Jan 3, 2014 ... Service Agreements as of January 3, 2014, and active through ... American
Honda Motor Co., Inc. (AHM), changes control .... Please keep a copy of this
bulletin in your marketing binder for future reference. .... eligibility requirements,
special rules governing American Honda Finance Corporation leasing.
American Honda Motor Co., Inc. Automobile Sales Division Market Support MARKETING BULLETIN ...
HPN-091 Issue Date: January 3, 2014
NAME:
2014 Honda President’s Award
DATES:
January 3, 2014–January 2, 2015
BACKGROUND:
This program is designed to recognize top-performing dealerships in the areas of sales, customer treatment, service retention, business management, and facilities.
SCOPE:
Each dealership’s performance in key areas is measured and scored against the defined criteria. Dealerships must achieve all program criteria to be awarded President’s Award status for the year 2014. Dealerships achieving all criteria and ranking in the top 10 dealerships in newvehicle sales earn President’s Award Elite status for the year 2014.
ELIGIBLE DEALERSHIPS:
All Honda dealerships with Honda Dealer Sales and Service Agreements as of January 3, 2014, and active through receipt of award are eligible to participate. If a dealership experiences a major ownership stock transfer during the calendar year that in the opinion of American Honda Motor Co., Inc. (AHM), changes control of the dealership, the selling dealership and the new dealership are ineligible to participate during the calendar year of the transfer.
FEATURED VEHICLES:
All new Honda models (including natural-njgas vehicles) are eligible. All eligible vehicles must be reported sold and delivered to the ultimate end user by the selling dealership during the stated program period in accordance with the program Official Rules, Terms, and Conditions. Fleet and Honda Courtesy Car Program (HCCP) sales are eligible.
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RULES STRUCTURE:
Honda dealerships must meet all the requirements below to earn President’s Award status. Program Criteria • Profitability ‒ Dealership must be profitable as of the November 2014 financial statement. •
Sales ‒ Dealership must achieve one of the following sales criteria: o Criterion 1 ‒ Achieve a minimum of 100 percent of the dealership’s new-vehicle sales (NVS) objective or sales objective indexed to the zone as of January 2, 2015, and achieve a YTD retail sales effectiveness (RSE) that is average or above average (zero or positive deviation from average) as of October 31, 2014. o Criterion 2 ‒ Achieve a YTD retail sales effectiveness (RSE) of 30 or higher as of October 31, 2014. • Vehicle Condition Index (VCI) ‒ Dealership must achieve a minimum YTD score of 97, with a minimum of 90 percent valid phone numbers submitted, as of December 31, 2014.
•
Customer Service Experience (CSE) E-Survey ‒ Dealership must achieve a minimum YTD score of 91 as of December 31, 2014.
•
Service Retention ‒ Dealership must be average or above average (zero or positive deviation from average) as of November 30, 2014.
•
Brand Representation (Image-Approved) ‒ Dealership must be Image-Approved, as determined unanimously by the zone management team, as of December 31, 2014. Standards are based on Honda’s new image evaluation process introduced in the fall of 2013.
Qualification Categories • President’s Award winner ‒ Dealership must achieve all program criteria. • President’s Award Elite winner ‒ Dealership must achieve all program criteria and rank among the top 10 dealerships in new-vehicle sales. o In case of a tie in new-vehicle sales volume, the tiebreaker criteria will be determined by Honda sales management. HPN-091
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GROUNDS FOR DISQUALIFICATION/ INELIGIBILITY:
A dealership that has repeat DMA fund suspensions over a two-year (calendar-year) period may be disqualified from the President’s Award program at the discretion of American Honda Motor Co., Inc. A dealership that violates the Survey Integrity Policy may be subject to disqualification. (See American Honda Motor Co., Inc., Survey Integrity Policy for further details.) A dealership that does not supply customer pay repair order (CPRO) data through the Honda Service Reminder System or a Honda Data Extraction Agreement is not eligible to receive the President’s Award.
SURVEY AND DATA MANIPULATION POLICY:
The Sales Satisfaction Telephone and Customer Service Experience (CSE) surveys are important measurement devices used by American Honda Motor Co., Inc., to accurately measure consumer satisfaction with purchase and service experiences at your dealership. American Honda Motor Co., Inc., relies on the accuracy of these customer surveys in making management and policy decisions. For this reason, any Honda dealership found to have manipulated these or any other survey used by American Honda Motor Co., Inc. ‒ whether by impacting survey targets or survey responses, or by any other means, so that in the sole determination of American Honda Motor Co., Inc., the data collected through these surveys is deemed unreliable ‒ may be subject to disqualification. If disqualified, the dealership will remain ineligible to participate in the President’s Award program until American Honda Motor Co., Inc., determines that the integrity of the subject dealership’s data has been restored.
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PROGRAM AWARDS:
The recipients of the 2014 Honda President’s Award are confirmed after calendar year-end. Awards will be distributed in early 2015. Recipients will receive 2014 Honda President’s Award showroom materials, personal recognition items, and promotional mention of award status by American Honda Motor Co., Inc. Dealerships achieving all program criteria and ranking among the top 10 dealerships in new-vehicle sales will earn President’s Award Elite status. Award recipient dealerships may use the 2014 Honda President’s Award logo (a proprietary standard of American Honda Motor Co., Inc.) only in accordance with all rules that govern the use of American Honda Motor Co., Inc., logos and standards. Dealerships must authorize an online “Standards Agreement” statement before the awards are distributed. For questions regarding the 2014 Honda President’s Award program, please contact the dealership’s District Sales Manager or President’s Award Program Headquarters at 310-783-3397.
Please keep a copy of this bulletin in your marketing binder for future reference. Also, be sure to provide a copy to your Accounting Manager for dealership records.
