ITG Brands CHOICE GROWTH MERCHANDISING

PLAN DESCRIPTION 2020

Factory Made Cigarettes (FMC)

This ITG Brands Choice Growth Plan Description (“Description’) is offered to all Retailers and their participating store(s) as
part of the ITG Brands Choice Growth Merchandising Agreement (“Agreement”). Retailers who meet the requirements of
the Agreement and this Plan Description will be eligible to receive Payment beginning on the Effective Date in accordance
with the payments described in the Payment Rates sections below.

A. Base Requirements

1. All merchandising space for cigarette products must be Non-Self Service.

2. Retail store(s) must average a minimum Industry CPW volume of 25 or more.
3. ITG Brands merchandising space must be in the primary visible Cigarette Merchandising Area, contiguous and
positioned based on ITG Brands Share rank among other manufacturer(s), and not positioned inferior to any
non-paying competitor.
4. ITG Brands share of merchandising space will be equal to or greater than ITG Brands Share of national, state
or store(s) volume. At no time can ITG Brands space be less than 9 pack merchandising facings for Gold level
and no less than 18 pack merchandising facings for Platinum level.
5. ITG Brands merchandising space must be a minimum of 1 foot wide, with the exception of the bottom shelf.
6. ITG Brands is allowed to place and maintain advertising materials within its merchandising space, and a
minimum of one (1) off fixture permanent advertising piece for each of ITG Brands Focus Brands.
7. Place appropriate product and/or promotional advertising pieces provided by ITG Brands or received through
suppliers. Ensure that all point-of-sale materials accurately reflect agreed upon pricing and reflect Price
Promotions for the duration of the promotion.
8. Maintain distribution of ITG Brands Focus Brands, as determined by ITG Brands, and accept and maintain
distribution for all new ITG Brands Products offered for a minimum of six (6) months.
9. Retailer is free to determine consumer retail prices on ITG Brands Products. However, to qualify under this
Description, a Retailer must price ITG Brands Products fairly and competitively and shall not disadvantage ITG
Brands Products. Plan participants must fairly apply the same or lower profit calculations to ITG Brands
Products that are used to calculate and establish the selling price for competitive cigarette brands.
10. “Pass through” the full value of all ITG Brands Products Price Promotions and ensure that they are sold only to
adult consumers and not to other retailers or wholesalers.
11. Maintain adequate inventory of ITG Brands Products.
12. Will not use any ITG Brands trademarks, brand names or intellectual property unless such use is authorized by
ITG Brands in advance in writing.
13. Comply with all local, state and federal laws, and all applicable court orders governing the sale and
merchandising of ITG Brands Products and all elements of the Master Settlement Agreement (MSA).
14. Purchase ITG Brands Products only from supplier(s) who report accurate weekly retail shipment data.
15. Assist ITG Brands as requested to implement any product recall (mandatory or voluntary).
16. Do not return ITG Brands Products to supplier(s) as unsalable unless it has been authorized by ITG Brands.
17. Fixture(s)/Displays supplied by ITG Brands are the property of ITG Brands at all times.
18. All advertising materials/sign(s) supplied by ITG Brands to Retailer are the property of the Retailer.
19. Retailer agrees to indemnify (hold harmless) ITG Brands for any loss or damage asserted against ITG Brands
by any person(s) claiming to suffer personal injury by said fixture(s)/display(s) and /or advertising material/signs.

ITG Brands FMC Plan Description Template Date: January 1, 2020 (Rev. 1-9-20) Page 1 of 4
 ITG Brands CHOICE GROWTH MERCHANDISING
PLAN DESCRIPTION 2020
Factory Made Cigarettes (FMC)

B. Base Rates and Multi-Category Incentives

Retailers who meet the requirements of the Agreement and this Description and/or the MMC Description and/or the NGP
Description will be paid, a base rate per ITG Brands cigarette carton as follows on ITG Brands Qualifying Purchases for
each qualifying store(s):

FMC
Merchandising Election(s) FMC Base Rate FMC and MMC OR FMC and MMC AND TOTAL POTENTIAL
FMC Plan ONLY NGP Plan(s) NGP Plans PAYMENT

GOLD 15₵ + 5₵ + 5₵ 25₵

Per Carton Per Carton Per Carton Per Carton

PLATINUM 50₵ + 5₵ + 5₵ 60₵

Per Carton Per Carton Per Carton Per Carton

C. Choice Enhancement Options (Choose up to 2)

1. Scan Data Reporting
a. Must be a participant in ITGB cigarette merchandising contract and ITG Brands Scan Data contract.
b. Submit complete and accurate and discernible transaction-level Scan Data for all nicotine delivery products
sold in each of the Retailer’s outlets.
c. Submit Scan Data on a weekly basis in accordance with the formatting and technical requirements set forth.
2. Add 2 Facings Over Share
a. Add 2 permanent facings over and above ITGB share of total cigarette category volume.

