Ace Hardware Policy & Procedures

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ACE HARDWARE CORPORATIONAce HardwarePolicy & Procedures1 Pa g eContact the Ace Vendor Support Center at 630‐990‐2777Check www.AceHardware-Vendors.com Contacts for additional Ace Hardware contact information.Confidential and Proprietary. @2021 Ace Hardware Corporation. All Rights Reserved.2455562.5000Revision Date: 2/8/2022

TABLE OF CONTENTSIntroduction . 3Overview. 3Ace’s Distribution Network . 3Minimum Requirements. 3Ethical Standards . 4Vendor Production Changes . 4Additional Resources . 4Ace Hardware Brand Standards . 6Ace Hardware Logo . 6Private and Control Label . 6Vendor Compliance . 7New Item Start Audit . 7Barcode Relabeling . 7Hazardous Goods. 7Product Regulatory Compliance . 8Vendor Performance Metrics . 8On-Time in Full . 9Implications of Late Shipments . 9ASN Accuracy . 9Electronic Data Interchange (EDI) Implementation Guide . 10Overview. 10EDI Compliance . 10EDI Transaction Codes . 10Ace Hardware Technical Requirements . 11Ace Hardware Document Layout Map Key. 12Purchase Order Management . 12Purchase Order Policies & Procedures . 12Item Management . 14Transportation/Traffic . 15Pre-Paid Vendors . 15Collect Vendors. 16Inbound Load Quality Shipping Requirements . 18Return Policy . 19Guaranteed Sales & Stock Balancing Program . 19RETURNED/Damaged Goods . 19NON-STOCK Skus . 20Closeout/Discontinued Items . 20Accounts Payable . 20Payment Guidelines . 20Dropship Orders . 21Invoice Terms & Dating . 21Allowances & Rebates . 21Appendices . 22Appendix A: Assessments for Non-Compliance. 222 Pa g eContact the Ace Vendor Support Center at 630‐990‐2777Check www.AceHardware-Vendors.com Contacts for additional Ace Hardware contact information.Confidential and Proprietary. @2021 Ace Hardware Corporation. All Rights Reserved.2455562.5000Revision Date: 2/8/2022

INTRODUCTIONOVERVIEWThis Ace Hardware Policy & Procedures manual (“Manual”) includes a number of policies, procedures and requirements that cover anumber of aspects of our vendor relationships from ethical standards to vendor requirements with respect to shipment standards.This Manual reflects a continuous effort to manage our business relationship in a manner that is legal and that benefits AceHardware and Ace Hardware storeowners. The policies defined are Ace’s minimum expectations of its vendors and will continue tochange with our business requirements. These policies are not without purpose but exist to educate and define both commonindustry practices as well as unique requirements of Ace’s business. The expectation is for our vendors to read and employ thesepolicies when doing business with Ace. In some cases, vendors may need to modify their processes, make system modifications, orpurchase equipment to meet these guidelines.ACE’S DISTRIBUTION NETWORKAce’s distribution network consists of 7 Consolidation Centers (Crossdocks) and 15 Retail Support Centers (RSCs). The purpose ofAce’s Crossdocks and Retail Support Centers is to move product from vendors to retailers more efficiently and provide higher servicelevels. This network allows Ace Hardware to support its continued growth. Alignment between Ace Hardware and our vendors iscritical to ensure products are received on time in full to fulfill customer orders.MINIMUM REQUIREMENTSVENDOR CERTIFICATE OF INSURANCEVendors must comply with the Minimum Acceptable Insurance Requirements as set forth in the Ace Hardware New Vendorenvelope. Certificates for renewal policies must be issued 10 days prior to the renewal date to the address listed on the MinimumAcceptable Insurance Requirements form. Ace Hardware may revise its minimum insurance requirements from time-to-time uponnotice to vendors.VENDOR INDEMNIFICATION AGREEMENTEvery vendor must sign and comply with the Vendor Indemnification Agreement found in the Ace Hardware New Vendor envelope.This document needs to be signed once by each vendor.ELECTRONIC DATA INTERCHANGE (EDI) AGREEMENTEvery vendor must sign and comply with the Electronic Data Interchange (EDI) Agreement found in the Ace Hardware New Vendorenvelope. This document allows Ace Hardware and the vendor to exchange data (e.g., purchase orders, invoices) electronically.VENDOR PURCHASE ORDER TERMS AND CONDITIONSVendors are expected to read and understand Ace Hardware’s Purchase Order Terms and Conditions found in the Ace HardwareNew Vendor envelope.ELECTRONIC FUNDS TRANSFER (EFT) AGREEMENTEvery vendor must sign and comply with the Electronic Funds Transfer (EFT) Agreement found in the Ace Hardware New Vendorenvelope. All vendors must receive payments from Ace Hardware electronically. Vendors not supporting EFT will be assessed a non‐compliance assessment as described in Appendix A.3 Pa g eContact the Ace Vendor Support Center at 630‐990‐2777Check www.AceHardware-Vendors.com Contacts for additional Ace Hardware contact information.Confidential and Proprietary. @2021 Ace Hardware Corporation. All Rights Reserved.2455562.5000Revision Date: 2/8/2022

