sample="supplemental" bates="2062542383" isource="pm" decade="1990" class="ne" date="19920102" March PHILIP MORRIS U.S.A. 120 PARK AVENUE, NEW YORK, N.Y. 10017 TELEPHONE (212) 880-5000 15600 JFK Blvd., #110, Houston, Texas 77032 January 2, 1992 Mr. Hal Adams National Convenience Stores 100 Waugh Drive Houston, Texas 77007 Dear Hal: Historically in the convenience store industry Marlboro suffers approximately a 3% out-of-stock situation for the months of December, January and February. As you well know, when you are out-of-stock on Marlboro, you cigarette sales suffer a long term basis. Using the 3% average on your Marlboro sales pricing this 13 week period, you will see a potential of 38,000 cartons or 380,000 packs of lost revenue. This is approximately $740,000 plus in lost sales or $116,000 in gross margin dollars. Our Trade Marketing Department has established a profitable program for you in order to protect out-of-stocks and lost sales. The program is a win-win situation and the details are as follows: ·From January 6th through January 17th, Philip Morris will pay you 20˘ per carton on 30 cartons over and above your normal orders during the two week period. This will be $6.00 per store x 975 stores for a total of $5,850.00. ·From January 20th through January 31st, Philip Morris will pay you 30˘ per carton on 30 cartons over and above your normal orders during the two week period. This will be $9.00 per store x 975 stores for a total of $8,775.00. · You must participate twice to receive the 30˘ bonus during the second period, otherwise 20˘ will be offered. The bottom line in this promotion will pay you $14,625 to protect a potential loss of $740,000 in lost Marlboro sales or $116,000 in potential lost gross margin dollars. We also want to insure sufficient inventories to support a national Marlboro direct coupon drop of 13 million $4.00 Marlboro carton coupons and to eliminate the seasonal out-of-stocks. Your payments on the bonus program will be made upon the receipt of a letter or invoice to your wholesaler requesting the automatic distribution of the product. If you have any questions, please let me know. Sincerely Mark Hall MH/mh cc: J. Love P. Reynolds T. Hoang J. Reed