Distributor Training Module 1

1. Distributor Training Module 1 Doing Business with Dynapar

2. Agenda • Dynapar Policies • Cancellations • Freight • Returns • Mechanics • Distributor Pricing & Discounts • SPR’s (special pricing) • Specials • Web Tools • Support • Dynapar Territory managers • 24 hr support parts Confidential

3. Cancellation Policy • Products: Dynapar, Northstar, Hengstler, Acuro, and Harowe • Effective: May 1, 2007 • NO FEE: Cancellation made prior to the production of standard products. • 25 % of the order value: Cancellation made prior to the production of “SPECIAL” products. (anything not specified in our catalog) • 100% : Cancellation made during the production of either standard or “SPECIAL” products. • Due to the highly configurable nature of the various encoders we manufacture, this policy will help us continue to deliver competitively priced products as well as maintain the short leads times we offer to our customers and distributors. Confidential

4. Freight Policy • UPS Prepaid and ADD • No charge is assessed for this service of freight • UPS Collect • No charge is assessed for UPS collect shipments. Customer’s account number must be clearly stated in P.O. • Collect Shipments from all other carriers • $6 surcharge applied for processing outside of automated system • Same day Shipping • $100 surcharge applied for all same day shipments • This cost is applied for the interruption of standard work procedures that occurs within a cell Confidential

5. Return Policy WARRANTY PERIOD • Dynapar and Northstar encoders will be covered under a two year warranty from the date of manufacture. ENCODERS WITHIN WARRANTY PERIOD • Encoder may be returned directly to Dynapar Service Department by the distributor or by the customer. A RMA (Returned Material Authorization) must be obtained for all returned goods. • The Service Department will evaluate the unit for warranty qualification. Any issues regarding non-qualification will be resolved through contact with the sending party. • Qualified units will be repaired or replaced with a new, same model encoder at no charge. The new encoder will be covered by the full 24 month warranty. • If the returned encoder is an obsolete model, and within warranty, an equivalent current model will be substituted. The new encoder will be covered by the full 24 month warranty. INDUSTRIAL ENCODERS OUTSIDE THE WARRANTY PERIOD • Encoder may be returned directly to Dynapar Service Department by the distributor or by the customer. A RMA must be obtained for all returned goods. • Dynapar Industrial size encoders will be replaced with a new, same model encoder at a charge of full list price. The new unit will be covered by the full 24-month warranty. • The following Dynapar encoder models fall under the “Industrial” classification: H20, H58, HA/HR/HA25, H42, 21/22, 60 Rotos, X25, E9, E12, E14, E23, EC23, HC, HS20, HS35, HSD, F14, F15, F18, F21, M9, M14, M15, M21, RI58, RI76, and Acuro. HEAVYDUTY ENCODERS OUTSIDE THE WARRANTY PERIOD • Encoder may be returned directly to Danaher Controls Service Department by the distributor or by the customer. A RMA must be obtained for all returned goods. • Heavyduty Dynapar and Northstar encoders will be repaired or replaced with a new same model endcoder at the following prorated charge: • Greater than 2 years old – 50% of list price. • Greater than 3 years old – 60% of list price. • Greater than 4 years old – 70% of list price. • Greater than 5 years old – List price. • The following encoder models fall under the “Heavy Duty” classification: Dynapar 60-P Rotos, H56, Northstar RIMTach, and SlimTach. • Evaluations can be requested for out of warranty units at a charge of $60.00 per unit. The warranty is VOID if the unit is over two years old, has been opened, modified, or otherwise damaged by improper installation or use by the customer. Units returned for repair/replacement may be held for a maximum of five working days for the following two reasons: • waiting for customer response of analysis or (2) waiting for customer approval of out of warranty repair/replacement charges. If situation is not resolved within 5 working days, the unit will be returned un-repaired. Confidential

