APAN SALES POLICIES - PHD, Inc

[Pages:9]Effective October 1, 2003 Revised July 6, 2020

SALES POLICIES

? For North, Central, & South America

CONTENTS Distributor Policy Automation Products Blanket Orders, Point of Sale, Demo Case Program Reseller Discounts, Prototype Pricing for Unique Solutions? Direct Sales, Marketing Consultants Policy Sales Lead Follow-up Returned Material Policy Returned Material Credit Amounts Sudden Service, Product Warranty

PAGE 2 3 4 5 6 7 8 9

PHD, Inc. reserves the right to amend and revise the enclosed policies without notice. ? 2020 PHD, INC.

PHD, INC. SALES POLICIES (for North, Central, & South America) Revised July 6, 2020

Distributor Policy Automation Products

PHD, Inc. agrees to sell through assigned Distributors; Automation Products including Cylinders, Rotary Actuators, Multi-Motion Devices, Powered Slides, Grippers, Clamps, and Accessories under the following conditions:

Distributor Discount Price Code

Base Discount

Quantity Discount

Recommended Customer Discount

OEM

User

None

35%

Schedule 3

15% + Quantity

Quantity Only

B

20%

Schedule 3

Quantity Only

None

E

25%

None

5%

None

F

20%

None

None

None

I

27%

None

5%

None

J

30%

None

None

None

M

35%

None

15%

None

P

25%

Schedule 2

None

Quantity Only

V

38%

None

15%

None

Price sheets and online pricing contain a discount letter code to designate discounts other than 35% base

plus quantity.

Schedule 2 1-19 20-99

100 and up

Quantity Discounts 0%

3.333% Consult Factory

Schedule 3 1-9

10-19 20-49 50-99 100-249 250 and up

Quantity Discounts 0% 5%

7.50% 10% 12% Consult Factory

Quantity discounts do not apply to Code E, F, I, M, and J. Quantity discounts apply only to identical units. This includes repair kits and parts.

Unique Solutions? Quotes

Unique Solutions? quotes are typically quoted as NET and are exempt from any discounts. Quotes that are quoted as LIST are subject to the above discounts.

Minimum Billing

None

Terms

Net 30 days F.O.B. Shipping point

RGA Repairs

Discount Code "J"

Returned Material

Refer to detail bulletin

Warranty

Standard (Refer to main catalog)

PHD, Inc. ? 9009 Clubridge Drive, Fort Wayne, IN 46809

2

Tel. (260) 747-6151 ? Fax (260) 747-6754

? phdinfo@

PHD, INC. SALES POLICIES (for North, Central, & South America) Revised July 6, 2020

Blanket Orders

Quality planning is essential in the Engineered Products Industry. The following policy has been set forth as a guideline for productive business practice.

PHD, Inc., in order to provide the best price and service for our customers, reserves the right to manufacture all of a total blanket order at the time of first release. The blanket order quantities will be subject to negotiation between distributor and PHD, Inc.

Quotations

Quotations are valid for 90 days unless otherwise noted.

Shipments

PHD will drop ship the first release directly to the customer unless otherwise noted.

PHD reserves the right to manufacture the entire blanket order to optimize efficiency of machinery and meet agreed upon delivery schedules. All product manufactured and not shipped on the first release may be immediately shipped to the distributor. It will be the distributor's responsibility to handle all releases after the first shipment.

Invoicing

PHD and distributor will establish a release schedule at the time the order is entered. PHD will invoice the distributor against this schedule.

Returned Goods

Returned goods policy on blanket orders will be established at the time of order entry if there will be any variances from the standard RGA policy.

Terms

All blanket orders will be for a maximum period of one year after receipt of order.

Point of Sale Information

PHD defines Point of Sale information as the company name and complete address for the customer who is purchasing PHD products. The majority of orders shipping from PHD are drop shipped to the Point of Sale customer. There are occasions where customer orders are shipped to the distributor instead of the actual Point of Sale customer. It is PHD's policy to require Point of Sale information for all such orders. To eliminate potential confusion, PHD requires one customer (point of sale) per purchase order. This is not applicable to general distributor stocking orders, such as: switches, repair kits, parts, etc. PHD uses the Point of Sale history to track both product usage and sales growth of various market segments and to share this information within MDN. As technology and order entry processes change, the method in which PHD obtains the Point of Sale information will change. It is our goal to make the reporting of Point of Sale information by our distributors as easy as possible. PHD will keep each distributor informed as to how to supply this information to PHD.

