A thousand dollars of buying.Six hundred thousand dollars back.

On 14 November 2001 Advanced Lighting Technologies signed a stock redemption agreement and filed it with the SEC. Bound into that exhibit, as Exhibit E(1), is a five year component purchase agreement between Ruud Lighting of Racine, Wisconsin and Venture Lighting International of Solon, Ohio. Ruud buys high intensity discharge lamps and power supplies. Venture sells them. Section 5 sets the price, and then it sets a rebate.

The sentence that turns the rebate on reads like this.

What follows is a table with two columns. The left column is headed AGGREGATE PRODUCT PURCHASES. The right column carries the whole argument of this piece, and it is worth reading twice: PERCENTAGE REBATE APPLIED TO ALL PRODUCTS PURCHASED IN CALENDAR YEAR.

Read the first two rows together. A year that ends at $5,999,000 of purchases pays nothing at all. A year that ends at $6,000,000 pays ten percent of the whole $6,000,000, which is $600,000.

One thousand dollars of buying, six hundred thousand dollars of rebate.

The wall at $6,000,000 is the one everybody sees. The four smaller risers above it are the finding. Each higher level is worth one more percentage point, and because that point applies to every dollar bought in the year, each of them is its own cliff.

Read the last column. Between $6,999,999 and $7,000,000 there is one dollar of purchases and $70,000.10 of rebate. The same dollar is worth $80,000.11 at the next level, $90,000.12 at the one above that, and $100,000.13 at the top. The table has five cliffs, and four of them are invisible to anybody watching only the headline threshold.

The mechanism is the column header. The percentage is applied to all products purchased in the calendar year, not to the products bought after the threshold was crossed.

Cross it on 28 December and every invoice back to January is repriced.

The trade has a name for this and it is written into filings. Ace Hardware, which EDGAR classifies under SIC 5070, wholesale hardware, plumbing and heating, puts a three level ladder into its distributor franchise agreement and marks every level the same way.

Quotation marks, three times in one paragraph. A drafter who puts a phrase in quotation marks is citing somebody else’s language, and the somebody else here is the trade.

Ace filed that agreement in 2003. Sixteen years later the same four words open the program terms of the 2019 Office Depot Trade Vendor Purchasing Agreement, which is public only because Packaging Corporation of America attached its subsidiary’s signed copy to its own annual report.

We counted how far the phrase travels. EDGAR full text search returns “back to dollar one” in 46 documents from 29 filers, the earliest dated 16 March 2001 and the most recent 2 September 2025, checked on 23 October 2026. That index only reaches back to 2001, so the 2001 date is the floor of the search rather than the floor of the phrase.

Not every one of the 46 is a supplier rebate either, because the same four words do the same job in an earnout and in an insurance deductible. That is the point. It is settled language, used by people who expect to be understood without explaining themselves.

A drafter writes “back to dollar one” because the other reading exists. A rebate can pay only on the purchases above the level, in which case crossing it is worth the rate on the excess rather than the rate on the year. On the Ruud table, a year that lands exactly on $6,000,000 pays $600,000 under the first reading and nothing at all under the second, off the same table and the same purchases.

So the question is what your own agreement says. The honest answer, from the corpus described at the foot of this piece, is that most of them never say.

A third of the corpus says which way it goes. The rest is silent, and that includes the half that set no level at all.

Where the paper is silent the question is settled by whoever does the arithmetic.

Usually that is the supplier, because the supplier is the one who sends the statement.

There is also no standard vocabulary to search your own paper for. Across the same corpus the most common phrase for what a rebate is measured against is “net sales”, at 10.5 percent. “Net Purchases”, the phrase most people would assume is the industry term, appears in 3.7 percent. No slot in these agreements has a term that wins.

A rate applied to the wrong base is wrong at every level of the ladder, and three separate questions sit under the base. All three are decided by the paper rather than by your ERP.

The first is which purchases count. A distribution agreement between Cisco and ScanSource carves an entire ordering channel out of the rebate, so the spend is real and none of it earns a back end rebate.

The second is which date puts a purchase inside the period. Office Depot answers it in capitals, which is a fair measure of how often the answer gets ignored.

That is one answer out of five, and the other four are all in normal use.

Your own purchase export may carry several of those dates. Picking the wrong one runs your running total against the tier wrong for weeks at a time.

The third is which year a purchase lands in. Ruud’s own section 5 moves a whole month across a year boundary, in a sentence sitting directly under the table, in the kind of language a reader skims.

One December of buying, moved into the following year by nineteen words. On a table where the first level is worth $600,000, a month in the wrong column decides whether the level is reached.

Section 5 does not stop at the table. The clause that follows makes the credit conditional, and it is the kind of sentence that gets skimmed because it opens with a word people read as boilerplate.

The rebate arrives as a credit to an account rather than as a payment, and the credit waits on the account being current. Ace writes the same arrangement from the other end.

