SECTION 1 - CORPORATE MISSION STATEMENT
Utilizing the tax law, we strive to legally minimize tax burden, while maximizing tax benefits and wealth. Standdown Tax Prep is designed to run along side of every network marketing company to help them retain distributors, Standdown Tax Prep is dedicated to providing an affordable, consistent and reliable product.
SECTION 2 - INTRODUCTION
2.1 - Policies and Compensation Plan Incorporated into IR Agreement
These Policies and Procedures, in their present form and as amended at the sole discretion of Standdown Tax Prep, Inc. (hereafter “STP” or the “Company”), are incorporated into, and form an integral part of, the STP IR Agreement. Throughout these Policies, when the term “Agreement” is used, it collectively refers to the STP Independent Representative (“IR”) Application and Agreement, these Policies and Procedures, the STP Marketing and Compensation Plan, and the STP Business Entity Application (if applicable). These documents are incorporated by reference into the STP IR Agreement (all in their current form and as amended by STP). It is the responsibility of each IR to read, adhere to, and ensure that he or she is aware of and operating under the most current version of these Policies and Procedures. When sponsoring or enrolling a new IR, it is the responsibility of the sponsoring IR to ensure that the applicant is provided with, or has online access to, the most current version of these Policies and Procedures and the STP Marketing and Compensation Plan prior to his or her execution of the IR Agreement.
2.2 - Changes to the Agreement
STP reserves the right to amend the Agreement and its prices in its sole and absolute discretion. By signing the IR Agreement, an IR agrees to abide by all amendments or modifications that STP elects to make. Amendments shall be effective 30 days after publication of notice that the Agreement has been modified. Notification of amendments shall be published by one or more of the following methods: (1) posting on the Company’s official web site; (2) electronic mail (e-mail); (3) fax-on-demand; (4) voice mail system broadcast; (5) inclusion in Company periodicals; (6) inclusion in product orders or bonus checks; or (7) special mailings. The continuation of an IR’s STP business or an IR’s acceptance of bonuses or commissions constitutes acceptance of any and all amendments.
2.3 - Delays
STP shall not be responsible for delays or failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond its reasonable control. This includes, without limitation, strikes, labor difficulties, riot, war, fire, death, curtailment of a party’s source of supply, or government decrees or orders.
2.4 - Policies and Provisions Severable
If any provision of the Agreement, in its current form or as may be amended, is found to be invalid, or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect. The severed provision, or portion thereof, shall be reformed to reflect the purpose of the provision as closely as possible.
2.5 - Waiver
The Company never gives up its right to insist on compliance with the Agreement and with the applicable laws governing the conduct of a business. No failure of STP to exercise any right or power under the Agreement or to insist upon strict compliance by an IR with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the Agreement, shall constitute a waiver of STP’s right to demand exact compliance with the Agreement. Waiver by STP can be effectuated only in writing by an authorized officer of the Company. STP’s waiver of any particular breach by an IR shall not affect or impair STP’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other IR. Nor shall any delay or omission by STP to exercise any right arising from a breach affect or impair STP’s rights as to that or any subsequent breach. The existence of any claim or cause of action of an IR against STP shall not constitute a defense to STP’s enforcement of any term or provision of the Agreement.
SECTION 3 - BECOMING AN IR
3.1 - Requirements to Become an IR
To become an STP IR, each applicant must:
• Be of the age of majority in his or her state of residence;
• Reside in the United States or U.S. Territories or country that STP has officially announced is open for business;
• Have a valid Social Security or Federal Tax ID number;
• Purchase an STP Business Kit (optional in North Dakota);
• Submit a properly completed IR Application and Agreement to STP either in hard copy or online format;
• Submit an IRS form W-9.
3.2 - No Product Purchase Required
No person is required to purchase STP products, services or sales aids. In order to familiarize new IRs with STP products, services, sales techniques, sales aids, and other matters, the Company requires that they purchase a Business Kit. STP will repurchase Resalable kits from any IR who terminates his or her IR Agreement pursuant to the terms of Section 8.3.
3.3 - IR Benefits
Once an IR Application and Agreement has been accepted by STP, the benefits of the Marketing and Compensation Plan and the IR Agreement are available to the new IR. These benefits include the right to:
• Sell STP products and services;
• Participate in the STP Marketing and Compensation Plan (receive bonuses and commissions, if eligible);
• Sponsor other individuals as Customers or IRs into the STP business and thereby, build a marketing organization and progress through the STP Marketing and Compensation Plan;
• Receive periodic STP literature and other STP communications;
• Participate in STP-sponsored support, service, training, motivational and recognition functions, upon payment of appropriate charges, if applicable; and
• Participate in promotional and incentive contests and programs sponsored by STP for its IRs.
3.4 - Term and Renewal of Your STP Business
The term of the IR Agreement is one year from the date of its acceptance by STP (subject to cancellation or reclassification for inactivity after three months pursuant to Section 11). IRs must renew their IR Agreement each year by paying an annual renewal fee of $45.00 on or before the anniversary date of their IR Agreement. If the renewal fee is not paid within 30 days after the expiration of the current term of the IR Agreement, the IR Agreement will be canceled.
SECTION 4 - OPERATING AN STP BUSINESS
4.1 - Adherence to the STP Marketing and Compensation Plan
IRs must adhere to the terms of the STP Marketing and Compensation Plan as set forth in official STP literature. IRs shall not offer the STP opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official STP literature. IRs shall not require or encourage other current or prospective Customers or IRs to execute any agreement or contract other than official STP agreements and contracts in order to become an STP IR. Similarly, IRs shall not require or encourage other current or prospective Customers or IRs to make any purchase from, or payment to, any individual or other entity to participate in the STP Marketing and Compensation Plan other than those purchases or payments identified as recommended or required in official STP literature.
4.2 - Advertising
4.2.1 - General
All IRs shall safeguard and promote the good reputation of STP and its products. The marketing and promotion of STP, the STP opportunity, the Marketing and Compensation Plan, and STP products must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.
To promote both the products and services, and the tremendous opportunity STP offers, except as provided in this Section 4.2.1, IRs must use the sales tools and support materials produced by STP. The Company has carefully designed its products, product labels, Marketing and Compensation Plan, and promotional materials to ensure that they are promoted in fair, truthful manner, that they are substantiated, and the material complies with the legal requirements of federal and state laws.
Only IRs who have achieved the rank of 6 Star may create and publish their own marketing materials, advertising materials, and/or other sales aids (independently produced websites are not permitted under any circumstance). However, even if an IR has achieve the rank of 6 Star all materials he or she produces must be submitted to the company for pre-approval before they can be used or made public.
STP further reserves the right to rescind approval for any sales tools, promotional materials, advertisements, or other literature, and IRs waive all claims for damages or remuneration arising from or relating to such rescission.
4.2.2 - IR Web Sites
If an IR desires to utilize an Internet web page to promote his or her business, he or she may do so through the Company’s official web site, using official STP templates.
4.2.3 - Blogs, Chat Rooms, Social Networks, Online Auctions, and other Online Forums
IRs may use online blogs, chat rooms, or social networks, to advertise, promote, or discuss STP’s products or services or the STP opportunity. In doing so, IRs may not make any income claims or representations, and all claims and representations regarding the products and opportunity must be consistent with official STP promotional materials. IRs shall not use online auction sites or any other like forum to market or sell STPs products or services or STP opportunity.
4.2.4 - Domain Names
IRs may not use or attempt to register any of STP’s trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, for any Internet domain name.
4.2.5 - Trademarks and Copyrights
STP will not allow the use of its trade names, trademarks, designs, or symbols by any person, including STP IRs, without its prior, written permission. IRs may not produce for sale or distribution any recorded Company events and speeches without written permission from STP, nor may IRs reproduce for sale or for personal use any recording of Company-produced audio or video tape presentations.
4.2.6 - Media and Media Inquiries
IRs must not attempt to respond to media inquiries regarding STP, its products or services, or their independent STP business. All inquiries by any type of media must be immediately referred to STP’s Legal Department. This policy is designed to assure that accurate and consistent information is provided to the public as well as a proper public image.
4.2.7 - Unsolicited Email
STP does not permit IRs to send unsolicited commercial emails unless such emails strictly comply with applicable laws and regulations including, without limitation, the federal CAN SPAM Act. Any email sent by an IR that promotes STP, the STP opportunity, or STP products and services must comply with the following:
• There must be a functioning return email address to the sender.
