SECTION 1 - CODE OF ETHICS
Legacy Direct (hereafter “Legacy Direct” or the “Company”) has made a commitment to provide the finest direct sales experience backed by impeccable service to its Distributors and customers. In turn, the Company expects Legacy Direct Distributors to reflect that image in their relationships with customers and fellow Distributors.
As a Legacy Direct Distributor you are expected to operate your business according to the highest standards of integrity and fair practice in your role as a Legacy Direct Distributor. Failure to comply with the Code of Ethics can result in your termination as a Legacy Direct Distributor. The Code of Ethics, therefore, states:
As an Independent Distributor:
1. I will conduct my business in an honest, ethical manner at all times.
2. I will make no representations about the income benefits of being a Distributor with Legacy Direct or the benefits of the Legacy Direct products other than those contained in officially-approved Company literature.
3. I will provide support and encouragement to my customers and other Distributors to ensure that their experience with Legacy Direct is a successful one.
4. I will motivate and actively work with Distributors in my downline organization to help them build their Legacy Direct business. I understand that that this support is critical to each Distributor’s success with Legacy Direct.
5. I will refrain from making income claims, exaggerating my personal income or the income potential in general and will stress to Distributor candidates the level of effort and commitment required to succeed in the business.
6. I will not abuse the goodwill of my association with Legacy Direct to further or promote other business interests (particularly those which may be competitive to Legacy Direct) without the prior written consent of Legacy Direct.
7. I will not make disparaging remarks about other products, services, distributors, or companies; likewise, I will not willfully denigrate the activities or personalities of fellow Legacy Direct Distributors.
8. I will abide by all of the Policies and Procedures of Legacy Direct as included herein, or as may be amended from time to time.
9. I will not make any payment(s) or promise to pay any prospective or existing Distributor in return for such Distributor’s enrollment, continued enrollment, or team building or recruiting activities with Legacy Direct.
SECTION 2 - INTRODUCTION
2.1 - Policies and Compensation Plan Incorporated into Distributor Agreement
These Policies and Procedures, in their present form and as amended at the sole discretion of Legacy Direct, are incorporated into, and form an integral part of, the Legacy Direct Distributor Agreement. Throughout these Policies and Procedures, when the term “Agreement” is used, it collectively refers to the Legacy Direct Distributor Application and Agreement Form, these Policies and Procedures and the Legacy Direct Compensation Plan. These documents are incorporated by reference into the Legacy Direct Distributor Agreement (all in their current form and as may be amended by Legacy Direct).
2.2 - Purpose of Policies
Legacy Direct is a direct sales company that markets products through Independent Distributors. Independent Distributors have the ability to receive commissions and bonuses by selling Legacy Direct products (see Legacy Direct Compensation Plan). It is important to understand that your success and the success of your fellow Distributors depends on the integrity of those who market our services. To clearly define the relationship that exists between Distributors and Legacy Direct, and to explicitly set a standard for acceptable business conduct, Legacy Direct has established the Agreement. Legacy Direct Distributors are required to comply with all of the provisions set forth in the Agreement, which Legacy Direct may amend at its sole discretion from time to time, as well as with all federal, state and local laws governing their Legacy Direct business and their conduct. Because you may be unfamiliar with many of these standards of practice, it is very important that you read and abide by the Agreement. Please review the information in this document carefully. It explains and governs the relationship between you, as an independent contractor, and the Company. If you have any questions regarding any policy or rule, do not hesitate to seek an answer from the Legacy Direct corporate office.
2.3 - Changes to the Agreement
Because laws and the business environment periodically change, Legacy Direct reserves the right to amend the Agreement, the products offered, the compensation plan, and the prices at the Company’s sole and absolute discretion. By signing the Distributor Agreement, a Distributor agrees to abide by all amendments or modifications that Legacy Direct elects to make. Amendments shall be effective 30 days after publication of notice of amendments in official Legacy Direct materials. The Company shall provide or make available to all Distributors a complete copy of the amended provisions by one or more of the following methods: (a) posting on the Company’s official website; (b) electronic mail (email); (c) inclusion in Company periodicals; (d) inclusion with commissions or bonus checks; or (e) special mailings. The continuation of a Distributor’s Legacy Direct business or a Distributor’s acceptance of bonuses or commissions constitutes acceptance of any and all amendments.
2.4 - Delays
Legacy Direct 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, government decrees or orders, and acts of God.
2.5 - 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 and shall be construed as if such invalid or unenforceable provision never comprised a part of the Agreement.
2.6 - 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 Legacy Direct to exercise any right or power under the Agreement or to insist upon strict compliance by a Distributor 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 Legacy Direct’s right to demand exact compliance with the Agreement. Waiver by Legacy Direct can be affected only in writing by an authorized officer of the Company. Legacy Direct’s waiver of any particular breach by a Distributor shall not affect or impair Legacy Direct’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Distributor. Nor shall any delay or omission by Legacy Direct to exercise any right arising from a breach affect or impair Legacy Direct’s rights as to that or any subsequent breach. The existence of any claim or cause of action of a Distributor against Legacy Direct shall not constitute a defense to Legacy Direct’s enforcement of any term or provision of the Agreement.
