Exhibit 10.31
[Letterhead & Logo]
XXXXXXXX WINDOWS, INC.
December 1994
Xxxxxx Distribution
00000 Xxxxx Xxxxxx
Xxxxx Xxx, XX 00000
TO: Xxxxxxxx Distributor
RE: Xxxxxxxx Windows, Inc. Distributor Agreement
Your Andersen Regional Sales Manager will be delivering to you with this letter
two copies of the new Xxxxxxxx Windows, Inc. Distributor Agreement for your
distributor location. We ask that you review and complete this Agreement, sign
both copies, and return them to Xxx Xxxxxxxxx, Manager, Channel Planning &
Analysis. The Agreement will become effective when we sign it in Bayport after
review. We will then send you a copy signed by us.
The new Distributor Agreement replaces the Terms and Conditions agreement that
Andersen has entered into with many distributors. Andersen believes that the
Distributor Agreement contains many improvements as compared with the Terms and
Conditions agreement. We anticipate that all distributor locations will enter
into the new Distributor Agreement with Andersen.
As you review the Distributor Agreement, please be aware of the following:
1. The name used for your business in the opening paragraph of the
Agreement and on the signature page should be the legal name under
which your business is incorporated and operated at the location
referred to in the Distributor Agreement. Please enter the state of
your incorporation in the blank in that opening paragraph. If your
business is not a corporation, please contact your Andersen Regional
Sales Manager.
2. Section 6 of the Agreement addresses competitive products. Over the
longer term, Xxxxxxxx'x aggressive sales goals will provide you with
significant growth opportunities. One of our longer-term goals is
distributors dedicated to Andersen products without reservation.
While Andersen considers any other window or patio door to be
competitive, the second sentence of Section 6 only addresses major
competitor's products. Major competitor's products include: products
that fill a substantial number of openings that would be otherwise
filled by Andersen products or that divert substantial energy and
resources from your promotion of Andersen products. We also ask that
you inform us if you are considering the addition of any other
manufacturer's windows and patio doors.
3. Section 15 of the Agreement requests a copy of your current Articles
of Incorporation, as amended, and a copy of a resolution of your Board
of Directors authorizing you to enter into the new Distributor
Agreement. If it is inconvenient for you to provide these documents
to us, please review this with your Andersen Regional Sales Manager.
4. Section 23 of the Agreement provides that the entire legally binding
agreement between you and us is the Distributor Agreement and written
Andersen policies provided generally to Andersen distributors. The
following are the only written Andersen policies in this category
which, along with the Distributor Agreement, constitute the entire
legally binding agreement between you and us at this time:
x. Xxxxxxxx Windows, Inc. Sales Policy of September, 1994.
x. Xxxxxxxx WindowCare [SM] Service Policy dated May, 1994.
x. Xxxxxxxx Distributor Bulletin SM-793 dated November 19, 1993
including Appendices A (as currently in effect), B and C.
d. The Andersen Advertising and Sales Promotion Policy as revised
April, 1993.
Your Andersen Regional Sales Manager will be providing you a copy of the
September 1994 Sales Policy and Distributor Bulletin SM-793 with current
Appendix A when he delivers the Distributor Agreement to you. If you have any
questions concerning the Agreement, please raise them with your Andersen
Regional Sales Manager.
Very truly yours,
XXXXXXXX WINDOWS, INC.
Xxx Xxxxxxxxx
Manager, Channel Planning & Analysis
XXXXXXXX WINDOWS, INC.
DISTRIBUTOR AGREEMENT
Xxxxxxxx Windows, Inc. ("We," "Us," "Our," "Andersen") welcomes Xxxxxx
Distribution, a (an)_________________________ corporation, ("You," "Your") as a
distributor for us. We agree to sell products to you as an authorized Andersen
distributor at your warehouse located at:
00000 Xxxxx Xxxxxx
Xxxxx Xxx, XX 00000
1. Andersen Policies. Your rights and obligations as an Andersen distributor
are contained in this Agreement, the Andersen Sales Policy and Distributor
Bulletin SM-793, and any other written Andersen policies provided generally
to you and other Andersen distributors.
2. Your Name. In your business as an Andersen distributor you will use the
name Xxxxxx Distribution. You may not use a name containing "Andersen."
3. Inventory. You agree to maintain an inventory representative of Andersen
products at a level we both believe is adequate for vigorous growth and
maintenance of customer service.
4. Primary Market Area. You agree to vigorously promote the sale of Andersen
products throughout your Market Area (shown in Distributor Bulletin
SM-793).
