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EXHIBIT 10.2(c)
AMENDMENT NO. 2 TO THE
LARGE ACCOUNT RESELLER REBATE ADDENDUM TO THE
MICROSOFT 1995/1996 CHANNEL AGREEMENT
This Amendment No. 2 ("Amendment") amends that certain Large Account Reseller
Rebate Addendum (as amended "Addendum") to The Microsoft 1995/1996 Channel
Agreement (as amended "Agreement") 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 July 1, 1996, and shall expire
December 31, 1996."
The Addendum is amended to include the following as Section 6:
"6. FAILURE TO EXECUTE
CUSTOMER shall not be eligible to receive Rebates or Opportunity Marketing
Funds until both CUSTOMER and MS have executed this Addendum. Should CUSTOMER
fail to execute, or should MS be unable to execute this Addendum by July 1,
1996, for each full month after July 1, 1996, in which this Addendum is not
executed, CUSTOMER shall forfeit such month's Achievement Rebate."
SCHEDULE B, REBATE PROGRAM GUIDELINES.
Schedule B is replaced in its entirety with the attached Schedule D.
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/JOHAN LIEDGREN By:/s/XXXXX X. XXXXXX
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Johan Liedgren Xxxxx X. Xxxxxx
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Name (please print) Name (please print)
Director, Channel Policies Executive Vice President - COO
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Title Title
8/2/96 July 1, 1996
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Date Date
Microsoft Confidential - Disclosure Prohibited
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SCHEDULE D
JULY - DECEMBER, 1996
LARGE ACCOUNT RESELLER
REBATE GUIDELINES
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SELECT REBATE PROGRAM OVERVIEW
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PROGRAMS: Microsoft offers four (4) Select rebate programs for the July -
December, 1996 Rebate period:
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Rebate Program Maximum Percentage Available
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Achievement Program *
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Total Sales-out Program *
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Open License Sales-out Program *
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Desktop Business Systems Sales-out Program *
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Total *
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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, 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.
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ACHIEVEMENT REBATE PROGRAM
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PROGRAM OBJECTIVES: The objective of the Achievement Rebate Program is to
provide incentive for CUSTOMER to comply with Microsoft contractual
requirements for payments, Street Dates, reporting and EDI ordering for Select
3.O.
ACHIEVEMENT: During any given month, failure achieve with any or all of the
current Achievement criteria will result in the forfeiture of the entire
Achievement Rebate for that month.
1. MICROSOFT PAYMENT REQUIREMENTS
Microsoft requires its customers to pay its invoices within terms. In order to
maintain compliance, one hundred percent (100%) of the gross invoice value for
non-Select and eighty-five (85%) of the gross invoice value for Select must be
current as of Microsoft's fiscal month-end. Additionally, no greater than one
percent (1%) of the gross value for Select invoices shall be past net 60 days.
Unapplied credits will be excluded from the calculation.
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Amendment No. 2 to The Large Account
Reseller Rebate Addendum to The Page D1
Microsoft Channel Agreement
3
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:
* Ship or deliver the product to any end-user customer
prior to the Street Date.
* 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.
* 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.
* Allow its 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 Achievement 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
amended 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.
ACHIEVEMENT REBATE CALCULATION: The Microsoft Achievement Rebate will be
calculated on a monthly basis. If CUSTOMER has met all of the Achievement
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. 2 to The Large Account
Reseller Rebate Addendum to The Page D2
Microsoft Channel Agreement
4
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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 July
- December, 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
100% of the first quarter goals, CUSTOMER can still achieve 100% of the
Semester goals provided that the Semester goals are met at the end of the
Rebate Period.
SALES-OUT DEFINITIONS/MEASUREMENT: MS Product Sales-out is defined as those MS
net product units sold through CUSTOMER's outlet locations. 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. 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%). If 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 Desktop Business Systems sales out goal of
$1,000,000 and a total Semester Desktop 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 July -
September sales.
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Semester * * * eligible Rebate of July -
December 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. 2 to The Large Account
Reseller Rebate Addendum to The Page D3
Microsoft Channel Agreement
5
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TOTAL SALES-OUT REBATE PROGRAM
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REBATE PERCENTAGES: The total possible Rebate percentage achievable for the
Total Sales-out Rebate Program is * of Qualified Sales for the July - December,
1996 Semester.
CUSTOMER's Total Sales-out Rebate Program goals are as follows:
o Quarter 1 Goal (July - September, 1996): *
o Semester Goal (July - December, 1996): *
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OPEN LICENSE SALES-OUT REBATE PROGRAM
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REBATE PERCENTAGES: The total possible Rebate percentage achievable for the
Open License Sales-out Rebate Program is * of Qualified Sales for the July -
December, 1996 Semester.
CUSTOMER's Open License Sales-out Rebate Program goals are as follows:
o Quarter 1 Goal (July - September, 1996): *
o Semester Goal (July - December, 1996): *
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DESKTOP BUSINESS SYSTEMS SALES-OUT REBATE PROGRAM
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REBATE PERCENTAGES: The total possible Rebate percentage achievable for the
Desktop Business Systems Sales-out Rebate Program is * of Qualified Sales for
the July - December, 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 Desktop Business
Systems Rebate. Provided that CUSTOMER meets the client license unit sales goal,
CUSTOMER's achievement against the Desktop Business Systems goal will be based
on CUSTOMER's performance against the Desktop Business Systems revenue goal.
CUSTOMER's Microsoft(R) BackOffice unit sales goals are as follows:
o Quarter 1 Goal (July - September, 1996): *
o Semester Goal (July - December, 1996): *
CUSTOMER's Desktop Business Systems Sales-out Rebate Program goals are as
follows:
o Quarter 1 Goal (July - September, 1996): *
o Semester Goal (July - December, 1996): *
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Amendment No. 2 to The Large Account
Reseller Rebate Addendum to The Page D4
Microsoft Channel Agreement