SECTION 3 - BECOMING A DISTRIBUTOR
3.1 - Requirements to Become a Distributor
To become a Legacy Direct Distributor, each applicant must:
3.1.1 - Be at least 18 years of age; or have written permission and signature agreement on the Distributor application agreement of their parent or legal guardian;
3.1.2 - Reside in the 50 United States or other jurisdictions officially opened by the Company;
3.1.3 - Have a valid Social Security or Tax ID number;
3.1.4 - Submit an accepted Legacy Direct Distributor Application and Agreement; and The Company reserves the right to reject any applications for a new Distributor or applications for renewal. No product purchase is required to become a new Distributor. However, Distributors will be required to purchase an at-cost distributor kit.
3.2 - Distributor Benefits
Once the Distributor Application and Agreement have been accepted by Legacy Direct, the following benefits are available to the new Distributor:
1. Market and sell Legacy Direct products;
2. Participate in the Legacy Direct Compensation Plan (receive bonuses and commissions, if eligible);
3. Sponsor other individuals as Distributors into the Legacy Direct business and thereby, build a marketing organization and progress through Legacy Direct Compensation Plan;
4. Receive periodic Legacy Direct literature and other Legacy Direct communications;
5. Participate in Legacy Direct-sponsored support, service, training, motivational and recognition functions, upon payment of appropriate charges, if applicable; and
6. Participate in promotional incentives and programs sponsored by Legacy Direct for its Distributors.
SECTION 4 - OPERATING A LEGACY DIRECT BUSINESS
4.1 - Adherence to the Legacy Direct Compensation Plan
Distributors must adhere to the terms of the Legacy Direct Compensation Plan as set forth in official Legacy Direct literature. Distributors shall not offer the Legacy Direct opportunity through, or in combination with, any other system, program or method of marketing other than that specifically set forth in official Legacy Direct literature. Distributors shall not require or encourage other current or prospective customers or Distributors to participate in Legacy Direct in any manner that varies from the program as set forth in official Legacy Direct literature. Distributors shall not require or encourage other current or prospective customers or Distributors to execute any agreement or contract other than official Legacy Direct agreements and contracts in order to become a Legacy Direct Distributor. Similarly, Distributors shall not require or encourage other current or prospective customers or Distributors to make any purchase from, or payment to, any individual or other entity to participate in the Legacy Direct Compensation Plan other than those purchases or payments identified as recommended or required in official Legacy Direct literature.
4.2 - Bonus Buying Prohibited
Bonus buying is strictly and absolutely prohibited. “Bonus buying” includes:
a. the enrollment of individuals without their knowledge and agreement and/or without execution of a Distributor Application;
b. the fraudulent enrollment of an individual as a Distributor;
c. the enrollment or attempted enrollment of non-existent individuals as Distributors;
d. the use of a credit card by or on behalf of a Distributor or customer when the Distributor or customer is not the account holder of such credit card;
e. purchasing Legacy Direct products on behalf of another Distributor, or under another Distributor’s ID number, to qualify for commissions or bonuses.
4.3 - Business Entities
A Partnership, LLC or Corporation may hold a Distributor business upon completion of the Distributor Application form, and providing on that form in the appropriate space, a Federal tax ID number. However, an individual may not participate in or have any beneficial interest in more than one (1) Distributor business of any kind. The person signing the application on behalf of a business entity must have the authority of said entity for entering into the transaction. In addition, by signing for as a business entity, you certify that no person with an interest of debt or equity in the business has had an interest in a Distributor business with Legacy Direct within six (6) months of the date of signature.
4.4 - Changes to a Legacy Direct Business
4.4.1 - General
Each Distributor must immediately notify Legacy Direct of all changes to the information contained in his or her Distributor Application and Agreement. Distributors may modify their existing Distributor Agreement Form by submitting a written request and appropriate supporting documentation.
4.4.2 - Change of Sponsor
To protect the integrity of all marketing organizations and safeguard the hard work of all Distributors, Legacy Direct does not allow changes in sponsorship for active Distributors. Maintaining the integrity of sponsorship is critical for the success of every Distributor and marketing organization. Accordingly, the transfer of a Legacy Direct business from one sponsor to another is not permitted.
A request for a change in sponsor, due to Legacy Direct error, will be accepted within 30 days of the submission of the new Distributor application.
4.4.3 - Cancellation and Re-application
A Distributor may legitimately change organizations by:
Voluntarily canceling his or her Legacy Direct Agreement and remaining inactive (i.e., no purchases of Legacy Direct products; no sales of Legacy Direct products; no sponsoring; no attendance at any Legacy Direct functions, no participation in any other form of Distributor activity, and no operation of any other Legacy Direct business) for 6 full calendar months.
Following the 6 calendar month period of inactivity, the former Distributor may reapply under a new sponsor. However the former Distributor will permanently lose any and all right to their former Distributor Downline organization. “Downline” shall mean the organization of Independent Distributors that enroll and are placed under any Independent Distributor.
4.5 - Unauthorized Claims and Actions
4.5.1 - Indemnification
A Legacy Direct Distributor is fully responsible for all of his or her verbal and written statements made regarding Legacy Direct products, services, and the Compensation Plan that are not expressly contained in official Legacy Direct materials. Distributors agree to indemnify Legacy Direct and Legacy Direct’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 Legacy Direct as a result of the Distributor’s unauthorized representations or actions. This provision shall survive the termination of the Distributor Agreement.
