Your browser does not support JavaScript!
LoginShopping Cart - 0 | $0.00 
 
SCHEDULE 2

PART 1: SUCCESS FEES


If specified in a PO, Consultant may be eligible for a Success Fee. This Schedule describes Success Fees (all rates stated below in U.S. dollars), lists the criteria for eligibility and describes how they are calculated. For the avoidance of doubt, the payment and determination of any Success Fee to Consultant is at the sole and absolute discretion of PMI.

Consultant is reminded of its obligations pursuant to Section 10.3 of this Agreement which applies to payment of Rewards:

Consultant shall issue a certificate of compliance, in the form specified in Schedule 4, with respect to payment of Rewards.

  1. DESCRIPTION

    A Success Fee is a discretionary form of compensation for Consultant that is determined solely by PMI and may be payable for delivering defined results in relation to activities and events specified in a PO. Generally, these activities are:

    • Seizure of Counterfeit PMI Products;
    • Seizure of Contraband PMI Products;
    • Seizure of specified brands of Non-PMI Contraband;
    • Seizure of cut filler or OTP;
    • Seizure of NTM;
    • Raids of storage facilities and points of sale, e.g., warehouses, night shops, open-air markets, retail outlets, street vendors; and
    • Raids of Counterfeit Factories and Counterfeit Printing Facilities.
  2. CRITERIA

    1. To be eligible for a Success Fee, the following criteria must be satisfied:
      1. Consultant must perform activities or provide information to PMI, or provide information to law enforcement authorities pursuant to express instructions from PMI, that directly and substantially result in the seizure of Counterfeit PMI Products and/or Contraband PMI Products and/or Non-PMI Contraband, cut filler, or NTM, or directly and substantially result in a raid of a Counterfeit Factory or Counterfeit Printing Facility;
      2. The proposed Success Fee must meet the additional criteria specified in paragraphs 2.2 to 2.5 of this Schedule 2 (inclusive);
      3. Verifiable documentation, created contemporaneously with the relevant event or activity, must exist that satisfies the requirements of paragraphs 2.1 (a) and (b) of this Schedule 2. Examples of such documentation may include:
        • contemporaneous emails or other correspondence between Consultant and PMI EA/ITP demonstrating how Consultant was both involved in developing information regarding the event or activity and informed PMI of it, and that PMI determined if and how to act on the information, that the information was shared with law enforcement by PMI or by the Consultant upon explicit instruction by PMI, and that a qualifying law enforcement action occurred directly or substantially as a result of the information provided;
        • regular written reports from Consultant which detail investigative activities, clearly identifying the projects being worked on, current status, expected progress, and confirm the actual role of Consultant in developing the information that led to the raid or seizure;
        • copies of ‘Official’ reports or notifications from the law enforcement agency concerned confirming the results of the law enforcement action. For example, for a raid of a Counterfeit Factory this could include an inventory of seized items and for a container seizure, this could include an email from customs confirming the brands and quantity of a seizure; and
        • press reports confirming the occurrence of the event.
    2. In respect of a seizure of Counterfeit PMI Products and/or Contraband PMI Products, a Success Fee shall only be payable if at least:
      1. 1 (one) Master Case of cigarettes or consumables, or
      2. 100 (one hundred) kg of OTP, or
      3. 50 (fifty) pieces of devices, or

      are seized and taken into safe custody. The PO must identify the specific brands of Non-PMI Contraband that may be eligible for a Success Fee (“Qualifying Brands”). No Success Fee shall be payable for brands of Non-PMI Contraband that are not identified in the PO. Moreover, in respect of a seizure of specified brands of Non-PMI Contraband, a Success Fee shall only be payable if at least 150 (one hundred fifty) Master Cases of Qualifying Brands are seized in a single enforcement action and taken into safe custody (“Qualifying Seizure”).

    3. In respect of cut-filler and/or NTM, Consultant will only be eligible for a Success Fee if it is proven to PMI’s satisfaction that such cut-filler and/or NTM was destined to be used for the production of Counterfeit PMI Products.
    4. In respect of a raid of a Counterfeit Factory or Counterfeit Printing Facility, Consultant will only be eligible for a Success Fee if the additional criteria of paragraph 3.2 of this Schedule 2 are met.
    5. Consultant shall not be eligible for a Success Fee if:
      • the seizure and/or raid was already planned to occur before Consultant provided corresponding information to PMI;
      • the information provided to PMI was already known by PMI or the relevant law enforcement authorities; or
      • PMI in its sole and absolute discretion decides not to act upon the activities performed or the information provided by Consultant.
  3. CALCULATION

    1. SEIZURES
      1. Counterfeit PMI Products and/or Contraband PMI Products (cigarettes and RRPs)

        Should Consultant be eligible for a Success Fee, the Success Fee per Master Case that may be payable in case of seizure amounts to 30 USD (Thirty U.S. dollars).
        1. Non-PMI Contraband

          Should Consultant be eligible for a Success Fee, the Success Fee that may be payable for a Qualifying Seizure amounts to 10 USD (Ten U.S. dollars) per Master Case.