6. Business Mechanics

7. 2006 Distributor Discounts • GOLD +$100K • SILVER $40K - $99K • BRONZE below $40K Discount Percentages Gold SilverBronze DI – Dynapar Investment EI – Eagle Signal & Veeder-Root Investment HI – Hengstler Investment DM – Dynapar Mature EM – Eagle Signal & Veeder-Root Mature HM – Hengstler Mature NM – Northstar Mature .60 .60 .60 .75 .75 .75 .75 .67 .67 .67 .83 .83 .83 .83 .71 .71 .71 .87 .87 .87 .87 *Note: These are the multipliers on list price Confidential

8. SPR’s • What’s an SPR: • Basically an SPR stands for “Special Pricing Request”. There may be competitive situations that arise where a distributor may need a special price to win business. These are only issued when a Dynapar Territory Manager is intimately involved in the opportunity and the final price is approved by Dynapar Management. • How to obtain an SPR: • All SPR’s are issued by the local Territory Manager on a case by case basis and typically are valid for 1 calendar year. • All SPR’s are revisited 30 days prior to the following calendar year to make adjustments for price increases or other competitive reasons to modify that specific SPR. • All SPR’s are stored in a database within Dynapar via a unique “SPR Number”. • If an SPR has not been renewed it will go delinquent. If pricing needs to be reissued to the customer it will be reissued according to the current list price. Confidential

9. Specials • All specials are issued through a Dynapar Territory Manager • Necessary Information in order to process a special • Customer • Competition (If any) • What is the probability of closing order? • Why does this customer need something special outside of our standard product offering? • What is the total potential business from the special? • What is the projected timeline from prototype to production? • Are there any other considerations that need to be taken into account outside the scope of the opportunity? I.E. special certifications, environment restrictions, etc. Confidential

10. Web Tools

11. Distributor Portal • Distributor Portal accessed through www. Dynapar.com • Items you will find in the portal • Access to the latest Dynapar Newsletter • Complete encoder price book as well as extensive “configured” encoder pricing calling out more than 30,000 configured part numbers • Dynapar Parts and Accessories Price list • Northstar Parts and Accessories Price list • Various Training Modules to help you and your sales team sell the various Encoder’s in the Dynapar Family • Up to date Demo kits to have on hand for open houses or local shows • Up to date Data sheets for all of the Dynapar, Northstar, Acuro, and Hengstler branded encoders • Online configurator to allow you to build and price custom encoder configurations • Contact information for Customer Service, Technical Assistance, and a detailed listing of your local Territory Manager Representative Confidential

12. Dynapar Territory Managers Dynapar – Territory Manager Map Washington Steve Koehler Upper Midwest Region North Maine Montana Dakota Gary Robertson Ohio Valley Region Vermont Oregon Idaho Minnesota Eric Bemis Northeast Region New South Hampshire Dakota Massachusetts Jarrett Colvin West Region Ed Tolkkinen Northern Plains Region New York Wyoming Wisconsin Rhode Island Michigan Connecticut New Jersey Pennsylvania Nebraska Iowa Ohio Illinois Maryland Nevada Delaware Indiana John Nakajima Mid Atlantic Region Matt Jahnke Midwest Region Utah West Colorado Virginia California Virginia Kansas Kentucky Missouri North Carolina Oklahoma New Mexico Tennessee Arizona Arkansas Allen Chasey Southeast Region John Reading Southwest Region South Carolina Georgia Alabama Mississippi Texas Louisiana Florida Confidential

13. Northstar 24/7 Emergency Parts Service • Dynapar is proud to bring back its Northstar Emergency parts program. Dynapar has teamed with its International Northstar Distributor partner, Argo international, to bring this program back to Distribution. • You will be connected to a certified Northstar Service Technician who will be able to get the right part for the right product quickly and efficiently from its vast inventory of Northstar products they carry. • Dial (800) 873-8731 anytime after 5:00 P.M. CST or Saturday and Sunday and you will be directed to a live voice to address your emergency situation • A $200 charge is applied to all emergency service requests, however, all products or parts are shipped immediately and can be delivered next day in many areas of the U.S. Confidential