4.5.2 - Income Claims and Marketing
In their enthusiasm to enroll prospective Distributors, some Distributors are occasionally tempted to make income claims or earnings representations to demonstrate the inherent power of network marketing. This is counterproductive because new Distributors may become disappointed very quickly if their results are not as extensive or as rapid as the results others have achieved.
Moreover, the Federal Trade Commission and the States have laws or regulations that regulate or even prohibit certain types of income claims and testimonials made by persons engaged in network marketing. While Distributors may believe it is beneficial to provide copies of checks, or to disclose their earnings or others, such approaches have legal consequences that can negatively impact Legacy Direct as well as the Distributor making the claim unless appropriate disclosures required by law are also made contemporaneously with the income claim or earnings representation. Because Distributors do not have the data necessary to comply with the legal requirements for making income claims, a Distributor may NOT make income projections, income claims or disclose his or her Legacy Direct income (including the showing of checks, copies of checks, bank statements or tax records).
When promoting the products and the tremendous opportunity Legacy Direct offers, Distributors must use only the sales tools and support materials produced by Legacy Direct. The Company has carefully designed its products, product labels, Compensation Plan and promotional materials to ensure that they are promoted in a fair, truthful manner; that they are substantiated and the material complies with the legal requirements of federal and state laws. Accordingly, Distributors must not produce their own literature, advertisements, sales tools, promotional materials, Internet Web pages, blogs, and/or social media pages.
4.5.3 – Claims of Illegal Use
When promoting Legacy Direct products, Distributors shall not make any verbal or written statement regarding the use—or potential use—of Legacy Direct products for any illegal purpose. This includes, but is not limited to, statements regarding knowledge of the illegal use of Legacy Direct products by the Distributor or any third party, the compatibility of Legacy Direct products with any other product known to be used for illegal purposes, or the potential compatibility of Legacy Direct products with any other product known or unknown that would facilitate any practice prohibited by law. Distributors agree to indemnify Legacy Direct and Legacy Direct’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 Legacy Direct as a result of any such statements made by the Distributor.
4.6 - Conduct at Legacy Direct Corporate Events
4.6.1 - No Selling or Recruiting at Legacy Direct Events
Selling and recruiting at official Legacy Direct corporate events is not permitted. These activities take away from the primary focus of the event, and can negatively reflect on the professional image of Legacy Direct as a company. You may, however, offer a business card and/or catalog.
4.6.2 - No Selling or Recruiting for Other Companies at Legacy Direct Events
Legacy Direct Distributors shall not sell any products or recruit for any business during Legacy Direct events. This restriction most specifically applies to sales and recruitment efforts for any other direct sales or marketing program, regardless of the product category, including those that do not compete with Legacy Direct’s product line.
4.7 - Conflicts of Interest
4.7.1 - Competition Policy
Legacy Direct Distributors are free to participate in other multilevel or network marketing business ventures or marketing opportunities (collectively “network marketing”), with the exception of those products in the same generic category as Legacy Direct products. Distributors may not display Legacy Direct products with any other products or services in a fashion that might in any way confuse or mislead a prospective customer or Distributor into believing there is a relationship between the Legacy Direct and non-Legacy Direct products or services.
4.7.2 – Non-solicitation
During the term of this Agreement, Distributors may not recruit other Legacy Direct Distributors or customers for any other network marketing business. Following the cancellation of this Agreement for any reason, and for a period of one year thereafter, a former Distributor may not recruit any Legacy Direct Distributor or customer for another network marketing business, with the exception of a Distributor who is personally sponsored by the former Distributor. The Distributors and Company recognize that because network marketing is conducted through networks of independent contractors dispersed across the entire United States, 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, the Distributors and Company agree that this non-solicitation provision shall apply to all markets in which Legacy Direct conducts business.
The term “recruit” means actual or attempted solicitation, enrollment, encouragement or effort to influence in any other way, either directly or through a third party, another Legacy Direct Distributor or customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity.
4.7.3- Downline Activity (Genealogy) Reports
Downline Activity Reports made available for Distributor access and viewing through Legacy Direct’s official website are considered confidential. Distributor 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 Legacy Direct. Downline Activity Reports are provided to Distributors in the strictest of confidence and are made available to Distributors for the sole purpose of assisting Distributors in working with their respective Downline Organizations in the development of their Legacy Direct business. Distributors should use their Downline Activity Reports to assist, motivate and train their Downline Distributors. The Distributor and Legacy Direct agree that, but for this agreement of confidentiality and nondisclosure, Legacy Direct would not provide Downline Activity Reports to the Distributor. A Distributor shall not, on his or her own behalf, or on behalf of any other person, partnership, association, corporation or other entity:
1. Directly or indirectly disclose any information contained in any Downline Activity Report to any third party;
2. Directly or indirectly disclose the password or other access code to his or her Downline Activity Report;
3. Use the information to compete with Legacy Direct or for any purpose other than promoting his or her Legacy Direct business;
4. Recruit or solicit any Distributor or Customer of Legacy Direct listed on any report or in any manner attempt to influence or induce any Distributor or customer of Legacy Direct to alter their business relationship with Legacy Direct;
5. Use or disclose to any person, partnership, association, corporation or other entity any information contained in any Downline Activity Report.
