1
EXHIBIT 10.31
SUPPORT services AGREEMENT between Microdyne Corporation ("Microdyne"), a
Maryland corporation located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX., 00000,
and Epson America, Inc. ("Epson"), 00000 Xxxxxxx Xxxxxx, Xxxxxxxx, XX., 00000.
RECITALS
In the course of the distribution and sale of its products, Epson requires
product and subassembly repair and refurbishment, warranty administration,
product upgrade projects, telephone technical support, and other miscellaneous
Services. Epson has determined that it is in its best interest to contract for
personnel to perform these Services, and Microdyne desires to provide personnel
to perform these Services on an independent contractor basis. Additionally,
Epson and Microdyne wish to terminate the previous Depot Repair, Product
Refurbishment, and Warranty Administration Agreement, dated December 13, 1990,
and replace it with this Agreement to reflect current Epson requirements,
working conditions, and revised pricing. The Depot Repair, Product
Refurbishment, and Warranty Administration Agreement, dated December 13, 1990,
and all its amendments, including Amendment 1, dated September 1, 1991,
Amendment 2, dated October 2, 1992, Amendment 3, dated December 1, 1992,
Amendment 4, dated May 1, 1993, Amendment 5, dated December 1, 1993, and
Amendment 6, dated October 1, 1994, are cancelled, terminated, and superseded
by this Agreement.
1 . TERM.
Five years effective April 1, 1996.
2. MICRODYNE PROVISION OF PERSONNEL AND SERVICES.
Microdyne will provide qualified personnel to perform depot repair of
products and subassemblies, product refurbishment, product upgrade
projects, warranty administration, telephone technical support, and other
miscellaneous Services (collectively called "Services") as requested by
Epson. The type and quantity of personnel and Services requested by
Epson are subject to change from time to time to meet Epson's business
needs. Some Services may be performed by Epson personnel or by other
independent contractors retained by Epson. The Services performed by
Microdyne will be mutually agreed upon and identified in writing, signed
by the parties."
1
2
2.1 Responsibility for Employees.
Pursuant to the terms of this agreement, Microdyne will provide
employees to work for and at the direction of Epson ("Leased
Employees"). By signing below, the parties expressly acknowledge
that all employees leased by Microdyne to Epson shall remain
employees of Microdyne (and not employees of Epson) for all
purposes. In particular, said employees shall remain subject to
Microdyne's employee policies and procedures which cannot be
modified by Epson without the express written authority of
Microdyne's Director of Human Resources.
The governing policies and procedures of Microdyne supersede those
of Epson in all areas, subject to limitations of federal and state
law, including, but not limited to:
Salary Status
Bonuses
Promotions/Demotions
Expense Accounts/Travel Guidelines
Attendance Schedules
Vacations
Sick time
Comp Time
Holiday Schedules/Pay
Flexible Work Schedules
Telecommuting
Performance Reviews
Identification Mechanisms (i.e., Business Cards, Employee Badges)
Disciplinary Action/Procedures
Reduction in Staff
Hiring/Rehiring
Terminations of Employment of Any Kind
Employee Benefits
2
3
2.2 Services.
Microdyne shall provide the Leased Employees and Services to Epson
as an independent contractor in accordance with the terms and
conditions of this agreement (as more fully described in the
Statement of Work, Attachment A hereto). Epson retains full
management control over its service terms and programs, as well as
Epson's customer and end user relations. For all practical
purposes, Microdyne's provisions of the Services shall be
invisible to Epson's customers and end users.
Microdyne, on a semi-annual basis, or sooner, shall provide Epson
a value engineering change proposal which shall identify
methodologies that may result in increased Epson customer service
and/or cost reductions.
2.3 Training.
Epson will provide, at no charge to Microdyne, ongoing training
for new Epson products to enable Leased Employees to perform the
Services.
2.4 Facilities and Equipment.
Services will be performed at Epson's facilities currently located
in Torrance and Carson, California, and Indianapolis, Indiana, and
other locations as mutually agreed upon in writing, signed by the
parties. Epson will provide use of these facilities and all
equipment, tools, test equipment, documentation, and supplies
needed for the Services at no charge to Microdyne. Both parties
shall have a mutual and affirmative obligation to maintain the
integrity and security of all facilities and equipment. Both
parties will take all reasonable steps to assure the security of
the facilities and their contents. Microdyne will reimburse Epson
for any damage or loss caused by negligence on the part of
Microdyne.
2.5 Insurance.
Microdyne shall indemnify, defend and hold Epson, its employees
and affiliates harmless from any and all damages, liabilities,
costs and expenses incurred by Epson as a result of any claims,
judgments, or adjudication against Epson for any breach by
Microdyne of the provisions of this Agreement or
3
4
arising from any misconduct or negligence of Microdyne's employees
in the scope of their employment. Epson shall indemnify, defend
and hold Microdyne, its employees and affiliates harmless from any
and all damages, liabilities, costs and expenses incurred by
Microdyne as a result of any breach of this Agreement by Epson,
arising out of processes or procedures required by Epson or
arising from any misconduct or negligence of Epson's employees in
the scope of their employment.