5. Goals. We will agree with you on goals for your sales and participation in
the window and patio door business in your Primary Market Area. Together
we periodically will review your progress in reaching these goals.
6. Other Products. We believe it is not in the best interests of Andersen
distribution for you to devote significant effort or resources to promoting
or selling other brands of window or patio door products. While you are an
Andersen distributor, you will not promote or sell another major window or
patio door manufacturer's products at your above location. Also, you will
advise us before you make any decision to begin promoting or selling window
or patio door products of any other manufacturer at your above location.
7. Sales, Service and Promotion. You will vigorously promote, sell and
provide service to those existing and potential retailers of our products
throughout your Primary Market Area which do or will actively promote, sell
and support our products. You may refuse to sell to a retailer whose
financial condition creates an unsatisfactory risk to your business.
8. Andersen Components. Whenever an Andersen component is available for use
with Andersen products, you will actively promote its availability to your
customers.
9. Staffing. You agree to employ adequate (a) sales staff to vigorously
promote the sale of Andersen products to retailers, consumers and
contractors and (b) architectural/builder specialty representatives to
vigorously promote Andersen products to architects, engineers and other
building professionals.
10. Prices; Shipments. The prices, payment terms and discounts that apply to
your purchases of products from us will be those in our price schedule and
distributor discount sheet which are in effect on the date of each shipment
by us to you. We can change our prices, terms and discounts at our
discretion without giving you prior notice. The volume, schedule for and
destination of each of our shipments to or for you will be as we state from
time to time in writing to you as expressly applicable to your above
location and can be changed by us at our discretion. We can allocate
production and deliveries of our products at our discretion.
11. Order Acceptance; Credit. Orders from you will be accepted by us only by
shipment. We can reject orders at any time, without cause.
We can decide at any time at our discretion, regardless of any security you
may have given us, that your financial condition is not adequate for us to
make additional sales or shipments to you on the credit terms then
available to you. We can then cease accepting orders from you and withhold
or stop shipments for orders we already have accepted from you. We will
not resume shipments to you until you have satisfactorily improved your
financial condition and provided us such mortgages, security interests,
guarantees or other security for payment that we in our discretion request
to assure your payment of amounts you then and will in the future owe us.
Before we accept any orders from you as an Andersen distributor, you will
furnish us the following instruments to secure your obligation to pay for
your purchases from us:
Without limiting our rights to reject orders or withhold shipments from
you, we can do so if you are past due on any unpaid invoice or are failing
to take any cash discount we make available for prompt payment. We can
refuse credit or remove, reduce or place conditions upon any credit limit
we establish for you at any time at our discretion without giving you prior
notice.
12. Nonagent. You are not an agent or other legal representative of us for any
purpose. You are not granted any authority to assume or create any
obligation on our behalf. This Agreement does not create a legal
partnership, joint venture, franchise or similar arrangement between you
and us, and you waive the application of any laws concerning such
arrangements.
13. Termination. You and we have the following termination rights:
A. Either you or we can terminate this Agreement and you as an Andersen
distributor at the above location at any time without cause by giving
the other party at least 60 calendar days' prior notice.
B. Either you or we can immediately terminate this Agreement and you as
an Andersen distributor at the above location for cause by giving the
other party notice.
C. We can immediately terminate this Agreement and you as an Andersen
distributor at the above location by giving you notice if there is a
change in the ownership or in the direct or indirect control of you or
your business.
D. This Agreement and your position as an Andersen distributor will
terminate automatically if you file or have filed against you a
petition for your bankruptcy, become insolvent, make an assignment for
the benefit of creditors, or go into liquidation or receivership.
Termination of this Agreement and you as an Andersen distributor will not
release your obligation to pay all amounts you owe us. Neither you nor we
will be liable to the other party for any loss, recoupment or damage,
whether actual, indirect, incidental, consequential, special, punitive or
otherwise, on any contract, warranty, tort, negligence, strict liability,
antitrust, RICO or any other legal basis, for or related to any termination
of this Agreement and you as an Andersen distributor as permitted by this
Agreement.
14. Confidential Information. You will use any of our confidential or
proprietary information which you receive only for the purpose of your
performing as our distributor, and you will keep the information
confidential except as necessary for that purpose. Upon any termination of
you as our distributor you will cease using our confidential or proprietary
information and will promptly return to us any such information in your
possession or control.
Our confidential or proprietary information is any nonpublic information
concerning us including information relating to our research, product
development, manufacturing, sales, marketing, administration and finances.