6. Upon demand by the Company, any current or former Distributor will return the original and all copies of Downline Activity Reports to the Company.
4.8 - Cross-Sponsoring
Actual or attempted cross-sponsoring is strictly prohibited. “Cross-sponsoring” is defined as the enrollment of an individual or entity that is already a current Customer or Distributor of Legacy Direct, or who has had such an agreement within the preceding 6 calendar months, within a different line of sponsorship. The use of a spouse or relative’s name, a straw man, trade names, assumed names or fictitious ID numbers to circumvent this policy is prohibited. Distributors shall not demean, discredit or defame other Legacy Direct Distributors in an attempt to entice another Distributor to become part of the first Distributor’s marketing organization. If a prohibited organization transfer occurs, Legacy Direct shall take disciplinary action against the Distributor(s) who engaged, acquiesced and/or knowingly participated in the improper cross-sponsoring. However, it shall be entirely within Legacy Direct’s discretion where in the genealogical structure, the cross-sponsored organization in question shall be placed or otherwise distributed.
Because equities often exist in favor of both Upline organizations, DISTRIBUTORS WAIVE ANY AND ALL CLAIMS AND CAUSES OF ACTION AGAINST THE COMPANY FOR ITS DECISION REGARDING THE FINAL DISPOSITION OR PLACEMENT OF THE CROSSSPONSORED ORGANIZATION. “Upline” shall mean the organization of Independent Distributors enrolled and placed above any Independent Distributor.
4.9 - Errors or Questions
If a Distributor has questions about or believes any errors have been made regarding commissions, bonuses, Downline Activity Reports, or charges, the Distributor must notify the Legacy Direct Distributor Support Department at 1221 E. Dyer Road, Santa Ana, California 92705, in writing, within 15 days of the date of the purported error or incident in question. Legacy Direct will not be responsible for any errors, omissions or problems not reported to the Company within 15 days.
4.10 – Sales Aids Optional
Distributors are not required to purchase or carry sales aids. Distributors who do so must make his or her own decision with regard to these matters. Absolutely no use of the Legacy Direct name may be used on marketing materials, including any social media such as Facebook or InstaGram. To ensure that Distributors are not encumbered with Company Sales Aids, such Sales Aids may be returned to Legacy Direct upon the Distributor’s cancellation pursuant to the terms of Section 8.2.
4.11 - Governmental Approval or Endorsement
No federal or state regulatory agencies or officials approve or endorse any direct selling program. Therefore, Distributors shall not represent or imply that Legacy Direct or its Compensation Plan have been “approved,” “endorsed” or otherwise sanctioned by any government agency.
4.12 - Holding Applications or Enrollments
Distributors must not manipulate enrollments of new Distributors or customer orders. All Distributor Applications and Agreements must be sent within 72 hours from the time they are signed by a Distributor.
4.13 - Identification
All Distributors are required to provide their Social Security Number or Federal Tax Identification Number to Legacy Direct on the Distributor Application and Agreement.
Upon enrollment, the Company will provide a unique Distributor Identification Number to the Distributor by which he or she will be identified. This number will be used to place orders and track commissions and bonuses.
4.14 - Income Taxes
Each Distributor is responsible for paying local, state and federal taxes on any income generated as a Distributor. Every year, Legacy Direct will provide IRS Form 1099 (non-employee compensation) earnings statement to each U.S. resident who (a) had earnings of over $600 in the previous calendar year or (b) made purchases during the previous calendar year in excess of $5,000 wholesale.
4.15 - Independent Contractor Status
Distributors are independent contractors and are not purchasers of a franchise or a business opportunity. The agreement between Legacy Direct and its Distributors does not create an employer/employee relationship, agency, partnership or joint venture between the Company and the Distributor. Distributors shall not be treated as an employee for his or her services or for federal or state tax purposes. All Distributors are responsible for paying local, state and federal taxes due from all compensation earned as a Distributor of the Company. The Distributor has no authority (expressed or implied) to bind the Company to any obligation. Each Distributor shall establish his or her own goals, hours, and methods of sale, so long as he or she complies with the terms of the Distributor Agreement Form, and these Policies and Procedures, and applicable laws.
The name of Legacy Direct and other names as may be adopted by Legacy Direct are proprietary trade names, trademarks and service marks of Legacy Direct. As such, these marks are of great value to Legacy Direct and are supplied to Distributors for their use only in an expressly authorized manner. Use of the Legacy Direct name on any item not produced by the Company is prohibited except as follows:
Independent Legacy Direct Distributor
All Distributors may list themselves as an “Independent Legacy Direct Distributor” in the residential telephone directory (“white pages”) under their own name. Distributors may not place telephone directory display ads in the classified directory (“Yellow Pages”) using Legacy Direct’s name or logo.
Distributors may not answer the telephone by saying “Legacy Direct” or in any other manner that would lead the caller to believe that he or she has reached the corporate offices of the Company.
Advertising is not limited to print media; it also includes internet advertising and other forms of advertising. It is prohibited for a Distributor to use an internet or email address that utilizes the trade name Legacy Direct, or includes Legacy Direct in a portion of the address. It is also prohibited for a Distributor to use any website materials on a website that references or relates to Legacy Direct that is not authorized in writing by Legacy Direct. It is also prohibited for a Distributor to place links to unauthorized websites or web pages onto a website or webpage that has been authorized by Legacy Direct.