To support these indemnities, Microdyne and Epson will obtain and
maintain in effect at all times contractual liability insurance in
support of this agreement. Epson will be named as an additional
insured and policy limits should not be less than $1 million per
occurrence and $10 million total. Evidence of insurance will be
provided to Epson within thirty (30) days of each policy renewal
by Certificate of Insurance.
Microdyne's insurance policies will waive any and all subrogation
against Epson.
2.6 Operating Assets and Equipment.
During the course of the previous agreement, Microdyne purchased
some assets and equipment as described in Attachment D. These
assets and equipment will continue to be owned and used by
Microdyne as required with no additional charge to Epson.
2.7 Parts, Inventory, and Ordering.
Epson will provide all parts necessary for the Services at no cost
to Microdyne. Microdyne will order parts from Epson on an as
needed basis in conformance with Epson's existing parts and
accounting procedures.
2.8 Records and Audit Rights.
(a) Microdyne agrees to keep and maintain commercially reasonable
records of the charges associated with Microdyne's provision
of the Leased Employees and Services. Epson retains the
right to have a representative of Epson's certified public
accounting firm inspect and audit Microdyne's books and
records pertaining to the
4
5
Leased Employees and Services upon notice to Microdyne, at
Epson's expense, to insure compliance with the terms of this
agreement. If the audit at Epson's expense reveals
deficiencies greater than 2% of billing, then the cost of the
audit will be paid by Microdyne.
(b) Microdyne agrees to furnish to Epson a statement within
fifteen (15) days following the end of each month identifying
the Services performed during the preceding month and labor
expended. Microdyne shall keep and maintain true and
accurate records regarding all information and data
reasonably necessary or required for the computation and
verification of all amounts payable to Microdyne hereunder.
(c) Microdyne agrees to provide any information required by Epson
to comply with government rules and regulations. The
information will be made available on a mutually agreeable
schedule determined at the time of any request.
2.9 Product Safety.
Microdyne agrees to notify Epson immediately in writing upon
discovery that any Epson product fails to comply with any
applicable consumer product or electrical safety law or
regulation, or upon discovery that any such product contains a
defect which could, in the reasonable opinion of Microdyne, create
a substantial operational problem or consumer product safety or
electrical hazard.
2.10 Failure to Perform.
(a) If Epson determines that Microdyne has consistently failed to
meet the mutually agreed upon quality and performance
standards for Services and Leased Employees, described in
Attachment A.II.A. and B., Epson will notify Microdyne in
writing of such discrepancies. Microdyne will have 15 days
to develop a written plan of corrective action to meet
quality and performance standards. Upon approval of the
corrective action plan by Epson, Microdyne will have 60 days
to restore Services or Leased Employees to quality and
performance standards.
5
6
(b) Additionally, if Epson executive management determines that
any Leased Employee has significantly failed to meet quality
or performance standards, or performed any other detrimental
act, Epson at its sole discretion may request that Microdyne
immediately replace that Leased Employee and Microdyne will
comply.
(c) Any personnel actions, including reductions in staff or
terminations, performed as a result of 2.10. a. or b. above
will be Microdyne's sole responsibility as defined in 2.1
above.
3. USE OF EPSON TRADEMARKS AND LOGOS.
During the term of this agreement, Microdyne is authorized to use the
Epson trademarks, proprietary logos, and designations applicable to the
products as may be necessary for Microdyne to provide the Services, in
conformity with Epson's written guidelines for trademark usage. Upon
expiration or termination of this agreement, Microdyne shall cease all
references and use of any and all Epson names, trademarks, logos, and
designations. Microdyne shall not use Epson trademarks, logos, or
designations in any advertising materials, nor publicize the agreement
without prior written authorization from Epson.
4. PROPRIETARY NATURE OF PRODUCTS.
4.1 Epson Rights.
No title to or ownership of Epson's products, including software
or any of the parts, is transferred to Microdyne by this agreement
or the provision of the Services by Microdyne. Title to all
applicable rights and patents, copyrights and trade secrets in
Epson's products shall remain with Epson, and Microdyne agrees to
respect and observe the proprietary nature thereof. Microdyne
agrees to take appropriate action by instructions or agreement
with its employees, agents, and contractors who are permitted
access to the Epson products or other proprietary information to
fulfill its obligations hereunder. Notwithstanding any provision
of this agreement, Epson owns and retains all title and ownership
of all intellectual property rights; all software; all firmware;
all master diskettes; and related materials provided by Epson to
Microdyne hereunder.
6
7
4.2 Reverse Engineering, Etc.
Microdyne agrees not to decompile, reverse engineer, reverse
compile, modify, or perform any similar type of operation on
products, parts, software or furniture furnished by Epson without
the express prior written consent of Epson.
5. TECHNICAL SUPPORT.
Epson shall make technical support available to Microdyne during the term
of this agreement without cost to Microdyne, to answer questions and
provide support for Microdyne in connection with the Services.
