1
EXHIBIT 10.3b
LARGE ACCOUNT RESELLER
REBATE ADDENDUM TO THE
MICROSOFT 1995/1996 CHANNEL AGREEMENT
(JULY - DECEMBER, 1995)
This Addendum ("Addendum") entered into as of the 1st day of July, 1995,
supplements that certain Microsoft 1995/1996 Channel Agreement ("Agreement")
between MICROSOFT CORPORATION ("MS") having its principal place of business at
Xxx Xxxxxxxxx Xxx, Xxxxxxx, XX 00000 and SOFTWARE SPECTRUM, INC. ("CUSTOMER")
having its principal place of business at 0000 Xxxxxxx Xxxxx, Xxxxxxx, XX
00000. The Agreement is hereby supplemented as follows:
1. PURPOSE
The purpose of this Addendum is to set forth the framework by which CUSTOMER
may earn Rebates on Microsoft Select sales.
2. TERM AND TERMINATION
This Addendum shall be effective as of the date indicated above, and shall
expire December 31, 1995. Either party may terminate this Addendum, with or
without cause, upon thirty (30) days prior written notice. This Addendum is not
valid unless both MS and CUSTOMER have executed a Microsoft 1995/1996 Channel
Agreement and the Addendum to the Microsoft 1995/1996 Channel Agreement
(Appointment As A Large Account Reseller).
3. DEFINITIONS
For purposes of this Addendum, capitalized terms not otherwise defined herein,
shall have the same definitions as set forth in the Agreement. Additional
capitalized terms included in this Addendum are as defined in Schedule A
attached hereto.
4. REBATES
CUSTOMER is eligible to receive up to a * Rebate on its Qualified Select Sales
made during the Rebate Period. The Rebate shall be paid provided CUSTOMER
complies with the Select Rebate Program Guidelines outlined in Schedule B.
Notwithstanding such Rebate Program Guidelines, MS may, at its sole discretion,
pay all or any portion of the Rebate prior to the end of the Rebate Period. The
Rebate so paid may be adjusted subsequently based upon compliance with the
Rebate Program Guidelines.
IN WITNESS WHEREOF, the parties have signed this Addendum on the date indicated
below. This Addendum is hereby made part of the Agreement. All terms and
conditions of the Agreement not supplemented herein shall remain in full force
and effect. This Addendum is not binding until executed by MS.
AGREED AND ACCEPTED TO BY AGREED AND ACCEPTED TO BY
MICRO CORPORATION ("MS") SOFTWARE SPECTRUM, INC.
("CUSTOMER")
By: /s/ ILLEGIBLE By: /s/ Xxxxx X. Xxxxxx
--------------------------------- ---------------------------------
/s/ ILLEGIBLE Xxxxx X. Xxxxxx
------------------------------------ ------------------------------------
Name (please print) Name (please print)
/s/ ILLEGIBLE Vice President of Operations
------------------------------------ ------------------------------------
Title Title
06/27/95 June 19, 1995
------------------------------------ ------------------------------------
Date Date
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
2
SCHEDULE A
DEFINITIONS
"ELECTRONIC DATA INTERCHANGE" or "EDI" is defined as the ANSI-ASCII
X.12 standard, adopted by Company, by which CUSTOMER shall order and report
to MS.
"QUALIFIED SELECT SALES" is defined as net Select sales excluding the
Select Maintenance revenue of all Enrollment Agreements signed prior to July 1,
1995, and all revenue from Enrollment Agreements signed prior to July 1, 1994,
made during the Rebate Period, to CUSTOMER's End User customers as reported to
MS in CUSTOMER's normal sales reporting.
"REBATE" is defined as the dollar amount paid to CUSTOMER by MS in the
form of a purchase credit for achieving specific rebate goals as set forth
herein.
"REBATE PERIOD" is defined as the six (6) calendar months, July 1,
1995 - December 31, 1995, during which CUSTOMER shall be eligible to earn
Rebates.
"STREET DATE" is defined as the date prior to which new Product or new
versions of existing Product shall not be available for End User purchase.
3
SCHEDULE B
REBATE PROGRAM GUIDELINES
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SELECT REBATE PROGRAM OVERVIEW
-------------------------------------------------------------------------------
PROGRAMS: Microsoft offers four Select rebate programs for the July - December,
1995 Rebate period. Rebate percentages available are listed in the table below.
Details on each program are also included in this document.
