ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") is made and
entered into effective as of January 1, 1999, by and between Homestead Village
Incorporated, a Maryland corporation ("the Company"), and SCGroup Incorporated,
a Texas corporation ("SCGroup").
WHEREAS, the Company wishes to purchase from SCGroup certain
administrative services designed to assist the Company in the cost-efficient
management of the Company's administrative and business affairs in the manner
and pursuant to terms and conditions as more specifically described herein; and
WHEREAS, SCGroup desires to provide or cause to be provided those
services requested by the Company under such terms and conditions; and
WHEREAS, SCGroup will perform similar administrative services for other
entities (collectively "SCGroup Clients") which may vary from time to time.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Services
1.1 Scope of Services. The specific services to be provided by
SCGroup to the Company (each a "Service" and collectively the "Services") shall
be listed in Schedule A. Schedule E provides a description of the manner and
extent to which each Service will be provided. The scope of Services provided by
SCGroup may be expanded, reduced or otherwise modified during the Initial Term
(as defined in Section 3) or any Renewal Term (as defined in Section 3) upon
prior written agreement of the parties. Unless otherwise agreed, the Company
shall provide SCGroup with written notice at least 30 days prior to any
requested change in the scope of Services. In addition, the parties shall review
the scope of Services annually and shall complete such review and agree upon any
resulting scope changes for the upcoming calendar year not later than November
30 of the then current year. In either event, Schedules A and E shall be amended
to reflect any agreed upon changes in the scope of Services.
1.2 Performance of Services. SCGroup covenants that it will
perform or cause to be performed the Services in a timely, efficient and
workmanlike manner. SCGroup further covenants that it will maintain or contract
for a sufficient staff of trained personnel to enable it to perform the Services
hereunder. SCGroup may delegate and subcontract some or all of its obligations
under this Agreement to one or more third parties. If SCGroup does so, it will
remain responsible for the performance of all obligations performed by such
subcontractors to the same extent as if such obligations were performed by
SCGroup employees.
1.3 Access, Information, Cooperation and Assistance. The
Company will provide SCGroup with all access, Company information, cooperation
and assistance necessary for SCGroup to perform the Services in accordance with
this Agreement. The Company will cooperate with SCGroup to institute changes
expected to result in reduced and more efficient resource usage.
1.4 Changes in Scope of Service. Subject to appropriate
undertakings of confidentiality by SCGroup, the Company shall notify SCGroup at
least 30 days prior to the occurrence of any of the following: (i) the Company
proposes to acquire any new property or properties; (ii) the Company proposes to
enter into any business combination or acquire any significant assets of another
person or entity, (iii) the Company proposes to establish any new subsidiary
corporation, partnership, joint venture, business trust or other entity; (iv)
the Company proposes to conduct operations or business in any state or other
jurisdiction in which the Company is not qualified to transact business; or (v)
the Company proposes to take any other action which may significantly increase
the scope of Services to be provided by SCGroup hereunder. Upon receipt of such
notice by SCGroup, the parties shall negotiate in good faith the scope of such
Services and the charges payable therefor (if additional Services are required).
Any such charges shall be payable by the Company as provided in Section 2.4.
Section 2. Charges.
2.1 Charges. The charges to be paid by the Company to SCGroup
for the Services then being performed or to be performed by SCGroup shall be
listed in Schedule B ("Charges"). These charges shall remain in effect
throughout the initial or applicable Renewal Term of this agreement. If the
scope of Services is changed during the annual review process or at any other
time, the parties shall negotiate in good faith and agree in advance on any
resulting changes in the Charges to be paid to SCGroup by the Company in the
subsequent Renewal Term. Schedule B shall be amended to reflect any agreed upon
changes in the Charges.
2.2 Retained Expenses. The Company shall retain financial
responsibility for those functions and expense items shown as retained expenses
in Schedule D. The Company will be billed directly by third parties for such
services. The Company agrees to pay such expenses timely and in the ordinary
course of business.
2.3 Pass-Through Expenses. Pass-through expenses are listed in
Schedule C. Unless otherwise agreed by the parties, pass-through expenses will
be paid by the Company directly. SCGroup will promptly provide the Company with
the original third-party invoice for such expenses together with a statement
that SCGroup has reviewed and validated the invoiced charges. SCGroup will
highlight any charges that appear to be inappropriate and will work with the
Company to reconcile all bills with the third-party suppliers.
