Table of Contents. ! Membership Privileges... 3 Baseline Benefits, Add-On Benefits. ! Baseline Benefits... 5 Ten Diverse Baseline Benefits

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2 Table of Contents! Program Overview... 2 Membership is a Choice! Membership Privileges... 3 Baseline Benefits, Add-On Benefits! Program Membership... 4 Qualifying and Registering! Baseline Benefits... 5 Ten Diverse Baseline Benefits! Points Program... 7 Earning, Tracking, Spending! Add-On Benefits Eight Unique Add-On Benefits! Definitions

3 Program Overview Sapa s New Premier plus Program is an elite membership program offering industry leading benefits to member distributors. Membership is a Choice Membership is open to ALL current Sapa recognized distributors, and members must choose to be a part of the program, as it requires an active commitment. Base level share commitments must be met. Resource training commitments must be met (and will be supported by Sapa). Please Note: These are essential commitments for participation in the Program not for doing business with Sapa and all but signage will be held to as strict requirements. 2

4 Membership Has its Privileges 10 Diverse Baseline Benefits: Each bringing distinct, recognizable value to distributors, and all are delivered automatically as part of membership in the Premier plus Program. 8 Unique Add-On Benefits: Each determined to be of significant, measurable bottom line value to distributors however the value each provides will vary tremendously across distributors. These benefits can be acquired via points earned by metal purchases. 3

5 Program Membership Qualifying / Registering for the Premier plus Program In Brief: Primary qualification/registration for Premier plus is at the corporate level; this is where all membership requirements must be met and registration decisions for divisions or regions and branches are made. Corporate registers for the program and must meet all membership requirements: - Commit to a Certain Share with Sapa Extrusions Year-one member must achieve either a 30% Sapa share, OR, at a minimum, a member must have 7.5% share dedicated to Sapa and commit to 2x growth of Sapa volume continuing 2x each year until 30% is achieved. Sapa share for program membership includes all plant purchases. - Commit to Sales Force Training 50% of branch locations are required to complete one training module per year. - Commit to Resource Training to Support Any Specialty Products Sold A minimum of one individual must be trained within the first quarter on any specialty products sold by Sapa. - Sapa Signage for Each Location is Recommended and Offered, But Not Required. - Twice-a-Year Review of Metrics with Upper Level Management Corporate must choose which divisions or regions it wishes to register as participating in the Premier plus program. Sapa will sub-register all chosen divisions/regions to track purchases and therefore, at any time, potential points are estimated at both levels. Corporate must also choose which branches it wishes to register as participating in the Premier plus program. Sapa will sub-register all chosen branches to track purchases and therefore potential points earned at this level. Sapa will count 80% of branches for customers who have over 25 locations. EXAMPLE: For customers with 25 or more registered branches, only 80% of those branches will be included in the calculation for an ALL BRANCH purchase. THE FINE PRINT If Corporate has met the required Program qualifications, they will be considered active and all registered divisions/regions and branches belonging to them will also be considered to have met the Program qualifications and will be granted member status. If they have not, the reverse is true. Qualification status will be reviewed at 2x/year management metric meetings and at the end of the fiscal year. If qualifications have not been met by December 31 st, Premier plus membership will not be granted for the following year. Corporate chooses which divisions/regions and branches to register as participants in the program. As long as Corporate remains active :! All registered participants are entitled to participate in Premier Program Baseline benefits.! All Sapa aluminum extrusion metal purchases made by active participants from any Sapa plant will count towards the Sapa Share for Membership requirements. If Corporate chooses to exclude a division/region or branch, no benefits will be awarded and metal purchased by this entity will not count. No exceptions. 4

6 Baseline Benefits 1. Access to Depot In Brief: Delivery 7 days maximum from date of order placement to delivery at dock. Depot will be available out of the following plants: Cressona Spanish Fork During high demand, max releases will apply: 7,000 lbs. solids 3,000 lbs. hollows 2. Electronic Downloadable Certifications In Brief: All certifications will be available on-line. Sapa IT resources will work with distributor IT to customize interface to facilitate downloading certifications. 3. EDI Order Entry In Brief: Order placement 24/7 with immediate confirmation. Sapa IT resources will work with distributor IT to customize interface to facilitate EDI order entry. 4. Instant Claim Resolution In Brief: Instant claim approval for claims under 1,000 lbs. While claim approval will be instant, samples and/or photos are still required to determine root cause. Please refer to attached claim policy & water stain policy for details. 5. Access to Free Tech Support In Brief: Hands on support to assist in development of new business opportunities. Direct line to Senior Technical Support Staff. Please refer to contact name and phone number on the home page of E-Sapa. 5