-------------------------------------------------------------------------------
REBATE INCENTIVE MAXIMUM PERCENTAGE OUTLINED ON PAGE(S)
AVAILABLE
-------------------------------------------------------------------------------
Compliance Program B1-B2
Business Systems Program B2-B4
Maintenance Program * B4-B5
Enterprise (MELP) Program B5-B6
Total
REBATE CALCULATIONS AND PAYMENTS: Rebates will be paid in the form of a
Microsoft purchase credit forty-five (45) days after the end of each quarterly
rebate period (i.e. November 15th for the July - September, 1995 quarter).
Rebates are calculated by multiplying the achieved rebate percentage by the
total Qualified Select Sales for the rebate period. All Microsoft Select
revenue will be included in calculating CUSTOMER's performance against the
Select Rebate goals. Revenue generated from Microsoft Select Enrollment Forms
executed by MS prior to July 1, 1994, shall be included in calculating
CUSTOMER's achievement toward the Select Rebate goals, but shall not be
included in CUSTOMER's final total Qualified Select Sales for purposes of the
Rebate payment. Only revenue generated from Microsoft Select Enrollment Forms
executed by MS on or after July 1, 1994 (excluding any Microsoft Select
Maintenance) will be included in CUSTOMER's final total Qualified Select Sales
for purposes of the Rebate payment.
ANY ISSUES SURROUNDING REBATES SHOULD BE SENT IN WRITING TO XXXXXXX XXXXXX,
REBATE SPECIALIST, NO LATER THAN THIRTY (30) DAYS FOLLOWING RECEIPT OF REBATE
PAYMENT. If such written notice is not provided within thirty (30) days,
CUSTOMER shall have no further right to dispute rebate payment.
-------------------------------------------------------------------------------
COMPLIANCE REBATE PROGRAM
-------------------------------------------------------------------------------
PROGRAM OBJECTIVES: The objective of the Compliance Rebate Program is to
provide incentive for CUSTOMER to comply with Microsoft contractual
requirements for payments, Street Dates, and EDI ordering for Select 3.0.
NON-COMPLIANCE: During any given month, failure to comply with any or all of
the current compliance criteria will result in the forfeiture of the entire
compliance rebate for that month.
1. MICROSOFT PAYMENT REQUIREMENTS:
Microsoft requires it's customers to pay it's invoices within terms. In order
to maintain compliance, 85% of the gross invoice value for Select must be
current as of Microsoft's fiscal month-end. Unapplied credits will be excluded
from the calculation.
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Microsoft 1995/1996 Channel Agreement
Large Account Reseller Rebate Addendum
July-December, 1995 Page A2
4
2. MICROSOFT STREET DATE REQUIREMENTS:
From time to time, Microsoft may announce a new product or new versions of an
existing product for which Microsoft shall set a Street Date. In order to
comply with the Street Date requirements, CUSTOMER shall not:
o Ship or deliver the product to any end-user customer prior to
the Street Date.
o Accept any end user payment for the product prior to the
Street Date. Checks and/or credit card numbers may be accepted
by CUSTOMER, but can only be processed when product is
delivered to the end user on or after the Street Date.
o Advertise, merchandise, or promote the product to end user
customers until it is officially announced by Microsoft.
Usually, the product announcement is on the Street Date. If
the product announcement is earlier than the Street Date,
Microsoft will clearly communicate the announce date to the
channel. If product is announced by Microsoft before the
Street Date, the product can be advertised, merchandised
and/or promoted immediately after such announcement, provided
that all such promotions clearly state that the product is not
yet available for purchase.
o Allow it's distribution centers and/or warehouses to
distribute, for a period of up to twelve months, a Street Date
product to any individual sales office, retail store, or
outlet which Microsoft in its sole discretion has determined
to be in violation of the Street Date Requirements.
In the event CUSTOMER violates the Street Date for any special products
specified in a Microsoft Street Date letter (including, but not limited to
Microsoft(R) Windows(R) 95), CUSTOMER shall forfeit up to the entire Compliance
Rebate for the six month Rebate period in which the violation occurred.
Should CUSTOMER fail to comply with the Street Date Requirements, Microsoft may
also, for a period of up to twelve (12) months, withhold shipments to CUSTOMER
of future product until the Street Date of such product.