6. INTELLECTUAL PROPERTY RIGHTS, INDEMNIFICATION.
6.1 By Epson.
Epson shall indemnify, defend, and hold Microdyne harmless from
any and all damages, liabilities, costs, and expenses incurred by
Microdyne as a result of any claims, judgments, or adjudication
against Microdyne that Epson products infringe any U.S. patent or
copyright of any third part, provided: (i) Microdyne shall
promptly notify Epson in writing of such claim; and (ii) Epson
shall have the sole control of the defense of any such action and
all negotiations for its settlement and compromise.
6.2 By Microdyne.
Microdyne shall indemnify, defend, and hold Epson harmless from
any and all damages, liabilities, costs, and expenses incurred by
Epson as a result of any claims, judgments, or adjudication
against Epson that Epson products modified by Microdyne outside of
the approved procedures supplied and enforced by Epson infringe
any U.S. patent or copyright of any third party, provided: (i)
Epson shall promptly notify Microdyne in writing of such claim;
and (ii) Microdyne shall have the sole control of the defense of
any such action and all negotiations for its settlement and
compromise.
7
8
7. CONFIDENTIALITY.
Both parties acknowledge that confidential information provided
hereunder, including the transfer of technology and software, constitute
a trade secret and, as such, shall be held and maintained in confidence,
as set forth in the Confidentiality and Non-Disclosure Agreement,
Attachment C hereto.
8. WARRANTIES AND DISCLAIMERS
8.1 Warranty.
Microdyne warrants that the depot repairs, product refurbishment,
product retrofits and Services will be performed in accordance
with the repair and refurbishment criteria for the applicable
service provided by Epson, and industry standards. In the event
any such repair, refurbishment, or retrofit does not perform in
accordance with the applicable specifications in Attachment A for
a period of ninety (90) days after shipment thereof by Epson to a
customer, Microdyne will remedy such failure by repair at no
additional cost to Epson.
8.2 Disclaimer.
Microdyne expressly disclaims all warranties except the limited
warranty set forth above.
9. PAYMENT.
Epson agrees to pay for the Leased Employees at those rates set forth in
Attachment B hereto. Microdyne shall invoice Epson monthly in arrears
for applicable Leased Employees and other related charges, accompanied by
the report described in Section 2.6(b) above. Said invoice shall be
paid in full within thirty (30) days after receipt. Any invoices which
are unpaid after this thirty (30) day period will be amended to include
interest charges of 1.5% (percent) a month on the invoice amount from the
thirty-first (31st) day following invoice date to date of payment to
Microdyne, or the highest amount allowed by law,
8
9
whichever is applicable. Further, Microdyne reserves the right to
suspend all Services provided under this agreement or require payment in
advance in the event any two consecutive invoices are not paid in full
within forty-five (45) days after the second invoice date.
The charges identified herein in Attachment C shall be reviewed and
negotiated, for the next twelve (12) month period, commencing ninety
(90) days prior to each anniversary date of this agreement. Either party
may request review and renegotiation of the rates charged at the
completion of the first three (3) months of this agreement.
10. TAXES.
Epson shall be responsible for the payment of all sales, use and personal
property taxes assessed on products provided or sold in connection with
this agreement, excluding taxes based upon the net income of Microdyne.
Microdyne shall be responsible for all taxes arising from Epson's
payments for the Services and Leased Employees, including but not limited
to withholding taxes, FICA payments, xxxxxxx'x compensation and state
disability payments.
11. TERMINATION AND DEFAULT.
11.1 Without Cause.
Either party may terminate this agreement at any time upon 90 days
written notice of termination to the other. Upon the effective
date of such termination, Epson will resume possession and control
over the Epson assets, and is free to hire or rehire any and all
of Microdyne's employees used in the provision of the Services.
11.2 For Cause.
Either party may terminate this agreement upon written notice to
the other party in the event that such other party fails to cure a
material breach within ninety (90) days after notice of breach
from the nonbreaching party. This agreement shall automatically
be cancelled if either party becomes insolvent or makes an
assignment for the benefit of creditors or if any insolvency
proceeding is initiated by or against it. All unpaid charges
accrued under this agreement shall become immediately due
9
10
and payable upon the happening of such event of termination. The
aforesaid rights shall be in addition to all other rights and
remedies provided at law, in equity, or hereunder. In the event
of termination for any of the foregoing reasons, Epson will resume
possession and control over the Epson assets, and is free to hire
any and all of Microdyne's employees used in the provision of the
Services.
11.3 In the event that Epson resumes possession and control of the
Epson assets, Microdyne agrees to sell and assign a complete copy
of Microdyne's depot repair activity management system as defined
in Attachment A, III, to Epson for a reasonable, mutually agreed
upon price. Microdyne further agrees to assist Epson in obtaining
any necessary consents from third parties with rights in said
software.
12. FORCE MAJEURE.
If either party shall be prevented from performing any portion of this
agreement (except the payment of money) by causes beyond its reasonable
control, including, without limitation, labor disputes, civil commotion,
war, governmental regulations or controls, casualty, inability to obtain
materials or Services, or acts of God, such party shall be excused from
performance for the period of the delay.
13. NOTICE.
Unless otherwise agreed to by the parties, all notices required hereunder
shall be made in writing by certified mail, return receipt requested, to
the addresses first above written and to the attention of the parties
executing this agreement or their successor(s) in office.
