Ron Simmons

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Setting the Record Straight - Part 3

I have now had a chance to reflect on what happened in the Federal court room outside of Dallas this past Friday, August 31 and also have received Judge Bush’s order enjoining Quixtar from doing several things and also pointing out the many flaws in their arguments against our use of Team materials and their abuse of their own arbitration system. I think the actual order will be posted on www.freetheibo.com site shortly.

As I sat there on Friday looking across the court room at two people whom I respected and had developed a friendship with (Gary Vanderven and Mike Mohr) and listened to their view of the Quixtar world and their view of my actions and those of the other Plaintiff’s I was, most of all, saddened. Sure it was nice and comforting to hear Judge Bush say that Quixtar would be stopped from mistreating us and interfering with our business. However, I actually got very little satisfaction from knowing that the company and some of the people with whom I had emotionally, fiscally, and physically “partnered” with over the last 13 years were now people and entities who wanted to be able to “bury” my business at the time of their choosing, if I did not do exactly as they commanded me to do. Legally it was a good victory for us, personally it was, as I told Lisa when I got home on Friday, I felt incredibly sad and mislead by people, promises, principles in which Lisa and I – actually our whole family - once believed.

On a factual basis and with the idea to make sure that recent events are recorded accurately for historical purposes there is one chain of events on which I feel compelled at this time to comment upon because of the complete misrepresentation of these events in various blogs, emails, legal briefs and live court room testimony or statements.

The chain of events to which I am referring is what led up to the meeting on August 9th between Orrin, Chris, Randy and their advisors and Quixtar. I was involved in most if not all of the communication surrounding all of the events culminating on that day. Here goes.

In early June, 2007 (after the IBOAI Board meeting announcing the name change back to Amway) Jim Payne sent Orrin Woodward and email stating that he would like to have a meeting to discuss five or six issues that he felt continued to come up regarding how Team affiliated IBOs built the business and some things that were said at Team meetings.

Orrin sent the email to me since I served as the volunteer liaison between Quixtar and Team regarding any bsm issues or rule violations. Jim and Orrin went back and forth or meeting times and finally settled on the first date available between the two of them to be August 9th.

Between the times the meeting was agreed upon and August 9th several things occurred:

1) On July 11, I went to Grand Rapids and met with Gary Vanderven and Jim Payne separately and discussed the concerns in the email although no details were given at that time but were promised that they would be sent to me so I could respond and prepare for the August 9 meeting. At NO TIME during these meetings did Gary or Jim every indicate that the concerns they had were of the nature that termination of Chris and Orrin was being contemplated or that there were “remedial steps” that needed to be taken to avoid termination.

2) On July 18, I emailed Jim and Gary with a summary of our meeting. Jim never responded but Gary did and stated that I had accurately summarized our meeting and the results thereof.

3) Between the early June IBOAI Board meeting and late July it became apparent, according to the opinion of Chris, Orrin, Randy and several other IBOAI Board members, that the Company was moving ahead with significant negative business changes (in the opinion of Orrin, Chris et al) and were not moving in the direction of new products with new pricing that had been requested.

4) In late July, Jim Payne called Orrin and told him that he had heard that Orrin was not happy with the changes that were being made. Orrin told him that he was not but that he wanted to withhold judgment until the special IBOAI Board meeting on August 6th and see what came out of that. Jim told Orrin that if he was still unhappy at that time that they could talk about a peaceful separation. Orrin told me of this conversation within a day or so of it occurring and also around the same time sent me a copy of the email he sent Jim summarizing their conversation.

5) While I was not privy to the following while it was occurring I have been told separately by multiple people who participated that the following occurred: Because Orrin et al felt that the Company (by there own admission) was about to embark on a total business transformation and that transformation would not be a successful one for the IBOs he and others felt there needed to be a strategy to give IBOs the right to depart Quixtar if they chose with no negative consequences. While Orrin was hopeful that Jim was sincere when he told him they would work out a “peaceful separation”, Orrin and others were also experienced enough to know they might need a back up plan that could require the Company to act fairly. This back up plan of course was the filing of a legal action asking a Federal court to compel Quixtar to let IBOs have the choice to go or stay with no strings attached. This was the absolute final course of action, only to be used if Quixtar refused to have reasonable discussions.