Should CUSTOMER wish to report a Street Date violation, CUSTOMER may fax a copy
of a dated sales receipt to STREET DATE VIOLATIONS AT MICROSOFT AT (206)
936-7329. Once a violation has been reported, Microsoft shall investigate the
violation, and take remedial action as appropriate. Please note, in order to
confirm a suspected violation, Microsoft must receive a dated sales receipt.
3. MICROSOFT REPORTING REQUIREMENTS
CUSTOMER must comply with the reporting requirements as outlined in the
1995/1996 Channel Agreement and/or the Senior Partner Marketing Fund and
Reporting Agreement, as applicable.
4. MICROSOFT TRANSACTION REQUIREMENTS
Electronic Data Interchange format ("EDI") transactions include, but are not
limited to 850/855 EDI transactions and all other EDI reporting requirements
which may be required by MS and in the EDI Implementation Guide attached hereto
as Schedule C. CUSTOMER must place EDI transaction orders at a minimum of once
per month per Enrollment Site if product is purchased during said month.
COMPLIANCE REBATE CALCULATION: The Microsoft Compliance Rebate will be
calculated on a monthly basis. If CUSTOMER has met all of the Compliance Rebate
criteria in a given month, CUSTOMER will be entitled to a Rebate payment equal
to (* ) of that month's total Qualified Select Sales. The rebate payment
will be made forty-five (45) days after the end of each quarterly rebate period.
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BUSINESS SYSTEMS REBATE PROGRAM
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PROGRAM OBJECTIVE: The objective of the Microsoft Business Systems Rebate
Program is to increase the Microsoft Business Systems revenue as well as to
increase the ratio of Microsoft Windows NT Client licenses to Server license
sales. The Microsoft Business Systems products consist of any license type of
the following products: MICROSOFT(R) BACKOFFICE, MICROSOFT(R) MAIL,
MICROSOFT(R) EXCHANGE, MICROSOFT(R) SNA SERVER, MICROSOFT(R) SQL SERVER(TM),
MICROSOFT(R) SYSTEMS MANAGEMENT SERVER, MICROSOFT(R) WINDOWS NT(TM) SERVER, and
MICROSOFT(R) WINDOWS NT(TM) WORKSTATION.
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Microsoft 1995/1996 Channel Agreement
Large Account Reseller Rebate Addendum
July-December, 1996 Page A3
5
REBATE PERCENTAGES: The total possible rebate percentage achievable for the
Business Systems Rebate Program is * of Qualified Select Sales for the
July - December, 1995 semester.
GOAL DEFINITIONS: The program goals are based upon the following:
o Existing Microsoft Business Systems revenue.
o Microsoft's Business Systems revenue goals.
o Microsoft's Windows NT Client to Server Ratio goals.
REBATE GOALS: CUSTOMER must meet a minimum Windows NT Client to Server Ratio of
* in order to receive any portion of the Business Systems rebate. Performance
against the Client to Server goal will be measured against all license types of
Microsoft Windows NT including full packaged product, MLPs, MOLP, and Select
license types. Provided that CUSTOMER meets the * Client to Server Ratio,
CUSTOMER's achievement against the Business Systems goal will be based on
CUSTOMER's performance against the Business Systems revenue goal. CUSTOMER's
performance against the revenue goal will also be based on all license types.
CUSTOMER has a first quarter rebate goal and a total semester rebate goal.
CUSTOMER's performance for the first three months of the July - December, 1995
semester will be measured against the first quarter rebate goal. At the end of
the first quarter, CUSTOMER will receive the percentage of the eligible rebate
earned based on performance against the first quarter goal. At the end of the
semester, CUSTOMER will be measured on their six-month performance against the
total semester goal. Even if CUSTOMER does not meet * of the first quarter
goal, CUSTOMER can still achieve * of the semester goal provided that the
semester goal is met at the end of the six-month period.
CUSTOMER's Business Systems Rebate Program goals are as follows:
o Minimum Windows NT Client to Server Ratio of *
o Quarter 1 Goal (July - September, 1995): *
o Semester Goal (July - December, 1995): *
PAYMENT: As stated earlier, CUSTOMER must attain a * Client to Server ratio of
Microsoft Windows NT in order to receive any portion of the Business Systems
Rebate. Provided CUSTOMER meets the Client to Server Ratio requirement,
CUSTOMER will be paid a Business Systems rebate based on performance against
the semester goal at the end of the semester. If CUSTOMER achieves greater than
* ) of the semester Business Systems revenue goal, and attains a minimum of *
Windows NT Client to Server ratio CUSTOMER will receive the exact achieved
percentage of the eligible Business Systems rebate up to * . If CUSTOMER
achieves less * ) of the Business Systems revenue goal, CUSTOMER will not
receive any portion of the Business Systems rebate. The purpose of this scale
is to offer an incentive for accounts to meet a portion of their goal in the
event they cannot achieve the full Microsoft Business Systems goal.