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ATTACHMENT A HPN-091 2014 Honda President’s Award Program AWARD CRITERIA To qualify
for the 2014 President’s Award, your dealership must achieve all the
following criteria: •
Profitability ‒ Dealership must be profitable as of the November 2014 financial statement.
•
Sales* – Dealership must achieve one of the following sales criteria: o Criterion 1 ‒ Achieve a minimum of 100 percent of the dealership’s newvehicle sales (NVS) objective or sales objective indexed to the zone as of January 2, 2015, and achieve a YTD retail sales effectiveness (RSE) that is average or above average (zero or positive deviation from average) as of October 31, 2014. o Criterion 2 – Achieve a YTD retail sales effectiveness (RSE) of 30 or higher as of October 31, 2014. *Sales objectives, including annual and periodic objectives for challenges, contests, and awards, may be based on a Honda dealership’s prior sales history or other factors independent of the opportunity available in the Honda dealership’s resident ASA. Therefore, annual and periodic sales objectives may be set at levels less than or greater than the levels required for the Honda dealership to meet its sales performance obligations under the Honda Automobile Dealer Sales and Service Agreement (DSSA), as more fully explained in American Honda Motor Company’s Dealer Sales Performance Evaluation Policy. The Honda dealership’s sales versus annual and periodic objectives for challenges, contests, and awards is not determinative of the Honda dealership’s sales performance under the DSSA.
Index calculation: Indexed % of Obj = (YTD % of Obj ÷ Zone % of Obj) x 100
Retail sales effectiveness is determined by comparing a dealership’s actual nationwide retail sales to the dealership’s expected retail sales. Expected retail sales are the number of retail registrations the dealership’s resident ASA would have if it were achieving Honda’s average market share for the dealership’s state (calculated by competitive segment). o
If a dealership’s actual retail sales are equal to its expected retail sales, its retail sales effectiveness is average, with a zero deviation from the average, and the dealership would meet the required achievement.
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o
If a dealership’s actual retail sales are greater than its expected retail sales, its retail sales effectiveness is above average, with a positive deviation from the average, and the dealership would meet the required achievement.
o
If a dealership’s actual retail sales are fewer than its expected retail sales, its retail sales effectiveness is below average, with a negative deviation from the average, and the dealership would not meet the required achievement.
•
Vehicle Condition Index (VCI) – Dealership must achieve a minimum YTD score of 97, with a minimum of 90 percent valid phone numbers submitted, as of December 31, 2014. VCI is calculated by using the answers to three Sales Satisfaction Telephone Survey questions. Answers to Question 4 (mechanical condition of vehicle), Question 5 (cleanliness of vehicle), and Question 6 (physical condition of vehicle) are weighted equally to determine an index.
•
Customer Service Experience (CSE) E-Survey – Dealership must achieve a minimum YTD score of 91 as of December 31, 2014. CSE is calculated on the YTD overall satisfaction score from the e-survey.
•
Service Retention ‒ Dealership must be average or above average (zero or positive deviation from average) as of November 30, 2014. Service retention is determined by comparing a dealership’s actual active units in operation (UIO) to the dealership’s expected active UIO. A dealership’s expected active UIO is calculated by multiplying the number of total UIO within the dealership’s resident ASA by the average active penetration achieved by all Honda dealerships in the dealership’s resident state.
Total UIO is the number of units in operation of the last 10 model years sold by any authorized Honda dealer in the United States, based on R.L. Polk & Co. data.
A UIO is considered active if it has been serviced by any authorized Honda dealership in the United States within the past 360 days.
A UIO is considered active to a dealership if it has been serviced by that authorized Honda dealership within the past 360 days.
o
If a dealership’s actual UIO is equal to its expected UIO, its service retention rate is average, with a zero deviation from the average, and the dealership would meet the required achievement.
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o
If a dealership’s actual UIO is greater than its expected UIO, its service retention rate is above average, with a positive deviation from the average, and the dealership would meet the required achievement.
o
If a dealership’s actual UIO is less than its expected UIO, its service retention rate is below average, with a negative deviation from the average, and the dealership would not meet the required achievement.
•
Brand Representation (Image-Approved) – Dealership must be ImageApproved, as determined unanimously by the zone management team, as of December 31, 2014. Standards are based on Honda’s new image evaluation process introduced in the fall of 2013.
Qualification Categories • President’s Award winner – Dealership must achieve all program criteria. • President’s Award Elite winner – Dealership must achieve all program criteria and rank among the top 10 dealerships in new-vehicle sales. Grounds for Disqualification • A dealership that has repeat DMA fund suspensions over a two-year (calendaryear) period may be disqualified from the President’s Award program at the discretion of American Honda Motor Co., Inc. • A dealership that violates the Survey Integrity Policy may be subject to disqualification. (See American Honda Motor Co., Inc., Survey Integrity Policy for further details.) • A dealership that does not supply customer pay repair order (CPRO) data through the Honda Service Reminder System or a Honda Data Extraction Agreement is not eligible to receive the President’s Award.
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American Honda Motor Co., Inc. Honda Automobile Incentive Programs RULES, TERMS AND CONDITIONS Version: 11.01.12 Issue Date: 11/01/2012
I: OVERVIEW From time to time, American Honda Motor Co., Inc. (“AHM” or “American Honda”) issues Marketing Bulletins that make available programs that offer authorized Honda dealerships (“Honda Dealerships”) and selected Honda Dealership employees the opportunity to earn various forms of incentives in connection with the retail sale of new Honda Automobiles (“Vehicles”). This document sets forth the general rules, terms and conditions governing participation in such Honda Automobile Sales Incentive Programs, including general eligibility requirements, special rules governing American Honda Finance Corporation leasing and financing incentives, required reporting procedures, how to “unwind” unconsummated sales, payment procedures, audit procedures, and various legal provisions. To understand a particular Incentive Program, this document should be read in conjunction with the applicable Marketing Bulletin. NOTE: Most of the capitalized terms used in these Incentive Rules are defined upon their first use. For convenience, the capitalized terms are also defined in Section IX.