• There must be a notice in the email that advises the recipient that he or she may reply to the email, via the functioning return email address, to request that future email solicitations or correspondence not be sent to him or her (a functioning “opt-out” notice).
• The email must include the IR’s physical mailing address.
• The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.
• The use of deceptive subject lines and/or false header information is prohibited.
• All opt-out requests, whether received by email or regular mail, must be honored. If an IR receives an opt-out request from a recipient of an email, the IR must forward the opt-out request to the Company.
STP may periodically send commercial emails on behalf of IRs. By entering into the IR Agreement, IR agrees that the Company may send such emails and that the IR’s physical and email addresses will be included in such emails as outlined above. IRs shall honor opt-out requests generated as a result of such emails sent by the Company.
4.2.8 - Unsolicited Faxes
Except as provided in this section, IRs may not use or transmit unsolicited faxes or use an automatic telephone dialing system relative to the operation of their STP businesses. The term “automatic telephone dialing system” means equipment which has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers. The terms "unsolicited faxes" means the transmission via telephone facsimile of any material or information advertising or promoting STP, its products, its compensation plan or any other aspect of the company which is transmitted to any person, except that these terms do not include a fax or e-mail: (a) to any person with that person's prior express invitation or permission; or (b) to any person with whom the IR has an established business or personal relationship. The term "established business or personal relationship" means a prior or existing relationship formed by a voluntary two way communication between an IR and a person, on the basis of: (a) an inquiry, application, purchase or transaction by the person regarding products offered by such IR; or (b) a personal or familial relationship, which relationship has not been previously terminated by either party.
4.2.9 - Use of STP’s Trademarks and Trade Names
The name of STP and other names as may be adopted by STP are proprietary trade names, trademarks and service marks of STP. As such, these marks are of great value to STP and are supplied to IRs for their use only in an expressly authorized manner. Use of STP name on any item not produced by the Company is prohibited except as follows:
IR's Name
Independent STP IR
4.2.10 - Telephone Book Listings
IRs may list themselves as an “Independent STP IR” in the white or yellow pages of the telephone directory under their own name, at their own expense. No IR may place telephone directory display ads using STP's name or logo. IRs may not answer the telephone by saying “STP”, “STP Incorporated”, or in any other manner that would lead the caller to believe that he or she has reached corporate offices of STP.
4.3 - Bonus Buying Prohibited
Bonus buying is strictly and absolutely prohibited. Bonus buying includes any mechanism or artifice to qualify for rank advancement, incentives, prizes, commissions or bonuses that is not driven by bona fide product or service purchases by end user consumers.
4.4 - Business Entities
A corporation, limited liability company, partnership or trust (collectively referred to in this section as a “Business Entity”) may apply to be an STP IR by submitting an IR Application and Agreement along with a properly completed Business Entity Registration Agreement and a properly completed IRS form W-9. The Business Entity Registration Agreement must be signed by all of the shareholders, members, partners, trustees, or other parties with any ownership interest in, or management responsibilities for, the Business Entity (collectively “Affiliated Parties”). The Business Entity, as well as all Affiliated Parties are individually, jointly and severally liable for any indebtedness to STP, compliance with the STP Policies and Procedures, the STP IR Agreement, and other obligations to STP.
To prevent the circumvention of Sections 4.28 (regarding transfers and assignments of an STP business) and 4.5, (regarding Sponsorship Changes), if any Affiliated Party wants to terminate his or her relationship with the Business Entity or STP, the Affiliated Party must terminate his or her affiliation with the Business Entity, notify STP Compliance Department in writing that he or she has terminated his/her affiliation with the Business Entity, and must comply with the provisions of Section 4.28. In addition, the party foregoing their interest in the Business Entity may not participate in any other STP business for six consecutive calendar months in accordance with Section 4.5.3. If the Business Entity wishes to bring on any new Affiliated Party, it must adhere to the requirements of Section 4.28.
The modifications permitted within the scope of this paragraph do not include a change of sponsorship. Changes of sponsorship are addressed in Section 4.5, below. There is a $25.00 fee for each change requested, which must be included with the written request and the completed IR Application and Agreement. STP may, at its discretion, require notarized documents before implementing any changes to an STP business. Please allow thirty (30) days after the receipt of the request by STP for processing.
4.4.1 - Changes to a Business Entity
Each IR must immediately notify STP of all changes to type of business entity they utilize in operating their businesses and the addition or removal of business associates. Changes shall be processed only once per year. All changes must be submitted by November 30 to become effective on January 1 of the following year.
4.5 - Change of Sponsor
To protect the integrity of all marketing organizations and safeguard the hard work of all IRs, STP prohibits changes in sponsorship more than 7 days after the date of enrollment as an IR except as noted in Sections 4.51, 4.5.2, or 4.5.3 below. Maintaining the integrity of sponsorship is critical for the success of every IR and marketing organization.
Requests for change of sponsorship must be submitted in writing to the IR Services Department, and must include the reason for the transfer. Transfers will only be considered in the following three circumstances:
4.5.1 - Misplacement
In cases in which the new IR is sponsored by someone other than the individual he or she was led to believe would be his or her Sponsor, an IR may request that he or she be transferred to another organization with his or her entire marketing organization intact. Requests for transfer under this policy will be evaluated on a case-by-case basis and must be made within 60 days from the date of enrollment. The IR requesting the change has the burden of proving that he or she was placed beneath the wrong sponsor. It is up to STP’s discretion whether the requested change will be implemented.
4.5.2 - Upline Approval
The IR seeking to transfer submits a properly completed and fully executed Sponsorship Transfer Form which includes the written approval of his or her immediate five upline IRs. The IR who requests the transfer must submit a fee of $50.00 for administrative charges and data processing. If the transferring IR also wants to move any of the IRs in his or her marketing organization, each downline IR must also obtain a properly completed Sponsorship Transfer Form and return it to STP with the $50.00 change fee (i.e., the transferring IR and each IR in his or her marketing organization multiplied by $50.00 is the cost to move an STP business.) Downline IRs will not be moved with the transferring IR unless all of the requirements of this paragraph are met. Transferring IRs must allow thirty (30) days after the receipt of the Sponsorship Transfer Forms by STP for processing and verifying change requests.
In cases wherein the appropriate sponsorship change procedures have not been followed, and a downline organization has been developed in the second business developed by an IR, STP reserves the sole and exclusive right to determine the final disposition of the downline organization. Resolving conflicts over the proper placement of a downline that has developed under an organization that has improperly switched sponsors is often extremely difficult. Therefore, IRS WAIVE ANY AND ALL CLAIMS AGAINST STP, ITS OFFICERS, DIRECTORS, OWNERS, EMPLOYEES, AND AGENTS THAT RELATE TO OR ARISE FROM STP’S DECISION REGARDING THE DISPOSITION OF ANY DOWNLINE ORGANIZATION THAT DEVELOPS BELOW AN ORGANIZATION THAT HAS IMPROPERLY CHANGED LINES OF SPONSORSHIP.
4.5.3 - Cancellation and Re-application
An IR may legitimately change organizations by voluntarily canceling his or her STP business and remaining inactive (i.e., no purchases of STP products for resale, no sales of STP products, no sponsoring, no attendance at any STP functions, participation in any other form of IR activity, or operation of any other STP business) for six (6) full calendar months. Following the six month period of inactivity, the former IR may reapply under a new Sponsor, however, the former IR’s downline will remain in their original line of sponsorship. STP will consider waiving the six month waiting period under exceptional circumstances. Such requests for waiver must be submitted to STP in writing.
4.6 - Unauthorized Claims and Actions
4.6.1 - Indemnification
An IR is fully responsible for all of his or her verbal and written statements made regarding STP products, services, and the Marketing and Compensation Plan which are not expressly contained in official STP materials. IRs agree to indemnify STP and STP’s directors, officers, employees, and agents, and hold them harmless from any and all liability including judgments, civil penalties, refunds, attorney fees, court costs, or lost business incurred by STP as a result of the IR’s unauthorized representations or actions. This provision shall survive the termination of the IR Agreement.
4.6.2- Income Claims
Because STP IRs do not have the data necessary to comply with the legal requirements for making income claims, an IR, when presenting or discussing the STP opportunity or Marketing and Compensation Plan to a prospective IR, may not make income projections, income claims, or disclose his or her STP income (including the showing of checks, copies of checks, bank statements, or tax records).
