Avaya Connect. Reaching Further. Avaya Acquisition Advantage Policy Guide
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1 Avaya Connect Reaching Further Avaya Acquisition Advantage Policy Guide U.S. and Canada Version Fiscal Year 2014 Updated 14 May 2014 This document is accurate as of the date printed above. For the most current information, please download the electronic version posted on the Avaya Connect Financial Benefits site.
2 Table of Contents Avaya Acquisition Advantage Policy Guide Program Overview Program Availability Program Benefits Eligibility Criteria Program Details New Definition Exclusions Minimum Growth Rate and Increase in New Calculation Table Payout Example Program-specific Terms and Conditions Growth Structure Payment Process Additional Resources... 9 Appendix A: Additional Terms and Conditions Appendix B: Track Document Changes
3 Avaya Acquisition Advantage Policy Guide This version of this document is the only in-force policy covering this program. All previous versions are superseded by this policy and document, regardless of date of transaction, fiscal period, deal, order, invoice or reporting period. All program decisions will be made by the policy outlined herein, as it is recognized as the only policy covering the program. Avaya reserves the right to change, modify, revoke, cancel or alter this program at any time, at its own discretion, with reasonable notice to partners. 1. Program Overview This easy-to-understand compensation program pays qualifying US and Canadian Platinum, Gold, and Silver partners a rebate against quarter-over-quarter new customer revenue growth (see Section 4.2 for Calculation Table). To qualify for the rebate, eligible partners must, 1) show growth in their Avaya new customer business both on a dollar basis, and as a minimum percentage of their total revenue, quarter-over-quarter (Q/Q), and 2) demonstrate Q/Q growth of one dollar or more in their total Avaya product revenue. With the addition of this program to reward incremental new customer business, partners most committed to successfully, and aggressively, closing new customer business may now accelerate their growth, help increase their company s profitability, and experience greater overall benefit from their Avaya relationship. 1.1 Program Availability The Avaya Acquisition Advantage program is currently available in the United States and Canada to Platinum, Gold, and Silver Partners, and is effective for fiscal year 2014, starting 1 October 2013 subject to future changes at any time with reasonable notice, including extension or termination. 2. Program Benefits This program provides improved overall margins based entirely on how much incremental new customer business a partner generates that exceeds their prior quarter s new customer revenue. See Section 4.4 for rate specifics. 3
4 Partner Compensation Program % Minimum Q/Q Percentage Point Increase in New * Minimum Growth Q/Q of total Avaya product revenue Maximum Amount FY14 Avaya Acquisition Advantage (US) FY14 Avaya Acquisition Advantage (Canada) 4-25% 5 points $1 4-25% 5 points $1 Capped at $150K per quarter/partner Capped at $50K per quarter/partner * Percentage point increases from a negative growth percentage (e.g. -23% to -9% or -4% to 3%) will not allow a partner to qualify for a rebate until a positive growth percentage is demonstrated (e.g. 3% to 14%). 3. Eligibility Criteria The Avaya Acquisition Advantage program is open to Avaya Connect partners in the U.S. and Canadian sales theatres (Resellers, Service Providers, and System Integrators) who have attained an Avaya Connect program level of Platinum, Gold, or Silver. Participants must qualify as Partners in Good Standing with Avaya. Avaya Connect partners achieving a program status of Platinum, Gold, or Silver by the first day of the first quarter in Avaya fiscal year 2014 may become eligible to participate in this program starting with that Avaya fiscal quarter and continuing thereafter for the program s duration. Enrollment is not required. Eligible partners are automatically enrolled by Avaya in this program. Distributors and Services-Only partners are ineligible to participate in this program. 4. Program Details Platinum partners This program is designed to reward eligible partners for increasing their new customer revenues (product-only) starting in 1Q14 compared to their new customer revenues (product-only) from 4Q13. The first rebate payouts will be sent in 2Q14. Gold and Silver partners This program is designed to reward eligible partners for increasing their new customer revenues (product-only) starting in 2Q14 compared to their new customer revenues (product-only) from 1Q14. The first rebate payouts will be sent in 3Q New Definition New End shall mean an end customer that has not purchased or licensed Avaya products or services from Avaya or an Avaya channel partner globally within thirty-six months of 4