II: ELIGIBILITY REQUIREMENTS 2.1
2.2
Dealership Eligibility: 2.1.1
General Incentive Programs: Unless otherwise specified by American Honda, all Honda Dealerships active at time of Vehicle sale, delivery and reporting are eligible to participate in an Incentive Program.
2.1.2
Objective-Based Award Programs: For Incentive Programs with objectivebased awards, a Honda Dealership must be active during the entire Incentive Program period and through receipt of the award or awards in order for the Honda Dealership or its Participants to be eligible to qualify for the award or awards.
2.1.3
Sales Objective Determinations: Sales objectives for challenges, contests and awards may be based on the Honda Dealership’s prior sales history or other factors independent of the opportunity available in the Honda Dealership’s ASA. Therefore, sales objectives may be set at levels less than or greater than the levels required for the Honda Dealership to meet its sales performance obligations under the Honda Automobile Dealer Sales and Service Agreement (the “DSSA”), as more fully explained AHM’s Dealer Sales Performance Evaluation Policy. The Honda Dealership’s sales versus objectives for challenges, contests and awards is not determinative of the Honda Dealership’s sales performance under the DSSA.
Participant Eligibility: 2.2.1
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Basic Eligibility: As used herein, “Individual Award Program” means an Incentive Program pursuant to which certain specified Participants in the employ of a Honda Dealership can receive awards in connection with the sale of Eligible Vehicles and “Participant” means an individual associated 8 of 20
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with a Honda Dealership that may be eligible to participate in an Individual Award Program. To qualify for an award, a Participant must be employed by the same qualifying Honda Dealership and must be in eligible job codes during the entire Individual Award Program period and through disbursement of the award or awards and must meet the criteria associated with the Individual Award Program. Individual Award Program payments are not to be misconstrued as “commissions” or any other type of compensation by any Participant/recipient or entity. 2.2.2
Dealer Award Trips: The only eligible Participants for travel on Dealer Award Trips are: (a) (b)
(c)
2.3
HPN-091
Equity owners of a Honda Dealership who are active in the Honda Dealership’s sales operations; Dealership Managers (as defined in the DSSA under either (1) Paragraph D (“Dealer Manager”), or (2) the Dealership Manager Attachment.); or Officers of a Honda Dealership who are active in the Honda Dealership’s sales operations.
Vehicle Eligibility: In order to qualify as a Vehicle the Sale of which will trigger a payment or other award pursuant to an applicable Incentive Program (an “Eligible Vehicle”), a Vehicle must meet all of the criteria in this Section 2.3 and not be otherwise disqualified pursuant to these Incentive Rules, including, without limitation, Section 2.4 hereof. As used herein, “Sold,” “sell,” and “sale” refer to the transfer by sale or lease of a New Vehicle by a Honda Dealership to a Retail Customer in conformity with the DSSA and applicable AHM policies. A Vehicle will not be considered “sold” until (a) the Honda Dealership and the Retail Customer have entered into a binding retail sales transaction or binding retail lease transaction, (b) the Vehicle has been properly RDR’d, and (c) the proper sales or lease documentation has been completed in accordance with these Incentive Rules. 2.3.1
Marketing Bulletin Listing: The Vehicle must be listed as covered by the Incentive Program in the "Vehicles" section of the applicable Marketing Bulletin.
2.3.2
New Vehicle: Except as set forth in Section 2.6 with respect to HCCP Vehicles, the Vehicle must be a New Vehicle. As used herein, “New Vehicle” means a Vehicle that (a) is new and not previously reported as sold pursuant to a Retail Delivery Registration (“RDR”); or (b) if previously reported as sold pursuant to an RDR, is one for which the prior “sale” was correctly Unwound pursuant to Section V hereof.
2.3.3
In Stock and Available for Delivery: The Vehicle must be in stock at the reporting Honda Dealership and available for delivery to the ultimate end user who is the owner/lessee and primary operator of the Vehicle (the “Retail Customer”) during the Incentive Program period. For the avoidance of doubt, Vehicles on order from American Honda or transferred from other Honda Dealerships must be available for delivery by the Honda Dealership applying for the incentive during the Incentive Program period in order meet this criterion.
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2.3.4
Sold During the Incentive Period: The Vehicle must be Sold to a Retail Customer during the Incentive Program period.
2.3.5
Delivered: The Vehicle must be delivered to the Retail Customer during the Incentive Program period. For the avoidance of doubt, Vehicles on order from American Honda or transferred from other Honda Dealerships must be delivered to the Retail Customer by the Honda Dealership applying for the incentive during the Incentive Program period in order meet this criterion. In order to qualify as an Eligible Vehicle, such Vehicle must be delivered to the Retail Customer at a Honda Dealership or, if delivered elsewhere, by a Qualified Honda Salesperson. “Qualified Honda Salesperson” means an employee of the Honda Dealership selling the Vehicle (a) whose principal duties at the Honda Dealership regularly include the delivery of New Vehicles to Retail Customers; (b) who at the time of the sale is enrolled in the Council of Sales Leadership (COSL); and (c) who has successfully completed all required Honda Sales Training modules. Documentation must be available in the deal jacket, and provided upon request of AHM, that supports to the satisfaction of AHM that delivery of a Vehicle was made in accordance with this Section 2.3.5.
2.3.6
Properly Reported: The Vehicle must be properly reported as set forth in Section IV of these Incentive Rules.