4.7 - Commercial Outlets
IRs may not sell STP products from a commercial outlet, nor may IRs display or sell STP products or literature in any retail or service establishment.
4.8 - Trade Shows, Expositions and Other Sales Forums
IRs may display and/or sell STP products at trade shows and professional expositions. Before submitting a deposit to the event promoter, IRs must contact the IR Services department in writing for conditional approval, as STP’s policy is to authorize only one STP business per event. Final approval will be granted to the first IR who submits an official advertisement of the event, a copy of the contract signed by both the IR and the event official, and a receipt indicating that a deposit for the booth has been paid. Approval is given only for the event specified. Any requests to participate in future events must again be submitted to the IR Services department. STP further reserves the right to refuse authorization to participate at any function which it does not deem a suitable forum for the promotion of its products, services, or the STP opportunity. Approval will not be given for swap meets, garage sales, flea markets or farmer’s markets as these events are not conducive to the professional image STP wishes to portray.
4.9 - Conflicts of Interest
4.9.1 - Nonsolicitation
STP IRs are free to participate in other multilevel or network marketing business ventures or marketing opportunities (collectively “network marketing”). However, during the term of this Agreement, IRs may not directly or indirectly Recruit other STP IRs or Customers for any other network marketing business.
Following the cancellation of an IR’s independent IR Agreement, and for a period of six calendar months thereafter, with the exception of an IR who is personally sponsored by the former IR, a former IR may not Recruit any STP IR or Customer for another network marketing business. IRs and the Company recognize that because network marketing is conducted through networks of independent contractors dispersed across the entire United States and internationally, and business is commonly conducted via the internet and telephone, an effort to narrowly limit the geographic scope of this non-solicitation provision would render it wholly ineffective. Therefore, IRs and STP agree that this non-solicitation provision shall apply to all markets in which STP conducts business.
The term “Recruit” means the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another STP IR or Customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity.
4.9.2 - Sale of Competing Goods or Services
IRs must not sell, or attempt to sell, any competing non-STP programs, products or services to STP Customers or IRs. Any program, product or services in the same generic categories as STP products or services is deemed to be competing, regardless of differences in cost, quality or other distinguishing factors.
4.9.3 - IR Participation in Other Direct Selling Programs
If an IR is engaged in other non-STP direct selling programs, it is the responsibility of the IR to ensure that his or her STP business is operated entirely separate and apart from any other program. To this end, the following must be adhered to:
• IRs shall not display STP promotional material, sales aids, products or services with or in the same location as, any non-STP promotional material or sales aids, products or services.
• IRs shall not offer the STP opportunity, products or services to prospective or existing Customers or IRs in conjunction with any non-STP program, opportunity, product or service.
• IRs may not offer any non-STP opportunity, products, services or opportunity at any STP-related meeting, seminar or convention, or within two hours and a five mile radius of the STP event. If the STP meeting is held telephonically or on the internet, any non-STP meeting must be at least two hours before or after the STP meeting, and on a different conference telephone number or internet web address from the STP meeting.
4.9.4 - Downline Activity (Genealogy) Reports
Downline Activity Reports are available for IR access and viewing at STP’s official web site. IR access to their Downline Activity Reports is password protected. All Downline Activity Reports and the information contained therein are confidential and constitute proprietary information and business trade secrets belonging to STP. Downline Activity Reports are provided to IRs in strictest confidence and are made available to IRs for the sole purpose of assisting IRs in working with their respective Downline Organizations in the development of their STP business. IRs should use their Downline Activity Reports to assist, motivate, and train their downline IRs. The IR and STP agree that, but for this agreement of confidentiality and nondisclosure, STP would not provide Downline Activity Reports to the IR. An IR shall not, on his or her own behalf, or on behalf of any other person, partnership, association, corporation or other entity:
• Directly or indirectly disclose any information contained in any Downline Activity Report to any third party;
• Directly or indirectly disclose the password or other access code to his or her Downline Activity Report;
• Use the information to compete with STP or for any purpose other than promoting his or her STP business;
• Recruit or solicit any IR or Customer of STP listed on any report, or in any manner attempt to influence or induce any IR or Customer of STP, to alter their business relationship with STP; or
• Use or disclose to any person, partnership, association, corporation, or other entity any information contained in any Downline Activity Report.
Upon demand by the Company, any current or former IR will return the original and all copies of Downline Activity Reports to the Company.
4.10 - Targeting Other Direct Sellers
STP does not condone IRs specifically or consciously targeting the sales force of another direct sales company to sell STP products or to become IRs for STP, nor does STP condone IRs solicitation or enticement of members of the sales force of another direct sales company to violate the terms of their contract with such other company. Should IRs engage in such activity, they bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration or mediation is brought against an IR alleging that he or she engaged in inappropriate recruiting activity of its sales force or customers, STP will not pay any of IR’s defense costs or legal fees, nor will STP indemnify the IR for any judgment, award, or settlement.
4.11 - Cross-Sponsoring
Actual or attempted cross sponsoring is strictly prohibited. “Cross sponsoring” is defined as the enrollment or attempted enrollment of an individual who or entity that already has a current Customer or IR Agreement on file with STP, or who has had such an agreement within the preceding six calendar months, within a different line of sponsorship. The use of a spouse’s or relative’s name, trade names, DBAs, assumed names, corporations, partnerships, trusts, federal ID numbers, fictitious ID numbers, any straw-man or other artifice to circumvent this policy is prohibited. IRs shall not demean, discredit or defame other STP IRs in an attempt to entice another IR to become part of the first IR’s marketing organization. This policy shall not prohibit a sponsorship change in accordance with Section 4.5.
If Cross Sponsoring is discovered, it must be brought to the Company’s attention immediately. STP may take disciplinary action against the IR that changed organizations and/or those IRs who encouraged or participated in the Cross Sponsoring. STP may also move all or part of the offending IR’s downline to his or her original downline organization if the Company deems it equitable and feasible to do so. However, STP is under no obligation to move the Cross Sponsored IR’s downline organization, and the ultimate disposition of the organization remains within the sole discretion of STP. IRs waive all claims and causes of action against STP arising from or relating to the disposition of the Cross Sponsored IR’s downline organization.
4.12 - Errors or Questions
If an IR has questions about or believes any errors have been made regarding commissions, bonuses, Downline Activity Reports, or charges, the IR must notify STP in writing within 60 days of the date of the purported error or incident in question. STP will not be responsible for any errors, omissions or problems not reported to the Company within 60 days.
4.13 - Governmental Approval or Endorsement
Neither federal nor state regulatory agencies or officials approve or endorse any direct selling or network marketing companies or programs. Therefore, IRs shall not represent or imply that STP or its Marketing and Compensation Plan have been "approved," "endorsed" or otherwise sanctioned by any government agency.
4.14 - Holding Applications or Orders
IRs must not manipulate enrollments of new applicants and purchases of products. All IR Applications and Agreements, and product orders must be sent to STP within 72 hours from the time they are signed by an IR or placed by a customer, respectively.
4.15 - Identification
All IRs are required to provide their Social Security Number, or a Federal Employer Identification Number to STP on the IR Application and Agreement. Upon enrollment, the Company will provide a unique IR Identification Number to the IR by which he or she will be identified. This number will be used to place orders, and track commissions and bonuses.
4.16 - Income Taxes
Each IR is responsible for paying local, state and federal taxes on any income generated as an IR. If an STP business is tax exempt, the federal tax identification number must be provided to STP. Every year, STP will provide an IRS Form 1099 MISC (Non-employee Compensation) earnings statement to each U.S. resident who: 1) Had earnings of over $600 in the previous calendar year; or 2) Made purchases during the previous calendar year in excess of $5,000.
4.17 - Income Tax Compliance
An IR must be in strict compliance with all applicable State and Federal tax filing and payment laws, rules and regulations. Failure to maintain such compliance may result in the involuntary cancellation of the non-compliant IR’s IR Agreement. If an IR has not filed one or more tax returns as required by law, the IR understands and agrees that his or her IR Agreement will be automatically terminated if attempts to become current on said returns have not been made within 30 days of the date of such IR’s enrollment as an IR.