Demo Case Purchase Program

PHD believes to effectively sell our products, you must be able to show our products. To facilitate product demonstrations, PHD has created product cases with interchangeable foam pads, which contain the majority of PHD products. It is strongly recommended each PHD distributor purchase at least one set of PHD product demo cases. Depending on the size of the distributor, PHD may recommend the need for more than one set of demonstration cases. PHD will automatically ship and bill for new foam pads with new products as these products are released in the appropriate quantities. PHD will also automatically ship and bill redesigned or new design products to replace obsolete products in the appropriate quantities required. Billing for the new or redesigned units will be at 50% off of the list price of the actuator plus the cost of the foam pad.

Additional Demo Cases with product may be purchased from PHD. Contact Sales or Marketing to obtain the current price.

PHD, Inc. ? 9009 Clubridge Drive, Fort Wayne, IN 46809

3

Tel. (260) 747-6151 ? Fax (260) 747-6754

? phdinfo@

PHD, INC. SALES POLICIES (for North, Central, & South America) Revised July 6, 2020

Reseller Discount

By definition, a Reseller is any organization who purchases PHD products with the express intent to further distribute or resell those products. These would include Procurement Organizations to handle some or all of an end customer's purchasing requirements. There are also OEM Service Centers that purchase PHD products with the intent to resell for upgrade or replacement on their equipment. In either case, these are also considered a Reseller.

PHD recommends that authorized distributors not sell any PHD products to these resellers without complete knowledge of the end customer's identity, location, and application.

PHD recommends the following discount structure be used when dealing with any Resellers:

Complete knowledge of the end customer's identity, location, and application.

- List price less standard customer discount (whatever discount the end customer is normally entitled to)

OEM Service Centers that purchase components for resale:

- List price only with no discount

PHD recommends that under no circumstances additional discounts be given to a reseller unless our distributor is certain of the order's destination and application. Discounting orders without knowing the order's destination encourages the "bootlegging" of products across territory lines or provides OEM Service Centers the ability to underprice the local distributor who supports the end customer. PHD reserves the right to refuse to sell any products to our distributors should PHD determine that the intended application presents a safety concern or may cause a safety concern based on lack of knowledge of the end user's application.

Prototype Pricing for Unique Solutions?

PHD understands the importance of providing prototype Unique Solutions? to customers for evaluation. This valuable tool has proven to be instrumental in obtaining large quantity orders from OEM and User customers after the evaluation stage. Without this tool the MDN sales person's chance of getting the large quantity order would be minimized.

In order for this program to be successful, it is imperative that the MDN Sales person provide realistic target net pricing (distributor cost) to PHD at the time of the quote creation on large quantity potentials. The target net pricing assists us in meeting the distributor's pricing goal.

PHD's Prototype Pricing Policy is as follows:

Realistic Target Net Price Provided

PHD will make every effort to sell the prototype unit at or below the provided target price. It is PHD's suggestion to the distributor that if the target price is met, the distributor should pass through this cost direct to the customer. If PHD's prototype price is below the target price given, we suggest the distributor sell the prototype unit at the target price.

No Target Price Is Provided

If the requested quantity meets PHD's guidelines but does not have a realistic target price than a three way split on the actual costs for one prototype unit will be implemented. Three way split on the costs is defined as each party (the customer, distributor, and PHD) paying one third of the costs to produce one prototype unit. It is PHD's suggestion that the distributor pass through the prototype price to the customer the 1/3 price.

PHD reserves the right to require either a copy of the quote you have provided to the customer or a copy of the invoice to the customer after shipment of the prototype unit. In addition, PHD reserves the right to contact the MDN sales person directly to obtain further information on the specific target price if deemed necessary and/or provide assistance in the sales process.

PHD, Inc. ? 9009 Clubridge Drive, Fort Wayne, IN 46809

4

Tel. (260) 747-6151 ? Fax (260) 747-6754

? phdinfo@

PHD, INC. SALES POLICIES (for North, Central, & South America) Revised July 6, 2020

PHD Policy for Direct Sales

This policy covers the direct sale of PHD products to private label customers and customers that use the PHD Product as a basis for a value-added product. This policy does not apply to products that are sold through PHD's traditional distribution channel.