Note: To qualify for any incentives under an Incentive Program, the Retail Sales Date on the RDR, the Delivery Date on the RDR and the date of the original sales contract with the Retail Customer must ALL be within the Incentive Period for the applicable Incentive Program. AHM understands that, from time to time, a sales contract between the Retail Customer and a Honda Dealership may need to be revised at the insistence of AHFC or another entity providing financing and such revised sales contract will be dated after the Incentive Period. In such case, the Honda Dealership should retain both the original and the revised sales contract so that, if audited, it will be able to qualify for the applicable incentive. 2.4
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Ineligible Vehicles:No Vehicle that fails to meet any of the criteria set forth in Section 2.3 shall be considered an Eligible Vehicle. Without limiting the foregoing, ineligible Vehicles include the following: 2.4.1
Natural Gas Vehicle: A natural gas vehicle is not an Eligible Vehicle unless specifically noted as such in the applicable Marketing Bulletin.
2.4.2
Vehicles Sold to a Dealership: A Vehicle sold by a Honda Dealership to any other business entity in which that Honda Dealership or Dealer Owner has ownership or control (including, without limitation, another dealership) is not an Eligible Vehicle. However, a Honda Dealership may sell a Vehicle to a rental car company that it or a Dealer Owner owns or controls and be paid the applicable Dealer Cash incentive under the terms of Section 2.5.2 (‘Fleet Vehicle Eligibility - Limited Eligibility of Fleet Vehicles”). In order to qualify for payment, all three of the following conditions must be met: (a) each such Vehicle (regardless of the number of Vehicles so sold) is properly reported as a Fleet Vehicle (“F”) as set forth in Section 4.4 of these Incentive Rules; (b) the Honda Dealership and the rental car company comply with the 120 Day Rule set forth in Section 2.4.14 of these Incentive Rules; and (c) the Vehicle is rented to and in the control of third party rental customers during a minimum of sixty (60) separate rental days. If said vehicle is reported as a Retail unit (“R”) or Other (“O”), it is ineligible for payment.
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2.4.3
Export Vehicle: An Export Vehicle is not an Eligible Vehicle. As used herein, “Export Vehicle” means any Vehicle sold to a customer or entity who:(a) resides outside the United States; (b) intends to register and/or primarily use that Vehicle outside the United States; or (c) intends to resell the Vehicle to any purchaser residing outside the United States. The Honda Dealership is responsible for taking reasonable steps to investigate whether a proposed sale would result in the Vehicle being an Export Vehicle (e.g., by obtaining a copy of a valid U.S. driver’s license, passport, or copy of a U.S. utility bill no older than one month from the date of sale showing U.S residency in the Retail Customer’s name, etc. For multiple sales to a single buyer, additional precautions should be taken to determine whether the purchaser is exporting Vehicles.) NOTE: Pursuant to the DSSA, export sales are specifically prohibited. In addition to ineligibility for Incentive Programs, American Honda reserves the right to exercise any remedies for such export sales available to it pursuant to the DSSA.
2.4.4
Import Vehicle: An Import Vehicle is not an Eligible Vehicle. As used herein, “Import Vehicle” means any Vehicle not originally sold by AHM to a Honda Dealership located within the United States (the 50 U.S. states and District of Columbia).
2.4.5
Stolen/Damaged Vehicle: No Vehicle that was stolen or damaged to the extent that it was deemed to be a total loss is an Eligible Vehicle.
2.4.6
AHM Vehicle: No Honda field vehicle, pool car, employee purchase Vehicle, Vehicle purchased at an auction, Vehicle sold to any AHM affiliate or other similarly sourced/designated Vehicle is an Eligible Vehicle.
2.4.7:
Vehicles Previously Reported as Sold: No Vehicle that has previously been reported by any Honda Dealership as having been sold is an Eligible Vehicle. Notwithstanding the foregoing, if a Vehicle has been reported as having been sold and the sale of such Vehicle was not consummated, such reported sale may be Unwound pursuant to the procedures set forth in Section V, and, if otherwise qualified, the Vehicle may be classified as an Eligible Vehicle.
2.4.8
Incorrectly Transferred Vehicles: No Vehicle transferred from one Honda Dealership to another Honda Dealership which transfer does not comply with the procedures set forth in Section 2.8 of these Incentive Rules is an Eligible Vehicle.
2.4.9
Chargeback Vehicle: No Vehicle previously charged back in an audit is an Eligible Vehicle.