This information is confidential or proprietary information regardless of
its form, e.g. oral, written, electronic, or other, and whether or not it
is labeled as "confidential." Our confidential or proprietary information
includes our information and that of our affiliates and third parties
concerning or relating to us.
15. Authority. You will deliver to us the following documents along with a
copy of this Agreement signed by you:
A. A copy of your Articles of Incorporation certified by your Secretary
of State; and
B. A copy of the resolution of your Board of Directors, certified by your
Secretary, authorizing you to sign and perform this Agreement.
16. Financial Statements. While you are our distributor and we are making
credit terms available to you or you have an unpaid balance owing us, you
will furnish to us as soon as available your year-end financial statements,
which will fairly represent your financial position, your results of
operations and your cash flows in conformity with generally accepted
accounting principles. As part of our credit review process, we may
request other financial statements from time to time, which you agree to
provide. Failure to prepare and provide any financial statements will
affect any credit determination made by us under Section 11 of this
Agreement.
17. Governing Law. This Agreement, and any controversy or claim or cause of
action concerning your being our distributor, are governed by the laws of
the State of Minnesota (without regard to the laws of conflict of any
jurisdiction) as to all matters, including validity, interpretation,
liability, litigation and remedies.
18. Severability. Each provision of this Agreement will be interpreted so as
to be valid under applicable law. If any provision of this Agreement is
found invalid, the provision will be ineffective without invalidating the
remainder of that provision or any other provisions of this Agreement.
19. Mediation. If a controversy or claim arises between you and us concerning
this Agreement or your being our distributor, you and we will meet together
in an effort to resolve the controversy or claim. If you and we are unable
to do so, the dispute will be submitted to nonbinding mediation
administered by the American Arbitration Association under its Commercial
Mediation Rules.
Either you or we may initiate the mediation by filing a request for
mediation with the Association. No legal action may be commenced in court
by either you or us relating to the controversy or claim until 45 calendar
days after the filing with the Association of the request for mediation.
The running of any applicable statute of limitations is not affected by
this Section.
This Section 19 does not apply to any claim or action by us asserting
nonpayment by you for Andersen products or services and will be of no
effect if the Association ceases to exist or to administer mediation. This
Section also does not apply to any claim or action by us against you
concerning our rights in our confidential or proprietary information, in
our patents, copyrights or trademarks, or in those of our affiliates.
20. Litigation. You consent to the personal jurisdiction of the state and
federal courts in Minnesota in connection with any controversy, claim or
cause of action between you and us, on any contract, warranty, tort,
negligence, strict liability, antitrust, RICO or any other legal basis,
concerning this Agreement or your being a distributor for us. You waive
any argument that venue in such courts is not convenient.
Any action or proceeding by us in connection with such controversy, claim
or cause of action may be brought and enforced against you in such
Minnesota courts. Further, any action or proceeding brought by you against
us in connection with such controversy, claim or cause of action will be
brought and enforced by you only in a state or federal court in Minnesota.
This Section 20 does not prevent us from bringing any action or proceeding
against you or your property in the courts of any other jurisdictions
asserting or relating to nonpayment by you for Andersen products or
services. This Section also does not apply to any claim or action by us
against you concerning our rights in our confidential or proprietary
information, in our patents, copyrights or trademarks, or in those of our
affiliates.
21. Expenses. The expenses of the American Arbitration Association and
mediator referred to in Section 19 will be shared equally by you and us.
If we assert a claim for relief, including a counterclaim, in litigation in
court against you in connection with any controversy, claim or cause of
action concerning this Agreement or your being our distributor and we do
not prevail on that claim for relief, we will reimburse you for all
reasonable costs, expenses and fees, including attorneys' fees, you
incurred in the litigation in defending against our claim for relief.
If you assert a claim for relief, including a counterclaim, in litigation
in court against us in connection with any controversy, claim or cause of
action concerning this Agreement or your being our distributor and you do
not prevail on that claim for relief, you will reimburse us for all
reasonable costs, expenses and fees, including attorneys' fees, we incurred
in the litigation in defending against your claim for relief.
A party prevailing as to any claim for relief, including a counterclaim,
asserted by that party shall bear its own fees, costs and expenses except
as otherwise provided by law.
