11-12-2014 Council Agenda - Laserfiche WebLink

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(1) For a Store to be an "Uncapped Store," such Store must (a) participate in the PM USA Scan Data Incentive, and (b) pass ongoing reviews of such Store's PM USA Scan Data to determine if the Store is in compliance with the PM USA Carton Limit. If PM USA verifies the Store's compliance with the PM USA Carton Limit, such Store will be an "Uncapped Store," effective as of the beginning of the STARS Quarter immediately following such verification and will continue to be an Uncapped Store until the Store fails to pass a review by PM USA. (2) If a Store ceases to participate in the PM USA Scan Data Incentive or submits PM USA Scan Data demonstrating non-compliance with the PM USA Carton Limit, in addition to any other remedies available to PM USA, such Store will fail the review and will cease to be an Uncapped Store. Such Store will not be eligible for Promotional Allowances in excess of the Cap Threshold beginning with the STARS Quarter immediately following the failure of such review. Such Store may again become an Uncapped Store only after it passes a subsequent review by PM USA demonstrating that the Store is in compliance with the PM USA Carton Limit. The Store's status as an Uncapped Store will be effective as of the beginning of the STARS Quarter immediately following the successful passing of such review. C. Sales Ineligible for Payment. Payment of PM USA Promotional Allowances will be made only for PM USA products sold in accordance with all applicable provisions of the Agreement and the terms and conditions of the applicable PM USA Promotion. Without limiting the foregoing, PM USA Promotional Allowances are not payable on (1) purchases of promoted PM USA products that exceed sales of such products to adult tobacco consumers during a designated Promotion Period, as determined by PM USA, or (2) any sale that: (a) is not conducted on a face-to-face basis (e.g., mail order, Internet); (b) is made in violation of a PM USA Trade Policy; (c) exceeds the PM USA Carton Limit; or (d) is made to other retail, wholesale, or trade accounts. D. Visibility Requirement. With respect to all PM USA Retail Price Promotions and Marlboro Performance Options, Retailer must place and maintain interior point-of-sale signage that advertises the promoted price of each promoted PM USA product in a location visible to adult tobacco consumers, E. Non -Promoted Price. (1) In the event of the initiation of a PM USA Retail Price Promotion, an increase in a PM USA Promotional Allowance, or any change in a Store's eligibility or election to participate in any PM USA Retail Price Promotion, PM USA may require that such Store not increase its Non -Promoted Price of the applicable promoted PM USA product offered in the previous Promotion Period for the greater of one full Promotion Period or the announced duration of the PM USA Retail Price Promotion, up to three full Promotion Periods, unless such Store incurs an increase in the cost of such promoted PM USA product (e.g., stale excise tax increase or wholesale list price increase by a non-affiliated distributor). (2) Retailer may not increase a Non -Promoted Price to impede the objective of a PM USA Promotion, which is to reduce the price of PM USA Products to adult tobacco consumers by an amount that is no less than the applicable PM USA Promotional Allowance. Exhibit H Page 2 of 2 46