2.4.10 Previous Credit: No Vehicle previously counted toward attainment of any Incentive Program objective and/or incentive awards (including sales consultant/manager spins, trip, challenges, etc.) is an Eligible Vehicle. 2.4.11 Incorrect Reporting:No Vehicle which is subject to any incorrect, incomplete, false or improper reporting or Unwinding is an Eligible Vehicle. Notwithstanding the foregoing, if a Vehicle is incorrectly reported due to a technical reporting error, and AHM believes, in its sole discretion, that the Vehicle is one which should have remained eligible despite the technical reporting error, the Vehicle may be reclassified by AHM as an Eligible Vehicle. 2.4.12 Incorrect or False Identification of Retail Customer: No Vehicle for which the Retail Customer shown in the required retail sales or lease documentation is different than the Retail Customer shown on the RDR submitted to AHM is an Eligible Vehicle. HPN-091
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2.4.13 Wholesale Sales: No Vehicle sold to any individual or entity in violation of the American Honda Motor Co., Inc. Wholesaling Policy (the “Wholesaling Policy”) is an Eligible Vehicle. The Honda Dealership is responsible for taking reasonable steps to investigate whether a proposed sale would violate the Wholesaling Policy (e.g., obtaining appropriate documentation from the end user purchaser. For multiple sales to a single buyer, additional precautions should be taken to determine whether the purchaser is wholesaling Vehicles.) NOTE: Pursuant to the DSSA and the Wholesaling Policy, Wholesale Sales are specifically prohibited. In addition to ineligibility for Incentive Programs, American Honda reserves the right to exercise any remedies for such Wholesale Sales available to it pursuant to the DSSA and the Wholesaling Policy. 2.4.14 120 Day Rule: No Vehicle that has been sold to any individual or entity other than a Retail Customer, including but not limited to brokers, leasing companies, used car dealers, rental car companies, non-AHM authorized dealerships, and the like, that resells or re-registers the Vehicle within 120 days of the original sale is an Eligible Vehicle. 2.4.15 Registration with State DMV: No Vehicle that is not officially titled, registered and plated with the appropriate state DMV is an Eligible Vehicle. 2.4.16 Inaccurate/Combined Dealership Sales Reporting: No Vehicle that is reported as having been sold by a Honda Dealership that, in fact, was sold by another Honda Dealership (whether or not the Honda Dealerships are under common ownership) is an Eligible Vehicle. NOTE: Because each individual Honda Dealership receives separate incentive objectives based on its sales history, for purposes of Incentive Programs, each individual Honda Dealership, even if owned by the same individual(s) or corporation, must separately report the Vehicles that it sells. Failure to do so will result in disqualification of the Honda Dealership from participation in the applicable Incentive Programs. 2.4.17 Fleet Vehicles: A Fleet Vehicle is not an Eligible Vehicle except to the extent specifically made eligible pursuant to Section 2.5 of these Incentive Rules. 2.4.18 HCCP Vehicles: A Honda Courtesy Car Program Vehicle (“HCCP Vehicle”) is not an Eligible Vehicle except to the extent specifically made eligible pursuant to Section 2.6 of these Incentive Rules. 2.4.19 AHM Policy Violations: No Vehicle that is sold in violation of the terms of the DSSA or any AHM policy, including, without limitation, the then-current Market Oriented Vehicle Environment (“MOVE”) policies, is an Eligible Vehicle. 2.5
Fleet Vehicle Eligibility: 2.5.1
Fleet Definitions: (a) “Fleet Customer” means (1) any entity (or any combination of entities which share common ownership and/or control) that acquire(s), either in one transaction or a series of transactions, more than nine (9) vehicles of any make or description from any source during a 12-month period, or at any time maintains an operational or static vehicle inventory of more than nine (9) vehicles or (2) a daily rental company. This definition does not include companies that hold vehicle titles for the purpose of consumer or end user leasing and financing. For further clarification, please refer to AHM’s most current MOVE policies.
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(b) “Fleet Vehicle” means a Vehicle that is sold by a Honda Dealership to a Fleet Customer. 2.5.2
Limited Eligibility of Fleet Vehicles: Unless otherwise noted in the applicable Marketing Bulletin, Fleet Vehicles are eligible only for Dealer Cash incentives and do not count towards credit for any other incentive, award, or recognition program. By way of example, but not limitation, Fleet Vehicles are ineligible for the following programs: Council of Sales Leadership; Market Support Dealer Incentives (except Dealer Cash); Market Support Contests, Challenges; Market Support Subsidized Financing or Leasing, SpinPlay (for Sales Consultants and Sales Manager Overrides); Market Support Accessory Incentives; all other Market Support Incentive Programs.
2.5.3
Restrictions on Credit for Fleet Vehicle Sales: WARNING: Vehicles reported as “Fleet” by the Honda Dealership on the RDR do not count toward: (a) (b) (c)
Travel Rate for MOVE allocation; Objective-based challenge and travel contest objectives; or Sales consultant spins or sales manager overrides
2.5.4
Dealership Responsibility to Determine Whether a Purchaser Is a Fleet Customer: A Honda Dealership should not assume that the sale of nine or fewer Vehicles to a single entity is not a sale of Fleet Vehicles. For example, if the customer maintains an operational or static vehicle inventory of more than nine (9) vehicles, the customer is a Fleet Customer and the sale of even a single Vehicle to that customer would be the sale of a Fleet Vehicle. The Honda Dealership is responsible for determining whether the purchaser is a Fleet Customer (as defined above) and therefore whether a Vehicle must be reported as a Fleet Vehicle.
2.5.5
Order Type "B" Vehicle: Order Type “B” Vehicles are to be reported as a Fleet Vehicle as set forth in this Section 2.5 and will be treated the same as standard Fleet Vehicles for incentive purposes.
2.5.6
Properly Reported: The Fleet Vehicle must be properly reported as set forth in Section IV of these Incentive Rules.
2.6
HCCP Vehicle Eligibility: Unless otherwise noted on the pages of the applicable Marketing Bulletin, HCCP Vehicles are eligible only for Dealer Cash incentives and do not count towards credit for any other incentive, award, or recognition program. To be eligible for Dealer Cash incentives, the HCCP Vehicle (a) must be transferred out of HCCP status, sold, and delivered during the applicable Dealer Cash Incentive Program period; and (b) must be properly reported as Sales Class “certified” or “used” on the RDR screen available on the Interactive Network, within the applicable Dealer Cash Incentive Program period. For the avoidance of doubt, HCCP Vehicles are ineligible for an American Honda Finance Corporation (“AHFC”) new Vehicle Lease or APR Financing and, consequently, for Lease or Finance cash incentive payments.
2.7
Demo Vehicle Eligibility: The placement by a Honda Dealership of a Vehicle into Demo Status does not constitute a sale and therefore a Vehicle in Demo Status is not an Eligible Vehicle. However, when a Vehicle is withdrawn from Demo Status and sold, it may be an Eligible Vehicle if it meets the criteria set forth in Section 2.3 of these Incentive Rules and is not otherwise disqualified from eligibility. NOTE: A demo Vehicle is eligible for an AHFC lease and APR Financing only if it is new, untitled with less than 6,000 miles, and meets all applicable AHFC guidelines.
