which Silk International recommends products are sold to consumers and includes GST. Q. WHO ARE RETAIL CONSUMERS? The end retail consumer is a customer of an Independent Sales Representative who has purchased products. Q. WHO IS AN ACTIVE INDEPENDENT SALES REPRESENTATIVE? An Independent Sales Representative is active when they place an order with Business Volume (BV) during a Bonus Period. All Independent Sales Representatives and above on the active file, regardless of title may be active in any given Bonus Period. Q. WHAT IS THE BONUS PERIOD? Each Bonus Period commences on the first day of the month, ending on the last day of the same month. End of Month Bonuses for each Bonus Period are paid into the nominated bank account on the 15th of the following month. Q. HOW DO I EARN PERSONAL SALES REBATES AND OTHER BONUSES? Personal Sales Rebates Independent Sales Representatives deduct and retain 20% of the BV on all Orders. Any Personal Sales Rebates in excess of the 20% already deducted and retained are paid on the 15th of the following month along with other bonus entitlements. Q. HOW DO I QUALIFY FOR OTHER BONUS ENTITLEMENTS? To be paid all Bonuses other than Personal Sales Rebates under the Income and Rewards Plan (IRP), a Personal BV Requirement (PBVR) of $500 (excluding GST) BV applies. Page 21 of 23

Q. WHAT ARE THE OTHER BONUS ENTITLEMENTS? Sponsor Bonus All Independent Sales Representatives of the title Senior Independent Sales Representative and above are paid on the personal Business Volume (PBV) of their Level 1 (personally sponsored) and Level 2 (sponsored by Level 1) VIP/Independent Sales Representatives/ITPs for the first 24 months. Sponsor bonus is only paid with a PBV of $500. (Excluding GST) Team Bonus All Leaders (LDRs), and above are paid on the Team BV of their group. For a Leader (LDR) it includes Self PLUS all downline in each leg to the next LDR or above. For a Senior Leader (SLDR) it includes Self PLUS all downline in each leg to the next SLDR or above. For a Manager (MGR) it includes Self PLUS all downline in each leg to the next MGR or above. For a Senior Manager (SMGR) it includes Self PLUS all downline in each leg to the next SMGR or above. For a Director (DIR) it includes Self PLUS all downline in each leg to the next DIR or above. For a Senior Director (SDIR), Executive Director (EDIR) and Presidential Director (PDIR) it includes Self PLUS all downline in each leg to the next SDIR or above. Q. WHAT HAPPENS IF I DO NOT REACH MY TBV, DO I RECEIVE A TEAM BONUS? Yes you are paid at the level achieved. ie. You are a Senior Leader and do not reach TBV $10,000. TBV $5,000 is reached therefore you are paid as a Leader. Leadership Bonus All Senior Managers (SMGRs), and above are paid on downline SMGR groups. Senior Manager (SMGR) is paid on 2 generations of the SMGR group of SMGRs and above in the compressed downline down each leg to the next SDIR or above. Director (DIR) is paid on 3 generations of the SMGR group of SMGRs and above in the compressed downline down each leg to the next SDIR or above. Senior Director and above (SDIR) is paid on 4 generations of the SMGR group of SMGRs and above in the compressed downline down each leg to the next SDIR or above. SMGR Development Bonus All Senior Managers (SMGRs), and above are paid for elevating lower levels from their SMGR group. Paid only once at each title on each elevating Independent Sales Representative/ITP. A Downline Independent Sales Representative/ITP re-elevating to the same title does not attract this Bonus for their Upline. $200 for each first-time elevation to LDR from their SMGR group. $300 for each first-time elevation to SLDR from their SMGR group. $1,000 for each first-time elevation to MGR from their SMGR group. $3,000 for each first-time elevation to SMGR from their SMGR group. SDIR Elevation Bonus All Senior Directors (SDIRs), and above are paid for elevating other SDIRs from their SDIR group. This Bonus is paid 24 months after the downline SDIR elevates. For the first 24 months the upline SDIR receives Team Bonus and Leadership Bonus as though the new SDIR had not elevated. Growth Bonus All Senior Directors (SDIRs), and above are paid this Bonus twice yearly on the Sales Growth in their SDIR group. Note: All Title levels are paid at their highest level of entitlement in a Bonus Period. For instance, a SDIR who does not maintain as an SDIR but maintains as a DIR will be paid as a DIR for that Bonus Period. A non-maintaining SMGR would roll back into the upline SMGR or above for all Bonus entitlements for that Bonus Period and the non-maintaining SMGR would not receive Leadership Bonus. Page 22 of 23