Although Microsoft pays the rebate ultimately based on performance against the
semester goal, Microsoft also pays a rebate at the end of the first quarter
based on performance against the first quarter goal. Microsoft pays a portion
of the rebate after the first quarter as an incentive for CUSTOMER to focus on
the Business Systems rebate program throughout the entire semester. The scale
for the first quarter payment is the same as the scale for the semester
payment. The first quarter payment amount will be subtracted from the final
semester payment for the rebate. Should CUSTOMER fail to meet the minimum
attainment for the final semester goal, MS will not seek reimbursement for
Rebate paid. Please note: Although performance against the Business Systems
Rebate is based on all Select, and non-Select Business Systems revenue, payment
will be based on Select revenue only.
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
6
Example:
Goals:
o Quarterly Business Systems revenue goal of *
o Semester Business Systems revenue goal of *
o Minimum Windows NT Client to Server Ratio of *
Performance:
o Windows NT Client to Server Ratio of *
o Actual Quarter Business Systems revenue is *
o Actual Semester Business Systems revenue is *
Because CUSTOMER attained the minimum Windows Mr Client to Server Ratio of *
CUSTOMER's Business Systems Rebate payment would be as follow:
-------------------------------------------------------------------------------------------------------
PERIOD GOAL SELL THROUGH PAYMENT
ACHIEVED
=======================================================================================================
First Quarter * * * eligible rebate = * July - September
Select Sales.
-------------------------------------------------------------------------------------------------------
Semester * * * eligible rebate = * of July - December
Select Sales less first quarter payment. The maximum
allowable Business Systems rebate is *
MAINTENANCE REBATE PROGRAM
PROGRAM OBJECTIVE: The objective of the Microsoft Maintenance Rebate Program is
to increase the Microsoft Maintenance revenue percentage of total Select
revenue.
REBATE PERCENTAGES: The total possible rebate percentage achievable for the
Maintenance Rebate Program is * of Qualified Select Sales for the July -
December, 1995 semester.
GOAL DEFINITIONS: The program goals are based upon the following:
o Existing Maintenance revenue percentage of total Select revenue.
o Microsoft's Maintenance revenue goals.
REBATE GOALS: CUSTOMER's achievement against the Maintenance goal will be based
on CUSTOMER's Select Maintenance revenue percentage of CUSTOMER's total Select
revenue.
CUSTOMER has a first quarter rebate goal and a total semester rebate goal.
CUSTOMER's performance for the first three months of the July - December, 1995
semester will be measured against the first quarter rebate goal. At the end of
the first quarter, CUSTOMER will receive the percentage of the eligible rebate
earned based on performance against the first quarter goal. At the end of the
semester, CUSTOMER will be measured on their six-month performance against the
total semester goal. Even if CUSTOMER does not meet * of the first quarter
goal, CUSTOMER can still achieve * of the semester goal provided that the
semester goal is met at the end of the six-month period.
CUSTOMER's Maintenance Rebate Program goals are as follows:
o Quarter 1 Goal (July - September, 1995): *
o Semester Goal (July - December, 1995): *
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
7
PAYMENT: CUSTOMER will be paid a Maintenance rebate based on performance
against the semester goal at the end of the semester. If CUSTOMER achieves
greater than * of the semester Maintenance rebate goal, CUSTOMER will receive
the exact achieved percentage of the eligible Maintenance rebate up to *
If CUSTOMER achieves less than * of the Maintenance rebate goal, CUSTOMER will
not receive any portion of the Maintenance rebate. The purpose of this scale is
to offer an incentive for accounts to meet a portion of their goal in the event
they cannot achieve the full Microsoft Maintenance goal.
Although Microsoft pays the rebate ultimately based on performance against the
semester goal, Microsoft also pays a rebate at the end of the first quarter
based on performance against the first quarter goal. Microsoft pays a portion
of the rebate after the first quarter as an incentive for CUSTOMER to focus on
the Maintenance rebate program throughout the entire semester. The scale for
the first quarter payment is the same as the scale for the semester payment.