22. DAMAGES LIMITATION. DAMAGES SOUGHT BY EITHER PARTY AGAINST THE OTHER PARTY
IN CONNECTION WITH ANY CONTROVERSY, CLAIM OR CAUSE OF ACTION CONCERNING
THIS AGREEMENT OR YOUR BEING OUR DISTRIBUTOR, WHETHER BASED ON CONTRACT,
WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY, ANTITRUST, RICO OR OTHERWISE,
SHALL BE LIMITED TO DIRECT DAMAGES. FURTHER, IN NO EVENT WILL EITHER PARTY
BE LIABLE TO THE OTHER PARTY, AND NEITHER PARTY WILL SEEK TO RECOVER OR
ENFORCE A JUDGMENT AGAINST THE OTHER PARTY, FOR:
A. INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING,
WITHOUT LIMITATION, DAMAGES RELATING TO LOSS OF INVESTMENT,
INDEBTEDNESS, LOSS OF FINANCING, LOSS OF SALES OR PROFITS, OR BUSINESS
INTERRUPTION, DISCONTINUANCE OR TERMINATION, OR
B. PUNITIVE, TREBLE OR OTHER DAMAGES IN EXCESS OF DIRECT DAMAGES,
WHETHER THE UNDERLYING CONTROVERSY, CLAIM OR CAUSE OF ACTION IS BASED ON
CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY, ANTITRUST, RICO OR
OTHERWISE, AND EACH PARTY WAIVES ANY CLAIM AGAINST THE OTHER PARTY FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL AND SPECIAL DAMAGES AND FOR PUNITIVE,
TREBLE OR OTHER DAMAGES IN EXCESS OF DIRECT DAMAGES.
THIS SECTION 22 DOES NOT APPLY TO ANY CLAIM OR ACTION BY US AGAINST YOU
CONCERNING OUR RIGHTS IN OUR CONFIDENTIAL OR PROPRIETARY INFORMATION, IN
OUR PATENTS, COPYRIGHTS OR TRADEMARKS, OR IN THOSE OF OUR AFFILIATES.
23. Entire Agreement; Amendment. This Agreement, the Andersen Sales Policy and
Distributor Bulletin SM-793, and any other written Andersen policies
provided generally to you and other Andersen distributors, as they may be
changed or adopted from time to time, constitute the entire legally binding
agreement between you and us concerning your being a distributor for us and
the rights and obligations of you and us concerning your Andersen
distributorship. All prior and contemporaneous agreements and discussions
between you and us, whether oral or written, are superseded by this
Agreement and are null and void. If there is any conflict between this
Agreement and any of our current or subsequent written policies, this
Agreement will govern.
This Agreement can only be amended by a statement in writing signed by you
and us. We can change the Andersen Sales Policy, Distributor Bulletin
SM-793 and our other written policies and adopt new policies from time to
time in our discretion without your consent and without giving you prior
notice.
24. Assignment. You cannot assign or delegate any of your rights or
obligations under this Agreement voluntarily, involuntarily or by operation
of law without our prior written consent. We can assign or delegate any of
our rights or obligations only to our affiliates.
25. Notices. All notices and consents required to be given by this Agreement
will be given in writing by telecopier, by personal delivery, or by United
States registered or certified mail, postage prepaid, return receipt
requested, to the parties at these addresses:
WE: Xxxxxxxx Windows, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
YOU: ___________________________
___________________________
___________________________
Attention: ________________
Telecopier:________________
or to another address which a party designates by notice to the other party.
All notices will be effective upon delivery to the designated address.
26. Waiver. No failure or delay by either you or us to assert any right or
remedy under this Agreement will be a waiver of that right or remedy if the
circumstances giving rise to the right or remedy continue or are repeated.
No waiver shall be effective unless given in writing.
27. Survival. Sections 12 through 14 inclusive, 17 through 23 inclusive, and
26 of this Agreement shall survive any termination of this Agreement or
your ceasing to be our distributor and will remain in full force and effect
thereafter.
Please show your agreement with the above provisions by signing this Agreement
and returning it to us.
Agreed:
Xxxxxx Distribution
______________________
(DISTRIBUTOR NAME)
BY ____________________________
(OFFICER'S SIGNATURE)
NAME __________________________
(Print or Type)
TITLE ________________________
Accepted at Bayport, Minnesota and
entered into on _____________, 19 ___.
XXXXXXXX WINDOWS, INC.
BY _________________________________
President
SALES POLICY
[Logo Xxxxxxxx
Windows - Patio Doors]
September 1994
Xxxxxxxx Windows, Inc. Bayport, Minnesota
XXXXXXXX SALES POLICY
I. GENERAL STATEMENT
Xxxxxxxx Windows, Inc. (Andersen) distributes its products through wholesale
window distributors. Adequate distribution is the governing factor in
Xxxxxxxx'x determining the number of distributor warehouses needed to serve a
given area. It is the practice of Andersen to seek distributors in such a
number that will maintain a vigorous distribution business for all concerned.