6) In early August I finally received the specific concerns and surrounding incidents that Jim Payne had with Team affiliated IBOs. The issues that Gary Vanderven sent to me in an email were (pasted from his email to me).

  • An IBO who started going to Team meetings with upline complained about business practices he thought were misleading: Quixtar not mentioned, retail not mentioned, Orrin and Chris invented the business & responsible for the products, etc.
  • An IBO who started attending Team meetings with upline complained that Quixtar is never mentioned, Orrin and Chris founded the :business, $270 required to register, heavy pushing of $300 tool pack.
  • New IBO complained she was told they don't have a business unless they buy the Team handbook. Upline required all hard copy :registrations to be sent upline and they would find out in about two weeks who was where in the LOS.
  • IBOs not knowing who their sponsor is or thought it was going to be someone else.
  • Prospect was given Part 1 CD's without Part 1 disclosures and It takes a Community was not the edited version--it was the original

I RESPONDED TO GARY ON AUGUST 5TH WITH THE FOLLOWING

-- Gary -

Thanks for taking the time, especially on a Sunday, to send me the information below.

I will go through your comments in order so that you can understand our initial position based on the information you have presented.

We do not mention Quixtar in our "concept open meetings" because we are just introducing the concept. We have discussed this with you and others in the past as this is the way we can get them interested in the concept, listen to Part 1 and then hopefully keep from the negative until we get back with them on the follow up and have built some type of relationship with them. It would be against Team policy for anyone to say that Orrin and Chris invented the business opportunity. Someone might say however that they started the Team and its approach to building the business. Please give us the name of the IBO and the person who they felt was misleading so we can investigate ourselves and take corrective action.

To join the Quixtar business as a member of the Team LOA it is about $270. This consist of about $40 paperwork/insurance cost from Quixtar and IBOAI; $150 in product pack we use consisting of XS drinks and bars; $65 Team website - recommended; and $16 business builders textbook for Team that goes over terminology, contacting methods for IBOs etc. It people are not willing to purchase the product portion of the registration then they are not invited to be a part of the Team LOA. We understand that they can join Quixtar for just the paperwork cost but they can not be a Quixtar IBO affiliated with the Team for just the paperwork cost. We have seen, and have been told by the company, way to many new IBOs never become active if they do not have product at registration. We do not push a $300 tool pack although we do explain the training system during the registration and explanation process. NOBODY is required and should not be pressured to purchase any support materials against their wishes. However we do explain, as the company does with retailing products etc that it is our experience that the most profitable IBOs participate in the training system. As you know Gary, Team affiliated IBOs that participate in the training system average almost twice the monthly PV than those Team affiliated IBOs not on the system.

The Team Handbook is part of our registration process IF they want to be affiliated with Team with their Quixtar business. It is the sponsoring IBO or the new IBO's coach's discretion as to if they want to invite someone to join their business that is not interested in receiving the Team handbook. It is likely that we would prefer they register in a different LOA or be a client.

Orrin's LOS has multiple centralized points (usually the first upline Platinum) that collects, reviews for accuracy and submits new registration paperwork for their group. The reason that the prospect may not yet know who their sponsor is that the Platinum needs to arrange for them to meet and agree to have the upline/downline relationship.

Please let us know when someone says they do not know their sponsor or they do not want to be sponsored by a person so we can see what and where the problem exists. Maybe we have a problem in a particular portion of the group that is not following the requirements. Our registration forms now have a place for the new IBO and sponsor to check and sign agreeing to the relationship.

Part 1 and Part 2 packets are to be given in their entirety and nothing different has been taught from a Team stage. Please let us know of who is involved in this specific incident so we can correct.

Please let us know the names of the IBO parent situation so that we can send a letter of apology and take any necessary corrective action with the Team affiliated IBO. It probably was a timing issue where the people said go ahead and then changed their mind after the registration and the first month's ditto was processed. Bottom line though is that we do NOT tell our IBOs to lie regarding our affiliation with Quixtar.