The first quarter payment amount will be subtracted from the final semester
rebate payment. However, if CUSTOMER does not meet the minimum attainment for
the semester goal, Microsoft will not seek reimbursement of the first quarter
rebate payment.
Example:
Goals:
o Quarterly Maintenance goal of * total Select revenue
o Semester Maintenance goal of * total Select revenue
Performance:
o Actual Maintenance revenue is * of total Select
revenue at the end of the quarter
o Actual Maintenance revenue is * of Select revenue
at the end of the semester
CUSTOMER's Maintenance Rebate payment would be as follows:
-------------------------------------------------------------------------------------------------------------------------
PERIOD GOAL PERCENTAGE PAYMENT
ACHIEVED
=========================================================================================================================
First Quarter * * * eligible rebate = * of July - September Select
Sales.
-------------------------------------------------------------------------------------------------------------------------
Semester * * * Eligible rebate = * of July - December Select
Sales less first quarter payment. The maximum allowable
Maintenance rebate is *
ENTERPRISE REBATE PROGRAM
PROGRAM OBJECTIVE: The objective of the Microsoft Enterprise Rebate Program is
to increase the Microsoft Enterprise revenue percentage of total Select
revenue.
REBATE PERCENTAGES: The total possible rebate percentage achievable for the
Enterprise Rebate Program is of Qualified Select Sales for the July - December,
1995 semester.
GOAL DEFINITIONS: The program goals are based upon the following:
o Existing Enterprise revenue percentage of total Select
revenue.
o Microsoft's Enterprise revenue goals.
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
8
REBATE GOALS: CUSTOMER's achievement against the Enterprise goal will be based
on CUSTOMER's Enterprise revenue percentage of CUSTOMER's total Select revenue.
CUSTOMER has a first quarter rebate goal and a total semester rebate goal.
CUSTOMER's performance for the first three months of the July - December, 1995
semester will be measured against the first quarter rebate goal. At the end of
the first quarter, CUSTOMER will receive the percentage of the eligible rebate
earned based on performance against the first quarter goal. At the end of the
semester, CUSTOMER will be measured on their six-month performance against the
total semester goal. Even if CUSTOMER does not meet * of the first quarter
goal, CUSTOMER can still achieve * of the semester goal provided that the
semester goal is met at the end of the six-month period.
CUSTOMER's Enterprise Rebate Program goals are as follows:
o Quarter 1 Goal (July - September, 1995): *
o Semester Goal (July - December, 1995): *
PAYMENT: CUSTOMER will be paid a Enterprise rebate based on performance against
the semester goal at the end of the semester. If CUSTOMER achieves greater than
* ) of the semester Enterprise rebate goal, CUSTOMER will receive the
exact achieved percentage of the eligible Enterprise rebate up to * if
CUSTOMER achieves less than * ) of the Enterprise rebate goal,
CUSTOMER will not receive any portion of the Enterprise rebate. The purpose of
this scale is to offer an incentive for accounts to meet a portion of their
goal in the event they cannot achieve the full Microsoft Enterprise goal.
Although Microsoft pays the rebate ultimately based on performance against the
semester goal, Microsoft also pays a rebate at the end of the first quarter
based on performance against the first quarter goal. Microsoft pays a portion
of the rebate after the first quarter as an incentive for CUSTOMER to focus on
the Enterprise rebate program throughout the entire semester. The scale for the
first quarter payment is the same as the scale for the semester payment. The
first quarter payment amount will be subtracted from the final semester rebate
payment. However, if CUSTOMER does not meet the minimum attainment for the
semester goal, Microsoft will not seek reimbursement of the first quarter
rebate payment.
Example:
Goals:
o Quarterly Enterprise goal of * of total Select revenue
o Semester Enterprise goal of * of total Select revenue Performance:
o Actual Enterprise revenue is * of total Select revenue at the end of
the quarter
o Actual Enterprise revenue is * of Select revenue at the end of the
semester
CUSTOMER's Enterprise Rebate payment would be as follows:
-----------------------------------------------------------------------------------------------------------------------
PERIOD GOAL PERCENTAGE PAYMENT
ACHIEVED
=======================================================================================================================
First Quarter * * * eligible rebate = * of July -
September Select Sales.