4.18 - Independent Contractor Status
IRs are independent contractors. The agreement between STP and its IRs does not create an employer/employee relationship, agency, partnership, or joint venture between the Company and the IR. IRs shall not be treated as employees for his or her services or for Federal or State tax purposes. All IRs are responsible for paying local, state, and federal taxes due from all compensation earned as an IR of the Company. The IR has no authority (expressed or implied), to bind the Company to any obligation. Each IR shall establish his or her own goals, hours, and methods of sale, so long as he or she complies with the terms of the IR Agreement, these Policies and Procedures, and applicable laws.
4.19 - Insurance
You may wish to arrange insurance coverage for your business. Your homeowner’s insurance policy does not cover business-related injuries, or the theft of or damage to inventory or business equipment. Contact your insurance agent to make certain that your business property is protected. This can often be accomplished with a simple “Business Pursuit” endorsement attached to your present home owner’s policy.
4.20 - International Marketing
Because of critical legal and tax considerations, STP must limit the resale of STP, products and services, and the presentation of the STP business to prospective customers and IRs located within the United States and U.S. Territories and those other countries that the Company has announced are officially opened for business. Moreover, allowing a few IRs to conduct business in markets not yet opened by STP would violate the concept of affording every IR the equal opportunity to expand internationally.
Accordingly, IRs are authorized to sell STP products and services, and enroll Customers or IRs only in the countries in which STP is authorized to conduct business, as announced in official Company literature. STP products or sales aids cannot be shipped into or sold in any foreign country. IRs may sell, give, transfer, or distribute STP products or sales aids only in their home country. In addition, no IR may, in any unauthorized country: (a) conduct sales, enrollment or training meetings; (b) enroll or attempt to enroll potential customers or IRs; or (c) conduct any other activity for the purpose of selling STP products, establishing a marketing organization, or promoting the STP opportunity.
4.21 - Excess Purchases
IRs must never purchase more products or services than they can reasonably use in a month, and must not influence or attempt to influence any other IR to buy more products or services than they can reasonably use or sell to retail customers in a month.
4.22 - Adherence to Laws and Ordinances
IRs shall comply with all federal, state, and local laws and regulations in the conduct of their businesses. As provided in Section 4.17 above, all IRs must be in strict compliance with all applicable State and Federal tax filing and payment laws, rules and regulations. Failure to maintain such compliance may result in the involuntary cancellation of a non-compliant IR’s IR Agreement. Many cities and counties have laws regulating certain home-based businesses. In most cases these ordinances are not applicable to IRs because of the nature of their business. However, IRs must obey those laws that do apply to them. If a city or county official tells an IR that an ordinance applies to him or her, the IR shall be polite and cooperative, and immediately send a copy of the ordinance to the Compliance Department of STP.
4.23 - Minors
A person who is recognized as a minor in his/her state of residence may not be an STP IR. IRs shall not enroll or recruit minors into the STP program.
4.24 - One STP Business Per IR and Per Household
An IR may operate or have an ownership interest, legal or equitable, as a sole proprietorship, partner, shareholder, trustee, or beneficiary, in only one STP business. No individual may have, operate or receive compensation from more than one STP business. Individuals of the same family unit may not enter into or have an interest in more than one STP Business. A “family unit” is defined as spouses and dependent children living at or doing business at the same address.
In order to maintain the integrity of the STP Marketing and Compensation Plan, husbands and wives or common-law couples (collectively “spouses”) who wish to become STP IRs must be jointly sponsored as one STP business. Spouses, regardless of whether one or both are signatories to the IR Application and Agreement, may not own or operate any other STP business, either individually or jointly, nor may they participate directly or indirectly (as a shareholder, partner, trustee, trust beneficiary, or any other legal or equitable ownership) in the ownership or management of another STP business in any form.
An exception to the one business per household rule will be considered on a case by case basis, such as, if two IRs marry or in cases of an IR receiving an interest in another business through inheritance. Requests for exceptions to policy must be submitted in writing to the Compliance Department.
4.25 - Actions of Household Members or Affiliated Individuals
If any member of an IR’s immediate household engages in any activity which, if performed by the IR, would violate any provision of the Agreement, such activity will be deemed a violation by the IR and STP may take disciplinary action pursuant to the Statement of Policies against the IR. Similarly, if any individual associated in any way with a corporation, partnership, LLC, trust or other entity (collectively “Business Entity”) violates the Agreement, such action(s) will be deemed a violation by the Business Entity, and STP may take disciplinary action against the Business Entity. Likewise, if an IR enrolls in STP as a Business Entity, each shareholder, officer, member, partner, or other individual or entity with an ownership interest or management responsibility in the Business Entity shall be personally and individually bound to, and must comply with, the terms and conditions of the Agreement.
4.26 - Requests for Records
Any request from an IR for copies of invoices, applications, downline activity reports, or other records will require a fee of $4.00 per page per copy. This fee covers the expense of mailing and time required to research files and make copies of the records.
4.27 - Roll-up of Marketing Organization
When a vacancy occurs in a Marketing Organization due to the termination of an STP business, each IR in the first level immediately below the terminated IR on the date of the cancellation will be moved to the first level (“front line”) of the terminated IR’s sponsor. For example, if A sponsors B, and B sponsors C1, C2, and C3, if B terminates her business, C1, C2, and C3 will “roll-up” to A and become part of A’s first level.
4.28 - Sale, Transfer or Assignment of an STP Business
Although an STP business is a privately owned, independently operated business, the sale, transfer or assignment of an STP business, and the sale, transfer, or assignment of an interest in a Business Entity that owns or operates an STP business, is subject to certain limitations. If an IR wishes to sell his or her STP business, or interest in a Business Entity that owns or operates an STP business, the following criteria must be met:
• The buyer or transferee must become a qualified STP IR. If the buyer is an active STP IR, he or she must first terminate his or her STP business and wait six calendar months before acquiring any interest in a different STP business;
• Before the sale, transfer or assignment can be finalized and approved by STP, any debt obligations the selling party has with STP must be satisfied.
• The selling party must be in good standing and not in violation of any of the terms of the Agreement in order to be eligible to sell, transfer or assign an STP business.
Prior to selling an STP business or Business Entity interest, the selling party must notify STP’s Compliance Department in writing and advise of his or her intent to sell the STP business or Business Entity interest. The selling party must also receive written approval from the Compliance Department before proceeding with the sale. No changes in line of sponsorship can result from the sale or transfer of an STP business.
4.29 - Separation of an STP Business
STP IRs sometimes operate their STP businesses as husband-wife partnerships, regular partnerships, LLCs, corporations, trusts, or other Business Entities. At such time as a marriage may end in divorce, or a corporation, LLC, partnership, trust or other Business Entity may dissolve, arrangements must be made to assure that any separation or division of the business is accomplished so as not to adversely affect the interests and income of other businesses up or down the line of sponsorship.
During the divorce or entity dissolution process, the parties must adopt one of the following methods of operation:
• One of the parties may, with consent of the other(s), operate the STP business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners or trustees authorize STP to deal directly and solely with the other spouse or non-relinquishing shareholder, partner or trustee.
• The parties may continue to operate the STP business jointly on a “business-as-usual” basis, whereupon all compensation paid by STP will be paid according to the status quo as it existed prior to the divorce filing or dissolution proceedings. This is the default procedure if the parties do not agree on the format set forth above.
Under no circumstances will the Downline Organization of divorcing spouses or a dissolving business entity be divided. Similarly, under no circumstances will STP split commission and bonus checks between divorcing spouses or members of dissolving entities. STP will recognize only one Downline Organization and will issue only one commission check per STP business per commission cycle. Commission checks shall always be issued to the same individual or entity. In the event that parties to a divorce or dissolution proceeding are unable to resolve a dispute over the disposition of commissions and ownership of the business in a timely fashion as determined by the Company, the IR Agreement shall be involuntarily canceled, and STP will roll-up their entire organization pursuant to Section 4.27.
If a former spouse has completely relinquished all rights in the original STP business pursuant to a divorce, he or she is thereafter free to enroll under any sponsor of his or her choosing without waiting six calendar months. In the case of business entity dissolutions, the former partner, shareholder, member, or other entity affiliate who retains no interest in the business must wait six calendar months from the date of the final dissolution before re-enrolling as an IR. In either case, the former spouse or business affiliate shall have no rights to any IRs in their former organization or to any former retail customer. They must develop the new business in the same manner as would any other new IR.