TAXPAYER IDEvery vendor must provide Ace Hardware with a valid Taxpayer Identification Number (TIN) for 1099 reporting where required.Failure to provide a taxpayer identification number may require Ace Hardware to withhold a percentage of certain payments (asdeemed appropriate) as backup withholding.MISCELLANEOUSAny and all taxes, fees, imports or stamps required by state, federal or municipal governments in the selling, transferring ortransmitting of merchandise to Ace Hardware shall be paid and assumed by vendor.ETHICAL STANDARDSAce Hardware staff will not accept gifts or services of any value whether delivered to work, home or some other place by an actual orpotential vendor, competitor or manufacturer’s representative. This includes travel accommodations, prizes and awards, meals,outings or samples. Additionally, Ace Hardware staff will not accept entertainment offers of any type by actual or potential vendorsor competitors.The following exceptions apply:1. Business travel: where factory trips and complementary transportation are disclosed in advance and approved by the AceHardware Merchant/Department Merchandising Manager for the area. The trip is limited to a two-day duration and thepurpose of the trip is entirely business.2. Business meals: meals are only acceptable from vendors in conjunction with industry shows, industry functions, factoryvisits, Ace Hardware shows, or office visits.3. Product samples: samples become the property of Ace Hardware and may be donated to charity or discarded.VENDOR PRODUCTION CHANGESAce expects its vendors to maintain open and continuous communication regarding changes related to the negotiated programs. Thefollowing are some common changes that vendors are responsible for communicating to Ace Hardware at least 60 days prior tooccurrence:1. ERP or new computers system implementation.2. Changes to shipping locations.3. Changes in sourcing of product to overseas or new overseas manufacturing.4. Packaging design changes including changes to card stock, packaging material, card and package configuration, cardand packaging size, bar code labeling, shipping carton (labeling, design and construction), color and any changeimpacting display at retail.5. Number of eaches contained in the retail or wholesale selling units.Report any changes immediately to your Ace Hardware Merchant to avoid issues and non-compliance assessments.ADDITIONAL RESOURCESACE VENDOR UNIVERSITYAce Vendor University is Ace Hardware's vendor training program. It is a way for vendors to understand how they can grow withAce, understand the Ace Hardware business, and become experts in the applications used for day-to-day tasks.4 Pa g eContact the Ace Vendor Support Center at 630‐990‐2777Check www.AceHardware-Vendors.com Contacts for additional Ace Hardware contact information.Confidential and Proprietary. @2021 Ace Hardware Corporation. All Rights Reserved.2455562.5000Revision Date: 2/8/2022