-----------------------------------------------------------------------------------------------------------------------
Semester * * * of * eligible rebate does not qualify
for any portion of the Business Systems rebate.
However the first quarter payment will not be
affected and Microsoft will not ask for
reimbursement.
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
9
AMENDMENT NO. 1 TO THE
LARGE ACCOUNT RESELLER ADDENDUM TO THE
MICROSOFT 1995/1996 CHANNEL AGREEMENT
This Amendment No. 1 ("Amendment"), dated this first day of January, 1996,
amends that certain Large Account Reseller Addendum to The Microsoft 1995/1996
Channel Agreement ("Addendum") dated July 1, 1995, between MICROSOFT
CORPORATION ("MS") having its principal place of business at Xxx Xxxxxxxxx Xxx,
Xxxxxxx, XX 00000 and SOFTWARE SPECTRUM, INC. ("CUSTOMER") having its
principal place of business at 0000 Xxxxxxx Xxxxx, Xxxxxxx, XX 00000. The
Addendum is hereby amended as follows:
2. TERM AND TERMINATION
The first sentence of the section is replaced with the following:
"This Addendum shall be effective as of the date indicated above, and shall
expire June 30, 1996."
SCHEDULE B
Schedule B is replaced in its entirety with the attached Schedule C.
IN WITNESS WHEREOF, the parties have signed this Amendment on the date
indicated below. This Amendment is hereby made part of the Addendum. All terms
and conditions of the Addendum not amended herein shall remain in full force
and effect. This Amendment is not binding until executed by MS.
AGREED AND ACCEPTED TO BY AGREED AND ACCEPTED TO BY
MICROSOFT CORPORATION ("MS") SOFTWARE SPECTRUM, INC.
("CUSTOMER")
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
--------------------------- ---------------------------------
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
------------------------------ ------------------------------------
Name (please print) Name (please print)
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
------------------------------ ------------------------------------
Title Title
1/3/96 December 20, 1995
------------------------------ ------------------------------------
Date Date
10
SCHEDULE C
JANUARY-JUNE, 1996
REBATE GUIDELINES
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SELECT REBATE PROGRAM OVERVIEW
-------------------------------------------------------------------------------
PROGRAMS: Microsoft offers four Select rebate programs for
the January - June, 1996 Rebate period:
------------------------------------------------------------------------------
REBATE INCENTIVE MAXIMUM PERCENTAGE AVAILABLE
==============================================================================
Compliance Program
Maintenance Sales-out Program *
Enterprise Sales-out Program
Business Systems Sales-out Program
Total
REBATE CALCULATIONS AND PAYMENTS: Rebates will be paid in the form of a
Microsoft purchase credit forty-five (45) days after the end of each quarterly
rebate period (i.e. May 15th for the January - March, 1996 quarter). Rebates
are calculated by multiplying the achieved rebate percentage by the total
Qualified Select Sales for the rebate period. All Microsoft Select revenue will
be included in calculating CUSTOMER's performance against the Select Rebate
goals. Revenue generated from Microsoft Select Enrollment Forms executed by MS
prior to July 1, 1994, shall be included in calculating CUSTOMER's achievement
toward the Select Rebate goals, but shall not be included in CUSTOMER's final
total Qualified Select Sales for purposes of the Rebate payment. Only revenue
generated from Microsoft Select Enrollment Forms executed by MS on or after
July 1, 1994 (excluding any Microsoft Select Maintenance) will be included in
CUSTOMER's final total Qualified Select Sales for purposes of the Rebate
payment.
ANY ISSUES SURROUNDING REBATES SHOULD BE SENT IN WRITING TO XXXXXXX XXXXXX,
MARKETING MANAGER, NO LATER THAN THIRTY (30) DAYS FOLLOWING RECEIPT OF REBATE
PAYMENT. If such written notice is not provided within thirty (30) days,
CUSTOMER shall have no further right to dispute rebate payment
COMPLIANCE REBATE PROGRAM
PROGRAM OBJECTIVES: The objective of the Compliance Rebate Program is to
provide incentive for CUSTOMER to comply with Microsoft contractual
requirements for payments, Street Dates, and EDI ordering for Select 3.0.
NON-COMPLIANCE: During any given month, failure to comply with any or all of
the current compliance criteria will result in the forfeiture of the entire
compliance rebate for that month.
