The meeting was set up and chaired by Herb Reading of Communication Resources - Portland.

NEC Dealers present were:

Herb Reading - Communication Resources, Portland, OR 503-684-9095

Vito Marrone - Tele-Pro Corp, Deer Park, NY 516-595-9100

Nathan Gordon - General Telcom, Santa Clara, CA 408-988-7744

Jay Dissinger/Ron Brennan, Americom Tele.Sys, Harrisburg PA 717-564-9722

Jim Pakasinski/Charles Eazor, AIM, Parsippany, NJ 201-515-9400

Fred Somes, Wolverine Telecom, Detroit, MI 313-871-5300

Gus Gaynor, Gaynor Telephone Systems, Redding, CA 916-223-2979

Sol Brinbaum, Birns Telecommunications, Inc, New York, NY 212-807-6000

Larry Eidelman, Central Business Comm., St. Louis, MO 314-535-6161

Sheldon Allen, American Telephone Technology, Seattle, WA 206-622-1600

Phil Maulding, Sound, Inc., Naperville, IL 708-369-2900

Greg Osler, Mercury Communications, Dallas, TX 214-637-4900

Randy Smith, Protecom, Macon, GA 912-471-1177

Ken Carver, Southeastern Telecom, Nashville, TN 615-248-0300

Allen Wood, Jr. Scientific Telecom, Greenwood, MS, 601-453-5841

Steve Autor, Digital Communications, Danville, IL 217-442-3800

Several other dealers provided input, (Star DataComm, CEDCO) but were unable to attend.

After general introductions, Herb announced the dealers had three main topics to be covered, NEC Direct, National Marketing, and the need for a NEC Dealer Council.

1. Continued problems with NEC Direct involving:

a. Price/bidding wars with Direct

b. Direct soliciting our trained service personnel

c. Direct actively seeking our existing maintenance customers

d. Direct is selling key systems

e. Direct is hiring non-NEC companies to install/service 2400's

f. Direct has begun marketing the 1400

g. NEC selling parts directly to customers and non-NEC dealers

A lengthy discussion, led by Allen Wood, took the balance of the morning. Dr. Millard commented that NEC Direct does not currently have a charter, but was supposed to be marketing to major 2400 customers in major cities, not selling key systems (unless incidental to the sale or in South Florida). Dr. Millard said that Direct sales would not approach any associate client, when a written service agreement was in effect. Dr. Millard indicated he was already aware of dealer concerns and was willing to work toward developing a solution. Dr. Millard agreed to set up three meetings immediately, one in each Direct region, and will send out a letter to all NEC dealers. Meetings will be held in Melville at NEC on May 16, Atlanta (location tba) on May 21, and Reno (location tba) on May 30th. In the meantime, Dr. Millard would develop guidelines and means that would hopefully prevent future problems and set up system safeguards. Dr. Millard announced that Direct is required to be profitable during 1991. In the recent staff cut-back, more Direct staff was cut than BSSD. Discussion about the new Prime agreement followed.

2. The second session, chaired by Herb Reading, dealt with the dealers' concern that NEC is an engineering driven company, and perhaps have the experienced national CPE marketing staff that the dealers feel is necessary to help support our mutual sales effort on a national scale. While the high quality of NEC equipment makes the equipment very saleable, national marketing efforts are also necessary. Several ideas were discussed. It was suggested that the dealer network is an asset and the local dealers should be promoted in advertising. Comment was made by Dr. Millard that we have some unique opportunities available with Tie filing for bankruptcy and Mitel closing down their U.S. factory. Also, AT&T announced a PBX price hike this week. Cliff Cosselino reported that NEC gets 100-120 calls per month on the 800# ads. It was felt we could do more to take advantage of the NEC golf tournament publicity. We were given information on a new dial-up system for getting technical information that will go on line in July.

3. The final session, chaired by Steve Autor, concerned the need to form a NEC Dealer Council. Dr. Millard agreed that this would be a good idea. The council would: Provide input for product development and enhancements, suggestions for marketing, and other activities appropriate for the group. Discussion ensued, and consensus was obtained on the following: Three members would be selected (by the dealers from that region) to serve on the council for a period of two years. DEALER COUNCIL MEMBERS WILL BE SELECTED AT THE MEETINGS DESCRIBED IN ITEM #1 ABOVE. During the initial term, there would be a means developed to provide for overlapping terms, so some would get 1 or 2 year terms to ensure continuity. Members of the Council would probably pay for their travel and hotel expenses and the Council would meet quarterly, It was suggested that a new dealer be included. Council members should be primarily (90%+) engaged in selling NEC telephone equipment. Steve Autor indicated that he has been working on forming a NEC Dealers Association to provide a means to provide services to and communicate among the dealers. Steve has a broadcast fax machine set up to transmit overnight to NEC dealers. (This might be helpful to survey dealer opinions and product ideas very quickly!) Fax numbers are being added (35 already) as they are obtained. It was commented that we need to be careful not to disseminate privileged information about technical problems and new products. With the responsibility of working together, we need to realize that when there is early discussion about new products and enhancements, that only when they are officially announced can we actively market the product or feature. Dr. Millard agreed to provide a list of NEC Dealers to the Dealers Association. The Midwest Region has already formed a Regional Association to discuss problems of mutual concern. It was suggested that if regional associations are formed, that minutes of those meetings would be transmitted to other regions, as well as to members of the Dealer Council, as well as faxed out nationally to ensure that information flows both to and from the Dealer Council.

Steve Autor

Rev. 5/7/91