There are currently over 30 training classes available for new and existing vendors. There are on-demand training videos on the AceLearning Place site, or vendors can choose to participate in virtual classroom training or in-person live courses with an expertinstructor. The current cost to access the training videos housed on Ace Learning Place is 50.00 per user per year. Additionaldetails surrounding course descriptions and costs can be found in the Ace Vendor University course catalog found by clicking here.REQUIRED TRAINING FOR NEW ACE HARDWARE VENDORSAce Hardware requires all new vendors to participate in New Vendor Orientation within the first 90 days of receiving a vendornumber and Ace Learning Place credentials. The training offered will be different depending on the type of vendor you are: Warehouse (RSC) OnlyBoth: Warehouse (RSC) & Drop Ship/ACENET DirectDrop Ship/ACENET Direct OnlyAll new Warehouse (RSC) Only & Both vendor types are required to participate in the following courses: Ace Essentials Package (2-Day): A collection of courses covering Data Quality, Item Maintenance, Reporting, PriceMaintenance, Barcode & Measurement Requirements, and the Mass Upload process. The 2-day course is offered in-personor live virtually every month beginning Feb. 2022 – November 2022.o Upon completion of the above course Vendor Portal credentials will be issued to begin on-boarding new items.Supply Chain Success / Inventory & Demand Package: A collection of courses covering Load Quality Requirements, SupplyChain Vendor Tools, and Traffic. In addition to covering the tools used for success: Lost Sales, MAID, and PurchaseProjections.Finance Bootcamp: Learn how to navigate A/P Vendor Data to allow review of open items, rejected invoices andchargeback documentation.ACENET Direct Marketing & Promotions Webinar: A webinar covering how to create and maintain a successful ACENETDirect profile and self-promote to Ace Hardware retailers.Dropship (ACENET Direct) ONLY vendors are required to participate in the following courses: Ace Essentials Package: A collection of courses covering Data Quality, Item Maintenance, Reporting, Price Maintenance,Barcode & Measurement Requirements, and the Mass Upload process. The 2-day course is offered in-person or virtuallyevery month beginning Feb. 2022 – November 2022.o Upon completion of the above course Vendor Portal Credentials will be issued to begin on-boarding new items.ACENET Direct Marketing & Promotions Webinar: A webinar covering how to create and maintain a successful ACENETDirect profile and self-promote to Ace Hardware retailers.Help & Questions: All Ace Vendor University requirements and guidelines, including a complete course catalog, pricing information,and information regarding the Ace Learning Place site, are maintained on the vendor portal E-Tools Login Training.For more information, you may email the Vendor Engagement Team at Vendor Engagement.VENDOR PORTALThe vendor portal can be found by visiting www.AceHardware-Vendors.com. You may login to (E-tools) to access Ace Hardware’svendor communication portal to find all of the current news, policy changes, training and business tools. Vendors are expected tomonitor this site daily for important news and changes in our vendor policies. Due to timing of vendor manual updates andimportant policy changes, vendor portal postings will be considered part of this Manual will supersede conflicting information in5 Pa g eContact the Ace Vendor Support Center at 630‐990‐2777Check www.AceHardware-Vendors.com Contacts for additional Ace Hardware contact information.Confidential and Proprietary. @2021 Ace Hardware Corporation. All Rights Reserved.2455562.5000Revision Date: 2/8/2022

this document. Ace Hardware reserves the right to change policies and create new requirements at any time. It is the responsibilityof each vendor to monitor changes and adjust their business processes accordingly.Vendors are expected to maintain the confidentiality and security of their unique access credentials to the vendor portal and updateAce Hardware when any employee’s access should be removed. Ace Hardware holds the vendors responsible for actions taken by auser using the vendor’s access credentials and for any unauthorized access. To request access to the vendor portal please click here.Each vendor employee accessing the vendor portal will be assigned unique login credentials. To remove an employee’s access to thevendor portal, please call the Ace Vendor Care Center at 630-990-2777, option 1.ACE HARDWARE BRAND STANDARDSACE HARDWARE LOGOThe most visible manifestation of the brand is the Ace Hardware logo itself. It is a recognizable ambassador of Ace Hardware. Assuch, Ace Hardware works to ensure that its logo is not used in a way that does not appropriately reflect its image. Wherever the AceHardware logo appears, we must ensure that it is used consistently so as not to dilute its powerful message.Ace Hardware requires vendors to adhere to the Ace Style Guide, which dictate appropriate use of the Ace Hardware logo and otherAce Hardware trademarks and offers recommendations on proper use. From the logo itself, to interior and exterior signage, toadvertising and promotional uses, this guide offers recommendations on proper use. Vendors must obtain prior approval of any useof the Ace Hardware logo and trademarks by contacting the Ace Hardware marketing team at brandstandards@acehardware.com.PRIVATE AND CONTROL LABELThe Ace Hardware Brand label is one of the top U.S. store brands and represents a key source of revenue for Ace Hardware. In orderto ensure the continued growth and success of Ace Hardware Brand, it is important that packaging for Ace Hardware brandedproducts be developed along specific guidelines. With such a large number of products and vendors, these guidelines help maintaina distinct brand image, ensure consistency across the product range and protect the brand name.Control Label: Ace Hardware developed the following Control Labels to address different retail strategies: Celebrations: holiday, incandescent & LED lighting, greenery, and décor Clark Kensington: liquid paints Fab Cordz: fabric extension cords, AV accessories Grill Mark: grill/outdoor cooking accessories Home Plus: opening price point of household consumables, lawn & garden tools, decorative plumbing, tarps, door lock sets,and impulse items KeyStart: Key fobs Living Accents: outdoor living, indoor lighting Oakbrook Collection: decorative plumbing, faucets and accessories Royal: liquid paints Steel Grip: opening price point to mid-price hand and power tools Projex: created for Ace Wholesale Holdings, equivalent to the Ace Hardware Brand product assortment and quality6 Pa g eContact the Ace Vendor Support Center at 630‐990‐2777Check www.AceHardware-Vendors.com Contacts for additional Ace Hardware contact information.Confidential and Proprietary. @2021 Ace Hardware Corporation. All Rights Reserved.2455562.5000Revision Date: 2/8/2022