4.30 - Sponsoring Online
When sponsoring a new IR through the online enrollment process, the sponsor may assist the new applicant in filling out the enrollment materials. However, the applicant must personally review and agree to the online application and agreement, STP’s Policies and Procedures, and the STP Compensation Plan. The sponsor may not fill out the online application and agreement on behalf of the applicant and agree to these materials on behalf of the applicant.
4.31 - Succession
Upon the death or incapacitation of an IR, his or her business may be passed to his or her heirs. Appropriate legal documentation must be submitted to the Company to ensure the transfer is proper. Accordingly, an IR should consult an attorney to assist him or her in the preparation of a will or other testamentary instrument. Whenever an STP business is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and commissions of the deceased IR’s marketing organization provided the following qualifications are met. The successor(s) must:
• Execute an IR Agreement;
• Comply with terms and provisions of the Agreement;
• Meet all of the qualifications for the deceased IR’s status;
• The devisee must provide STP with an “address of record” to which all bonus and commission checks will be sent;
• If the business is bequeathed to joint devisees, they must form a business entity and acquire a Federal Taxpayer Identification Number. STP will issue all bonus and commission checks and one 1099 to the business entity.
4.31.1 - Transfer Upon Death of an IR
To effect a testamentary transfer of an STP business, the executor of the estate must provide the following to STP: (1) an original death certificate; (2) a notarized copy of the will or other instrument establishing the successor’s right to the STP business; (3) certified letters testamentary or a letter of administration appointing an executor; and (4) written instructions from the authorized executor to STP specifying to whom the business and income should be transferred.
4.31.2 - Transfer Upon Incapacitation of an IR
To effectuate a transfer of an STP business because of incapacity, the successor must provide the following to STP: (1) a notarized copy of an appointment as trustee; (2) a notarized copy of the trust document or other documentation establishing the trustee’s right to administer the STP business; and (3) a completed IR Agreement executed by the trustee.
4.32 - Telemarketing Techniques
The Federal Trade Commission and the Federal Communications Commission each have laws that restrict telemarketing practices. Both federal agencies (as well as a number of states) have “do not call” regulations as part of their telemarketing laws. Although STP does not consider IRs to be “telemarketers” in the traditional sense of the word, these government regulations broadly define the term “telemarketer” and “telemarketing” so that your inadvertent action of calling someone whose telephone number is listed on the federal “do not call” registry could cause you to violate the law. Moreover, these regulations must not be taken lightly, as they carry significant penalties (up to $11,000.00 per violation).
Therefore, IRs must not engage in telemarketing in the operation of their STP businesses. The term “telemarketing” means the placing of one or more telephone calls to an individual or entity to induce the purchase of an STP product or service, or to recruit them for the STP opportunity. “Cold calls" made to prospective customers or IRs that promote either STP’s products or services or the STP opportunity constitute telemarketing and are prohibited. However, a telephone call(s) placed to a prospective customer or IR (a "prospect") is permissible under the following situations:
• If the IR has an established business relationship with the prospect. An “established business relationship” is a relationship between an IR and a prospect based on the prospect’s purchase, rental, or lease of goods or services from the IR, or a financial transaction between the prospect and the IR, within the eighteen (18) months immediately preceding the date of a telephone call to induce the prospect's purchase of a product or service.
• The prospect’s personal inquiry or application regarding a product or service offered by the IR, within the three (3) months immediately preceding the date of such a call.
• If the IR receives written and signed permission from the prospect authorizing the IR to call. The authorization must specify the telephone number(s) which the IR is authorized to call.
• You may call family members, personal friends, and acquaintances. An “acquaintance” is someone with whom you have at least a recent first-hand relationship within the preceding three months. Bear in mind, however, that if you engage in “card collecting” with everyone you meet and subsequently calling them, the FTC may consider this a form of telemarketing that is not subject to this exemption. Thus, if you engage in calling “acquaintances,” you must make such calls on an occasional basis only and not make this a routine practice.
• In addition, IRs shall not use automatic telephone dialing systems relative to the operation of their STP businesses. The term “automatic telephone dialing system” means equipment that has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.
4.33 - Back Office Access
STP makes online back offices available to its IRs. Back offices provide IRs access to confidential and proprietary information that may be used solely and exclusively to promote the development of an IR’s STP business and to increase sales of STP products. However, access to a back office is a privilege, and not a right. STP reserves the right to deny IRs’ access to the back office at its sole discretion.
SECTION 5 - RESPONSIBILITIES OF IRS
5.1 - Change of Address, Telephone, and E-Mail Addresses
To ensure timely delivery of products, support materials, and commission checks, it is critically important that the STP’s files are current. Street addresses are required for shipping since UPS cannot deliver to a post office box. IRs planning to change their e-mail address or move must send their new address and telephone numbers to STP’s Corporate Offices to the attention of the IR Services Department, or IRs must amend their contact information through their IR Back Office. To guarantee proper delivery, two weeks advance notice must be provided to STP on all changes.
5.2 - Continuing Development Obligations
5.2.1 - Ongoing Training
Any IR who sponsors another IR into STP must perform a bona fide assistance and training function to ensure that his or her downline is properly operating his or her STP business. IRs must have ongoing contact and communication with the IRs in their Downline Organizations. Examples of such contact and communication may include, but are not limited to: newsletters, written correspondence, personal meetings, telephone contact, voice mail, electronic mail, and the accompaniment of downline IRs to STP meetings, training sessions, and other functions. Upline IRs are also responsible to motivate and train new IRs in STP product knowledge, effective sales techniques, the STP Marketing and Compensation Plan, and compliance with Company Policies and Procedures. Communication with and the training of downline IRs must not, however, violate Section 4.2 (regarding the development of IR-produced sales aids and promotional materials).
IRs should monitor the IRs in their Downline Organizations to guard against downline IRs making improper product or business claims, or engaging in any illegal or inappropriate conduct.
5.2.2 - Increased Training Responsibilities
As IRs progress through the various levels of leadership, they will become more experienced in sales techniques, product knowledge, and understanding of the STP program. They will be called upon to share this knowledge with lesser experienced IRs within their organization.
5.2.3 - Ongoing Sales Responsibilities
Regardless of their level of achievement, IRs have an ongoing obligation to continue to personally promote sales through the generation of new customers and through servicing their existing customers.
5.3 - Nondisparagement
STP wants to provide its independent IRs with the best products, compensation plan, and service in the industry. Accordingly, we value your constructive criticisms and comments. All such comments should be submitted in writing to the IR Services Department. Remember, to best serve you, we must hear from you! While STP welcomes constructive input, negative comments and remarks made in the field by IRs about the Company, its products, or compensation plan serve no purpose other than to sour the enthusiasm of other STP IRs. For this reason, and to set the proper example for their downline, IRs must not disparage, demean, or make negative remarks about STP, other STP IRs, STP’s products, the Marketing and Compensation plan, or STP’s directors, officers, or employees.
5.4 - Providing Documentation to Applicants
IRs must provide the most current version of the Policies and Procedures and the Compensation Plan to individuals whom they are sponsoring to become IRs before the applicant signs an IR Agreement. Additional copies of Policies and Procedures can be downloaded from STP’s website.
5.5 - Reporting Policy Violations
IRs observing a Policy violation by another IR should submit a written report of the violation directly to the attention of the STP Compliance Department. Details of the incidents such as dates, number of occurrences, persons involved, and any supporting documentation should be included in the report.
SECTION 6 - SALES REQUIREMENTS
6.1 - Product Sales
The STP Marketing and Compensation Plan is based on the sale of STP products and services to end consumers. IRs must fulfill personal and Downline Organization retail sales requirements (as well as meet other responsibilities set forth in the Agreement) to be eligible for bonuses, commissions and advancement to higher levels of achievement. The following sales requirements must be satisfied for IRs to be eligible for commissions:
• IRs must satisfy the Personal Volume and Group Volume requirements to fulfill the requirements associated with their rank as specified in the STP Marketing and Compensation Plan. “Personal Volume” includes purchases made by the IR and purchases made by the IR’s personal customers. Group Sales Volume shall include the total Sales Volume of all IRs in his or her marketing organization, but shall not include the IR’s Personal Sales Volume.
• At least 70% of an IR’s total monthly personal sales volume must be sold to personal retail customers.
• IRs must develop or service at least five Customers every month.
6.2 - No Territory Restrictions
There are no exclusive territories granted to anyone. No franchise fees are required.