          Consultant shall also be eligible for an additional volume-based payment for aggregate Qualifying Seizures that occurred during the term of a PO or successive POs in a calendar year. This amount shall be calculated at the conclusion of each calendar year in accordance with the following table:

          Aggregate Qualifying Seizures (in Master Cases)
          Additional Payment (USD)
          3,500 – 9,999
          7,000
          10,000 – 14,999
          22,000
          15,000 and up
          35,000
        2. Counterfeit PMI Products and/or Contraband PMI Products (OTP)

          Items Unit Unit Price (USD)
          OTP Kilogram 1.00

          • The Success Fee is calculated as follows: Quantity x Unit Price
      2. Seizure of Cut Filler and NTM

        Success Fees may be payable for the seizure by law enforcement authorities of cut filler and NTM used or to be used in the manufacture of Counterfeit PMI Products. Should Consultant be eligible for a Success Fee, the table below states the Success Fees that may be payable for the seizure of such items:

        1. Cut Filler, Tow, and Filter Plug

          Items Unit Unit Price (USD)
          Cut-filler Kilogram 0.50
          Filter Tray 5.60
          Tow Kilogram 1.00

          • The Success Fee is calculated as follows: Quantity x Unit Price
        2. Branded Packaging Material

          This is packaging material bearing PMI Trademarks destined to be used for the production of Counterfeit PMI Products. Should Consultant be eligible for a Success Fee, the table below states the Success Fees that may be payable for the seizure of such items:

          Items Unit Unit Price (USD)
          Soft-Pack Labels 1,000 Pieces 4.00
          Bundle Wrap 1,000 Pieces 8.00
          Blanks 1,000 Pieces 4.80
          Carton Blanks 1,000 Pieces 20.00
          Tear Tape 1 roll 1.50
          Other 1,000 Pieces 10.00

          • The Success Fee is calculated as follows: Quantity x Unit Price
        3. Cigarette/RRPs Manufacturing Material

          This is manufacturing material destined to be used for the production of Counterfeit PMI Products (cigarettes/RRPs). Should Consultant be eligible for a Success Fee, the table below states the Success Fees that may be payable for the seizure of such items:


          Items Unit Unit Price (USD)
          Cigarette/RRPs Paper (typically 6,000 meters per roll) Roll 2.49
          Tipping Paper (typically 3,500 meters per roll) Roll 7.80
          Plug Wrap (typically 6,000 meters per roll) Roll 2.10

          • The Success Fee is calculated as follows: Quantity x Unit Price
      3. Seizure of Machinery and Equipment

        Success Fees may be payable for the seizure by law enforcement authorities, in the raid of a qualifying facility, as described in paragraph 3.2 of this Schedule 2, of Machinery and Equipment used or in the sole opinion of PMI to be used for the production of Counterfeit PMI Products. If the facility raided does not meet the criteria for a qualifying facility, no Success Fee shall be payable for seized Machinery and Equipment.

        Success Fees are calculated on the basis of fixed amounts for each item of Machinery and Equipment seized and taken into safe custody by law enforcement authorities, but subject to the maximum Success Fee set out in paragraph 3.2 of this Schedule 2 for the qualifying facility. Should Consultant be eligible for a Success Fee, the table below states the maximum Success Fees that may be payable:

        Items Success Fee per Unit (USD)
        Offset Printer/Silk Screen/Flexo
        Up to 2,500
        Gravure Printer
        Up to 15,000
        Packer Up to 25,000
        Maker Up to 15,000
        Filter Maker Up to 20,000
        Gravure Cylinders (with PMI Trademark)
        Up to 500
        Other stand-alone equipment *
        Up to 2,000

        * Other stand-alone equipment includes: wrapper, slitter, cutter or other major forms of equipment used in the manufacturing or printing process for Products.
    2. Counterfeit Factory and Counterfeit Printing Facility Raids
      1. Qualifying Criteria

        A Success Fee per Counterfeit Factory or Counterfeit Printing Facility raided may be payable to Consultant if it meets the following criteria:
        • Consultant develops the information leading directly to a successful enforcement action against a Counterfeit Factory or a Counterfeit Printing Facility;
        • In the case of a Counterfeit Factory, it must contain at least 1 (one) mechanized and operational production line;
        • In the case of a Counterfeit Printing Facility, it must contain at least 1 (one) printer (either gravure or off-set); and
        • Significant quantities of Counterfeit PMI Products and/or NTM destined to be used for the production of Counterfeit PMI Products must be seized during the raid and taken into safe custody by law enforcement.