Ace Hardware owns the specifications of the products bearing the Ace Hardware marks regardless of where and by whom it ismanufactured. Ace Hardware requires the use of the Global Trade Item Number (GTIN) on all packaging. The GS1 Company Prefixmay not be sold, leased, or given, in whole or in part, for use by any other company.The Ace Hardware Brand Packaging Guidelines outline the design requirements and specifications for Ace Hardware Brand packagingas well as highlight some exceptions to the established standards. These guidelines are maintained on the vendor portal at E‐Tools Brands. If you do not have access to the vendor portal, please request access through Login Help.VENDOR COMPLIANCENEW ITEM START AUDITAce Hardware considers master data integrity and compliance to the GS1 US Packaging Measurement Guidelines critical to anefficient supply chain. As a result, Ace Hardware performs an audit of the initial purchase order from the vendor and compares theactual receipt to the submitted “IDM-New Item” data entry. Ace Hardware will verify three pieces of data in the audit: Barcodes: Each quantity level the item is packaged (each/inner/master/pallet) Measurement: Data at each level the item is packaged (each/inner/master/pallet) Weight: Each quantity level (each/inner/master/pallet)Point of Sale items must be measured in the correct order (Height – Width – Depth) in adherence to GS1-US Package MeasurementGuidelines.For measurements and weights, Ace Hardware will allow a 4 percent variance; however, barcode data must match the originalsubmitted data exactly. Non-compliance assessments will be administered for each of these areas if data submitted falls outside ofthe stated variances. However, advance communication by the vendor (prior to the initial shipment arriving at the RSC) will beaccepted to avoid potential non-compliance assessments if the new data is valid. Report all product data errors related to thecategories mentioned above by emailing WMDomestics.BARCODE RELABELINGThe vendor is responsible for the integrity of the barcode and associated data. If any Ace Hardware RSC is required to generatebarcode labels for the following reasons, a non-compliance assessment will be charged as described in the Traverse Systemsdocumentation in the Compliance tab on the vendor portal: Unscannable or missing barcode Inaccurate numerical data that associates the barcode to another item Packaging level hierarchy does not have a barcode to be scannedHAZARDOUS GOODSAce Hardware manages the way in which it transports hazardous materials to ensure compliance with all applicable hazardousmaterials regulations, especially those that relate to international shipments. Vendors are required to maintain documentation withAce Hardware using the Hazardous Goods Product Information Request Form, which requests specific shipping information aboutthe products Ace Hardware purchases from its vendors. This information is required for domestic ground, vessel and commercial airtransportation. The requested information will be entered into a central database maintained by Infotrac, Inc.Please maintain a Hazardous Goods Product Information Request Form for each hazardous product. Be certain to complete aseparate form for each UPC (package type, size or volume). The most recent version of SDS for each product is also required. If you7 Pa g eContact the Ace Vendor Support Center at 630‐990‐2777Check www.AceHardware-Vendors.com Contacts for additional Ace Hardware contact information.Confidential and Proprietary. @2021 Ace Hardware Corporation. All Rights Reserved.2455562.5000Revision Date: 2/8/2022