6.3 - Sales Receipts
All IRs must provide their retail customers with two copies of an official STP sales receipt at the time of the sale. These receipts set forth the Customer Satisfaction Guarantee as well as any consumer protection rights afforded by federal or state law. IRs must maintain all retail sales receipts for a period of two years and furnish them to STP at the Company’s request. Records documenting the purchases of IRs’ Direct Customers will be maintained by STP. When an order is placed online, a receipt will be emailed to the buyer.
Remember that customers must receive two copies of the sales receipt. In addition, IRs must orally inform the buyer of his or her cancellation rights.
SECTION 7 - BONUSES AND COMMISSIONS
7.1 - Bonus and Commission Qualifications
AN IR must be active and in compliance with the Agreement to qualify for bonuses and commissions. So long as an IR complies with the terms of the Agreement, STP shall pay commissions to such IR in accordance with the Marketing and Compensation plan. The minimum amount for which STP will issue a check is $20.00. If an IR’s bonuses and commissions do not equal or exceed $20.00, the Company will accrue the commissions and bonuses until they total $20.00. A check will be issued once $20.00 has been accrued.
7.2 - Adjustment to Bonuses and Commissions
7.2.1 - Adjustments for Returned Products and Services
IRs receive bonuses and commissions based on the actual sales of products and services to end consumers. When a product is returned to STP for a refund or is repurchased by the Company, either of the following may occur at the Company’s discretion: (1) the bonuses and commissions attributable to the returned or repurchased product(s) will be deducted, in the month in which the refund is given, and continuing every pay period thereafter until the commission is recovered, from the upline IRs who received bonuses and commissions on the sales of the refunded products; or (2) the upline IRs who earned commissions based on the sale of the returned products will have the corresponding points deducted from their Group Volume in the next month and all subsequent months until it is completely recovered.
7.2.2 - Check Processing Fee
A $3.50 check processing and handling fee will be deducted from each commission check issued.
7.2.3 - Authorized Deductions for Product Payment
If an IR has a standing monthly product order with STP and wishes to pay for the products through deductions from his/her commissions, STP will make the appropriate deduction upon receipt of the IR’s Commission Deduction Authorization form. If an IR lacks sufficient funds in his/her commission account to pay for the products, STP will charge the IR’s credit card for the balance of the amount due.
7.2.4 - Tax Withholdings
If an IR fails to submit a W-9 form, STP will deduct the necessary withholdings from the IR’s commission checks as required by law.
7.3 - Reports
All information provided by STP in online or telephonic downline activity reports, including but not limited to personal and group sales volume (or any part thereof), and downline sponsoring activity is believed to be accurate and reliable. Nevertheless, due to various factors including but not limited to the inherent possibility of human, digital, and mechanical error; the accuracy, completeness, and timeliness of orders; denial of credit card and electronic check payments; returned products; credit card and electronic check charge-backs; the information is not guaranteed by STP or any persons creating or transmitting the information.
ALL PERSONAL AND GROUP SALES VOLUME INFORMATION IS PROVIDED "AS IS" WITHOUT WARRANTIES, EXPRESS OR IMPLIED, OR REPRESENTATIONS OF ANY KIND WHATSOEVER. IN PARTICULAR BUT WITHOUT LIMITATION THERE SHALL BE NO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, OR NON INFRINGEMENT.
TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, STP AND/OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION WILL IN NO EVENT BE LIABLE TO ANY IR OR ANYONE ELSE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT ARISE OUT OF THE USE OF OR ACCESS TO PERSONAL AND/OR GROUP SALES VOLUME INFORMATION (INCLUDING BUT NOT LIMITED TO LOST PROFITS, BONUSES, OR COMMISSIONS, LOSS OF OPPORTUNITY, AND DAMAGES THAT MAY RESULT FROM INACCURACY, INCOMPLETENESS, INCONVENIENCE, DELAY, OR LOSS OF THE USE OF THE INFORMATION), EVEN IF STP OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. TO THE FULLEST EXTENT PERMITTED BY LAW, STP OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION SHALL HAVE NO RESPONSIBILITY OR LIABILITY TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY OR OTHER THEORY WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT OR TERMS AND CONDITIONS RELATED THERETO.
Access to and use of STP’s online and telephone reporting services and your reliance upon such information is at your own risk. All such information is provided to you "as is". If you are dissatisfied with the accuracy or quality of the information, your sole and exclusive remedy is to discontinue use of and access to STP’s online and telephone reporting services and your reliance upon the information.
SECTION 8 - PRODUCT GUARANTEES, RETURNS AND INVENTORY REPURCHASE
8.1 - Product Guarantee
STP offers a 100%, 7 day money-back satisfaction guarantee (less shipping charges) to all Customers, retail customers, and IRs.
8.2 - Returns by Retail Customers
STP offers, through its IRs, a 100%, 7 day money-back guarantee to all retail customers. Every IR is bound to honor the retail customer guarantee. If, for any reason, a retail customer is dissatisfied with any STP product or service, the retail customer may return the unused portion of the product to the IR from whom it was purchased, within 7 days, for a replacement, exchange or a full refund of the purchase price (including shipping costs).
The following provision sets forth the minimum refund permitted by law to a retail customer:
A retail customer who makes a purchase of $25.00 or more has three business days (72 hours, excluding Sundays and legal holidays) after the sale or execution of a contract to cancel the order and receive a full refund consistent with the cancellation notice on the order form (5 days for Alaska residents). When an IR makes a sale or takes an order from a retail customer who cancels or requests a refund within the 72 hour period, the IR must promptly refund the customer's money as long as the products are returned to the IR in substantially as good condition as when received (5 days for Alaska residents). IRs must orally inform customers of their right to rescind a purchase or an order within 72 hours (5 days for Alaska residents), and ensure that the date of the order or purchase is entered on the order form. All retail customers must be provided with two copies of an official STP sales receipt at the time of the sale. The back of the receipt provides the customer with written notice of his or her rights to cancel the sales agreement.
8.3 - Return of Inventory and Sales Aids by IRs Upon Cancellation
Upon cancellation of an IR’s Agreement, the IR may return his or her Business Kit and sales aids held in his or her inventory for a refund. IRs may only return Business Kits, products and sales aids that he or she personally purchased from STP (purchases from other IRs or third parties are not subject to refund) and which are in Resalable (see Definition of “Resalable” below) condition and which have been purchased within one year prior to the date of cancellation. Upon receipt of a Resalable Business Kit and/or Resalable products and sales aids, the IR will be reimbursed 90% of the net cost of the original purchase price(s). Shipping charges incurred by an IR when the Business Kit, products or sales aids were purchased will not be refunded. If the purchases were made through a credit card, the refund will be credited back to the same account. If an IR was paid a commission based on a product(s) that he or she purchased, and such product(s) is subsequently returned for a refund, the commission that was paid based on that product purchase will be deducted from the amount of the refund.
8.3.1 - Montana Residents
A Montana resident may cancel his or her IR Agreement within 15 days from the date of enrollment, and may return his or her Business Kit for a full refund within such time period.
8.4 - Procedures for All Returns
The following procedures apply to all returns for refund, repurchase, or exchange:
• All merchandise must be returned by the IR or customer who purchased it directly from STP.
• All products to be returned must have a Return Authorization Number which is obtained by calling the IR Services Department. This Return Authorization Number must be written on each carton returned.
• The return is accompanied by:
o a completed and signed Consumer Return Form;
o a copy of the original dated retail sales receipt; and
o the unused portion of the product in its original container.
• Proper shipping carton(s) and packing materials are to be used in packaging the product(s) being returned for replacement, and the best and most economical means of shipping is suggested. All returns must be shipped to STP shipping pre-paid. STP does not accept shipping-collect packages. The risk of loss in shipping for returned product shall be on the IR. If returned product is not received by the Company’s Distribution Center, it is the responsibility of the IR to trace the shipment.
• If an IR is returning merchandise to STP that was returned to him or her by a personal retail customer, the product must be received by STP within ten (10) days from the date on which the retail customer returned the merchandise to the IR, and must be accompanied by the sales receipt the IR gave to the customer at the time of the sale.
No refund or replacement of product will be made if the conditions of these rules are not met.