14. WAIVER.
No waiver of any right or remedy on one occasion shall be deemed a waiver
of such right or remedy on any other occasion or of any other right or
remedy.
10
11
15. SEVERABILITY.
If any provision(s) of this agreement is held to be illegal,
unenforceable, or invalid by a court of competent jurisdiction, the
validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby, so long as the verifiable
intent of the parties is not materially affected thereby.
16. INDEPENDENT CONTRACTORS.
Both parties hereto are independent contractors and neither party shall
represent itself as an agent or legal representative of the other.
17. COMPLIANCE WITH LAWS.
Each party shall comply, at its own expense, with all statutes,
regulations, rules, ordinances, and orders of any governmental body,
department, or agency thereof, which apply to or result from its
obligations hereunder.
18. ATTACHMENTS.
The attachments referred to in the body of this agreement are an integral
part of this agreement and reference to this agreement shall be deemed to
include all the attachments.
19. HEADINGS.
The headings of this agreement are included solely for convenience of
reference and shall not control the meaning or interpretation of any
provision of the agreement.
20. ENTIRE AGREEMENT/GOVERNING LAW.
This document constitutes the entire agreement between the parties
regarding the subject matter hereof. No agent, employee, or
representative of Microdyne has any authority to bind Microdyne to any
affirmation, representation, or warranty concerning the products or
Services furnished under this agreement, unless the same is expressly
included within this written agreement. This agreement may be modified
only by a written instrument signed by both parties hereto or by their
duly authorized agents. The terms and conditions herein shall
11
12
govern with respect to the subject matter hereto and shall override all
terms and conditions contained on any purchase order or acknowledgement
form, previous letters, etc., issued by the parties hereto. This
agreement shall be governed by the laws of the State of California. This
agreement may be executed in counterparts, each of which shall be deemed
an original. The individuals signing this agreement on behalf of each
party represents and warrants that he/she has the power and authority to
sign.
MICRODYNE CORPORATION EPSON AMERICA, INC.
BY: [SIG] BY: [SIG]
-------------------------- --------------------------
Authorized Signature Authorized Signature
TITLE: VP Operations TITLE: Vice President, Operations & Logistics
DATE: March 20, 1996 DATE: March 20, 1996
12
13
ATTACHMENT A
STATEMENT OF WORK
I. Services.
During the period of this agreement, Microdyne will provide Leased
Employees to perform Services as indicated below.
A. Warranty Administration.
1. Administrative Services involving review and processing of
warranty claims, Epson Extra Care (service contract) claims,
and billable repair or exchange orders, including initiation
of warranty labor payments or credits, and parts orders.
2. Receipt and verification of warranty and billable repair
parts or products.
3. Preparation of parts or products for induction into the depot
repair process.
B. Product and Subassembly Repair.
1. Depot repair to the discrete component level for Epson
products, including whole units and subassemblies.
2. Administrative functions involved with depot activities and
customer interface.
3. Coordination and administration of outsourced repair
activity.
4. Development and maintenance of repair, test, and quality
procedures.
C. Product Refurbishment.
Inspection and rework of Epson products will be performed in
accordance to Epson's criteria by product type. This process will
include a physical inspection, testing, repair cleaning and
repackaging to Epson specifications. Items to be completed during
these functions are as follows:
1
14
1. Physical Inspection - The physical inspection process will include
an inspection for physical and cosmetic damage.
2. Testing - Each unit will be tested according to Epson's criteria.
3. Repair - The repair process will be performed on units deemed
economical to repair as determined by Epson standards. The repair
process will be limited to assembly level repair.
4. Cleaning - The units passing the Criteria in Items (a), (b), and
(c) above, will be cleaned to a like new condition. Any unit
which cannot be restored to this condition will be so noted and
returned to Epson.
5. Kitting - Accessories and collateral materials will be inspected,
cleaned, and repackaged.
6. Repackaging - Product which passes the cleaning stage will be
repackaged in accordance to Epson's standards. This would entail
repacking the unit into a new package configuration.
D. Telephone Technical Support.
1. Telephone technical support for Epson customers on product
specification, configuration, installation, operation, failure
identification, customer relations, and reseller/service center
referral or service dispatch.
2. Assist Epson in continually standardizing and enhancing the
information bases, both printed and system based, available for
each TTS representative to enable more rapid and accurate response
to customer questions, and to shorten average call handle times.
3. Fully utilize all systems and tools provided to increase
productivity and accuracy levels.
4. Services to be provided during hours specified by Epson, up to and
including 7 days per week, 24 hours per day.
E. Product Upgrade Projects.
1. Performance of periodic special projects to repackage, upgrade,
configure, or modify products as requested by Epson.
2
15
2. Review and estimate labor and materials requirements on a
case-by-case basis for each project. Epson will review and accept
each project estimate prior to authorizing work by Microdyne.
3. Microdyne will prepare a cost analysis at the end of each project
comparing actual cost to project estimates, and will explain
significant variances.
4. Maintain a core group of Microdyne employees as specified by Epson
to plan, coordinate, and supervise project activities.
