1/18/2017. Dear Valued Michelin Direct Retailer,

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1 1/18/2017 Dear Valued Michelin Direct Retailer, As an instrumental asset within the Michelin Retail Network, we truly value your input and recommendations you have provided to us and deemed critical for your success; not only in our partnership together, but more importantly, in your business. We have heard from you that our marketing funds program (referred to as Brand Development Funds «BDF») has room to be improved. Our mission with the BDF program is to help you promote your business and our brands, and if you are unable to perform the tasks necessary to be successful in doing so, we take this seriously as an area of focus. As a result of your valuable feedback, we have improved the BDF program to be drastically simplified for you in 2017! As a Strategic Retail Alliance and Regional Tire Retailer, you are now on Auto-Pay! What does this mean to you? You will be paid your BDF accruals monthly, directly into your accounts, with no claims to submit prior to payment. As a secondary enhancement to the program, we will be splitting your accruals into two categories: Brand and Business. Your business accruals are yours to spend to help you grow your business and the MAST business. No claims, audits or caps. We will be sending you additional documentation with more detail on the program shortly. If you have questions in the meantime, please contact your account manager. We understand in order for you to be successful, you need the tools necessary to be effective and efficient. And sometimes, those tools are simply, removing obstacles. We look forward to an exciting year ahead and wish you a successful 2017! Sincerely, Eric Sweigart Director, IDG Channel Kelsey Oliver Director, Dealer Experience Eddie Barnes Director Sales, West George Kahaleh Director Sales, East Michelin North America, Inc. One Parkway South Greenville, South Carolina Tel: 864 /

2 Michelin BDF Auto-Pay 2017 Who is Eligible: Available to All Michelin SRA and RTR Direct Dealers When: All SRAs and RTRs are automatically placed on Auto-pay starting January 1, The first autopay payment is made the first Tuesday of March, 2017 and monthly on the first Tuesday of each month after. Requirements: A minimum of 40% Share of Account (SOA) OR A 1% year-over-year increase in Michelin MAST product sales volume and All audited claims substantiated by February 28, 2018 Participation is re-evaluated at year-end based on electronic sellout data to validate eligibility for continued participation in the Auto Pay Program. Dealers who do not meet the below requirements will have their auto pay status suspended and will be returned to per claim status. How does it work? Michelin automatically pays BDF accruals to dealers Michelin accounts. o Dealers are pre-paid accrued funds into their Michelin Accounts the first Tuesday of each month, beginning March o Accruals will be allocated to two different funds: Brand Fund (60% of total accruals) Business Fund (40% of total accruals) o Brand Fund expenses will be audited on a quarterly basis to ensure compliance to BDF program guidelines. o Business Fund expenses are provided to help dealers fund critical business needs. While we are asking for reporting on how the money is spent, spend against these funds are not audited and are not required to meet BDF fund guidelines. Example of 2017 Account Summary (Dealer Dashboard)

3 Dealers are required to submit quarterly BDF spend reports o At the end of each calendar quarter, dealers have 10 days to submit all expenditures for the quarter. Auto Pay dealers will be provided access to a tool on Michelin Connect that allows them to record their BDF expenditures. Dealers can wait until the end of the quarter to submit their claims or they can enter throughout the quarter. Entering BDF Claims for AutoPay Auditing Fill out the fields on the AutoPay Entry screen. These fields are similar to the fields on the current claim forms. o Media Type (select from drop down) required field o Media Name required field o Activity Start Date- required field o Invoice Date required field o Invoice # - required field o Invoice Amount required field o PreApproval # (if applicable) optional field o BDF Reimbursement Rate (select from drop down) required field if you are not sure of the correct BDF reimbursement rate, please select 100%. Rates reported may be adjusted during the audit process. Select the check box(es) that best describes the product(s) associated with the activity. There is a miscellaneous check box, if the specific tire is not listed. You may leave this blank if it is not applicable to your claim. Once you have completed your entry, click on the Add Entry button. This will create a claim in the Current Entries table below the entry screen.

4 Once you have added at least one line item, you are given the option to Upload Documentation. This is optional at this stage. You will only be required to provide documentation for 15% of line items during each quarterly audit. You can wait until the audit process begins to verify which lines will need to have documentation submitted. However, you may upload documentation during the entry process if that is easier for you. You can check the Claims Status report to see what has been submitted throughout the quarter if you are entering activities as you go. Audit Process Channel Fusion will audit 15% of line items that fall in the Brand Fund category for each dealer quarterly. o This will require the dealer to submit supporting documentation to substantiate line items selected for audit. o Dealers will be notified, by , that their claims are ready for audit (typically 5 days after the reporting deadline). o Dealers will log in to Michelin Connect and navigate to the AutoPay Audit screen to check which claims need documentation submitted. o Only line items that require documentation will be visible on the audit screen. Check your Claim Status report for a full view of all claims submitted. o Reminder: Business Fund expenditures are for reporting only and are not audited. Claims should be entered but they are not subject to BDF guidelines.

5 o Submitted documentation will be reviewed and the audit completed within 10 days of receipt of documentation. The AutoPay Audit Screen will only be active when line items are in the auditing process. You will see a message stating There are currently zero claims under autopay audit for this dealer, when the audit period is not active. AutoPay Audit Reporting Once the audit is complete, dealers will be notified by and a full AutoPay Audit Report will be available on Michelin Connect, showing: Total Brand Accruals Amount Claimed Amount Approved Remaining Substantiation Needed

6 Remaining substantiation needed will be colored: Red if approved claims are <50% of Brand Fund Accruals Yellow if approved claims are between 50% and 79% of Brand Fund Accruals Green if approved claims are 80% or greater of Brand Fund Accruals These indicators are intended to alert the dealer if they are falling behind on the AutoPay reporting requirements. The report also includes a summary of Spend by Media Type and audit details for all Brand Fund line items submitted. Sample of Audit Report Format (for presentation purposes only) August 1 st represents a Reporting Milestone: o If a dealer has greater than 20% of total accruals in unsubstantiated claims after as of August 1 st (red or yellow status on the Audit Report), Michelin reserves the right to hold 4 th quarter funds until claims are substantiated. November 30 th represents a Reporting Milestone: o If all accruals YTD are not substantiated by November 30, 2017, Michelin reserves the right to debit unsubstantiated funds from dealers December 2017 and/or January 2018 accrual credits to cover the shortfall. Failure to comply with reporting requirements will result in being removed from the program and placed back on per claim status.

7 Additional Information about the Auditing Process What are we auditing? Audits check for program adherence identical to the guideline adherence expected in per claim processing such as: observing spending caps, reimbursement rates, incentives, etc. How are Audits Conducted? Channel Fusion will check for compliance on claims. If the documentation does not support guidelines, the dealer will have a balance of unsubstantiated claims. Channel Fusion will audit at least one claim from each media type activity submitted. If a line item fails the audit, resulting in a denial, all like line items will also be denied. (For example; if a newspaper ad claim is denied because of branding violations, all newspaper ad claims will be denied. Similarly, if a newspaper ad is adjusted to 25% reimbursement because of competitive content, all newspaper ads will be reimbursed at 25%.) The dealer will have the opportunity to submit documentation for unaudited lines to substantiate a different status for those line items. The dealer will also have the ability to substantiate any unsubstantiated claims, or submit a business justification for substantiation. (see reporting milestones above).