4.16 - Insurance
4.16.1 - Business Pursuits Coverage
You may wish to arrange insurance coverage for your business. Your homeowner’s insurance policy may not cover business related injuries or the theft of or damage to your business. Contact your insurance agent to make sure that your business property is protected.
4.17 - International Marketing
Because of critical legal and tax considerations, Legacy Direct must limit the marketing and enrollment of Legacy Direct services and the presentation of the Legacy Direct business to prospective customers and Distributors located within the 50 United States of America and any other jurisdiction officially opened by Legacy Direct. Distributors are only authorized to do business in the countries in which Legacy Direct has announced are open for business in official Company literature.
4.18 - Laws and Ordinances
Distributors shall comply with all federal, state and local laws and regulations in the conduct of their businesses. Many cities and counties have laws regulating certain home-based businesses. In most cases these ordinances are not applicable to Distributors because of the nature of their business. However, Distributors must obey those laws that do apply to them. If a city or county official tells a Distributor that an ordinance applies to him or her, the Distributor shall comply with the law.
4.19 - Minors
Distributors shall not enroll or recruit individuals under the age of 18 into the Legacy Direct program.
4.20 - Actions of Household Members or Affiliated Individuals.
If any member of a Distributor’s household, family, or other affiliated individual engages in any activity that, if performed by the Distributor, would violate any provision of the Agreement, such activity will be deemed a violation by the Distributor and Legacy Direct may take disciplinary action pursuant to the Statement of Policies against the Distributor.
4.21 - One Legacy Direct Business Per Distributor and Household Restrictions
A Distributor may operate or have an ownership interest in only one Legacy Direct business. No individual may have, operate or receive compensation from more than one Legacy Direct business. Individuals of the same family unit may enter into or have an interest in more than one Legacy Direct Business provided a family member acts as the direct sponsor of the other. A “family unit” is defined as spouses, domestic partners and dependent children living at or doing business at the same address.
An exception to the one-business-per-Distributor rule will be considered on a case-by-case basis if two existing Distributors marry. Requests for exceptions to this policy must be submitted in writing to the Compliance Department.
4.22 – Seventy Percent (70%) Rule
Legacy Direct will strictly adhere to the policy that prior to honoring an order for product by a Distributor, the Distributor must certify that he/she has sold at retail at least 70% of all prior inventory purchased. A Distributor will be allowed to purchase a reasonable amount of product for personal use.
The Company will monitor compliance with this rule, and any fraudulent information supplied or fraudulent certifications provided by the Distributor will be grounds for termination. For this reason it is important that the Distributor keep accurate sales records.
It is Company policy to strictly prohibit the purchase of products in unreasonable amounts solely for the purpose of qualifying for commissions or advancement within the Compensation Plan. All such forms of frontloading or stockpiling are strictly prohibited.
4.23 - Requests for Records
Any request from a Distributor for copies of invoices, agreements, Downline activity reports or other records/reports will require a fee of $1.00 per page per copy. This fee covers the expense of mailing and time required to research files and make copies of the records.
4.24 - Sale, Transfer or Assignment of Legacy Direct Business
4.24.1 – Although an Legacy Direct business is a privately owned, independently operated business, the sale, transfer or assignment of an Legacy Direct business, and the sale, transfer or assignment of an interest in a Business Entity that owns or operates a Legacy Direct Distributor business, is subject to certain limitations. If a Distributor wishes to sell his or her Legacy Direct business, or interest in a Business Entity that owns or operates a Legacy Direct business, the following criteria must be met:
1. The selling Distributor must offer Legacy Direct the right of first refusal to purchase the business on the same terms as agreed upon with a third-party buyer. Legacy Direct shall have fifteen (15) days from the date of receipt of the written offer from the seller to exercise its right of first refusal.
2. The buyer or transferee must become a qualified Distributor. If the buyer is an active Legacy Direct Distributor, he or she must first terminate his or her Legacy Direct business and however the six (6) calendar month waiting period may be waived before acquiring any interest in the new Legacy Direct business;
3. Before the sale, transfer or assignment can be finalized and approved by Legacy Direct, any debt obligations the selling party has with Legacy Direct must be satisfied.
4. 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 a Legacy Direct Distributor business.
Prior to selling a Business Entity interest, the selling party must notify Legacy Direct’s Compliance Department in writing and advise of his or her intent to sell Legacy Direct’s business or Business Entity interest. The selling party must also receive written approval from the Compliance Department before proceeding with the sale.
4.25 - Separation of a Legacy Direct Distributor Business
In the event of a dissolution of marriage of a Legacy Direct Distributor, and a spouse, arrangements must be made to assure that any division of the business assets is accomplished so as not to adversely affect the interests and income of other businesses up or down the line of sponsorship. If the separating parties fail to provide for the best interests of other Distributors and the Company, Legacy Direct may be forced to involuntarily terminate the Distributor Agreement.
4.25.1 - During the pendency of a divorce or dissolution, the Company shall treat the business according to the status quo as existed prior to the filing of the divorce or dissolution.