5. Provide additional temporary or part-time Microdyne personnel to
fulfill project requirements as authorized in (2) above. If the
required number of Microdyne employees are not available to meet
project quantity and time requirements, Microdyne will recruit
outside temporary agency personnel following Epson's procedures
for procuring temporary agency personnel.
F. Miscellaneous Services.
Provide Leased Employees for a wide variety of positions as requested by
Epson. These may be individual positions or a group of positions. The
positions may be long term or temporary. Microdyne Leased Employees in
these positions may receive operational direction from Epson personnel
subject to the provisions of section 2.l.
II QUALITY AND PERFORMANCE STANDARDS.
A. Quality Standards.
1. Microdyne Leased Employees will be qualified to satisfactorily
perform their duties as specified in their job description.
2. All Services will be performed to generally accepted industry
standards and practices.
3. Written quality standards will be developed and maintained by
Epson and Microdyne jointly for all major processes.
3
16
B. Performance Standards.
1. Written performance standards will be developed and agreed to by
Epson and Microdyne for each of the Services specified in (I)
above as applicable. These performance standards may include
items such as turnaround time, average repair time, and TTS
average call handle time (ACHT).
2. Performance standards will be reviewed and updated every six (6)
months at a minimum.
C. Reporting.
1 Microdyne will provide monthly reports as requested by Epson
indicating achievement to quality and performance standards.
2. As a result of providing the Services, Microdyne may collect
information that can be applied to improve Epson's products and
Services. Microdyne shall actively seek to identify such
information and report back to Epson on a timely basis.
D. Efficiency.
Microdyne will insure all Leased Employees are utilized efficiently, and
will continuously strive to increase the level of efficiency.
III REPAIR ACTIVITY MANAGEMENT SYSTEM (RAM).
A. Microdyne will install, maintain, and periodically update subject to
mutual agreement, repair activity management systems at Indianapolis and
Xxxxxx depots at no charge to Epson. These systems will minimally
maintain a database which will provide the following information:
1. Tracking of specific units or lots in the repair process by model,
serial number, and customer.
2. Labor utilization, repair time.
3. Parts usage by unit and model.
4. Failure history including no trouble found.
5. Efficiency and productivity.
6. Repeat repairs.
7. Summary data on failure analysis, average cost per unit, scrap
rate, and refurbishment yield rates.
4
17
B. RAM system design will be compatible for future linkage with Epson's
systems.
C. Epson may request additional major functions be added to these systems.
Microdyne will perform these upgrades subject to negotiation of
development costs with Epson.
IV INVENTORY MANAGEMENT.
All product and parts inventory (product) will remain the property of
Epson. At no time will title of any Epson product pass on to Microdyne.
Microdyne will be responsible for protecting all inventory in its
possession from loss or damage. Products lost or damaged through
negligence, while in the possession of Microdyne, will result in
compensation to Epson for Epson's cost of the product in question.
Additionally, Microdyne will be responsible for maintaining and tracking
inventory levels while the product is in its possession. Transfer of
product into and out of Microdyne's control will be through a mutually
accepted transfer process.
5
18
ATTACHMENT B
SCHEDULE OF PRICES
I. GENERAL.
Under the terms of this agreement, the Services and Leased Employees to
be provided by Microdyne, as outlined in both the basic agreement and
Attachment A, will be charged according to the following pricing
provisions:
A. Job Descriptions and Salary Ranges.
1. Microdyne will develop and maintain written job descriptions for
each Leased Employee based on the Services requested by Epson.
2. Microdyne will assign a salary grade to each job description based
on fair market value for each position at the employment location.
3. All job descriptions and salary grades must be approved by Epson
and Microdyne executive management.
4. As duties change, job descriptions may be modified periodically
and salary grades evaluated for the revised job description.
5. All job descriptions will be reviewed annually.
B. Leased Employee Types.
1. Full Time Employee - Regular, full time, salaried or hourly
employee with full Microdyne benefits.
2. Temporary Employee - Temporary employee with modified Microdyne
benefits.
3. Part Time Employee - Temporary employee with no Microdyne benefits.
C. Leased Employee Staffing Levels.
1. Epson will specify in writing the quantity of full time Microdyne
employees requested by job description, with thirty (30) days
advance notification of increases or decreases subject to the
limitation of C.3 below.
1
19
2. Epson will specify in writing the quantity of temporary or part
time Microdyne employees requested by job description and will
estimate the duration of the requirement. Epson will make a best
effort to provide a minimum of two (2) days advance notice for
increases and one (1) day advance notice for decreases.
3. Epson will provide 65 days advanced notice for any decrease in
Leased Employee staffing levels which may trigger the requirements
of the Workers Adjustment and Retraining Notification Act of 1988.
4. All changes to requested staff levels require approval by Epson
executive management or authorized Epson management.