And the window to argue about the figure is short, and in at least one agreement it starts running whether or not anything arrived.

The Office Depot agreement is with Boise White Paper, and its pricing exhibit carries a second ladder, written in exactly the language this piece has been tracking.

Then comes the chart. It has three rows and two columns, headed Rebate Percentage and Minimum Volume (tons), and every one of the six cells is printed as three asterisks in brackets. The exhibit explains itself at the top of the first page: “Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.”

That is the state of the public record. The shape of a program survives redaction and the numbers do not.

We went looking for the numbers on the other side too, with a domain filtered search across twenty three manufacturer sites in HVAC and plumbing including Rheem, Carrier, Trane, Lennox, Goodman and Daikin. No published distributor rebate schedule on any of them.

The layer that is published is the one aimed at the contractor, because that layer is meant to be seen. The layer aimed at the distributor is the real price of the relationship, and it is usually under a confidentiality clause. Across the corpus, 85.8 percent of these agreements carry one.

Which means nobody has published your rates anywhere we looked.

The only copy of your rates we could find is the one in your own filing cabinet.

The percentages in this piece are ours, and they come from two counts taken separately. The figures given as a share of the corpus are over 1,495 deduplicated contract exhibits from 913 filers, every one of them a document that uses the word rebate.

The agreements read end to end are a second pass: 3,147 documents pulled from EDGAR, cut by detectors to 724 candidates and then to the 293 carrying contract metadata, of which 21 were read in full rather than pattern matched. Of those 21, sixteen measure the rate against the distributor’s purchases rather than against its onward sales, and only three set a flat rate with no level in it at all.

The twenty one split into five economic shapes, which is the number that matters if you ever have to build the arithmetic rather than read it.

The claim further up about manufacturer websites is a second search and it earns its own line, because a stated absence is as easy to get wrong as a stated figure. It was a domain filtered web search for a published distributor rebate schedule across rheem, carrier, trane, lennox, goodman, daikin, aosmith, bradfordwhite, greenheck, moen, kohler, zurn, watts, nibco, viega, oatey, charlottepipe, apollovalves, libertypumps, zoeller, rectorseal, sioux-chief and mifab. Twenty three domains, and a schedule on none of them.

The counts are ours, and the list of documents behind them is not published, so you cannot redo them from this page. What you can check is every document quoted above, each linked in the sources below, and the EDGAR search the count started from, which returned 1,825 results on 23 October 2026 against the 1,495 we counted. Open one and check us.

Ruud Lighting is a lighting manufacturer buying components. Ace Hardware is a hardware cooperative supplying distributors. Office Depot is a reseller of office products. Cisco sells networking hardware. Microsoft sells software. Not one of them is an HVAC wholesaler.

Here is the search behind the note above. On 23 October 2026 we ran eight phrases through EDGAR full text search: volume rebate, purchase rebate, growth rebate, back to dollar one, annual rebate, tiered rebate, rebate shall be paid and volume incentive rebate. They returned 3,236 documents, and 598 of those were contract exhibits. Every result names the SEC industry code of the company that filed it. Two of the 598 came from a filer in a wholesale code for these trades (5063, 5070, 5072, 5074, 5075, 5084 or 5085). One is the Ace Hardware agreement quoted above. The other is a 2009 bank loan agreement from Houston Wire & Cable, an electrical wire distributor, which is not a supplier agreement. No exhibit came from a filer coded as plumbing and heating, warm air and air conditioning, industrial machinery or industrial supplies.

The limits are plain. Eight phrases do not cover every filing, so a supplier agreement that uses none of them would not appear. Sixteen of the 598 carry no industry code, so this check cannot place them. And we read the filers’ codes, not all 598 documents.

We think the reason is Item 601 of Regulation S-K, and we have not tested that. It asks a public company to attach the contracts that are material to it, and it lets the company leave out a contract made in the ordinary course of business unless the business depends on it. A supplier agreement can fall on that side of the line, and a private company has no filing to attach anything to. What survives is the shape of the clauses, from the filers that did publish one.

None of this needs software to check on a single agreement. Take the top one off the pile and answer four things.

1. 1Does the rate reach backwards? Look for “back to dollar one” and for “applied to all”. If neither phrase nor its opposite is anywhere in the document, you are in the majority of the corpus that never says, and the answer is whatever your supplier’s statement assumed.
2. 2What is the rate measured against? Purchases or sales, gross or net of returns, net of freight, and which brands and product lines are inside the number. The phrase will not be the one you expect.
3. 3Which date puts a purchase in the period? Receipt, invoice, payment, shipment or purchase order, and what the agreement does with the weeks either side of the period end.
4. 4How long do you have to claim, and from when? Half of these agreements set a window. Read whether the clock starts on the sale, on the statement, or on the day a credit failed to arrive.

On one agreement that is an afternoon. The reason it does not get done is that a distributor doing $20M to $200M has forty of them, each written by a different lawyer, each measuring a different thing over a different year.