Each Andersen distributor has been determined by Andersen to have the unique
qualifications necessary to adequately promote and sell its products. When the
ownership of a distributor is to be changed, it is necessary for Andersen to
determine whether the new party can and will adequately represent Andersen.
Therefore, the Andersen Distributor Agreement provides that Andersen has the
right, without incurring any liability to any distributor, to terminate
Xxxxxxxx'x relationship with the distributor in the event that there is a change
in the ownership or in the direct or indirect control of the distributor or its
business.
If a distributor plans a change in ownership or in the direct or indirect
control of the distributor and the new owner or controlling parties wishes to
continue as an Andersen distributor, the existing distributor and the proposed
new owner or controlling parties should each notify Andersen in writing at least
60 days before the proposed change. This written notice should describe the
proposed change in ownership or control and should request that, following the
change, the distributor be permitted to continue as an Andersen distributor. If
the new ownership or control of the distributor is acceptable to Xxxxxxxx,
Xxxxxxxx will expect that the distributor, at the time of the change in
ownership or control, remains or becomes bound to a Distributor Agreement with
Xxxxxxxx.
Xxxxxxxx maintains a consistent price policy in selling to its distributor
customers, adhering to its published price lists and discounts. Xxxxxxxx
Corporation's reputation of fairness to all customers in the distribution
channels has been established over many years of the company's existence and all
Andersen personnel are committed to it.
II. DIRECT FACTORY SHIPMENTS
Andersen will ship products to the distributor's warehouse or to the business
location of the distributor's customers, as provided in Distributor Bulletin
SM-793. Andersen will not divert shipments.
III. THE ANDERSEN SALES REPRESENTATIVE'S TERRITORY
A. The Andersen sales representative's territory will be established by
Andersen management. The Andersen sales representative will make
calls and service the Andersen distributors in that territory.
B. The Andersen sales representative will make calls in his territory
with distributor sales representatives for introduction of new
products, training in new selling techniques and training of
distributor's retail customers. Travel by an Andersen sales
representative into another Andersen sales representative's territory
is not encouraged and should be done only when absolutely necessary.
C. The Andersen sales representative will conduct meetings for a
distributor's retail customer in another Andersen representative's
territory when practical and if requested to do so, but will invite
the Andersen representative assigned to the other territory to attend
and participate in these meetings.
D. The Andersen sales representative servicing a distributor is the
representative from whom the distributor should seek sales help and
solutions to problems.
IV. ANDERSEN WILL PROVIDE THE FOLLOWING FOR ITS DISTRIBUTORS:
A. Administration of Sales Policy
1. The Andersen sales representative, with the regional sales
manager, is responsible for the interpretation and
administration of the Andersen Sales Policy and other Andersen
policies.
B. Sales Promotion Assistance
1. Xxxxxxxx'x promotional program is stated in the Andersen
Advertising and Sales Promotion Policy. Each Andersen
distributor, Andersen sales representative and regional sales
manager has a copy of the Andersen Advertising and Sales
Promotion Policy.
2. Andersen sales representatives will give adequate sales
promotion and selling time to all distributors but this should
be on a proportionally equal basis, based upon each
distributor's volume of sales and promotional activities. The
allocation of time spent with each distributor is the
responsibility of the Andersen sales representative.
3. Workshops
a. The Andersen sales representative will conduct workshops
for distributor personnel as needed.
b. Consistent with Distributor Bulletin SM-793, the Andersen
sales representative will assist distributors in
conducting dealer workshops as these are arranged.
4. Meetings
a. It is Xxxxxxxx'x recommendation that only Andersen
products be presented at promotional meetings. With the
expanded lines of Andersen products now available, an
effective presentation is not possible if other products
are shown.
b. Consistent with Distributor Bulletin SM-793, Andersen will
conduct meetings for a distributor and its retail
customers.
5. Service (repair) of Andersen products
a. The Andersen WindowCare [SM] service Policy is followed in
performing service work by Andersen sales representatives
and service representatives. Each Andersen distributor,
regional sales manager, Andersen sales representative and
service representative has a copy of the Andersen
WindowCare [SM] Service Policy.
x. Xxxxxxxx will assist in training the Set-Up Department of
the distributor and distributor's retail customers and in
the training of distributor's service employees. This
work will be done by the Andersen sales representative and
service representative.