D. Monthly Charges (Based on Rates in Table 1)
1. Full Time Employees, Salaried:
a. Charges will be at a monthly flat rate per employee based on
the applicable pay grade.
b. Epson will not be charged for full time, salaried employees
who are absent due to short or long term disability, leave of
absence, or jury duty; nor will these absences be counted
against Microdyne attendance percentages.
c. Microdyne will be expected to maintain acceptable levels of
full time, salaried employee attendance as follows:
# Salaried employee days worked in month = Monthly Attendance %
----------------------------------------
# Salaried employees x # work days in month
A rolling six month minimum monthly attendance average of 94%
must be maintained for the immediate preceding six months.
In any month where the six month average falls below 94%, the
monthly invoice will be reduced in percentage by the amount
that the six month average is below 94%. For example, a six
month average attendance percent of 92.5% would cause a 1.5%
decrease in the invoice for that month.
2
20
2. Full Time Employees, Hourly:
Billing will be for actual hours worked based on the applicable
pay grade. All other hours and payments are excluded.
3. Temporary and Part-Time Employees, Hourly:
Billing will be for actual hours worked on a cost plus basis. All
other hours and payments are excluded.
4. Volume Discount:
A volume discount will be applied to the total monthly invoice
amount.
E. Overtime Authorization.
For each operational area, Epson will authorize Microdyne the authority
to work a reasonable amount of overtime sufficient to provide operational
flexibility. Overtime in excess of this amount must be approved in
advance by Epson.
F. Pricing Equity.
1 Microdyne will insure that all Leased Employees meet or exceed
minimum job description qualifications for their assigned job and
pay grade as charged to Epson, and that actual pay rates for
Leased Employees will meet or exceed the low pay range of the pay
grade charged to Epson for that Leased Employee.
2. Microdyne will further insure that it hires and administers Leased
Employee salaries within the guidelines of Microdyne's employee
policies and procedures, meeting reasonable industry standards.
G. Skill Range Progression.
1. Certain jobs have skill range progressions, e.g., technicians, TTS
representatives. Microdyne and Epson will agree on the desired
number of employees at each skill level.
3
21
2. Microdyne may be unable to provide sufficient qualified personnel
to meet the agreed upon skill level allocation. If this occurs
Microdyne, with Epson's approval, may elect to provide Leased
Employees at a lower skill level, charging at the appropriate
lower pay rate. At some time, some of these Leased Employees may
have increased their skills to meet the job description
requirements for the next higher pay rate. Microdyne may promote
these Leased Employees to a higher pay grade and increase charges
to Epson, subject to Epson's agreement that the Leased Employee
meets job description requirements and is within the skill level
allocation stated in Gl.
H. Other Charges.
1 . Epson may request travel for non-management Leased Employees or
special travel for management Leased Employees. Microdyne will
insure travel expenses are incurred within Microdyne's travel
expense policies, and will invoice Epson for actual charges. No
charges will be invoiced for normal business travel by Microdyne
management employees.
2. Epson will pay directly for all outside vendors, services, and
temporary agency personnel utilized in performing Services.
3. No other charges will apply.
4
22
ATTACHMENT B
TABLE 1
SALARY RANGES AND CHARGES
======================================================= ================================================
FULL TIME SALARIED EMPLOYEES FULL TIME HOURLY EMPLOYEES
------------------------------------------------------- ------------------------------------------------
SALARY RANGE SALARY RANGE
PAY --------------------------- MONTHLY PAY ----------------------------- HOURLY
GRADE LOW MID HIGH CHARGE GRADE LOW MID HIGH CHARGE
------------------------------------------------------- -------------------------------------------------
S1 $25,500 $30,250 $35,000 $4,235 H1 $5.58 $6.18 $6.78 $11.37
S2 $26,500 $31,250 $36,000 $4,375 H2 $5.81 $6.44 $7.06 $11.84
S3 $27,500 $32,250 $37,000 $4,515 H3 $6.05 $6.70 $7.35 $12.33
S4 $29,750 $34,500 $39,250 $4,830 H4 $6.28 $6.95 $7.63 $12.80
S5 $31,000 $35,750 $40,500 $5,005 H5 $6.51 $7.21 $7.91 $13.27
S6 $33,500 $38,250 $43,000 $5,323 H6 $6.74 $7.47 $8.19 $13.74
