DISCOUNT EXCEPTION POLICY Clause Samples

DISCOUNT EXCEPTION POLICY. Discount exceptions may be requested by the Distributor to counter competitive situations, documented contract pricing, and other promotional programs. Upon Philips' receipt of documented and approval of the Discount Exception Form, Philips may provide the Distributor the additional discount percentage points necessary to provide a discount margin of up to 10%. For example, if the Distributor discount is 40% for the Products and 40% for supplies and a Philips contracted discount is 35% for the Products and 20% for the supplies; in this case, Philips will provide an additional discount to the Distributor of up to 5% on the Products and 0% on supplies for sales to Distributor which will be resold under the applicable program. All discount exception requests must be submitted through the Indirect Channel Manager for approval by Philips marketing. Philips may require documentation of Distributor's customer pricing as part of the discount exception approval. Distributors are expected to use existing marketing programs first, before requesting a discount exception. A new Product order with Philips is required to apply the additional discount credit. If Distributor utilizes existing inventory for the Product order associated with a discount exception, then Philips will not apply the additional discount credit until Distributor places a new order having the same number of Product units covered by such discount exception. No credit vouchers will be issued for any discount exceptions. Philips may require documentation to support Distributor's proper use of the discount exception.