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2.8
Transfers of Vehicles Between Honda Dealerships: No Vehicle acquired by a Honda Dealership from another Honda Dealership will qualify as an Eligible Vehicle unless the Honda Dealerships involved in the transaction have complied with the following procedures: 2.8.1
Interactive Network: The transfer of the Vehicle must have been completed through the Interactive Network.
2.8.2
Eligibility Verification: The receiving Honda Dealership must (a) verify that the transferring Honda Dealership had not previously reported to AHM that the Vehicle was sold; or (b) if the Vehicle was previously reported as sold, (i) verify that it was correctly Unwound by the transferring Honda Dealership pursuant to the process set forth in Section V or (ii) correctly Unwind the sale of the transferred Vehicle pursuant to the process set forth in Section V.
III: SPECIAL RULES ‒ AHFC SUBSIDIZED APR / LEASE 3.1
3.2:
AHFC Approval: For incentives offering consumer financing or leasing, eligibility is contingent upon approval of financing by AHFC. In order for the Vehicle transaction to be eligible for any AHFC subsidized incentive APR rate or Retail Lease, the following minimum criteria must be met: 3.1.1
Vehicle Status: The Vehicle must be an Eligible Vehicle as set forth in Section II of these Incentive Rules.
3.1.2
AHFC Application: The Honda Dealership must submit the application to AHFC, and AHFC must receive the application prior to close of business on the last day of the applicable Incentive Program period. If the application is either submitted by the Honda Dealership or received by AHFC after the close of business on the last day of the applicable Incentive Program period, that transaction is ineligible for that subsidized lease or APR Financing.
3.1.3
AHFC Approval: Eligibility is contingent on AHFC’s approval of the Retail Customer’s application and the Retail Customer correcting any conditional approval/stipulations to AHFC’s satisfaction per the terms outlined in Section 3.2 of these Incentive Rules.
10-Day Submission: As a policy of AHFC, the Honda Dealership and Retail Customer shall have ten (10) days from the date of sale to resolve any stipulations imposed by AHFC and submit the required documents/contracts to the satisfaction of AHFC. If the stipulations are not satisfied within the ten-day period and the documents are not received and accepted by AHFC within ten (10) days of the last day of the applicable Incentive Program period, the transaction shall no longer be eligible for consideration under that APR Financing or Retail Lease Incentive Program. This ten-day period shall not be construed as an extension of the Incentive Program period.
IV: REQUIRED REPORTING PROCEDURES 4.1
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RDR Submission: In order for an Eligible Vehicle to qualify for any incentives under an Incentive Program, the Retail Delivery Registration (RDR) for such Eligible Vehicle must be in the applicable Retail Customer’s name and must be received by AHM on or before the first to occur of (a) twenty-one (21) days following the date of the sales transaction; and (b) the close of business (7:00 p.m. Pacific Time) on the specified Incentive Program end date.
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Without limiting the foregoing, for the avoidance of doubt, to qualify for eligibility under an objective-based dealer challenge or contest, the Honda Dealership must report the Vehicle as described in this Section 4.1. 4.2
Retail Sale Documentation Required: For Eligible Vehicles sold to a Retail Customer, the following documents are required to be in the Honda Dealership’s physical possession for the sale of the Eligible Vehicle to qualify for payments or awards pursuant to an Incentive Program: (a) (b)
4.3
a fully completed motor vehicle registration/license application for the Vehicle in the name of the Retail Customer identified on the dealer’s sales contract; and a fully executed dealer’s sales contract or similar document which must provide: (1) The Retail Customer’s name, Retail Customer’s signature, and date of sale; (2) The VIN of a Vehicle which is available at the Honda Dealership (on the same date as appears on the dealer’s sales contract) for delivery to the Retail Customer; and (3) The Vehicle’s purchase price received in full or accounted for in full by a fully executed, valid finance contract, installment note, or fleet billing within 10 days from the date of the RDR.
Retail Lease Documentation Required: For Eligible Vehicles leased to a Retail Customer, the following documents are required to be in the Honda Dealership’s physical possession for the lease of the Vehicle to qualify for payments or awards pursuant to an Incentive Program: (a)
(b)
a fully completed motor vehicle registration/license application for the Vehicle in the name of the Retail Customer or leasing company (whichever is applicable) identified on the dealer’s sales contract executed by the leasing company or its agent; and a fully executed and enforceable lease agreement which must: (1) Be signed and dated by the Retail Customer (not an agent, broker, assignee or buying service) during the Incentive Program period; and (2) Include the VIN of a Vehicle which is available at the Honda Dealership (on the same date as appears on the lease agreement) and the delivery date to the Retail Customer.
4.4
Fleet Vehicle RDR Reporting Requirements: All Fleet Vehicles must be reported sold using the “FLEET” sales type category in the “Vehicle Information” section of the RDR menu on the Interactive Network screen in order to be eligible for any incentive. Failure to do so will result in disqualification of the applicable Fleet Vehicles from receipt of otherwise available Dealer Cash incentives and other award credits (if applicable).
4.5
Accurate Information: Each Honda Dealership is solely responsible for the maintenance and submission of complete and accurate information pertaining to Vehicles, Incentive Programs and these Incentive Rules. Submission of incomplete, inconsistent or incorrect information may result in disqualification of the Honda Dealership’s participation in Incentive Programs or ineligibility of its Vehicles under the applicable Incentive Programs.
V: UNWIND PROCESS 5.1
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Unwinding unsuccessfully sold/erroneously reported Vehicles is required: When a sale “backs out,” the Honda Dealership must use the Unwind process to:
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(a) (b) (c) (d)
Place the Vehicle back in the Honda Dealership’s inventory so that it may qualify as an Eligible Vehicle; Stop improper incentive payments; Stop the warranty “clock”; and Avoid charge back and Vehicle ineligibility as a result of improper reporting.