        PMI may additionally require, at its sole and absolute discretion, that Consultant ensures that, as far as legally permissible, the factory or facility which was raided is inspected by PMI personnel to verify that such factory or facility produced or was destined to produce Counterfeit PMI Products or NTM destined to be used for the production of Counterfeit PMI Products and to verify that it meets the other above criteria.
      2. Success Fees Payable

        The table below states the Success Fees that may be payable if a Counterfeit Factory or a Counterfeit Printing Facility raid is conducted of a qualifying factory or printing facility:

        Facility Tangible Amount (up to) (includes min. Success Fee) (USD)
        Minimum Success Fee (USD)
        Intangible Amount (up to) (USD)
        Maximum Success Fee (USD)
        Counterfeit Factory
        75% 75,000 10,000 25% 25,000 100,000
        Counterfeit Printing Facility
        100% 25,000 5,000 0 0 25,000
      3. Minimum/Maximum Amounts for Counterfeit Factory Raids
        • The maximum Success Fee payable for Counterfeit Factory Raids is the total sum of the Success Fees that may be paid for a raid consisting of 75% for tangible factors (see under (i) below) and 25% for intangible factors (see under (ii) below).
        • The minimum Success Fee may be paid, if a raid is made at a qualifying facility (i.e. in accordance with the criteria specified in paragraph 3.2 (a) of this Schedule 2) as follows:

          If the total amount of Success Fees for cut filler, NTM, and Machinery and Equipment seized is equal to or greater than the minimum Success Fee, then Consultant shall not be eligible for the minimum Success Fee but may be eligible for a Success Fee for the cut filler, NTM, and Machinery and Equipment seized subject to the maximum Success Fee. In addition, Consultant may be eligible for an additional Success Fee for Counterfeit PMI Products seized as specified in paragraph 3.1 (a) of this Schedule 2.
        1. Tangible Factors

          The amount allocated for tangible factors is capped at 75% of the maximum Success Fee and applies to:
          • the minimum Success Fee for a raid of a qualifying factory; and
          • Success Fees for the seizure of cut filler, NTM, and Machinery and Equipment.
        2. Intangible Factors

          The amount allocated for intangible factors is capped at 25% of the maximum Success Fee. It may be used by PMI to pay, at its sole and absolute discretion, an additional Success Fee in relation to the particular circumstances of a raid of a qualifying factory. Factors that PMI may consider include:
          • Operational difficulty, which can be rated as high, medium or low, and takes into account:
            • environment and location;
            • identification, confirmation and penetration of factory; and
            • the law enforcement and legal situation, including the feasibility/complexity of the raid action.
          • Size and scale of qualifying factory, i.e. production capacity (based on PMI’s estimate).
          • Duration of counterfeiting activity at that facility.
          • Prevalence of Counterfeit PMI Products in the relevant market or markets.
          • Quality of investigation and role of Consultant.
          • Impact of raid (the relevant market’s perception).
          • Quality of post-raid report.
          • Duration of the project and amount of Project Fees already paid.
      4. Minimum/Maximum Amounts for Counterfeit Printing Facility Raids

        • The maximum Success Fee payable for Counterfeit Printing Facility Raids is 25,000 USD (Twenty-five thousand U.S. dollars).
        • The minimum Success Fee may be paid, if a raid is made at a qualifying facility (i.e. in accordance with the criteria specified in paragraph 3.2 (a) of this Schedule 2), as follows:

          If the total amount of Success Fees for NTM and Machinery and Equipment seized is equal to or greater than the minimum Success Fee, then Consultant shall not be eligible for the minimum Success Fee but may be eligible for a Success Fee for NTM and Machinery and Equipment seized subject to the maximum Success Fee. In addition, Consultant may be eligible for an additional Success Fee for Counterfeit PMI Products seized as specified in Section 3.1 (a) of this Schedule 2.