offer access to your SDS on the Internet, please provide the URL. It is imperative that both the vendor’s stock number and theassociated Ace Hardware SKU are annotated on the SDS and the request form is attached to the appropriate SDS to ensure accurateclassification for each product. When using the New Item application, this information must be entered for each new productcreated. Discrepancies must be reported to your Replenishment planner.The Hazardous Goods Product Information Request Form(s) and applicable SDSs should be sent directly to Infotrac atAce@infotrac.net. If you have questions or require additional assistance, contact Infotrac immediately.PRODUCT REGULATORY COMPLIANCEAce Hardware vendors are required to answer product regulatory compliance questions when onboarding all new items and tomaintain the compliance data associated to each item they sell to Ace Hardware on an ongoing basis. This includes, but is not limitedto, pesticide registrations, Proposition 65 Warnings, and selling restrictions.Ace Hardware has engaged UL Verification Services (“UL”) to provide regulatory product classification services for certain chemicalcontaining products that we sell. The following product types will require WERCSmart registration: all chemical-containing products,pesticides, aerosols, all battery-containing products, appliances, lightbulbs.Your role as an Ace Hardware vendor is to register your products and formulations with UL WERCSmart prior to item set-up. If youare a current WERCSmart subscriber, your participation in this regulatory compliance initiative is mandatory. Ace Hardware willutilize your item assessment data from UL WERCS to obtain and maintain several compliance data points. Please note that theWERCSmart registration and assessment process does not supersede the SKU onboarding process in IDM.For detailed information on regulatory compliance requirements for onboarding new items, see the Compliance section of the NewItem Onboarding Step by Step Guide.For detailed information on regulatory compliance requirements for maintaining existing items, see the see the Compliance sectionof the Item Maintenance Step by Step Guide.If you need to add or change selling restrictions on existing items, the Restrictions Request Form can be found on Vendors.com here:Home Vendor Compliance Legislative Requirements. Completed Restrictions Request Forms should be emailed toRestrictions@acehardware.comVENDOR PERFORMANCE METRICSVendor compliance to Ace Hardware’s policies and procedures is critical to fulfilling retailer orders on time and in full. Ace’s VendorScorecard measures vendor supply chain performance. Vendor delivery performance is measured through the calculation of an OTIFrating: Units which are shipped On Time and In Full, as set forth in a Purchase Order received from Ace Hardware. Our goal and ourrequirement is to have all vendors maintain an OTIF rating in excess of 95%. Failure to do so may result in vendor assessments,formal reviews of vendor performance and possible loss of business with Ace Hardware.8 Pa g eContact the Ace Vendor Support Center at 630‐990‐2777Check www.AceHardware-Vendors.com Contacts for additional Ace Hardware contact information.Confidential and Proprietary. @2021 Ace Hardware Corporation. All Rights Reserved.2455562.5000Revision Date: 2/8/2022

Ace Hardware utilizes the EDI 856 Advanced Ship Notice (ASN) document as the record of a vendor’s readiness to ship. ASNs must besubmitted on the same day that the shipment leaves the vendor’s facility. Any delay in submitting an ASN will result in a loweredOTIF score and possible vendor assessments.Vendors can access views of their monthly scorecard, weekly supplier dashboard data, and weekly purchase projections through thevendor portal E-Tools Toolbox ADW Reporting. We strongly encourage you to access this information on a consistent basis.ON-TIME IN FULLAce Hardware measures vendor performance with theOn-time in Full metric, known as OTIF, at an each level.This metric is calculated by totaling the number of unitsshipped on or before the requested ship date,compared to the number of units on the Purchase Order.# of Units Shipped by Ace

Ace Vendor University is Ace Hardware's vendor training program. It is a way for vendors to understand how they can grow with Ace, understand the Ace Hardware business, and become experts in the applications used for day‐to‐day tasks.

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