S7 $34,500 $39,250 $44,000 $5,462 H7 $6.98 $7.73 $8.48 $14.22
S8 $36,000 $40,750 $45,500 $5,671 H8 $7.21 $7.98 $8.76 $14.69
S9 $37,000 $42,250 $47,500 $5,880 H9 $7.44 $8.24 $9.04 $15.16
S10 $38,500 $45,250 $52,000 $6,297 H10 $7.67 $8.50 $9.32 $15.63
S11 $40,000 $47,500 $55,000 $6,571 H11 $7.91 $8.76 $9.61 $16.12
S12 $45,000 $52,500 $60,000 $7,306 H12 $8.14 $9.01 $9.89 $16.59
S13 $52,000 $59,500 $67,000 $8,280 H13 $8.37 $9.27 $10.17 $17.06
S14 $60,000 $66,500 $73,000 $9,255 H14 $8.60 $9.53 $10.45 $17.53
S15 $70,000 $78,500 $87,000 $10,925 H15 $8.84 $9.79 $10.74 $18.01
S16 $75,000 $82,500 $90,000 $11,481 H16 $9.07 $10.04 $11.02 $18.38
======================================================= H17 $9.30 $10.30 $11.30 $18.85
H18 $9.53 $10.56 $11.58 $19.32
H19 $9.77 $10.82 $11.87 $19.80
======================================================= H20 $10.00 $11.07 $12.15 $20.27
TEMPORARY (TMH) AND PART-TIME (PTH) EMPLOYEES - HOURLY H21 $10.23 $11.33 $12.43 $20.73
------------------------------------------------------- H22 $10.46 $11.59 $12.71 $21.20
H23 $10.70 $11.85 $13.00 $21.69
TYPE RATE + MARKUP% = CHARGE H24 $10.93 $12.10 $13.28 $22.04
------------------------------------------------------- H25 $11.16 $12.36 $13.56 $22.62
H26 $11.39 $12.62 $13.84 $23.09
PTH EMPLOYEE 52.0% HOURLY CHARGE H27 $11.63 $12.88 $14.13 $23.57
PAY RATE H28 $11.86 $13.13 $14.41 $24.04
H29 $12.09 $13.39 $14.69 $24.50
PTH EMPLOYEE 42.9% OVERTIME HOURLY H30 $12.32 $13.65 $14.97 $24.97
OVERTIME CHARGE H31 $12.56 $13.91 $15.26 $25.32
PAY RATE H32 $12.79 $14.16 $15.54 $25.78
H33 $13.02 $14.42 $15.82 $26.24
TMH EMPLOYEE 58.0% HOURLY CHARGE H34 $13.25 $14.68 $16.10 $26.71
PAY RATE H35 $13.49 $14.94 $16.39 $27.19
H36 $13.72 $15.19 $16.67 $27.65
TMH EMPLOYEE 48.5% OVERTIME HOURLY H37 $13.95 $15.45 $16.95 $28.12
OVERTIME CHARGE H38 $14.18 $15.71 $17.23 $28.58
PAY RATE H39 $14.42 $15.97 $17.52 $29.07
======================================================= H40 $14.65 $16.22 $17.80 $29.53
H41 $14.88 $16.48 $18.08 $29.99
H42 $15.11 $16.74 $18.36 $30.46
======================================================= H43 $15.35 $17.00 $18.65 $30.94
VOLUME DISCOUNT H44 $15.58 $17.25 $18.93 $31.40
------------------------------------------------------- H45 $15.81 $17.51 $19.21 $31.87
H46 $16.04 $17.77 $19.49 $32.15
MONTHLY INVOICE DISCOUNT % APPLIED H47 $16.28 $18.03 $19.78 $32.63
AMOUNT TO MONTHLY AMOUNT H48 $16.51 $18.28 $20.06 $33.10
OVER $1,100,000 H49 $16.74 $18.54 $20.34 $33.56
H50 $16.97 $18.80 $20.62 $34.02
FROM TO H51 $17.21 $19.06 $20.91 $34.50
---- -- H52 $17.44 $19.31 $21.19 $34.96
H53 $17.67 $19.57 $21.47 $35.42
Less than $ 1,100,000 0.0% H54 $17.90 $19.83 $21.75 $35.88
$ 1,100,001 - $ 1,200,000 - 3.0% H55 $18.14 $20.09 $22.04 $36.35
$ 1,200,001 - $ 1,300,000 - 4.0% H56 $18.37 $20.34 $22.32 $36.82
$ 1,300,001 - $ 1,400,000 - 4.4% H57 $18.60 $20.60 $22.60 $37.29
$ 1,400,001 - $ 1,500,000 - 4.8% H58 $18.83 $20.86 $22.88 $37.75
$ 1,500,001 - $ 1,600,000 - 5.2% H59 $19.07 $21.12 $23.17 $38.22
$ 1,600,001 - $ 1,700,000 - 5.6% LE $10.58 $12.75 $14.92 $20.53
$ 1,700,001 - $ 1,800,000 - 6.0% L1 $12.26 $14.79 $17.31 $23.66
$ 1,800,001 - $ 1,900,000 - 6.4% L2 $13.22 $15.99 $18.75 $25.42
$ 1,900,001 - $ 2,000,000 - 6.8% L3 $14.30 $17.13 $19.95 $27.06
$ 2,000,001 - $ 2,100,000 - 7.2% L4 $15.62 $19.40 $23.17 $30.45
======================================================= ================================================
=======================================================
FULL TIME HOURLY - OVERTIME CHARGE
-------------------------------------------------------
HOURLY CHARGE + 41% XXXX UP = OVERTIME HOURLY CHARGE
=======================================================
5
23
ATTACHMENT C
CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
This Agreement is made as of the 1st day of April, 1996, by and between Epson
America, Inc., a California corporation with its principal place of business at
00000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 ("Epson") and Microdyne
Corporation, a Virginia corporation located at 0000 Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 ("Microdyne").
Whereas Epson will disclose to Microdyne certain information relating to its
products, parts, customers, and business practices for the purpose of enabling
Microdyne to perform various maintenance, repair, and distribution services
pertinent to certain Epson products and sub-assemblies sold by Epson and its
other appointees in the marketplace. Epson desires that any confidential and/or
proprietary information ("Information") disclosed to Microdyne be used only to
further the business relationship between the parties hereto.