X. XXXXXXXX EXPECTS THE DISTRIBUTOR TO PROVIDE THE FOLLOWING AS AN ANDERSEN
DISTRIBUTOR:
A. The distributor's obligation for handling and promoting Andersen
products:
1. Andersen expects the distributor to vigorously promote and sell
the available Andersen products that meet the building needs of
the distributor's primary market area as specified in
Distributor Bulletin SM-793.
2. To maintain a strong market position by selling inventories of
Andersen products to distributors' customers which do or will
actively promote, sell and support Andersen products.
3. To provide vigorous sales and sales promotion coverage to all
market factors, including promotion to architects, engineers
and other building professionals.
X. Xxxxxxxxx with Andersen in providing distributor personnel for
training in selling and promotion techniques.
C. Sales promotion activities
1. Provide manpower at distributor meetings and promotional shows,
set up displays, furnish promotional material, participate in
presentations, etc. with the assistance of Andersen sales
representative. Provide transportation for these promotional
materials.
2. The distributor is expected to offer promotional programs for
retail customers in order to encourage and promote sales of
Andersen products.
D. Catalogs
To publish an assembled Andersen product catalog for its customers.
E. Service (setting up) of Andersen Products
All Andersen products should be set up by the distributor or the
distributor's retail customers according to the instruction sheets
and assembly manuals furnished by Andersen.
F. Service (scheduled delivery) of Andersen Products
Strive to give delivery within one week or provide whatever level of
more rapid service is necessary to meet competitive practices.
G. Service (repair) of Andersen Products
Assist Andersen in providing repair service of Andersen products in
line with the current published Andersen WindowCare [SM] Service
Policy.
It is not possible to anticipate all specific situations which might arise that
would relate to this Sales Policy. Situations not covered should be discussed
with the Andersen sales representative. The solving of problems arising from
distributor-retailer relationships is the responsibility of each Andersen
distributor.
Andersen retains the right to change or modify this Sales Policy and other
Andersen policies from time to time in its discretion.
Xxxxxxxx Windows, Inc.
Bayport, Minnesota
September, 1994
ANDERSEN
DISTRIBUTOR BULLETIN
November 19, 1993
BULLETIN NO.: SM-793
SUBJECT: Primary Market Area Policy
EFFECTIVE: July 1, 1994
Effective July 1, 1994 this Bulletin replaces Distributor Bulletin No. SM-186
(except for 4., below, the change in which is effective January 1, 1994). This
Bulletin also qualifies the Xxxxxxxx Windows, Inc. Sales Policy to the extent
the Sales Policy is inconsistent with the Bulletin. Xxxxxxxx Windows, Inc.
(Andersen) hereby informs each of its distributors of the following policies
which have been adopted by Andersen:
1. Except as set forth in 1.a. and 1.b. below, Andersen will not make direct
shipments for a distributor to any location outside that distributor's
primary market area as determined from time to time by Andersen. (See 3.,
below and Appendix A to this Bulletin)
a. Effective July 1, 1994 Andersen will make direct shipments for a
distributor to a retailer's redistribution center located within or
outside that distributor's primary market area, provided (i) that
the retailer has an outlet located within that distributor's primary
market area and (ii) that annually the amount of the direct
shipments to the redistribution center for that distributor
substantially corresponds to or is less than the amount of Andersen
products the retailer ships back to outlets within the distributor's
primary market area.
If the amount of Andersen products cannot be identified
specifically, Andersen will estimate volume based on the number of
retail sales outlets within a distributor's Primary Market Area.
For the time period of July 1, 1994 through December 31, 1994
Andersen will estimate historical volume on the basis of sales from
July 1, 1993 through December 31, 1993. Effective January 1, 1995,
Andersen will estimate volume on the basis of sales during the prior
calendar year.
Andersen defines a redistribution center as a central warehouse
operated by a retailer at which the retailer receives shipments to
be redistributed by the retailer to other locations where the
retailer maintains sales outlets. In addition, to qualify as a
redistribution center for purposes of this Bulletin:
(1) the retailer must operate forty or more retail sales outlets in
at least eight or more states; and
(2) the retailer must have received at least $4 million (Xxxxxxxx'x
price to distributor) of Andersen products in direct van
shipments to the redistribution center in 1993.
b. Upon request from a distributor Andersen may make direct shipments
for the distributor to a location outside the distributor's primary
market area if Andersen determines that the circumstances justify
the shipments.
x. Xxxxxxxx will not authorize customer pick-up at Xxxxxxxx'x Bayport,
Minnesota facility for a customer of the distributor located outside
that distributor's primary market area; and
x. Xxxxxxxx will not authorize reconsignment of a car or van shipment
to any location outside that distributor's primary market area.