Our contacting position is to check for interest in the business side of the opportunity and the product side - based on the response of the prospect determines where the conversation will head. However it is each IBO's discretion as to how much they contact at all and to what area of the business they emphasize. Many of our IBOs purchase a small amount of product for inventory that they sell from to their family and friends who were not interested in the business. Team leadership does not teach using self consumption as retail sales.

The reason someone may have been charged $450 early in their IBO experience was for the registration, initial products and first month recommended ditto. Of the $450 over $330 was products, $40 registration and $80 was for the Team site and Builders handbook. At least this is my guess of what the $450 consisted of. I am a little shocked that this is a concern when the new QBI proposal will force us to encourage new IBOs to spend over $350 PER MONTH for products each month for the first three months!

Obviously we will talk more but this is our initial response. As always we want this business to work well for all parties - but most of all we want to give the new IBO the best chance to achieve his or her goals and dreams. See you Thursday at 11.

Respectfully,

Ron Simmons As you can see the items above were either misunderstandings on the part of Quixtar (thinking that the products at registration were tools when in fact they are Quixtar products) or situations that could be addressed easily.

For the Company to claim that we “ambushed” them at the August 9th meeting is without merit. Jim Payne knew full well that Orrin, Randy and Chris were not happy with the direction of the Company (they had reiterated such again as recently as August 6th at the IBOAI Board meeting at which Jim was an attendee) and would want to discuss such on August 9th. Jim had in fact told Orrin they would do so during their conversation in late July.

Further for the Company to say that Orrin and Chris had committed such numerous and egregious rules violations that significant remedial steps would be required in order for them to stay in the business is heresy. No one from the Company EVER communicated to me or to Chris or Orrin that they were on the brink of termination. The only concerns that leading up to the August 9th meeting that were mentioned were those listed above in Gary’s email to me. As you can see I responded to these with explanations or promises to investigate and correct. Gary never responded to my August 5th email. The facts are that I asked Gary and his staff time and time again from January 2007 through early August 2007 if there were any issues that we were not addressing that needed to be addressed. On multiple occasions they communicated to me that there were not.

I have no doubt that the Company, with premeditation, intended to either terminate Chris and Orrin on August 9th or make it so difficult for them to help the new Team affiliated IBO to have success under Team Approach that they would quit – or better yet just drift away, remaining as IBOs but not active in their groups.

As I reported on the original Setting the Record Straight, Randy Haugen and his attorney tried to talk with Quixtar about why that he, Orrin, Chris and others could not continue forward in the new business model. Quixtar executives seemed to understand but Quixtar’s legal team would have nothing of it and refused to discuss any type of separation outside of their current 6 month non compete and two year non solicitation rules. They refused to acknowledge that the impending business changes were in fact a new business and therefore IBOs should have a choice…without penalty.

When they refused to listen or negotiate, Orrin told Mike Mohr that he would then need to meet Orrin’s lawyer and could he bring him up from the lobby downstairs. Mike refused and said he would go down to the lobby.

Orrin’s lawyer presented (this was told to me by a first hand participant as I was not present in the lobby) Mike Mohr with the brief for the lawsuit and said that Orrin had instructed him NOT to file it yet but to give Mike and his staff time to review it and reconsider having further discussions. He told Mr. Mohr that he had “stand still agreements” (this requires both parties to do nothing for 24 hours) in his pocket ready to be signed if Mr. Mohr wanted to continue any discussions about a reasonable separation agreement. Mr. Mohr said he would look at the lawsuit and call him in an hour or so but that he had another meeting to go to. An hour went buy and we hear nothing. Orrin’s attorney tried to call Mr. Mohr but to no avail. Billy Florence spoke with Quixtar attorney, Sharon Grider, and tried to get her to agree to have discussions and not force Orrin et al to file the lawsuit. She told Billy that they had looked at it and that he would have to do what he thought he needed to do. After almost three hours of waiting (one hour past the deadline to hear back from Mohr) the lawsuit was filed in Federal Court in Los Angeles.

This folks, is the way it happened. There was no ambush, there were no major rules offenses that we were aware of, but there was significant effort displayed by Randy, Orrin, Chris and others to try and have negotiations but these were immediately rebuffed by the legal representatives of the Company.