In order to ensure that the information disclosed by Epson to Microdyne is used
only in accordance with the purposes stated above, the parties agree to the
following:
I. This Agreement shall be in effect for five (5) years.
II. Microdyne shall prevent the disclosure to others of
Information transmitted to Microdyne where such
Information is prominently designated as confidential,
and is disclosed in the performance of, or in
connection with, Microdyne services performed for
Epson. Any Information delivered by Epson to Microdyne
marked "secret", "confidential", or with words of
similar meaning, shall be conclusively deemed, as
between the parties, confidential and trade secret
information of Epson. Any Information not bearing such
marking shall not, however, be deemed to be non-secret
or non-confidential, but any such unmarked information
shall be subject to the same restrictions as contained
herein.
III. Epson warrants that no restriction is made upon
Microdyne relating to Microdyne's freedom to offer
services to any other persons or to transmit any
Information to other persons where such Information (a)
shall have been in its possession prior to the
disclosure by Epson, (b) shall have become part of the
public domain through no fault of Microdyne, (c) shall
have been developed subsequent to, and independent of,
the disclosure by Epson, or (d) shall have been
released in writing by Epson so that Microdyne may make
public disclosure or otherwise deemed no longer to be
confidential.
1
24
IV. Microdyne shall not use such confidential information
itself, disclose it to others to permit the disclosure
of such information to others, and will prevent
Microdyne employees (so long as they shall remain
employed by Microdyne) from divulging, publishing, or
using such information, except as is necessary to
perform the aforementioned maintenance repair and
distribution services.
V. All information disclosed by Epson to Microdyne shall remain
the property of Epson. At Epson's request, the tangible
information from Epson shall be promptly returned or
destroyed, together with all copies thereof. Upon request,
Microdyne shall provide written certification of the
destruction.
VI. Any notice or other communication provided under this
Agreement will be in writing and be sent via facsimile,
or certified or registered mail, return receipt
requested, to the respective addresses as either party
has designated to the other by notice in writing. Any
such notice will be deemed given when received by the
other party, attention directed to the individual
singing this Agreement.
VII. This Agreement will be governed by the laws of the
State of California and constitutes the entire
Agreement between Epson and Microdyne pertaining to the
subject matter hereof. No provisions of this Agreement
will be deemed waived, amended, or modified by either
party unless such waiver, amendment, or modification be
in writing signed by the party against whom it is
sought to enforce the waiver, amendment, or
modification. If any provision of this Agreement is
held to be illegal or unenforceable, such shall not
effect the balance thereof.
VIII. The parties hereto acknowledge that they have read this
Agreement, understand it, and agree to be bound by its terms
and conditions. Further, the parties acknowledge that this
Agreement supersedes all prior agreements, oral or written,
and all other communications between the parties relating to
the subject matter of this Agreement.
2
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed. The persons signing warrant that they are authorized to sign for, and
on behalf of, the respective parties.
MICRODYNE CORPORATION EPSON AMERICA, INC.
BY: [SIG] BY: [SIG]
----------------------- -----------------------------
Authorized Signature Authorized Signature
TITLE: V.P. Operations TITLE: Vice President, Operations & Logistics
---------------------- --------------------------
DATE: March 20, 1996 DATE: March 20, 1996
---------------------- ---------------------------
3
26
ATTACHMENT D
MICRODYNE ASSETS
The following Microdyne assets are located at the Carson, California, service
depot:
Manufacturer Description Model Quantity
------------ ----------- ----- --------
Xxxxxx Soldering Iron EC1002 9
Xxxxxx Soldering Iron WTCPS 1
Xxxxxx Soldering Iron WTCPT 2
Xxxxxx Soldering Iron EC1201 2
Xxxxxx Soldering Iron WCC100 2
Xxxxxx Soldering Iron TC201T 2
Xxxxxx Soldering Iron EC1001 1
Xxxxxx Soldering Iron EC2001 2
Microtech Soldering Iron MT1000 1
EST Soldering Iron BT-1011 1
Pace Soldering Station MBT 13
Solder Aid Desoldering Station SA-150 1
Hakko Desolder 470 1
Fluke DVM 77 12
Fluke DVM 8021B 2
Triplet DVM 3550 1
Tektronic DVM DMM251 6
Tektronix Scope 475 5
Tektronix Scope 2235A 4
OK Industries Hot Air Machine FCR-21Q1 1
Goldstar Video Cassette Player GVPB115 10
Opticon Barcode Reader (Wand) Opticon 8
Xxxxx Xxxxx Barcode (Wand) 2350 18
Xxxxx Xxxxx Barcode Reader 3400 1
Scanteam Barcode Reader 5500 1
Huntron Tracker 1000 8
Worthington Data
Solutions Barcode Reader 5310HP43 1
Dayton Air Compressor 32419 1
(Speed Air)
Aqua Blaster Washing Machine 1200 1
Nu-Concept Sys. Hot Air Desoldering Tool Xxxx 200A 1
HP O'Scope 54502A 1
1