Under no circumstances will the Downline Organization of divorcing spouses be divided. Similarly, under no circumstances will Legacy Direct split commission and bonus checks between divorcing spouses. Legacy Direct will recognize only one Downline Organization and will issue only one commission check per Legacy Direct business per commission cycle. Commission checks shall always be issued to the individual whose name appears on the Distributor Agreement.
4.26 - Sponsoring
All active Distributors in good standing have the right to sponsor and enroll others into Legacy Direct. Each prospective Distributor has the ultimate right to choose his or her own sponsor. If two Distributors claim to be the sponsor of the same new Distributor, the Company shall regard the first application received by the Company as controlling.
4.27 - Stacking
“Stacking” is strictly prohibited. The term “stacking” includes: (a) violating the one-business-per-household rule and/or (b) enrolling fictitious individuals or entities into the Legacy Direct Compensation Plan, in an attempt to manipulate the Compensation Plan.
4.28 - Telemarketing
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. While you may not consider yourself a “telemarketer” in the traditional sense of the word, these 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, Distributors must not engage in telemarketing relative to the operation of their Legacy Direct businesses. The term “telemarketing” means the placing of one or more telephone calls to an individual or entity to induce the purchase of a Legacy Direct product or service, or to recruit them for the Legacy Direct opportunity. “Cold calls” made to prospective customers or Distributors that promote either Legacy Direct’s products or services or the Legacy Direct opportunity constitute telemarketing and are prohibited. However, a telephone call(s) placed to a prospective customer or Distributor (a “prospect”) is permissible under the following situations:
1. If the Distributor has an established business relationship with the prospect. An “established business relationship” is a relationship between a Distributor and a prospect based on the prospect’s purchase, rental or lease of goods or services from the Distributor, or a financial transaction between the prospect and the Distributor, within the 18 months immediately preceding the date of a telephone call to induce the prospect’s purchase of a product or service.
2. The prospect’s personal inquiry or application regarding a product or service offered by the Distributor within the 3 months immediately preceding the date of such a call.
3. If the Distributor receives written and signed permission from the prospect authorizing the Distributor to call. The authorization must specify the telephone number(s) that the Distributor is authorized to call.
4. You may call family members, personal friends and acquaintances. An “acquaintance” is someone with whom you have at least a recent first-hand relationship (i.e., you have recently personally met him or her). Bear in mind, however, that if you make a habit of “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.
5. In addition, Distributors shall not use automatic telephone dialing systems relative to the operation of their Legacy Direct 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.
SECTION 5 - RESPONSIBILITIES OF DISTRIBUTORS
5.1 - Change of Address or Telephone
To ensure timely delivery of products, support materials and commission checks, it is critically important that Legacy Direct's files are current. Distributors planning to move should email Legacy Direct corporate office, at firstname.lastname@example.org, their new address and telephone numbers. To guarantee proper delivery, two-weeks advance notice to Legacy Direct is recommended on all changes.
5.2 - Continuing Development Obligations
5.2.1 - Ongoing Training
Any Distributor who sponsors another Distributor into Legacy Direct must perform a bona fide assistance and training function to ensure that his or her Downline is properly operating his or her Legacy Direct business. Distributors must have ongoing contact and communication with the Distributors 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 Distributors to Legacy Direct meetings, training sessions, and other functions. Upline Distributors are also responsible to motivate and train new Distributors in Legacy Direct product knowledge, effective sales techniques, the Legacy Direct Compensation Plan and compliance with Company Policies and Procedures. Communication with and the training of Downline Distributors must not, however, violate Section 4.5.2 (regarding the development of Distributor-produced sales aids and promotional materials). Distributors cannot charge for training.
Upon request, every Distributor should be able to provide documented evidence to Legacy Direct of his or her ongoing fulfillment of the responsibilities of a sponsor.
5.2.2 - Increased Training Responsibilities
As Distributors progress through the various levels of leadership, they will become more experienced in sales techniques, product knowledge and understanding of the Legacy Direct program. They will be called upon to share this knowledge with lesser-experienced Distributors within their organization.
5.2.3 - Ongoing Sales Responsibilities
Regardless of their level of achievement, Distributors have an ongoing obligation to continue to personally promote sales through the generation of new customers or Distributors and through servicing their existing customers or Distributors.
5.3 – Non-disparagement
Legacy Direct wants to provide its Distributors 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 Legacy Direct corporate offices. While Legacy Direct welcomes constructive input, negative comments and remarks made in the field by Distributors about the Company, its products or Compensation Plan serve no purpose other than to sour the enthusiasm of other Legacy Direct Distributors. For this reason, and to set the proper example for their Downline, Distributors must not disparage, demean or make negative remarks about Legacy Direct, other Legacy Direct Distributors, Legacy Direct’s services, the Compensation Plan or Legacy Direct’s directors, officers or employees.
5.4 - Providing Documentation to Applicants
Distributors must provide the most current version of the Policies and Procedures and the Compensation Plan to individuals whom they are sponsoring to become Distributors before the applicant signs an Distributor Agreement. Additional copies of Policies and Procedures can be found on the Legacy Direct Back Office website, or in your business center under the forms section.