Philosophy

PHD believes in selling through the MDN distributor network whenever possible. There are situations where it may not feasible to sell through the MDN channel. PHD would only consider selling direct if it is deemed to have no major effect on our MDN partners. These opportunities include, but are not restricted to "catalog houses", private label agreements, and other manufacturers that provide a value added product with the PHD product as part of their assembly. PHD would like to take advantage of these situations when it is deemed prudent and will include the affected MDN distributor in all negotiations. It is PHD's intent to negotiate a reasonable commission to the distributor who has the primary facility or contact.

PHD Responsibility

PHD will be responsible for providing technical specifications on the products and any support required for the creation of collateral material by the customer. PHD will receive and process the customer order and be responsible for the receivables. PHD will determine and accept the credit worthiness of the customer. PHD will handle all correspondence and support relating to the order process. PHD will track the business produced as a result of the agreement. PHD will supply sales reports and commission checks for those sales to the distributor with the primary facility. PHD will review the agreement on a yearly basis to determine the viability of the arrangement and the impact on MDN.

Distributor Responsibility

The distributor with the primary facility will be responsible for assisting in the initial negotiations and representing the interests of MDN. The distributor will participate in any yearly price negotiations as well. They will also be responsible for ongoing product support as required and assisting with design changes or upgrades and additional new opportunities.

Customer Discounts

PHD will work with the Customer and the local MDN distributor to establish a discount or pricing structure that will allow the customer to sell the PHD product at an acceptable profit margin, while causing a minimum amount of disruption and conflict for our MDN distributor channel.

Commissions to the Distributor

PHD will commission the distributor with the primary customer facility. The commissions will be paid on a regular schedule based on an agreement between the distributor and PHD. Commissions will typically range between 2% and 10% of the net price to the customer based on the need for local product support.

Marketing Consultants Policy

When deemed appropriate, PHD, Inc. reserves the right to employ consultants for marketing segment projects. In such an event, the apportioned costs will be shared between PHD, Inc. and the benefiting distributor.

PHD, Inc. ? 9009 Clubridge Drive, Fort Wayne, IN 46809

5

Tel. (260) 747-6151 ? Fax (260) 747-6754

? phdinfo@

PHD, INC. SALES POLICIES (for North, Central, & South America) Revised July 6, 2020

Sales Lead Follow-up

Sales leads generated from PHD are expected to be appropriately followed-up with feedback returned to PHD. Examples of lead sources include CAD downloads, sizing requests, website registrations, trade shows, and website visits. Following are PHD's expectations and procedures for sales leads.

Sales leads requiring a follow-up:

PHD expects a full follow-up for sales leads that meet one of the following criteria: the account is a new Prospect, the account is a "Past-Active" having bought in the past but not within 36 months, a New User registers on PHD's website, and leads from a Trade Show. These criteria are highlighted on the lead. Other leads for current existing customers with known projects do not require follow-up.

Procedure for follow-up and feedback:

The distributor lead management system is housed on PHD's distributor site. Designated lead managers are assigned at each distributorship. These lead managers have the ability to assign leads to specific salespeople from their dashboard. After assignment, the salesperson will receive an email with the lead and a link for feedback. After following-up with the account, the link will lead to a form where feedback can be entered. The lead will then be marked as complete on the salesperson's dashboard. A salesperson's dashboard will show leads assigned to them only.

PHD will notify each distributor as the new lead system becomes available.

PHD, Inc. ? 9009 Clubridge Drive, Fort Wayne, IN 46809

6

Tel. (260) 747-6151 ? Fax (260) 747-6754

? phdinfo@

PHD, INC. SALES POLICIES (for North, Central, & South America) Revised July 6, 2020

Returned Material Policy

Returned Material:

All items returned direct from the customer or distributor must contain proper paperwork including Return Authorization Number from PHD. Items returned without a return authorization number will be shipped back to sender at their expense.

RETURNED MATERIAL POLICY

I. REPAIRS

Repair Under Warranty: In requesting a Return Goods Authorization (RGA), the Distributor's Original P.O. number or PHD Sales Order Number must be entered along with the exact nature of the trouble with the unit.