2. The following will apply with respect to any distributor location upon
Xxxxxxxx'x determining, based on information deemed sufficient by Andersen,
that at any time on or after July 1, 1994 that location has made a sale
from its warehouse to customers located outside its primary market area:
a. For a period of ninety (90) days after Andersen has determined that
a distributor location has made a sale outside its primary market
area, Andersen will apply a discount reduction to each invoice sent
by Andersen for all shipments to that distributor location. In the
case of a distributor organization with multiple locations, if
Andersen cannot determine the location which made the sale, the
discount reduction will be applied to shipments to the distributor's
location nearest to the customer to whom the sale was made.
b. The amount of the discount reduction will be one and one-half per
cent (1-1/2%), i.e. based on Xxxxxxxx'x current discounts the
discount on carload - vanload shipments will be 50% rather than
51.5% and on L.C.L. shipments will be 40% rather than 41.5%.
c. As to any sale or sales by a distributor location to which 2.a. -
2.b. above would otherwise apply, Andersen shall have the right, at
its election, to make an additional charge to that distributor
location in lieu of 2.a. - 2.b. above. The additional charge shall
be 10% of the dollar amount (Xxxxxxxx'x price to distributor) of the
sale or sales outside its primary market area by that distributor
location to which 2.a. 2.b. would otherwise apply.
The additional charge shall be invoiced by Andersen when Andersen
determines the sale or sales have been made and shall be payable by
the distributor in full thirty days after the date of invoice. The
amount of sales by the distributor location outside its primary
market area shall be determined by Andersen based on information
Andersen deems sufficient.
d. Amounts realized by Andersen from the discount reduction in 2.a. -
2.b. above or additional charge in 2.c. above will not be returned
to the distributor and may be used by Andersen for any purposes
determined by Andersen in its discretion. Such uses may include
application by Andersen of the amounts against costs or unrecovered
expenses related to sales by distributors outside their primary
market areas or for advertising or other sales promotion activities
supporting Andersen products.
e. Upon request from a distributor, this part 2. may be inapplicable to
sales made by the distributor outside its primary market area if
Andersen determines that the circumstances of such sales justify
inapplicability.
x. Xxxxxxxx emphasizes that, as set forth in the final paragraph of
this Bulletin, it has the right to change, modify, or interpret this
Bulletin, including part 2, from time to time in its discretion.
Appendix B to this Bulletin contains examples of the application of this
part 2.
3. A list of those counties which effective July 1, 1994, Andersen considers
to be your primary market area is attached to this Bulletin as Appendix X.
Xxxxxxxx has determined each distributor's primary market area on an
equitable basis. Upon any distributor's request, Andersen will identify
for any particular county or counties, the number and names of those
distributors that have that county within their primary market areas.
4. A partial list of the activities with respect to which Andersen will
participate for a distributor only within the distributor's primary market
area is attached to this Bulletin as Appendix C. This list applies
throughout the U.S. and the first part of it is effective at present.
Effective January 1, 1994, purchases by a dealer from a distributor whose
sales to the dealer are outside the distributor's primary market area at
the time of the sale will not qualify for the Andersen/Distributor
Cooperative Merchandising program for Andersen Dealers.
Implementation of this Distributor Bulletin is a matter solely between Andersen
and each of its individual distributors. If you have questions concerning the
Bulletin, please feel free to discuss them with the Andersen Regional Sales
Manager. We suggest that each distributor refrain from discussing this Bulletin
with any other Andersen distributor.
The Xxxxxxxx Windows, Inc. Sales Policy remains in full force and effect,
except to the extent expressly modified in this Distributor Bulletin. Andersen
retains the right to change, modify, or interpret the policies set forth in this
Bulletin, as well as the Sales Policy and other Andersen policies, from time to
time in its discretion.
XXXXXXXX WINDOWS, INC.
Revised April 6, 1994
Effective July 1, 1994
Appendix A
to Xxxxxxxx Windows, Inc.