SECTION 9 - DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS
9.1 - Disciplinary Sanctions
Violation of the Agreement, these Policies and Procedures, violation of any common law duty, including but not limited to any applicable duty of loyalty, any illegal, fraudulent, deceptive or unethical business conduct, or any act or omission by an IR that, in the sole discretion of the Company may damage its reputation or goodwill (such damaging act or omission need not be related to the IR’s STP business), may result, at STP's discretion, in one or more of the following corrective measures:
• Issuance of a written warning or admonition;
• Requiring the IR to take immediate corrective measures;
• Imposition of a fine, which may be withheld from bonus and commission checks;
• Loss of rights to one or more bonus and commission checks;
• STP may withhold from an IR all or part of the IR’s bonuses and commissions during the period that STP is investigating any conduct allegedly violative of the Agreement. If an IR’s business is canceled for disciplinary reasons, the IR will not be entitled to recover any commissions withheld during the investigation period;
• Suspension of the individual’s IR Agreement for one or more pay periods;
• Involuntary termination of the offender’s IR Agreement;
• Suspension and/or termination of the offending IR’s STP website or website access;
• Any other measure expressly allowed within any provision of the Agreement or which STP deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the IR’s policy violation or contractual breach;
• In situations deemed appropriate by STP, the Company may institute legal proceedings for monetary and/or equitable relief.
9.2 - Grievances and Complaints
When an IR has a grievance or complaint with another IR regarding any practice or conduct in relationship to their respective STP businesses, the complaining IR should first report the problem to his or her Sponsor who should review the matter and try to resolve it with the other party's upline sponsor. If the matter involves interpretation or violation of Company policy, it must be reported in writing to the IR Services Department at the Company. The IR Services Department will review the facts and attempt to resolve it.
9.3 - Mediation
Prior to instituting an arbitration, the parties shall meet in good faith and attempt to resolve any dispute arising from or relating to the Agreement through non-binding mediation. One individual who is mutually acceptable to the parties shall be appointed as mediator. The mediator’s fees and costs, as well as the costs of holding and conducting the mediation, shall be divided equally between the parties. Each party shall pay its portion of the anticipated shared fees and costs at least 10 days in advance of the mediation. Each party shall pay its own attorneys fees, costs, and individual expenses associated with conducting and attending the mediation. Mediation shall be held in the City of Las Vegas, Nevada and shall last no more than two business days.
9.4 - Arbitration
If mediation is unsuccessful, any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. IRs waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in the County of Clark, Nevada. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure, and the Federal Rules of Evidence shall apply. There shall be one arbitrator, an attorney at law, who shall have expertise in business law transactions with a strong preference being an attorney knowledgeable in the direct selling industry, selected from the panel which the American Arbitration Panel provides. The prevailing party shall be entitled to receive from the losing party costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court of competent jurisdiction. This agreement to arbitration shall survive any termination or expiration of the Agreement.
Notwithstanding the foregoing, nothing in these Policies and Procedures shall prevent STP from applying to and obtaining from any court having jurisdiction a writ of attachment, a temporary injunction, preliminary injunction, permanent injunction or other relief available to safeguard and protect STP’s interest prior to, during or following the filing of any arbitration or other proceeding or pending the rendition of a decision or award in connection with any arbitration or other proceeding.
9.5 - Governing Law, Jurisdiction and Venue
Jurisdiction and venue of any matter not subject to arbitration shall reside exclusively in Clark County, State of Nevada. The Federal Arbitration Act shall govern all matters relating to arbitration. The law of the State of Nevada shall govern all other matters relating to or arising from the Agreement. Notwithstanding the foregoing, and the mediation and arbitration provisions in Sections 9.3 and 9.4 above residents of the State of Louisiana shall be entitled to bring an action against STP in their home forum and pursuant to Louisiana law.
SECTION 10 - PAYMENT AND SHIPPING
10.1 - Returned Checks
All checks returned by an IR’s bank for insufficient funds will be re-submitted for payment. A $50.00 returned check fee will be charged to the account of the IR. After receiving a returned check from a customer or an IR, all future orders must be paid by Credit Card, money order or cashier’s check. Any outstanding balance owed to STP by an IR for NSF checks and returned check fees will be withheld from subsequent bonus and commission checks.
10.2 - Restrictions on Third Party Use of Credit Cards and Checking Account Access
IRs shall not permit other IRs or Customers to use his or her credit card, or permit debits to their checking accounts, to enroll or to make purchases from the Company.
10.3 - Sales Taxes
In designing the STP opportunity, one of our guiding philosophies has been to free IRs from as many administrative, operational, and logistical tasks as possible. In doing so, IRs are free to concentrate on those activities that directly affect their incomes, namely product sales and enrollment activities. To these ends, STP relieves IRs of the burdens of collecting and remitting sales taxes, filing sales tax reports, and keeping records relative to sales taxes.
By virtue of its business operations, STP is required to charge sales taxes on all purchases made by IRs and Customers, and remit the taxes charged to the respective states. Accordingly, STP will collect and remit sales taxes on behalf of IRs, based on the suggested retail price of the products, according to applicable tax rates in the state or province to which the shipment is destined. If an IR has submitted, and STP has accepted, a current Sales Tax Exemption Certificate and Sales Tax Registration License, sales taxes will not be added to the invoice and the responsibility of collecting and remitting sales taxes to the appropriate authorities shall be on the IR. Exemption from the payment of sales tax is applicable only to orders which are shipped to a state for which the proper tax exemption papers have been filed and accepted. Applicable sales taxes will be charged on orders that are drop-shipped to another state. Any sales tax exemption accepted by STP is not retroactive.
SECTION 11 - INACTIVITY, RECLASSIFICATION, AND CANCELLATION
11.1 - Effect of Cancellation
So long as an IR remains active and complies with the terms of the IR Agreement and these Policies and Procedures, STP shall pay commissions to such IR in accordance with the Marketing and Compensation Plan. An IR’s bonuses and commissions constitute the entire consideration for the IR's efforts in generating sales and all activities related to generating sales (including building a downline organization). Following an IR’s non-renewal of his or her IR Agreement, cancellation for inactivity, or voluntary or involuntary cancellation of his or her IR Agreement (all of these methods are collectively referred to as “cancellation”), the former IR shall have no right, title, claim or interest to the marketing organization which he or she operated, or any commission or bonus from the sales generated by the organization. An IR whose business is cancelled will lose all rights as an IR. This includes the right to sell STP products and services and the right to receive future commissions, bonuses, or other income resulting from the sales and other activities of the IR’s former downline sales organization. In the event of cancellation, IRs agree to waive all rights they may have, including but not limited to property rights, to their former downline organization and to any bonuses, commissions or other remuneration derived from the sales and other activities of his or her former downline organization.
Following an IR’s cancellation of his or her IR Agreement, the former IR shall not hold himself or herself out as an STP IR and shall not have the right to sell STP products or services. An IR whose IR Agreement is canceled shall receive commissions and bonuses only for the last full pay period he or she was active prior to cancellation (less any amounts withheld during an investigation preceding an involuntary cancellation).
11.2 - Cancellation Due to Inactivity
If an IR has not earned a commission for three consecutive months (and thus become “inactive”), his or her IR Agreement shall be canceled for inactivity. If he or she is on the Company’s autopay program, the autopay agreement shall remain in force. If the former IR was not on autopay, he or she will be entitled to continue purchasing products directly from the company at IR pricing.
11.3 - Involuntary Cancellation
An IR’s violation of any of the terms of the Agreement, including any amendments that may be made by STP in its sole discretion, may result in any of the sanctions listed in Section 9.1, including the involuntary cancellation of his or her IR Agreement. Cancellation shall be effective on the date on which written notice is mailed, emailed, faxed, or delivered to an express courier, to the IR’s last known address, email address, or fax number, or to his/her attorney, or when the IR receives actual notice of cancellation, whichever occurs first.
STP reserves the right to terminate all IR Agreements upon thirty (30) days written notice in the event that it elects to: (1) cease business operations; (2) dissolve as a corporate entity; or (3) terminate distribution of its products via direct selling.
11.4 - Voluntary Cancellation
A participant in this network marketing plan has a right to cancel at any time, regardless of reason. Cancellation must be submitted in writing to the Company at its principal business address. The written notice must include the IR’s signature, printed name, address, and IR I.D. Number. If an IR is also a Customer, the IR’s Customer Agreement shall continue in force unless the IR also specifically requests that his or her Customer Agreement also be canceled.
11.5 - Non-renewal
AN IR may also voluntarily cancel his or her IR Agreement by failing to renew the Agreement on its anniversary date. The Company may also elect not to renew an IR's Agreement upon its anniversary date.