5 the date of the invoice of the qualifying purchase or license transaction. The end customer and its affiliates, branch offices, and site locations are the same single end customer. revenue is considered to be new for three calendar months from the date of the first invoice of the qualifying purchase or license transaction. 4.2 Exclusions All Avaya services, US Federal Government, Canadian Federal Government, Select Product Program (SPP), and Communication-as-a-Service (CaaS) revenues are excluded. s, and the associated revenue from each of the aforementioned sources, will not be factored into the new customer revenue calculation. 4.3 Minimum Growth Rate and Increase in New -qualifying partners will automatically receive a minimum of 4% cash rebate, against their Q/Q new customer revenue growth, both on a dollar basis and as a minimum percentage of their total quarterly revenue. FY 2014 Quarter Compared Against FY 2013 / 2014 Quarter s Sent 1Q14 (Platinum only) 4Q13 2Q14 2Q14 1Q14 3Q14 3Q14 2Q14 4Q14 4Q14 3Q14 1Q Calculation Table If Q/Q Change in New is: % is: 5-8 percentage points 4% of incremental new customer revenue percentage points 8% of incremental new customer revenue percentage points 15% of incremental new customer revenue 15.1 percentage points 25% of incremental new customer revenue 4.5 Payout Example For illustrative purposes only, here s an example to show how the program works and the attractive rewards available to those partners who stay focused on driving new customer revenue growth. Partner ABC is an Avaya Connect Platinum partner in the U.S. or Canada, and is eligible to participate in the Avaya Acquisition Advantage program. This partner finished the fourth quarter of fiscal 2013 with new customer revenue of $1M, and total revenue of $3M. Those numbers now become this partner s baseline for new customer revenue calculations going into the first quarter of fiscal year 2014 for program purposes. At the end of the first quarter, this partner delivered $1.5M in new customer revenue, while maintaining the same total revenue of $3M. Because their Q/Q percentage point increase (17%) exceeded 5 points, Partner ABC is now qualified for a rebate: 25% of $.5M (incremental new customer revenue Q/Q), resulting in a total rebate for the second quarter of $125,000. 5
6 Partner Results Payouts (USD) Total New New % Q/Q New Growth % Point Change in New Revneue Eligible? % Amount Q413 $3M $1M 33% Q114 $3M $1.5M 50% $.5M 17% Yes 25% $ 125K Here s an example that describes a scenario in which a partner would not be eligible for a rebate. Partner ABC finished the fourth quarter of fiscal 2013 with new customer revenue of $1M and total revenue of $3M. Those numbers now become this partner s baseline for new customer revenue going into the first quarter of fiscal year 2014 for program purposes. At the end of the first quarter, this partner delivered $1.5M in new customer revenue, while increasing their total revenue to $6M. Although the amount of new customer revenue increased in Q1, the percentage of their new customer revenue to their total quarterly revenue decreased. In order for this partner to qualify for a rebate, they must show growth in their Avaya new customer business both on a dollar basis, and as a minimum percentage of their total revenue, quarter-over-quarter (Q/Q). Partner Results Payouts (USD) Total New New % Q/Q New Growth % Point Change in New Revneue Eligible? % Amount Q413 $3M $1M 33% Q114 $6M $1.5M 25% $.5M -8% No 0% $ 0 6