5.5 - Reporting Policy Violations
Distributors observing a policy violation by another Distributor should submit a written report of the violation directly to the attention of the Legacy Direct Compliance Department. Details of the incident(s), 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 Legacy Direct Compensation Plan is based upon the sale of Legacy Direct products to end user consumers. Distributors must fulfill personal and Downline organization 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.
6.2 -Sales of Legacy Direct products through on-line classifieds or auction sites, such as Ebay or craigslist, are prohibited, without the expressed written consent of Legacy Direct.
6.3 - Territory Restrictions
There are no exclusive territories granted to anyone. No franchise fees are required.
SECTION 7 - BONUSES AND COMMISSIONS
7.1 - Bonus and Commission Qualifications
A Distributor must be active and in compliance with the Agreement and these policies to qualify for bonuses and commissions. So long as a Distributor complies with the terms of the Agreement and these policies, Legacy Direct shall pay commissions to such Distributor in accordance with the Compensation Plan. The minimum amount for which Legacy Direct will issue a commission payment is $25.00. If a Distributor’s bonuses and commissions do not equal or exceed $25.00, the Company will accrue the commissions and bonuses until they total $25.00. Commissions will be issued once $25.00 has been accrued via check, paycard or direct deposit. Distributors understand and agree that any commissions or bonuses paid via physical check will be subject to a Three Dollar ($3.00) service fee that will be deducted from each and every check processed.
7.2 - Commission Payments and Promotions
7.2.1 - Payments, Calculations, and Bonuses
Commissions will be mailed out in accordance with the Compensation Plan. Commissions will be calculated according to the level for which a Distributor actually satisfied all of the requirements according to the Compensation Plan rather than the highest rank or title achieved. Commission reports will be provided to Distributors on-line, via web access.
7.2.2 - Promotions
Promotions are determined based on business organization and sales activity for each applicable period.
7.3 - Adjustment to Bonuses and Commissions
7.3.1 - Adjustments for Returned Products
Distributors receive bonuses and commissions based on the actual enrollment for services to merchants. When a service is canceled and refund is authorized by the Company, the bonuses and commissions attributable to the refunded service(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 Distributors who received bonuses and commissions on the sales of the refunded service(s).
7.4 - Unclaimed Commissions and Credits
7.4.1 - Distributors must deposit or cash commission and bonus checks within six months from their date of issuance. A check that remains uncashed after six months will be void. There shall be a $25.00 charge for reissuing a check. These charges shall be deducted from the balance owed to the Distributor.
7.5 - Reports
All information provided by Legacy Direct 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 the inherent possibility of human and mechanical error; the accuracy, completeness and timeliness of orders; denial of credit card and electronic check payments; returned products; and credit card and electronic check charge-backs, the information is not guaranteed by Legacy Direct or any persons creating or transmitting the information. All personal and group sales volume information is provided “as is” without warranties, expressed 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, Legacy Direct and/or other persons creating or transmitting the information will in no event be liable to any Distributor 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 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 Legacy Direct 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, Legacy Direct 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 Legacy Direct’s online 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 Legacy Direct’s online reporting services and your reliance upon the information.
SECTION 8 - RETURNS AND SALES AIDS REPURCHASE
8.1 - Retail Sales and Customer Returns
Retail sales to the customer are the foundation of the Legacy Direct business. The entire commission structure is based upon volume of retail sales referred by the individual Distributor as well as their entire organization.
Legacy Direct offers all customers a 7 day 100 percent money back guarantee on product purchases. If, for any reason, a customer is dissatisfied with any Legacy Direct product, the customer may return unused and resalable product for a replacement or full refund within 7 days of purchase. Shipping costs are not refundable. Refunds will be issued within thirty (30) days of DSM’s receipt of refund request.
NOTE: If a Distributor returns more than $500.00 in products in any twelve (12) consecutive month period, it shall constitute the Distributor’s request to cancel his or her Distributor Agreement, and the return shall be treated as an inventory return pursuant to Section 8.2.
8.2 Inventory and Sales Aids Repurchase
Distributors may cancel the Agreement within three (3) days of execution and receive a full refund of all distributorship fees and any voluntary inventory or sales aids purchases.
After the three (3) day rescission period, a Distributor may still cancel the Agreement and the Distributor may return any sales aids or inventory for a refund. Distributors may only return sales aids or inventory that he or she personally purchased from Legacy Direct (purchases from other Distributors or third parties are not subject to refund). Any returned inventory or sales aids must be in unused, resalable condition. Sales aids and/or products are only available for a refund if the item(s) were purchased by the Distributor within the year prior to the date of cancellation. Upon Company’s receipt of resalable sales aids and/or inventory, the Distributor will be reimbursed 90 percent (90%) of the net cost of the original purchase price(s). Shipping charges are not refundable. If the purchases were made through a credit card, the refund will be credited back to the same account. NOTE: Inventory that has been certified as sold by the Distributor pursuant to the 70% Rule is NOT subject to any refund.
For purposes of reimbursing Distributors who have canceled the Agreement, the purchase of one (1) Legacy Direct product shall be considered for personal use and shall be subject to the requirements outlined above in Section 8.1. Purchases in excess of one (1) Legacy Direct product shall be considered inventory.
A Montana resident may cancel his or her Distributor Agreement within fifteen (15) days from the date of enrollment, and may return his or her inventory and/or sales aids for a full refund within such time period.