PHD will cover standard ground freight charges for warranty repairs, incorrect units, or parts to and from PHD so long as the problem is clearly a PHD error. If an alternate shipping method is requested, any additional charges over and above those charged for standard ground shipment will be the responsibility of the distributor or customer. If it is determined not to be a PHD error, the shipping charges to and from PHD will be the responsibility of the distributor or customer.

NOTE: Units MUST carry Original PHD I.D. Tag.

Repairs Not Covered By Warranty: Items returned for repair not covered by warranty will be repaired and charged against the Distributor's Returned Goods number. Authorization to repair must be obtained within 30 days of notification of repair charges. After 30 days, units will be returned to Distributor "as is."

All freight charges are the responsibility of the distributor or customer.

All items repaired by PHD will receive a new 12 month warranty.

II. CREDITS

Items Returned for Credit: In requesting a Return Goods Authorization (RGA), the Distributor's Original P.O. number or PHD Sales Order Number must be provided.

All freight charges are the responsibility of the distributor or customer.

NOTE: Units MUST carry Original PHD I.D. Tag.

III. ITEMS NOT MANUFACTURED BY PHD - (to be sent to PHD for a project or quote)

Items that are not manufactured by PHD but need to be sent to PHD Sales, Customer Service, Application Engineering, or PHD Unlimited for a project or quote must have a RGA attached to it for tracking purposes.

All items received are presumed to be property of PHD and discarded after 6 months unless properly documented and communicated through the RGA process.

Items returned not in accordance with above will be returned directly to the sender.

Reminder ? The RGA number must accompany any Return Goods Shipment to PHD, Inc.

PHD, Inc. ? 9009 Clubridge Drive, Fort Wayne, IN 46809

7

Tel. (260) 747-6151 ? Fax (260) 747-6754

? phdinfo@

PHD, INC. SALES POLICIES (for North, Central, & South America) Revised July 6, 2020

Return Material Credit Amounts

The following are the amounts that will be credited to the Distributor on all material returned for any reason that is not the fault of PHD, Inc. PHD reserves the right to adjust the charges after inspecting the returned material. An RGA number must be obtained from PHD, Inc. and accompany any Return Goods Shipment to PHD, Inc.

Warranty Credits will not be issued on products which carry date codes over 12 months from date of request. Non-warranty Credits will not be issued on products which carry date codes over 6 months from date of request. Additionally, all non-warranty credit items must be in new condition. We strongly suggest you properly package the material to prevent it from being damaged in transit.

Returned Material Credit Amount

Product

Credit Amount

- Shelf Components

Net Price Less 25%

Notes: 1) Shelf components - Shelf components include stocked kits, parts, attachments,

switches and sensors, shock absorbers*, and stocked assemblies.

2) Stroke and rotation-related parts such as piston and rod assemblies, guide shafts,

transition plates, etc. are cut to order, so they will not be credited.

3) Switches and electronic motors and controllers will not be credited unless they are

returned in the original, unopened packaging.

* Shock absorbers returned for a warranty claim will first be examined for condition of the shock as received. Application Engineering will then contact the customer to determine how shock was applied prior to authorized replacement or credit.

- All Standard Grippers, Escapements, Clamps

Net Price Less 35%

- All Standard Rotation/Stroke Actuators, including Optimax - Non-Stock Kits - PPC Products

Net Price Less 50%

- All Non-Standard Rotation/Stroke Actuators

Net Price Less 65%

- Series 1-8000 Rotary Actuators with non-cataloged rotation

- Series SG, SGxM, CV, SCV, SK/SL, CR/CT, SFP, SFM

- Series 5000-8000 Multi-Motion Actuators

- All standard PHD Plus Actuators

Net Price Less 65%

Special Units/Unique Products: Specials, also referred to as "C" or "ML" are: 1) A modification of an existing product or 2) A totally new product Sales and Marketing has deemed logical to produce or is requested by the customer.

Due to the nature of Unique Solutions?, it is difficult to render an all-encompassing restocking charge for C or MLs. Since the PROBABILITY exists that nothing can be reused, PHD must examine C or MLs before it can be determined whether credit can be issued. Consult PHD Customer Service for estimated restocking charge.

PHD, Inc. ? 9009 Clubridge Drive, Fort Wayne, IN 46809

8

Tel. (260) 747-6151 ? Fax (260) 747-6754

? phdinfo@

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