5.2
Dealer Unwind: During the first/current sales month, the Honda Dealership can Unwind any sale utilizing the Interactive Network.
5.3
Zone Unwind: If the Honda Dealership fails to Unwind an improperly reported sale per Section 5.2, it is the Honda Dealership’s responsibility to contact its Zone Office to request the Vehicle be Unwound during the sales month immediately following the month that the improperly reported RDR event occurred.
5.4
Unwind Deadline: No Unwind can occur after the month immediately following the month in which the RDR was erroneously reported.
5.5
Improper Use of Unwind Process: Any Vehicle that has been Sold and is subsequently Unwound and re-reported in order to make the Vehicle eligible for an incentive or any other type of manipulation of the sales reporting process is ineligible.
5.6
Prohibited Behavior: Any Honda Dealership or Participant that is found to violate the terms of the Unwind process is subject to the following sanctions: (a)
(b) (c)
First offense: Forfeiture of incentive award (spin, contest credit, etc.,) plus forfeiture of one penalty unit (two for one). This clause applies to both the Participant named on the RDR and the Honda Dealership. Second offense: Forfeiture of all winnings/award credit for the entire Incentive Program and forfeiture of any award dollars paid. Repeat Violators: Repeat violators may be subject to exclusion from participation in future Incentive Programs and any other penalties available to AHM.
VI: PAYMENT PROCEDURES 6.1
Reconciliation: AHM’s financial system will automatically reconcile eligible Incentive Program cash incentive awards based on proper Vehicle delivery and reporting information submitted by the Honda Dealership utilizing the Interactive Network as outlined in Section IV.
6.2
Payments: Incentive payments for Vehicles that meet the Incentive Program criteria are made on the Balance Forward Statement for the month that the sale was RDR’d. In order for a Vehicle to be paid on that statement, it would have to be an eligible sale properly reported (RDR’d) prior to the statement cut-off date. The Balance Forward Statement cut-off date is two business days prior to the last calendar day of the month. Any sale occurring after that date will appear on the following month’s statement. Payments may be reversed on a future statement in the event that the sale and/or Vehicle is ineligible for payment.
6.3
Dealer’s Responsibility: It is the Honda Dealership’s responsibility to track incentive payments due from AHM and, in the event of a non-payment, to notify its District Sales Manager, in writing, of any claim or adjustment for sales credit of allegedly Eligible Vehicles within sixty (60) days of Incentive Program end. Claims for credit must be accompanied by complete and consistent documentation in support of any claim of Vehicle eligibility.
6.4
Claim Adjustments Received After 60 Days: Incentive claims or adjustment requests received by AHM after the sixty- (60-) day time limit described in Section 6.3 above will not be considered.
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6.5
Exception Granting Authority: The authority to grant exceptions for specific VIN’s is reserved for Treasury Control and Compliance (TCC) or the National Incentive Department. No statements from field personnel regarding any adjustment/exception are binding upon AHM.
VII: AUDITS 7.1
Dealership Audits: AHM reserves the right to audit dealership records and to question and/or disqualify any sales and/or purchases made or reported that are not in accordance with these Incentive Rules, the applicable Marketing Bulletin, the DSSA or the policies of AHM. All payments and/or value of awards made under Incentive Programs are subject to audit and chargeback to the Honda Dealership’s Balance Forward Statement. By participating in Incentive Programs, the Honda Dealership agrees to abide by these Incentive Rules and the applicable Marketing Bulletins. Without limiting the foregoing, AHM reserves the right to: (a) (b) (c)
Inspect dealership records during normal business hours; Disqualify any incorrectly, falsely or improperly reported sales; and Disqualify any sales that AHM determines to be ineligible units and/or ineligible deliveries.
Honda Dealerships refusing to allow AHM auditors to conduct or impeding them from conducting audits will be subject to exclusion from participation in future Incentive Programs and such other penalties available under the DSSA and applicable AHM policies. 7.2
Availability of Documents: If any file (i.e., “deal jacket”) or supporting documents are unavailable at the time of the audit, the Vehicle shall be deemed unsold and ineligible for any incentive payments.
7.3
Dealer Self Audit: A list of all Eligible Vehicles that are credited under an Incentive Program may be sent to the Honda Dealership at the conclusion of the Incentive Program. The Honda Dealership will be required to audit this list, exclude any sales deemed ineligible according to the applicable Marketing Bulletin and these Incentive Rules, and return the completed self-audit to AHM by the date indicated. Failure to accurately complete and return a Honda Dealership self-audit by the requested deadline may result in the charge back of all incentives paid under the affected Incentive Program or a delay in payments resulting from the Honda Dealership’s inaction.
7.4
Charged-Back Sales: In the event that AHM determines, at its sole discretion, that a sale is ineligible, AHM may debit the Honda Dealership’s Balance Forward Account, or at AHM’'s election, the Honda Dealership will promptly reimburse AHM for the cost of the award for any ineligible Vehicle that is charged back by any other means acceptable to AHM.
7.5
Repeat Violators: Repeat violators may be subject to exclusion from participation in future Incentive Programs and any other penalties available to AHM.
VIII: MISCELLANEOUS 8.1
Taxes: 8.1.1
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Dealership Awards: For tax purposes and unless otherwise noted, the Honda Dealership is the recipient of the awards and will be treated as such by AHM. AHM is not liable for any taxes applicable to Incentive Program awards. For all tax purposes, the Honda Dealership is responsible for the accurate reporting of the receipt of awards and allocation thereof by the Honda Dealership consistent with this clause. 17 of 20
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8.1.2
Individual Awards: Prize award payments under the Award Card Program that are paid directly to Sales Consultants and Sales Managers without Honda Dealership allocation/distribution or other Honda Dealership intervention, are taxable to the individual Participant. Recipients of such award payments should contact their tax advisor for advice. AHM will report all awards to the IRS and provide a 1099 to the recipient.