2.4 Payment for Services. SCGroup shall invoice the Company,
at the end of each calendar month, the amount agreed to from time to time
pursuant to Section 2.1 for the applicable Service. Such amount shall be payable
in full within 20 days of receipt of such invoice by the Company. Any past due
amounts shall be subject to a .834% per month (10% per annum) (or the maximum
rate allowable by law, whichever is less) late payment fee.
2.5 Taxes.
(a) Each party will pay any real estate or personal property
taxes on property its owns or leases, franchise and privilege taxes on
its business, and taxes based on its net income or gross receipts.
(b) SCGroup will pay all sales, use, excise, value-added,
services, consumption, and other taxes and duties payable by SCGroup on
any goods or services used or consumed by SCGroup in providing the
Services where the tax is imposed on SCGroup's acquisition or use of
such goods or services and the amount of tax is measured by SCGroup's
costs in acquiring such goods or services.
(c) In the case of any sales, use, excise, value-added,
services, consumption, or other tax during the term of this Agreement
that is assessed on the provision of the Services as a whole, or on any
particular hardware, software, or Services received by the Company from
SCGroup, the Company will pay such taxes.
(d) The Parties agree to fully cooperate with each other to
enable each to more accurately determine its own tax liability and to
minimize such liability to the extent legally permissible.
Section 3. Term. The initial term of this Agreement shall commence on
the date hereof and, unless terminated earlier in accordance with Section 10,
shall end on December 31, 1999 (the "Initial Term"). Absent written notice of
non-renewal as provided in this Section 3, this Agreement shall be automatically
renewed for successive one-year terms (each, a "Renewal Term") upon the
expiration of the Initial Term and each Renewal Term. Notice of non-renewal, if
given, shall be given in writing by either party hereto not less than ninety
(90) calendar days before the expiration of the Initial Term or any Renewal
Term.
Section 4. Audit of Services. At any time during regular business hours
and as often as reasonably requested by the Company's officers, SCGroup shall
permit the Company or its authorized representatives to examine and make copies
and abstracts from the records and books of SCGroup for the purpose of auditing
the performance and Charges of SCGroup under the terms of this Agreement;
provided, that all costs and expenses of such inspection shall be borne by the
Company.
Section 5. Company Data. Data obtained by SCGroup from the Company in
connection with the performance of any Services ("Company Data") is and shall
remain the exclusive property of the Company. SCGroup is authorized to have
access to and make use of the Company Data as necessary and appropriate for the
performance by or for SCGroup of its obligations under this Agreement. Upon the
termination or expiration of this Agreement, SCGroup will return to the Company
all Company Data then in its possession. SCGroup will not use Company Data for
any purpose other than for providing the Services.
Section 6. Confidentiality. Except as otherwise provided in this
Agreement, SCGroup and the Company each agree that all information communicated
to it by the other, whether before or after the effective date of this
Agreement, will be received in strict confidence, will be used only for purposes
of this Agreement, and will not be disclosed by the recipient party without the
prior written consent of the other party. Each party agrees to use the same
means it uses to protect its own Confidential Information, but in any event not
less than reasonable means, to prevent the disclosure of such information to
outside parties. However, neither party will be prevented from disclosing
information to its counsel or regular public accountants, or from disclosing
information which belongs to such party, or is (a) already known by the
recipient party without an obligation of confidentiality; (b) publicly known or
becomes publicly known through no unauthorized act of the recipient party; (c)
rightfully received from a third party; (d) independently developed without use
of the other party?s confidential information; (e) disclosed without similar
restrictions to a third party by the party owning the confidential information;
or (f) required to be disclosed pursuant to a requirement of a governmental
agency or legal requirement if the disclosing party provides the other party
with notice of this requirement prior to disclosure.
Section 7. Service Levels.
7.1 Establishment of Service Levels. Schedule E contains the
scope of services and service levels agreed to by the parties. To the extent any
desired service level is determined by the parties to be unattainable using
commercially reasonable efforts, SCGroup will identify the level of service
which is reasonably attainable, the modifications or changes necessary to attain
the higher service level and the costs associated with such modifications or
changes. Following the initial one year period, the parties will meet as
required to evaluate and revise the service levels to the extent appropriate.