7 6. Improved Order Tracking In Brief: Offer an improved system for tracking order information. On-line status check including estimated delivery date. This information will appear in the Tracking Center of E-Sapa. Changes in order status are automatically ed along with rescheduled date. Information is also located in the tracking center of E-Sapa. Firm metal contract data available on line via E-Sapa. Orders marked to show stock or order to ensure key items are delivered on time. Requests should be shown on customers purchase order or communicated to their Sapa Customer Service Rep at time of order entry. We will make every effort to mark these items a priority, but cannot guarantee they will always make the truck. 7. Specialty Product Access In Brief: Access to specialty products will be limited to Premier plus customers. ACC-U-products, large diameter rod over 8 and all specialty alloys: 1XXX, 3XXX, 7XXX, 6005A, 6013, 6042, 6060, 6066, 6070, 6082, 6262, 6351, 6463, C06N, C34E, C57B. Specialty tempers: H, X, G, P, W, S followed by a number. 8. Extrusion Process & Product Training In Brief: Sapa resources will be available to distributors for extrusion process and product training as needed. Sapa to provide training or customers can reference video on line via E-Sapa. 9. Monthly State of the Industry Update In Brief: Monthly communication of industry updates including LME metal trends, market trends, Sapa products & services. The Premier Edition newsletter will be ed monthly to the persons identified within our customer locations. Newsletter will be linked to the E-Sapa home page. 10. Annual Holiday Extrusions In Brief: Premier Plus customers will receive limited edition Holiday extrusions. 6

8 The Points Program Earning Points In Brief: To acquire Add-Ons a distributor earns points via purchases of metal. After exceeding the required Add-On share % threshold, Add-On points begin to accrue. Qualifying pounds are the number of pounds that count towards conversion into points and are a combination of: - End of Year (EOY) metal purchases (not including any metal purchases required to reach the share % threshold) - End of Year (EOY) market share (above the 30% baseline requirements) Points are earned on an annual basis January thru December Points are applied for 1 year no rollover points Add On-Benefits are annual EOY to following EOY At different share levels points multipliers go into effect 40% share points 50% share points 60% share points THE FINE PRINT For 2010, the Sapa plants participating in the Add-On program are Cressona and Spanish Fork based on initial program definition and current plant capabilities. Therefore the 2009 aluminum extrusion purchases counting towards Add-On benefits are the purchases made from these 2 plants, and the Add-On share threshold required is to exceed 30% market share based on these purchases. The formula for qualifying lbs. is as follows: TOTAL POINTS = Qualifying lbs. 10 X Extra Share Bonus Multiple 7

9 Tracking Points In Brief: A system will be available online for tracking your points. All points will be tracked at a corporate, division, region and branch level. Go to: to view Rewards Tracking details and information. Corporate will have permission to view all locations. Divisions, regions and branches will have permission to view only their responsible location. At the end of the year we will send a statement itemizing the points earned with a suggested allocation of points by branch. THE FINE PRINT For 2010, the Sapa plants participating in the Add-On program are Cressona, PA and Spanish Fork, UT. Points are owned by corporate. At the end of the year, Sapa will give corporate the option to either spend the points or allocate the points across the branches, OR, give the branches access to the points they earned with the option to spend them on their own. A couple of caveats: 1. Point allocation occurs in the first month of the program year. 2. The only branches eligible to get any points allocated to them are the branches registered by their corporate office as participating in the program. If they are not registered, no benefits. No exceptions. 8

10 Spending Points Some Add-Ons must be acquired across all branches of a distributor (i.e. Optimized Standard Depot, Transactional Sales Tool, Custom/Complex Sales Quoting System, Fixed Lead Time Reserve). Other Add-Ons may be acquired as a single unit for a single branch (i.e. Vendor Jointly Developed Leads, Expedited Orders Service, Custom/Specialty Depot, Die Bank for New Dies). Spending Scenarios will need to be taken into account when deciding point allocation. Spending Scenarios: - Corporate is spending points they purchase expedites and reserves for the branches - therefore branches need to check with corporate to get approval. - Branches have points to spend. They purchase expedites & reserves with their own points. If a registered branch wants an expedite and does not have enough points to purchase it AND corporate has enough points left over to buy them that benefit, the branch must contact corporate to discuss (therefore, corporate may want to keep some points on the side for situations like this). - Branches cannot gift another branch one of their expedites or a portion of their reserve (i.e. branch A needs an expedite, branch B has not used up both of their expedites this month and wants to give one to branch A.) The system was not designed to accommodate that. A benefit is purchased by the branch and must be used as a whole unit. Example of Spending Points: 9

11 Add-On Benefits 1. Vendor Jointly Develop Leads In Brief: Identify and co-develop target markets/accounts. Per branch purchase provides one lead per month. Contact name and address is required to forward leads. The Process: Mailers send to prospects via an outside service targeting specific SIC codes. Sapa will phone interview each prospect to determine if prospect meets qualification criteria. Regional Managers will review each prospect to make every effort prospect is not currently buying from a Distributor. Prospect/Lead will be given to Distributor within the Region they service. Lead may be other Non Ferrous alloys. Rejecting A Lead: Under certain circumstances a Distributor may need to reject a prospect/lead for the following reasons: 1) Bad Credit, 2) Dispute between two accounts. Distributor will have 48 hours to inform the Program Manager or their Regional Manager if they are rejecting a lead. Maximum allowable rejections are one per quarter. Sapa reserves the right to quote a customer direct if lead is competing against another direct mill. 2. Transactional Sales Tool In Brief: Rapid/automated access to production information (P & D) to enable pricing standards within minutes. On-line tool, accessed within E-Sapa All Branch requirement No firm metal contracts or supply agreements Press Minimums Future price changes not reflected in price program Price in effect at time of shipment Warehouse limits apply (7K- solids, 3K- hollows) Reserve does not apply Lead times are current and subject to change Standard ship tolerances apply Sapa terms and conditions apply Excluded products: CNG tube, bus pipe, light pole, fire hose coupling, sign panel, impact rod, Diamondback, fabrication Select alloys will be excluded Contact your SSR or the Quote Specialist to obtain a better price and delivery if needed. Contact your SSR for exact quantity charges or close length tolerances. 10