8.2
Modification or Amendment: AHM reserves the right to modify, amend, cancel or revoke, in whole or in part, these Rules and any Incentive Program at any time and without prior notice.
8.3
Interpretation: In all matters pertaining to interpretation and application of any rule or phase of these Rules or any Incentive Program, the decision of American Honda shall be final.
8.4
Void Where Prohibited by Law: Subject to Section 8.5, any Incentive Program is void where prohibited by law.
8.5
Severability: If any provision of an Incentive Program or of these Rules or should be held invalid or unenforceable for any reason whatsoever or conflict with any applicable law, these Rules and the applicable Marketing Bulletin will be considered divisible as to such provisions, and such provisions will be deemed amended to comply with such law, or if it cannot be so amended without materially altering the tenor of the Incentive Program, then it will be deemed deleted from these Rules or the applicable Marketing Bulletin in such jurisdiction, and in either case, the remainder of these Rules and the applicable Marketing Bulletin will be valid and binding.
8.6
Choice Of Law: These Rules and all Incentive Programs are and shall be deemed to have been entered into in California and shall be governed by and construed in accordance with the laws of the State of California without reference to its choice of law principles.
IX: DEFINITIONS 9.1
“AHFC” means American Honda Finance Corporation.
9.2
“AHM” and “American Honda” means American Honda Motor Co., Inc.
9.3
“Dealership Managers” are defined in the DSSA under either (1) Paragraph D (“Dealer Manager”), or (2) the Dealership Manager Attachment.
9.4
“DSSA” means the Honda Automobile Dealer Sales and Service Agreement.
9.5
“Eligible Vehicle” means a Vehicle the Sale of which will trigger a payment or other award pursuant to an applicable Incentive Program in accordance with these Incentive Rules and the applicable Marketing Bulletin.
9.6
“Export Vehicle” means any Vehicle sold to a customer or entity who: (a) resides outside the United States; (b) intends to register and/or primarily use that Vehicle outside the United States; or (c) intends to resell the Vehicle to any purchaser residing outside the United States.
9.7
“Fleet Customer” means (1) any entity (or any combination of entities which share common ownership and/or control) that acquire(s), either in one transaction or a series of transactions, more than nine (9) vehicles of any make or description from any source during a 12-month period, or at any time maintains an operational or static vehicle inventory of more than nine (9) vehicles or (2) a daily rental company. This definition does not include companies that hold vehicle titles for the purpose of 18 of 20 January 3, 2014
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consumer or end user leasing and financing. For further clarification, please refer to AHM’s most current MOVE policies. 9.8
“Fleet Vehicle” means a Vehicle that is sold by a Honda Dealership to a Fleet Customer.
9.9
“HCCP Vehicle” means a Honda Courtesy Car Program Vehicle.
9.10
“Honda Dealerships” means authorized Honda dealerships.
9.11
“Import Vehicle” means any Vehicle not originally sold by AHM to a Honda Dealership located within the United States (the 50 U.S. states and District of Columbia).
9.12
“Incentive Period” means the period during which a particular Incentive Program is in effect as stated in the applicable Marketing Bulletin.
9.13
“Incentive Program” means a program made available by or through AHM or AHFC to Honda Dealerships to incentivize the sale of New Vehicles.
9.14
“Incentive Rules” means these Automobile Incentive Programs Rules, Terms and Conditions and any amendments, additions or exhibits hereto and, with respect to a particular Incentive Program, the applicable Marketing Bulletin.
9.15
“Individual Award Program” means an Incentive Program pursuant to which certain specified Participants in the employ of a Honda Dealership can receive awards in connection with the sale of Eligible Vehicles.
9.16
“Marketing Bulletin” means a bulletin distributed to Honda Dealerships describing in detail a specific Incentive Program, including special eligibility requirements (if any), sales requirements, available awards and incentives, Participant qualifications, Vehicles covered by the Incentive Program, the start date and end date and other pertinent information.
9.17
“MOVE” means Market Oriented Vehicle Environment.
9.18
“New Vehicle” means a Vehicle that (a) is new and not previously reported as sold pursuant to an RDR Retail Delivery Registration (“RDR”); or (b) if previously reported as sold pursuant to an RDR, is one for which the prior “sale” was correctly Unwound pursuant to Section V hereof.
9.19
“Participant” means an individual associated with a Honda Dealership that may be eligible to participate in an Individual Award Program.
9.20
“Qualified Honda Salesperson” means an employee of the Honda Dealership selling the Vehicle (a) whose principal duties at the Honda Dealership regularly include the delivery of New Vehicles to Retail Customers; (b) who at the time of the sale is enrolled in the Council of Sales Leadership (COSL); and (c) who has successfully completed all required Honda Sales Training modules.
9.21
“RDR” means Retail Delivery Registration.
9.22
“Retail Customer” means the ultimate end user who is the owner/lessee and primary operator of the Vehicle.
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9.23
“Sold,” “sell,” and “sale” refer to the transfer by sale or lease of a New Vehicle by a Honda Dealership to a Retail Customer in conformity with the DSSA and applicable AHM policies. A Vehicle will not be considered “sold” until (a) the Honda Dealership and the Retail Customer have entered into a binding retail sales transaction or binding retail lease transaction, (b) the Vehicle has been properly RDR’d, and (c) the proper sales or lease documentation has been completed in accordance with these Incentive Rules.
9.24
“Unwind” and “Unwound” means the process set forth in Section V pursuant to which a Vehicle that has been reported as Sold, either incorrectly or prematurely, may be reclassified as a New Vehicle.
9.25
“Vehicles” means new Honda Automobiles.
9.26
“Wholesaling Policy” means the American Honda Motor Co., Inc. Wholesaling Policy.
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