SECTION 12 - DEFINITIONS
Achieved Rank - This is the highest rank attained while building this business. This rank will remain as long as a Rep earns a commission at least once every three months. Notwithstanding an IR’s Achieved Rank, the IR will be paid according to his or her “Active Rank”. See the definition of “Active Rank” below.
Active Independent Representative - An Independent Representative (or “IR”) who satisfies the minimum Personal Sales Volume requirements, as set forth in the STP Marketing and Compensation Plan, to ensure that he or she is eligible to receive bonuses and commissions.
Active Rank - The term “active rank” refers to the current rank of an IR, as determined by the STP Marketing and Compensation Plan, for any month. To be considered “active” relative to a particular rank, an IR must meet the criteria set forth in the STP Marketing and Compensation Plan for his or her respective rank. (See the definition of “Rank” below.)
Agreement - The contract between the Company and each IR includes the Independent Representative Application and Agreement, the STP Policies and Procedures, the STP Marketing and Compensation Plan, and the Business Entity Form (where appropriate), all in their current form and as amended by STP in its sole discretion. These documents are collectively referred to as the “Agreement.”
Business Kit - This consists of a Welcome/Sales Kit, Virtual Office from which a Representative can track sales and enrollments, it also includes training on managing their business legally and professionally. All IRs must purchase a Business Kit when enrolling.
Cancel - The termination of an IR’s business. Cancellation may be either voluntary, involuntary, through non-renewal or inactivity.
Commission Cycle – This is a real-time commission credit. The IR has up until noon on Friday of each week to request a commission withdraw.
Customer - This is an Individual or entity that purchases “Standdown Tax Prep” Tax or Business products but who is not an IR. Also referred to as a “Retail Customer”. See the definition of “Retail Sale” below.
Downline Leg - Each one of the individuals enrolled immediately underneath you and their respective marketing organizations represent one “leg” in your marketing organization.
Genealogy Report - A monthly report generated by STP that provides critical data relating to the identities of IRs, sales information, and enrollment activity of each IR’s Marketing Organization. This report contains confidential and trade secret information which is proprietary to STP. This report is also referred to as the “Downline Activity Report”. See Section 4.9.4 above.
Group Volume (GV)- The commissionable value of STP products or services sold by an IR’s Marketing Organization. Group Sales Volume includes up to 680 of the subject IR’s Personal Sales Volume. (Business Kits and other sales aids have no Sales Volume.)
IBTS - This is the processing company that takes care of all Standdown Tax Prep Independent Representative and Customers.
Immediate Household - Heads of household and dependent family members residing in the same house.
Independent Representative (or “IR”) - This is a person or business entity who executes an Independent Representative Application and Agreement and purchases a Business Kit, and who has not been cancelled for any reason.
Level - The layers of downline Customers and IRs in a particular IR’s Marketing Organization. This term refers to the relationship of an IR relative to a particular upline IR, determined by the number of IRs between them who are related by sponsorship. For example, if A sponsors B, who sponsors C, who sponsors D, who sponsors E, then E is on A’s fourth level.
Loss of Active Status - This happens when an Independent Representative has not earned a commission within 90 days or has not met the PV, GV, and/or Retail quotas for that same time period. See the definition of “Active Independent Representative” above.
Loss of ”Paid As” Rank - If an IR fails to personally produce the minimum PV or GV specified for their rank, or fails to meet the minimum Retail Customer quota for his or her Rank, the IR will lose his or her Active Rank for that commission period. The IR will be paid at the highest rank at which he or she actually qualifies (the “Active Rank”) based on the PV, GV, and retail Customer quotas for which they actually qualify.
Loss Recovery Fee - If STP recovers overpaid past taxes for a client as a result of a Tax Review performed by the Company, there is a Loss Recovery Fee of 15% of the money recovered that is paid to IBTS.
Marketing Organization - The Customers and IRs sponsored below a particular IR.
Official STP Material - Literature, audio or video tapes, and other materials developed, printed, published and distributed by STP to IRs.
Pay Cut-Off Period – Is noon on Friday of each week to request a commission withdraw.
Paid as Rank - This is the IR’s current Active Rank at the Pay Cut-Off Period. The Paid as Rank is based on the subject IR’s number of personally sponsored active IR, customers, PV, GV over the qualifying time period. This will fluctuate based on the IR’s efforts, dedication, skill, leadership ability and how well the IR trains his or her Marketing Organization. This may not be the same as an Independent Representatives Achieved Rank.
Pay Qualification time period – This is real time. When an IR or Customer purchases a product or service, the system will look back 30 days to determine your Paid as Rank for commissions and/or Rank advancements (if applicable).
Personal Production - Moving STP products or services to an end consumer for personal use.
Personal Volume (PV) - An IR’s Personal Sales Volume includes the commissionable value of services and products purchased in a month: (1) by the IR; (2) by the IR’s Retail Customers.
Rank - The “title” that an IR has achieved pursuant to the STP Marketing and Compensation Plan.
Recruit - For purposes of STP’s Conflict of Interest Policy (Section 4.9), the term “Recruit” means:
(a) the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another STP IR or Customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity; and
(b) The conduct described in (a) above constitutes recruiting even if the IR’s actions are in response to an inquiry made by another IR or by a Customer. This subsection (b) shall not be applicable in California.
Resalable - Products and Sales aids shall be deemed "resalable" if each of the following elements is satisfied: 1) they are unopened and unused; 2) packaging and labeling has not been altered or damaged; 3) they are in a condition such that it is a commercially reasonable practice within the trade to sell the merchandise at full price; 4) it is returned to STP within one year from the date of purchase. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be resalable.
Resident Agency Fee - This is the fee paid to the Resident Agent of a business entity. The commission will only be paid on Resident Agency fees that are handled by our processing company (IBTS) offices. See the definition of “Resident Agent” below.
Resident Agent – Under state laws, a business entity such as a corporation or an LLC must have a Resident Agent. The Resident Agent is a business or individual designated to receive service of process on behalf of a business entity when the business entity is a party in a legal action such as a lawsuit or summons. The Resident Agent’s address is also the address where the state in which the business entity is organized may send the paperwork for the yearly renewal of the business entity's charter. Also referred to as “Registered Agent”.
Retail Customer – See the definition of “Customer” above.
Retail Sales – Sales to a Retail Customer. If a sale is made to a customer who subsequently submits an STP IR Agreement within 30 days from the date of the sale, or if an immediate household family member of the Customer submits an STP IR Agreement within 30 days of the sale, such sale shall not constitute a Retail Sale. An IR’s personal purchases from STP do not constitute Retail Sales.
Roll-Up - The method by which a vacancy in a Marketing Organization left by an IR whose IR Agreement has been canceled is filled. See Section 4.27 above.
Sponsor - An IR who enrolls a Customer or another IR into the Company, and is listed as the Sponsor on the IR Application and Agreement. The act of enrolling others and training them to become IRs is called “sponsoring.”
Star-IR - An IR who meets the qualifications above their initial status and has earned a commission within the most recent three month period.
Suspension Period - This is a seven day period following the first day that an IR drops below their PV or GV quota, or fails to meet the Retail Customer quota specified for their rank. The IR’s points will be held during this period. This is not to be confused with “suspended”, which is a disciplinary sanction that may be imposed by the Company against an IR who has violated the terms of the IR Agreement (See Section 9.1 above).
Tax Data Base Fee - This is the fee that is required for programming a Customer’s Data, in depth, into the system the first time. Two years of tax returns are required for this process.
Two Years Tax Review Fee - This is the fee charged for reviewing two years of income tax returns to confirm accuracy and potentially recover overpaid tax dollars. If an IR or Customer has paid for the $230.00 Tax Data Base set up, this Tax review is done at the same time without an extra fee being charged for it.
Unfiled Tax Return Fee - This is the fee for preparing and submitting unfiled Tax Returns on past years. This fee costs $320.00 per tax return year for Retail Customers and $289.00 per tax return year for IRs. Prices are subject to change at the Company’s discretion.
Upline - This term refers to the IR or IRs above a particular IR in a sponsorship line up to the Company. Conversely stated, it is the line of sponsors that links any particular IR to the Company.
2% Bonus Pool - This is the pool of the entire company GV paid on a monthly basis that is shared by all the Independent Representatives who attain 6 Star Rank based on a percentage calculated from the GV of each 6 Star IR’s organization. The cut off will be the first day of each month at noon Pacific Standard Time.
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