Eligible Activities and Reimbursement Calculations for Handlers

Michelle 1

Sample calculation of handler share of available $ Handler s total assessment based on inspected product determined at a rate set through budgetary process, for this program handlers would be reimbursed up to their cap of X dollars, based on their respective share of the acquisitions/budget. If we assume 0.04/per hundredweight rate (approx. $25MM) Program budget of 10% of assessments (approx. $2.5MM) Handler X has 10% share of acquisitions Handler dollars available/cap of $250,000 2

Procedures & Example Calculations 3

Eligible Activities Advertising Public Relations/Publicity Sales Promotion Marketing Research Tradehows/Seminars 4

Eligible Activities - detailed Advertising Definition: Placements of advertisements in print, digital and/or broadcast. Includes agency commissions not to exceed 15% of gross billing. Creative and design fees are not reimbursable. Reproductions of films and/or file transfers, as well as postage cost to forward materials to publishers are reimbursable. Examples of reimbursable activities Cost of radio/tv time, print ad space Digital/social media advertising Standard creative and media buying agency commission not to exceed 15% of total cost Examples of non-reimbursable activities Any paid media targeting the farming/growing trade Production and creative costs for paid media 5

Non-Eligible Activities Any activity that targets the farming/growing trade Travel Expenses (meals, lodging, etc.) Ordinary business expenses (business cards, stationary, logo development, etc.) Product packaging Walnut product samples Capital expenditures (i.e. trade show booth or other assets) Redemption costs (price redemption/discount) for couponing Marketing research pre/post testing of paid media Research & Development costs Production & creative costs of paid media Charitable donations Sponsorships Sweepstakes Agency fees for publicity Sales meetings Staff wages 6

Reimbursement Calculations Walnut Only Promotional Material/Products Qualified expenditures to support walnut products that contain only walnuts as the primary ingredient (i.e. walnut-only walnut butter, walnut- only walnut milk) are eligible for 100% credit-back. Example: $10,000. Original expense to the handler X 100. Percentage applicable $10,000. Total claim amount submitted for Credit- Back X .70 Percent applicable to credit back $ 7,000. Amount reimbursed/credited-back to the handler 7

Reimbursement Calculations Mixed Nut/ Other Promotional Material/Products When walnuts are marketed with other non-walnut items (other nuts, dried fruits, etc.) eligible Credit-Back will be limited to the walnut percentage. Qualified expenditures to support walnuts used as an ingredient in a manufactured food product would receive Credit-Back on the proportionate share of walnuts included. In order to calculate the Credit-Back percentage, list all products (food and non-food) and determine the walnut and walnut product(s) percentage (excluding packaging). Examples: $10,000. Original expense to the handler X XX. Eligible credit-back percentage (see below) $ XX. Total claim amount submitted for Credit- Back X .70 Percent applicable to credit back $ XX Amount reimburse/credited-back to the handler 8

Reimbursement Calculations Products Snack Bar: 30% walnuts 30% almonds 30% cashews 10% other (non-nut) Eligible Credit-Back =30% Walnut Butter 100% walnuts Eligible Credit-Back =100% Advertising/Promotional Materials Advertising: Ad featuring product spread with 1 walnut item and 1 almond item. Eligible Credit-Back = 50% Promotional Materials: Brochure featuring multiple products: walnut butter, cashew butter and almond butter. Eligible Credit-Back = 33% Sales Brochure: Brochure featuring only walnuts and/or walnut-only product (i.e. walnut butter) Eligible Credit-Back =100% 9