7 4.6 Program-specific Terms and Conditions Avaya Acquisition Advantage is subject to these program-specific terms and conditions: Avaya reserves the sole right to determine whether a partner has satisfied the program s requirements and other criteria, including eligibility. Avaya may amend, modify, revoke, or cancel this program, in whole or in part, for any reason, at any time, with reasonable notice to partners including, but not limited to, rebate payout rates, rebate capping, or minimum growth rate threshold required to qualify for a rebate payout. For purposes of this program, eligible revenue is product only at Partner Net as defined and explained in the Avaya Connect Program Guide 1 and is generally the same basis as that used in assessing if a partner has met the revenue requirement for an Avaya Connect program (or medal) level. Eligible partners must grow their new customer revenue by a minimum growth rate Q/Q, and also on a dollar basis, to qualify for a rebate payout. For fiscal year 2014, the minimum growth rate threshold is 5 percentage points Q/Q to qualify for a rebate payout. (See Section 4.1 for Minimum Growth Rates by Quarter.) References to quarter periods in this announcement are Avaya fiscal-year quarters, unless otherwise specified. s in this program are paid on growth dollars only. Avaya must, however, reserve the right to cap such rebates (i.e., set a maximum rebate amount a partner may earn under the program) for any reason, at any time, with thirty-day notice in advance to eligible participants. For the program s duration, an eligible partner s new customer revenue baseline under the program automatically resets each quarter to the prior quarter s revenue results. Any financial matter related to this program s implementation or administration is deemed in U.S. currency. In the event of a partner acquisition or merger, that partner s continued participation in this program must be approved and authorized by Avaya in its sole discretion. In Avaya s sole discretion, any participant who gives the appearance of withholding orders in one quarter to inflate a subsequent quarter s results and, thereby, artificially maximize their rebate payout may be removed from the program and disqualified from further participation. s offered by this program are incremental to any other discount offered by Avaya. Participants may use Special Bids and other marketing programs or promotions with this program. This incentive cannot be combined with Grow Right or SME Solution Sale Incentive ( S3I ). The partner will receive the largest qualifying rebate from this incentive, Grow Right, or S3I. This program is administered in the U.S. and Canada by the Avaya Connect global channel program office. This program is subject to Additional Terms and Conditions included at the end of this policy guide. Avaya will not entertain partner requests for audits of the results of this compensation program. 1 Actual URL is 7
8 5. Growth Structure payout depends on four factors: 1) the partner s new customer revenue results for the prior quarter, as a portion of their total quarterly revenue, which establishes the baseline; 2) the amount of growth by which the partner s Avaya-specific new customer business in the current quarter exceeds their prior quarter s baseline; 3) whether the partner s Q/Q new customer revenue growth rate equals the minimum growth rate threshold required to qualify for a rebate payout set at 5 percentage points or greater, Q/Q, for fiscal year 2014 (see Section 4.1 for Minimum Growth Rates by Quarter); and 4) whether the partner has delivered a minimum of $1 growth in Q/Q purchases of Avaya product To ensure both Avaya and the partner are tracking against the same metrics in the program, quarterly results are issued for each eligible partner within forty-five (45) days of a fiscal quarter s end. The Avaya Acquisition Advantage program manager will supply this information in a summary report to the Avaya CAMs of program-eligible partners who will then in turn have responsibility for communicating such quarterly results to those partners they manage. In addition, any rebate payouts earned are calculated within seventy-five (75) days after the end of each fiscal quarter, starting with the first quarter of fiscal year 2014, and the CAM is informed of the results. 6. Payment Process Payout of quarterly growth incentives in this program are made ninety (90) days after the end of the quarter. Here is the payment schedule: Avaya Fiscal 2014 Quarter Inclusive Dates Sequence Payout Date 4Q13 7/1/13-9/30/13 1Q14 10/1/13 12/31/13 Establishes baseline (Platinum only) Growth #1 (Platinum only) N/A By 31 March Q14 1/1/14 3/31/14 Growth #2 By 30 June Q14 4/1/14 6/30/14 Growth #3 By 30 September Q14 7/1/14 9/30/14 Growth #4 By 31 December