1. MICROSOFT PAYMENT REQUIREMENTS
Microsoft requires its customers to pay its invoices within terms. In order to
maintain compliance, 85% of the gross invoice value for Select must be current
as of Microsoft's fiscal month-end. Unapplied credits will be excluded from the
calculation.
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Amendment No. 1 to The Large Account Page C2
Reseller Rebate Addendum to The Microsoft
1995/1996 Channel Agreement
11
2. Microsoft Street Date Requirements
From time to time, Microsoft may announce a new product or new versions of an
existing product for which Microsoft shall set a Street Date. In order to
comply with the Street Date requirements, CUSTOMER shall not:
o Ship or deliver the product to any end-user customer prior to the
Street Date.
o Accept any end user payment for the product prior to the Street
Date. Checks and/or credit card numbers may be accepted by
CUSTOMER, but can only be processed when product is delivered to
the end user on or after the Street Date.
o Advertise, merchandise, or promote the product to end user
customers until it is officially announced by Microsoft. Usually,
the product announcement is on the Street Date. If the product
announcement is earlier than the Street Date, Microsoft will
clearly communicate the announce date to the channel. If product is
announced by Microsoft before the Street Date, the product can be
advertised, merchandised and/or promoted immediately after such
announcement, provided that all such promotions clearly state that
the product is not yet available for purchase.
o Allow it's distribution centers and/or warehouses to distribute,
for a period of up to twelve months, a Street Date product to any
individual sales office, retail store, or outlet which Microsoft in
its sole discretion has determined to be in violation of
the Street Date Requirements.
In the event CUSTOMER violates the Street Date for any special products
specified in a Microsoft Street Date letter, CUSTOMER shall forfeit up to the
entire Compliance Rebate for the six month Rebate period in which the violation
occurred.
Should CUSTOMER fail to comply with the Street Date Requirements, Microsoft may
also, for a period of up to twelve (12) months, withhold shipments to CUSTOMER
of future product until the Street Date of such product.
Should CUSTOMER wish to report a Street Date violation, CUSTOMER may fax a copy
of a dated sales receipt to Street Date Violations at Microsoft at (206)
936-7329. Once a violation has been reported, Microsoft shall investigate the
violation, and take remedial action as appropriate. Please note, in order to
confirm a suspected violation, Microsoft must receive a dated sales receipt.
3. Microsoft Reporting Requirements
CUSTOMER must comply with the reporting requirements as outlined in CUSTOMER's
then current 1995/1996 Channel Agreement and/or Senior Partner Marketing Fund
and Reporting Agreement, as applicable.
4. Microsoft Transaction Requirements
Electronic Data Interchange format ("EDI") transactions include, but are not
limited to 850/855 EDI transactions and all other EDI reporting requirements
which may be required by MS and in the EDI Implementation Guide provided by MS
from time to time. CUSTOMER must place EDI transaction orders at a minimum of
once per month per Enrollment Site if product is purchased during said month.
5. Select Certification Program
CUSTOMER shall participate in and obtain certification in the Microsoft Select
Certification Program for no less than two (2) CUSTOMER Select administration
contacts by June 30, 1996.
Compliance Rebate Calculation: The Microsoft Compliance Rebate will be
calculated on a monthly basis. If CUSTOMER has met all of the Compliance Rebate
criteria in a given month, CUSTOMER will be entitled to a Rebate payment equal
to * of that month's total Qualified Select Sales. The
rebate payment will be made forty-five (45) days after the end of each
quarterly rebate period.
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Amendment No. 1 to The Large Account Page C3
Reseller Rebate Addendum to The Microsoft
1995/1996 Channel Agreement
12
-------------------------------------------------------------------------------
SALES-OUT REBATE PROGRAMS
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REBATE GOALS: CUSTOMER has first quarter sales-out goals and total semester
sales-out goals. CUSTOMER's performance for the first three months of the
January - June, 1996, semester will be measured against the first quarter
sales-out goals. At the end of the first quarter, CUSTOMER will receive the
percentage of the eligible rebates earned based on performance against the first
quarter goals. At the end of the semester, CUSTOMER will be measured on their
six-month performance against the total semester goals. Even if CUSTOMER does
not meet * of the first quarter goals, CUSTOMER can still achieve * of the
semester goals provided that the semester goals are met at the end of the
six-month period.