3. Lowest Everyday Price

a. Price Crowns as the Lowest Everyday Price in store by a minimum of 1₵ per pack (except the states of WV,
OH, PA, AL, KY and TN).
b. Price Sonoma as the Lowest Everyday Price in store by a minimum of 1₵ per pack (in the states of WV,
OH, PA, AL, KY and TN). Any additional brand manufactured by ITG Brands may be priced equal to
Sonoma where legally allowed.
D. Choice Enhancement Rates

Retailers who meet the requirements of the Choice Enhancement Options and the Agreement and this Description will be
paid, a rate per ITG Brands cigarette carton in addition to the base rate as follows on ITG Brands Qualifying Purchases for
each qualifying store(s):

Merchandising Election(s) Scan Data Add 2 Facings Above Lowest

SOM Everyday
Price
GOLD + 10₵ + 2₵ + 2₵
Per Carton Per Carton Per Carton
PLATINUM + 10₵ + 5₵ + 5₵
Per Carton Per Carton Per Carton

ITG Brands FMC Plan Description Template Date: January 1, 2020 (Rev. 1-9-20) Page 2 of 4
 ITG Brands CHOICE GROWTH MERCHANDISING
PLAN DESCRIPTION 2020
Factory Made Cigarettes (FMC)

E. Payment Requirements

1. Retailer may begin earning Payments any week during the Payment Period based on the Effective Date.
2. Retailer will be eligible to earn Payment beginning with the first full week of retail shipment data following the
Effective Date.
3. Payments will be made on all Qualifying Purchases of ITG Brands Cigarette Products up to a maximum of 3,000
cartons per store in any 13 Week Payment Period.
4. Private label brand / contracted brand volume is excluded from Qualifying Purchases and ITG Brands retail
merchandising payments.
5. Payments on Qualifying Purchases for each store (s) during each 13 week Payment Period will be calculated and
accrued based on weekly retail shipment data.
6. Payments will be made quarterly upon receipt and review of complete volume data provided for the entire Payment
Period.

I. Non-Compliance

Any corrected non-compliance will result in the loss of the store(s) merchandising payment for four (4) RSD Weeks.
Uncorrected non-compliance will result in cancellation of payments for the plan and future Price Promotion support offered
by ITG Brands in the identified stores(s).

J. Definitions

1. “Cigarette Merchandising Area” means the permanent and primary location for merchandising cigarettes.

2. “Display” means Retailer or manufacturer supplied package units used to display a single manufacturer’s brand(s).

3. “Effective Date” means the date in which all elements of the merchandising plan Description are secured in a
Retailer’s store(s) to be eligible for merchandising plan payments. Payment eligibility will begin with the first full
week of retail shipment data following the date all required elements are in place.
4. “Industry CPW” means the average number of total cigarette cartons purchased per week by the qualifying store
based on a 12-month period. See “ITG Brands CPW” definition above for determining all other measures.
5. “ITG Brands CPW” means the average number of ITG Brands cartons purchased per week by the qualifying store
based on a designated 12-month period. When data is not available for the entire 12-month period, ITG Brands
may determine average CPW based on the average of a time period for which records are available. For Retailers
operating one or more stores, ITG Brands may take an average of all stores, or group of stores, and state such
average as the ITG Brands CPW for each store. ITG Brands CPW for new Retailers will be established using
either: (1) the average ITG Brands CPW of other stores within a chain or (2) the average ITG Brands CPW of other
plan participants within the same marketing area. The ITG Brands CPW average will be adjusted for new stores
based on a 12-month period thereafter.
6. “ITG Brands Focus Brands” means designated ITG Brands by state or local market.
7. “ITG Brands Products” means all cigarette products manufactured and sold by ITG Brands (excluding all ITG
Brands Private Label and Contract Brands).
8. “ITG Brands Qualifying Purchases” means the qualified ITG Brands cigarette products (excluding private label /
contract brands) brands, purchased by Retailer from a reporting wholesaler less returns during the Program Period.

ITG Brands FMC Plan Description Template Date: January 1, 2020 (Rev. 1-9-20) Page 3 of 4
 ITG Brands CHOICE GROWTH MERCHANDISING
PLAN DESCRIPTION 2020
Factory Made Cigarettes (FMC)

9. “ITG Brands Share” means the percentage of ITG Brands cigarettes purchased by a Retailer against the total
industry cigarette purchases. For Retailers operating one or more stores, ITG Brands may take an average of all
stores, or group of stores, and state such average as the ITG Brands share for each store.
10. “Non-Self Service (NSS)” means merchandising and selling cigarette products in a manner that prevents direct
access by adult consumers and cigarettes are sold only in a face-to-face exchange with retail store personnel.
Qualified adult only restricted stores that merchandise and sell cigarettes are considered to be NSS.
11. “Payment” means the sum of earnings by Retailer for a Payment Period as defined in the Payment Rates section of
the appropriate ITG Brands Plan Description.
12. “Payment Period” means a time period comprised of thirteen (13) RSD weeks as identified by ITG Brands.
13. “Price Promotions” means any product promotion, buydown or off-invoice discount offered by ITG Brands.
14. “Retailer” includes any and all locations owned and operated by Retailer which sell Product to adult consumers.
15. “Kiosk” means small retail outlets not allowing customers to enter the location, where transactions are completed
through a window or security glass.

ITG Brands FMC Plan Description Template Date: January 1, 2020 (Rev. 1-9-20) Page 4 of 4