Distributor Bulletin No. SM-793
In accordance with paragraph 3 of Andersen Distributor Bulletin No. SM-793, the
primary market area of the following distributor authorized warehouse location:
XXXXXX DISTRIBUTION
00000 XXXXX XXXXXX
XXXXX XXX, XX 00000
is comprised of these counties:
MICHIGAN
Xxxxxx Xxxxxxxx Xxxxxxxx Oscoda
Alpena Xxxxx Lapeer Otsego
Antrim Xxxxx Xxxx Presque Isle
Arenac Genesee Mackinac Roscommon
Bay Gladwin Macomb Saginaw
Charlevoix Gratiot Midland St Clair
Cheboygan Huron Montcalm Sanilac
Chippewa Xxxxxx Montmorency Shiawassee
Clare Ionia Oakland Tuscola
Xxxxxxx Xxxxx Ogemaw
Nothing in this Appendix or the accompanying Andersen Distributor Bulletin No.
SM-793, or in the Xxxxxxxx Windows, Inc. Sales Policy or any other Andersen
policies or agreements, shall be interpreted to in any way indicate or otherwise
suggest that the distributor has an exclusive right to make sales to customers
in the counties listed above.
Andersen retains the right to provide for supplemental or alternative
distribution by Andersen or others in any or all of the counties listed above
from time to time in its sole discretion. Andersen retains the right to change
or modify the designation of counties in the above distributor's (or any other
distributor's) primary market area from time to time in its discretion by adding
counties, removing counties, or in any other manner.
Appendix B
to Xxxxxxxx Windows, Inc.
Distributor Bulletin No. SM-793
Examples of Part 2 of Distributor Bulletin SM-793
(1) On August 1, 1994 Andersen determines that Distributor Location A
made a sale outside its primary market area on July 15, 1994. For
90 days beginning August 1, 1994 each invoice sent by Andersen for
shipments to that location will have a 1-1/2% discount reduction.
For example, if the total amount for Andersen products on an invoice
based on the Andersen Price Schedule is $100,000, Distributor
Location A will be invoiced $50,000 ($100,000 x .5) rather than
$48,500 ($100,000 x .485), assuming vanload shipments. This
discount reduction will apply to all invoices sent by Andersen for
shipments to that location from August 1, 1994 through October 29,
1994.
(2) The discount reduction will cease for invoices sent on and after
October 30, 1994 unless Andersen has determined that Distributor
Location A has made another sale outside its primary market area.
For example, if on October 15, 1994 Andersen determines that on
August 15, 1994 Distributor Location A made another sale outside its
primary market area, the discount reduction will apply to all
invoices sent by Andersen for shipments to that location through
January 12, 1995.
(3) The discount reduction will not apply to invoices sent by Andersen
for direct shipments from Bayport to the business locations of
customers of Distributor Location A. It only applies to shipments by
Andersen to Distributor Location A's warehouse.
Andersen retains the right to change, modify or interpret part 2 of Distributor
Bulletin SM-793 and the above examples from time to time in its discretion.
Appendix C
to Xxxxxxxx Windows, Inc.
Distributor Bulletin No. SM-793
Andersen Activities Limited to a
Distributor's Primary Market Area
1. Effective at present:
x. Xxxxxxxx will forward sales leads to a distributor only for those
counties within that distributor's primary market area. Andersen will
forward sales leads to dealers in accordance with Xxxxxxxx'x then
current policy.
b. With respect to customer calls on dealers and contractors, the
Andersen representative will travel with a distributor only within the
distributor's primary market area.
c. With respect to meetings and workshops held for the benefit of a
distributor, Xxxxxxxx and Xxxxxxxx representatives will participate
with a distributor in only those meetings and workshops held in the
distributor's primary market area.
d. With respect to meetings held for the benefit of dealers, Xxxxxxxx and
Xxxxxxxx representatives will participate with any dealer, and will
participate with those distributors in whose primary market areas the
dealer is located.
x. Xxxxxxxx will participate in the Cooperative Print Advertising Program
for Distributors only for those advertisements printed in publications
circulated within a distributor's primary market area.
f. The Andersen Window of Knowledge [TM] System, the Xxxxxxxx Window
Center [R] Program, group visits to Bayport, and the dealer built-in
display co-op program can be made available by a distributor only to
dealers located in the distributor's primary market area.
2. Effective January 1, 1994:
a. Purchases by a dealer from a distributor whose sales to the dealer are
outside the distributor's primary market area at the time of the sale
will not qualify for the Andersen/Distributor Cooperative
Merchandising program for Andersen Dealers.
For example, assume in each of 1993 and 1994 90% of Dealer X's
purchases of Andersen products are from a distributor selling within
its primary market area at the time of the sale and 10% of Dealer X's
purchases are from another distributor selling outside its primary
market area. 100% of Dealer X's purchases in 1993 qualify for its
co-op budget for use in 1994 and 90% of its purchases in 1994 qualify
for its co-op budget for use in 1995.