SALES-OUT DEFINITIONS/MEASUREMENT: MS Product Sales-out is defined as those MS
net product units sold through CUSTOMER's outlet locations. For the Business
Systems sales-out goal, CUSTOMER's full packaged product, Microsoft Open
License, and upgrade sales-out units will be measured from the sales-out
reported by CUSTOMER to MS. For the Maintenance and Enterprises sales-out goals,
only the appropriate Select license will be measured. Licensing sales (Select,
Microsoft Maintenance) are captured and generated by MS' financial systems and
included in total sales-out used to measure product sales-out rebate
performance.
Any Microsoft Select 2.x and 1.x and Microsoft Maintenance revenue credit is
granted as MS recognizes the revenue. This occurs when MS has received the
customer's license reporting. Following receipt of reporting, MS bills the
customer/reseller and simultaneously recognizes the revenue.
PAYMENT: At the end of the semester, CUSTOMER will be paid sales-out rebates
based on performance against the semester goals. If CUSTOMER achieves greater
than sixty percent (60%) of each semester sales-out goal, CUSTOMER will receive
the exact achieved percentage of the eligible sales-out rebate up to one
hundred percent (100%) CUSTOMER achieves less than sixty percent (60%) of any
sales-out rebate goal, CUSTOMER will not receive any portion of that sales-out
rebate.
Although MS pays the sales-out rebate ultimately based on performance against
the semester sales-out goal, MS also pays a sales-out rebate at the end of the
first quarter based on performance against the first quarter goal. MS pays a
portion of the rebate after the first quarter to provide incentive for CUSTOMER
to focus on sales-out throughout the entire semester. The scale for the first
quarter payment is the same as the scale for the semester payment. The first
quarter payment amount will be subtracted from the final semester payment for
the sales-out rebate.
Example: If CUSTOMER has a quarterly Business Systems sales out goal of
$1,000,000 and a total semester Business Systems goal $2,500,000 and
CUSTOMER sells $800,000 over the first quarter period and $2,600,000 over the
entire semester period, CUSTOMER will receive the following rebate payments:
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PERIOD GOAL SELL-THROUGH PAYMENT
ACHIEVED
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First Quarter * eligible rebate = * of January -
* * June sales.
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Semester * eligible rebate = * of January -
* * June sales less first quarter payment. The
maximum allowable rebate is *
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Amendment No. 1 to The Large Account Page C4
Reseller Rebate Addendum to The Microsoft
1995/1996 Channel Agreement
13
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SELECT MAINTENANCE SALES-OUT REBATE PROGRAM
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REBATE PERCENTAGES: The total possible rebate percentage achievable for the
Maintenance Sales-out Rebate Program is * of Qualified Sales for the
January - June, 1996 semester.
CUSTOMER's Total Sales-out Rebate Program goals are as follows:
o Quarter 1 Goal (January - March, 1996): *
o Semester Goal (January - June, 1996): *
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ENTERPRISE SALES-OUT REBATE PROGRAM
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REBATE PERCENTAGES: The total possible rebate percentage achievable for the
Enterprise Sales-out Rebate Program is * of Qualified Sales for the
January - June, 1996 semester.
CUSTOMER's Total Sales-out Rebate Program goals are as follows:
o Quarter 1 Goal (January - March, 1996): *
o Semester Goal (January - June, 1996): *
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BUSINESS SYSTEMS SALES-OUT REBATE PROGRAM
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REBATE PERCENTAGES: The total possible rebate percentage achievable for the
Business Systems Sales-out Rebate Program is * of Qualified Sales for the
January - June, 1996 semester.
REBATE GOALS: CUSTOMER must meet a minimum Microsoft(R) BackOffice client
license unit sales goal in order to receive any portion of the Business Systems
rebate. Provided that CUSTOMER meets the client license unit sales goal,
CUSTOMER's achievement against the Business Systems goal will be based on
CUSTOMER's performance against the Business Systems revenue goal.
CUSTOMER's Microsoft(R) BackOffice unit sales goals are as follows:
o Quarter 1 Goal (January - March, 1996): *
o Semester Goal (January - June, 1996): *
CUSTOMER's Business Systems Sales-out Rebate Program goals are as follows:
o Quarter 1 Goal (January - March, 1996): *
o Semester Goal (January - June, 1996): *
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Amendment No. 1 to The Large Account Page C5
Reseller Rebate Addendum to The Microsoft
1995/1996 Channel Agreement