INCOME & REWARDS PLAN FAQ S Q. WHO IS IN MY DOWNLINE? All VIPs/Independent Sales Representatives/Industry Trade Professionals (who are not terminated) below you are considered to be part of your downline. Q. WHAT IS A GENERATION? The relationship between one SMGR or higher and another SMGR or higher, based on Title. If a SMGR or higher is not paid-as a SMGR they are not considered a Generation to their upline SMGR or higher. (See Compressed Downline) Q. WHAT DOES COMPRESSED DOWNLINE MEAN? When an Independent Sales Representative/ITP holds a title less than SMGR their generation does not count and any SMGRs below them are compressed to their upline for determination on generation entitlement to Leadership Bonus. Q. UNDER THE IRP WHAT IS A LEG? A leg begins with a first level Independent Sales Representative/ITP and includes all of the Independent Sales Representatives/ITP beneath them. An Independent Sales Representative/ITP has as many legs as they have first level VIPs/Independent Sales Representatives/ITPs. Q. WHAT IS A LEVEL IN A DOWNLINE? The position an Independent Sales Representative/ITP has in a downline relative to another upline or downline Independent Sales Representative/ITP. Independent Sales Representatives/ITPs personally sponsored (i.e. first level) are Level One. Those Independent Sales Representatives/ITPs sponsored by Level One Independent Sales Representatives/ITPs are Level Two, relative to the original Independent Sales Representative/ITP, and so on, whether or not the Independent Sales Representative/ITP is Active. Q. HOW DO I GET PROMOTED TO A HIGHER TITLE? Refer to Title Achievement on Page 4. Q. WHAT IF A DOWNLINE AND AN UPLINE ARE SIMULTANEOUSLY TRYING TO QUALIFY FOR THE SAME TITLE? This is called a Piggy-Back Qualification and certain rules apply to ensure that both downline and upline will maintain their Title after promotion. The following Piggy-Back Rules apply when an Upline (A) and a downline from their Personal Group (B) are running for elevation to the same Title during the same period: LDR, SLDR & MGR A can count B as one of their personally sponsored Independent Sales Representatives/ITP Sales must stand alone for their own group SMGR A and B must stand alone for car qualification DIR & SDIR A can count B s sales for the first qualifying month only Then, A can count B as a downline leg for the remaining months of qualification, but cannot count the downline sales Q. WHAT IS A CAR ALLOWANCE? An amount paid to SMGRs and above car drivers in respect of the Group BV achieved in a Bonus Period. SMGRs are eligible to participate in the Silk International Income and Rewards Car programme. Q. DO I RECEIVE A CAR ALLOWANCE IF I DO NOT PURCHASE/OWN A BMW? No, the allowance is only for SMGRs who purchase/lease/own a BMW within 3 years of age on qualification for the car. Q. WHAT DOES REASSIGNMENT MEAN? Refers to the demotion to a lower Title level. Reassignment occurs as a result of not meeting the maintenance requirements of the current Title level. Page 23 of 24

Q. WHO IS AN UPLINE? An Independent Sales Representative s/itp s Sponsor, the Sponsor s Sponsor and so on up the hierarchy. Q. CAN I RE-ELEVATE (BE PROMOTED AGAIN) AFTER DEMOTION? Yes. By meeting the requirements for Promotion (see How Do I Get Promoted to a Higher Title). Note: SMGR Development Bonus is not paid to SMGRs or higher on re-elevating Independent Sales Representatives. Q. HOW DO I RETAIN MY TITLE? Please refer to Title Achievement on Page 4. Page 24 of 24

SILK INTERNATIONAL PTY LTD PHONE: 1300 424 739 or (07) 3880 3380 EMAIL: INFO@SILKOILOFMOROCCO.COM.AU WEBSITE: WWW.SILKOILOFMOROCCO.COM ADDRESS: UNIT 13, 9-11 REDCLIFFE GARDENS DRIVE, CLONTARF 4019 QLD AUSTRALIA ISSUE 03