All inventory or sales aids to be returned for refund under these provisions must be approved in advance of shipment to Legacy Direct by calling the Distributor Service Department at (714) 548-8950.
SECTION 9 - DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS
9.1 - Disciplinary Sanctions
Violation of the Agreement, these Policies and Procedures or any illegal, fraudulent, deceptive or unethical business conduct by a Distributor may result, at Legacy Direct’s discretion, in one or more of the following corrective measures:
1. Issuance of a written warning or admonition;
2. Requiring the Distributor to take immediate corrective measures;
3, Imposition of a fine, which may be withheld from bonus and commission checks;
4. Loss of rights to one or more bonus and commission checks;
5. T he withholding from a Distributor of all or part of the Distributor’s bonuses and commissions during the period that Legacy Direct is investigating any conduct allegedly in violation of the Agreement. If a Distributor’s business is canceled for disciplinary reasons, the Distributor will not be entitled to recover any commissions withheld during the investigation period;
6. Suspension of the individual’s Distributor Agreement for one or more pay periods;
7. Involuntary termination of the offender’s Distributor Agreement;
8. Any other measure expressly allowed within any provision of the Agreement or that Legacy Direct deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the Distributor’s policy violation or contractual breach; or
9. In situations deemed appropriate by Legacy Direct, the Company may institute legal proceedings for monetary and/or equitable relief.
9.2 - Grievances and Complaints
When a Distributor has a grievance or complaint with another Distributor regarding any practice or conduct in relationship to their respective Legacy Direct businesses, the complaining Distributor 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 cannot be resolved, it must be reported in writing to the Company. The Company will review the facts and determine if a policy violation has occurred and take appropriate action.
9.3 - Arbitration
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 or other recognized arbitration service, under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Distributors waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in the County of Orange, California, unless the laws of the state in which a Distributor resides expressly require the application of its laws, in which case the arbitration shall be held in the capital of that state. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure. 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 that the American Arbitration Panel provides. The prevailing party shall be entitled to receive from the losing party, OR each party to the arbitration shall be responsible for its own, 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.
Nothing in these Policies and Procedures shall prevent Legacy Direct 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 Legacy Direct’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.
9.4 - Governing Law, Jurisdiction and Venue
Jurisdiction and venue of any matter not subject to arbitration shall reside in Orange County, State of California. The Federal Arbitration Act shall govern all matters relating to arbitration. The law of the State of California shall govern all other matters relating to or arising from the Agreement.
9.4.1 - Louisiana Residents: Notwithstanding the foregoing, Louisiana residents may bring an action against the Company with jurisdiction and venue as provided by Louisiana law.
SECTION 10 - INACTIVITY AND CANCELLATION
10.1 - Effect of Cancellation
So long as a Distributor remains active and complies with the terms of the Distributor Agreement and these Policies and Procedures, Legacy Direct shall pay commissions to such Distributor in accordance with the Compensation Plan. A Distributor’s bonuses and commissions constitute the entire consideration for the Distributor’s efforts in generating sales and all activities related to generating sales (including building a Downline Organization). Following a Distributor’s termination for inactivity, or voluntary or involuntary termination of his or her Distributor Agreement (all of these methods are collectively referred to as “termination”), the former Distributor shall have no right, title, claim or interest to the marketing organization that he or she operated, or any commission or bonus from the sales generated by the organization. A Distributor whose business is terminated will lose all rights as a Distributor. This includes the right to sell Legacy Direct products and services and the right to receive future commissions, bonuses or other income resulting from the sales and other activities of the Distributor’s former Downline sales organization. In the event of termination, Distributors 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 a Distributor’s termination of his or her Distributor Agreement, the former Distributor shall not hold himself or herself out as a Legacy Direct Distributor. A Distributor whose Distributor Agreement is terminated 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 termination).
10.2 - Involuntary Termination
A Distributor’s violation of any of the terms of the Agreement, including any amendments that may be made by Legacy Direct in its sole discretion, may result in any of the sanctions listed above, including the involuntary termination of his or her Distributor Agreement. Cancellation shall be effective on the date on which written notice is mailed, faxed or delivered to an express courier to the Distributor’s last known address (or fax number), or to his or her attorney, or when the Distributor receives actual notice of termination, whichever occurs first.
10.3 - Voluntary Termination
A Distributor has a right to cancel, at any time, regardless of reason. Termination must be submitted in writing to the Company at its principal business address. The written notice must include the Distributor’s signature, printed name, address and Distributor ID number. Distributors who have resigned may re-apply to become a Distributor with Legacy Direct after 6 months. A Distributor’s position is subject to termination due to inactivity (i.e., merchant enrollments, no commissions, no sponsoring; and no attendance at any Legacy Direct functions, participation in any other form of Distributor activity, or operation of any other Legacy Direct business) after being inactive for 6 full calendar months.
10.4 - Non-Renewal
A Distributor may also voluntarily cancel his or her Distributor Agreement by failing to maintain the Agreement annually. The Company may also elect not to renew a Distributor’s Agreement.
10.5- Complete Agreement
These Policies and Procedures, any and all modifications made by the Company, along with the Terms and Conditions and the Compensation Plan make up the entire agreement between Distributor and Company.