12 3. Custom/Complex Sales Quoting Tool In Brief: Rapid response to Non-Tooled customs. All Branch requirement Time starts when quotation appears in Presale In-Box Web address: Cut to Length included Custom shapes only print included 6 items or less Any alloy Any complex quote may fall outside the normal practice and may not be included in the 1-2 hour turn around. These include items that need to be viewed by plant personnel. These items will default to the normal 24-hour timeframe. 4. Expedite Orders In Brief: One week to ship on critical orders. Two expedites per month 3,000 lbs or press minimum Ship in 7 days for solids Ship in 14 days for hollows Geography exceptions as follows: - Cressona Plant / West of Mississippi = 9 days to ship solids, 16 days to ship hollows - Cressona Plant / Western Canada = 16 days to ship solids, 23 days to ship hollows - Utah Plant / Eastern Canada 9 days to ship Expedites do not roll over to the next month. Common alloys only: 6061, 6063, 6101, 6005, 6105, 6262 Common Tempers: -T6, -T5, -T6511, -T52 Does not include fabrication or corrective roll Standard packing only (i.e. wood crate, wood box and skids are excluded) Subject to press outages (holiday shutdowns, etc.), cylinder changes and billet availability If Sapa cannot ship within the parameters, the Expedite will be returned to the customer to use in the following month. 5. Optimized Standard Depot In Brief: A partner to facilitate rationalization of inventory across customers organization and lower carrying costs. All branch requirement Value gained through inventory turns 11

13 6. Custom/Specialty Depot In Brief: Ability to locate a higher-volume, hard to predict custom/specialty item in depot. Avoid stock outs on customers floor. Per Branch requirement Five items per year 2,000 lbs per unit or press minimum Buffer stock to deliver in 7 days Std bundle size 1,000 lbs Fill at standard lead-time Auto-replenish on empty 60-day turn required Standard length bundles of 10 min to 25 max No fabricated items or specialty items Packing subject to review New Dies / New Items subject to review and standard lead time to fill depot PIE at time of shipment Contracts / Supply Agreements default to negotiated price 7. Fixed Lead Time Reserve In Brief: Improved mill delivery time for standards & customs. Maximum 28 day delivery for key items 5,000 per week per Unit UT and PA Plants only Current + 3 weeks solids Current + 4 weeks hollows Excludes fabrication Standard Alloys: 6061, 6063, 6262, 6101, 6005 Orders must be received by 3 pm EST Friday each week to Commit to reserve schedule Use or lose weekly allotments Customers with seamless reserve can use this for all round tube and pipe. Includes seamless and structural. Customers will be allowed 5% tolerance on reserve shipments. Sapa will notify customers immediately if reserve orders exceed weekly capacity. 12

14 8. Die Bank for New Dies In Brief: Earn points to pay for tolling of new sections Per Branch requirement $4,000 die bank dollars per unit Applies to Cressona, PA and Spanish Fork, UT plants Die bank amount does not carry over to the following year. Die bank dollars cannot be used where Sapa is the incumbent supplier and exclusive rights to tooling have been previously established. Use of die bank must be accompanied with an actual extrusion order. Cost to Purchase each Add-On Benefit: 13

15 Definitions Transactional: Simple orders that can be closed quickly that typically consists of standard industry sections (angles channels etc) or specialty product (such as ACC-U-PLATE, ECON-O-PLATE, ECON-O-ROD Plus) Non-Transactional: More complex orders that typically take longer to close which can consist of for custom shapes or contractual business Industry STD Sections: commonly used products stocked by multiple distributors (ex. angles, channels, beams, round pipe and tube, square and rectangular tube, rod and bar) Mill Depot: Any items available from extrusion vendors internal depot stock Custom Shapes: Unique extrusion tooling typically used by one end use customer (ex. custom solid and hollow shapes) Specialty Products: ACC-U-products, large diameter rod over 8 and all specialty alloys: 1XXX, 3XXX, 7XXX, 6005A, 6013, 6042, 6060, 6066, 6070, 6082, 6262, 6351, 6463, C06N, C34E, C57B. Specialty tempers: H, X, G, P, W, S followed by a number. 14

16 2010 Sapa Extrusions. Proprietary and confidential. All rights reserved. 15