9 Growth rebate payouts are automatic. No action is required on the part of the partner or the partner s CAM to initiate payment. Avaya Acquisition Advantage quarterly rebate payouts are made to partners by Avaya through Birch Worldwide a leading global provider of channel program support services for many of the world s largest technology companies. Birch Worldwide is also the same provider who handles payments to partners under Avaya Connect s MDF program today. Birch Worldwide will process and mail rebate checks to eligible partners earning rebates under this program ninety (90) days after the end of the quarter. Partners who have provided current and valid banking information in connection with Avaya Connect s MDF program may have the option to receive their Avaya Acquisition Advantage payouts via electronic funds transfer in lieu of a rebate check. 7. Additional Resources All program documentation is published on the Avaya Partner Portal under the Avaya Connect Financial Benefits page at Partner Portal> Partner Programs> Avaya Connect> Financial Benefits 2. For any questions that cannot be answered by this documentation, or by your Avaya Channel Account Manager, please contact: Randy Steinberg Sr. Manager, GTM Strategy & Programs, Avaya Inc. (908) rdsteinberg@avaya.com 2 Actual URL is: 9
10 Appendix A: Additional Terms and Conditions The terms and conditions outlined herein will be in effect for the duration of this program. 1. Violation of the terms and conditions of this program may result in the partner being billed for any discount received associated with this program, and possible disqualification from participating in this program and other promotions. In addition, such violation of the terms and conditions of this program may also jeopardize a participant s status as a Partner in Good Standing, which is a basic requirement of Avaya Connect. 2. Avaya may cancel, suspend, amend, modify, revoke, or terminate this program, in whole or in part, for any reason, at any time, for all partners, with reasonable notice. 3. Avaya expressly disclaims any and all liability relating to the results of any of its marketing plans or promotions/programs. 4. Avaya Channel Account Managers or other similar Avaya representatives have no authority to interpret or vary the terms of this program. 5. Avaya reserves the sole right to interpret and establish the terms and conditions of this program. 6. This program may not be used in conjunction with any other Avaya promotion unless otherwise explicitly stated within the program-specific terms and conditions of the program or another Avaya promotion. 7. Information contained herein is confidential and proprietary information of Avaya and is provided for the internal use of Avaya and its authorized partners. Except as specifically authorized in writing by Avaya, the partner shall not alter any terms and conditions of this program. Any attempted alteration shall be deemed null and void and of no force or effect. In no event shall Avaya be liable for any errors or omissions resulting from the information contained herein. Any communication of this program or its parameters beyond an authorized partner may jeopardize the participant s status as a Partner in Good Standing with Avaya. 8. Partner's participation in this program is partner's acceptance of the terms and conditions of this program. In the event that partner does not agree with any terms or conditions of this program, partner may not participate in this program. 9. Both Avaya and the Partner agree that customer information or any other sales-related information provided to Avaya under this program is confidential and proprietary whether marked as such or not. Avaya agrees that it shall use such information solely for the purposes of this program, and for no other purposes Avaya Inc. All Rights Reserved. Avaya and the Avaya Logo are trademarks of Avaya Inc. and may be registered in certain jurisdictions. All trademarks identified by the, SM or TM are registered trademarks, service marks or trademarks, respectively, of Avaya Inc., with the exception of FORTUNE 500 which is a registered trademark of Time Inc. All other trademarks are the property of their respective owners. 02/14 10
11 Appendix B: Track Document Changes Date Page Section Summary Updated Ts & Cs to clarify incentive stacking 14 May 2014 rules for FY Mar 2014 Updated calculation periods Combined US and Canada Policy Guides 18 Feb Extended Canada program to Silver as well as Gold and Platinum partners; all other terms remain the same as FY13 20 Nov 2013 Updated for FY14 To include Gold & Silver partners 12 Mar Updated disclaimer in box. 7 Dec 2012 Initial Document 11
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