Maureen reviewed meeting with NEC (Maureen & Vito) regarding the terms of the Agreement. There are still items that are of concern.

Doug Wonson has been working with MCI for some time and NEC was concerned about a number of issues including making the program accessible to all NEC dealers, not just a selected few. Difficult to tell if it is a good deal, but other manufacturers (Lucent, Siemans, Mitel) are participating. Until a resolution is achieved, Tom Burger explained that there is nothing hindering a NEC dealer associate to independently participate in their program. Escalation procedures may be launched by NEC in the near future.

Council is displeased with direct incentives such as cash to sales reps for attending product rollout. Essentially the concept of awards is good, but Principals take exception to NEC bypassing dealers' Management. This issue is tied into the efforts of NEC to gain intelligence into its dealers' organizations. Recognize NECs intent may be an effort to thoroughness, but it is making dealers nervous.

Tom replied with respect to the institution of licensing agreements. Support issues were behind the move to license agreements. Technicians were calling in for NTAC support and had to be registered to protect both dealers and NEC. Sales people program is questionable…the case could be made that NEC doesn't need to know the sales people. But it is intended to see where they are in training, and how NEC can be more helpful with training; and what percentage of sales reps who are selling NEC product have been trained. NEC is trying to augment and supplement training via the database. With respect to all other databases there has not been one instance where NEC has misused the database.

NECSI recognizes that from a legal standpoint (re the Contract) that dealers may be signing away legal recourse—changes in the marketplace are creating anxieties on all sides. The intent was to communicate to the installed base re new product—stimulate the base and marketplace to drive more business to associates. If NEC does not survey the base, they cannot get industry recognition. Customers at User Meetings complain that they do not know what is going on. What does the manufacturer do? Tom pledged to work together and inform NECSI rather than restrict campaigns on a per dealer basis.

Debating whether it is an exclusive dealer relationship (ie 80% NEC) or year over year increases. The issue is the Platinum status would be dynamic. Council put forward the idea of a 2 – tier program. Platinum purpose was to allow smaller NEC dealer an advantage against larger dealers. Council clarified that it had asked for Exclusive program, not a volume based program. Tom promised Council to provide a draft of the program for input.

NEC is signing final submission Tuesday, November 3, 1999. Dealers with trained personnel and capability of performance will be eligible. Tom confirmed that the whole NEC product line (Key to PBX) is scheduled. Seven States now buy off the GSA schedule and up to 14 States are approved to go.

Victor reported that Doug Wonson and Maureen Gaynor have approved the script. Should be able to release the tape in December 1, 1999. For a $1,000 dealer fee we can have company logo, address, 1 photo/graphic, sound effects. For more intensive dealer branding the price can be negotiated. The Generic tape is FREE (one copy/ dealer). Also, Coop dollars can be applied to customization of the tape.

White papers and competitive info should be on web site by December. In addition Associate letters will be appearing on www.necworx.com. Password protected.

Went well over all.

NEC reported Tapi Link Jan-Feb. OAI to NT server connection Additional work on TeLAN drivers to support TAPI for Viewcall Plus features. Dterm PC Card will also support 32-bit driver.

Formal program isn't in the works, but dealers are advised to not put anything in writing but refer clients to manufacturer web sites. There is no requirement to accept any additional liability unless you put something in writing. New proposals can be of concern because of compliance clauses. US Government spent 4 days of testing at NEC and although they were satisfied some glitches did arise. The most innocuous statements should be examined very closely as they can result in liability. Maintenance renewals should carry liability disclaimers.

NECSI has received numerous complaints. NEC has been working to sort out categories and put VARS in another category. Reno shows 2 pages yet there are only 3 dealers. British Columbia Canada shows only one location for the entire province (BCS, Calgary, Alberta).

NECSI wants jobs sold by NEC Direct to be installed by NEC dealers. Tom reports that the continuance of the program is questionable. National account market is dominated by Lucent, Nortel, Seimans-Rolm. NEC needs to have a national accounts program through BNS that works. Will be targeting and expanding vertical markets. If this is successful it should result in activity for the dealer network and NEC will seek to work with its dealers. Dealers need to give NEC an opportunity to make this work-taking a collaborative approach. Idea is to gain market share by taking it away from the incumbent manufacturers. Will establish criteria to work with dealers in going after Fortune 1000 organizations. This will include communication procedures by Dealers to NEC where the dealer is already working on a "national account".

NEC states that BNS staff will be discouraged from disparaging dealers, although scope and breadth may be differentiated. Idea is to work cooperatively.