SCGroup will measure the quality and quantity of the Services actually
delivered. The data obtained by SCGroup will be reviewed and verified by the
parties and will be one of the bases for evaluating and possibly revising
Schedule E. All such revisions must be agreed to by the Company and SCGroup. If
requested, the Company will provide copies of relevant information in its
possession to SCGroup to assist in any review or revision of the service levels.
7.2 Failure to Attain Service Levels. If SCGroup fails to
attain any service level, SCGroup will (i) promptly investigate the cause of the
problem; (ii) prepare a report identifying the cause of the problem and
recommending solutions; and (iii) use commercially reasonable efforts to correct
the problem and to begin meeting the service levels as soon as practicable.
Section 8. Prevention of Performance. SCGroup shall not be determined
to be in violation of this Agreement if it is prevented from performing any
Services hereunder, in whole or in part, by the acts or omissions of the Company
or a third party or for any other reason beyond its reasonable control,
including without limitation acts of God, nature or public enemy, war, civil
disturbance, labor dispute, failure or fluctuation in electrical power, heat,
light, air conditioning or telecommunication service, or limitations of law,
regulations or rules of the Federal, state or local government or of any agency
thereof.
Section 9. Software and Other Intellectual Property.
9.1 Company Software. The Company's ownership, license or
other right or title to computer software used by the Company
("Company Software") will remain the Company's property and SCGroup will have no
ownership interest or other right in such Company Software due to this Agreement
or the services provided hereunder, except as provided in this Section. The
Company grants to SCGroup, without charge, the limited nonexclusive
nontransferable right to access Company Software during the term of this
Agreement for the purpose of, and to the extent necessary for, performing the
Services.
9.2 SCGroup Software. Software owned by or licensed to SCGroup
which is used by SCGroup in providing the Services (collectively, "SCGroup
Software") is and will remain SCGroup's property and the Company will have no
ownership interest or other right in such SCGroup Software.
9.3 Intellectual Property Rights. If, in the course of
providing Services under this Agreement, the Company requests and SCGroup agrees
to develop any Software, process, document or other material to the
specification of the Company, not being SCGroup Software or an enhancement
thereto, and the Company pays all of the Charges associated with such
development ("Work Product"), then the copyright or other intellectual property
rights and all legal and beneficial rights therein shall belong to the Company.
SCGroup hereby assigns to the Company all right, title and interest that arises
in SCGroup with respect to such Work Product, including all intellectual
property rights related thereto, and SCGroup agrees to take all reasonable steps
and execute all documents necessary to perfect title to such Work Product in the
Company. SCGroup shall be permitted to access and use such Software, process,
document or other material to the extent necessary for the provision of the
Services to the Company.
9.4 SCGroup Ownership Rights. Except as provided for in
Section 9.3 above, all copyright or intellectual property rights in any
Software, process, document or other material created by SCGroup, its employees
or agents and all legal and beneficial rights therein shall belong to SCGroup.
Section 10. Termination.
10.1 Termination for Cause. Either party may terminate this
Agreement, in whole or in part, by giving written notice to the other party, if
such other party materially breaches any of its duties or obligations set forth
herein and fails to cure such breach within thirty (30) days of written notice
of such breach. If less than all Services are terminated, the parties will
equitably adjust the Charges to be paid by the Company hereunder for the
remaining Services.
10.2 Terminate for Insolvency. In the event that either party
(a) files for bankruptcy; (b) becomes or is declared insolvent, or is the
subject of any proceedings related to its liquidation, insolvency or the
appointment of a receiver or similar officer for it; (c) makes an assignment for
the benefit of all or substantially all of its creditors; or (d) enters into an
agreement for the composition, extension, or readjustment of substantially all
of its obligations, then the other party may terminate this Agreement at any
time upon notice to the other party.
SECTION 11. DISCLAIMER AND LIMITATION OF LIABILITY AND INTELLECTUAL
PROPERTY CLAIMS BETWEEN PARTIES.
11.1 DISCLAIMER. EXCEPT AS SPECIFICALLY STATED IN THIS
AGREEMENT, NEITHER SCGROUP NOR THE COMPANY MAKES ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, REGARDING ANY MATTER, INCLUDING THE
MERCHANTABILITY, SUITABILITY, ORIGINALITY, TITLE, FITNESS FOR A PARTICULAR USE
OR PURPOSE, OR RESULTS TO BE DERIVED FROM THE USE OF ANY HARDWARE, SOFTWARE,
SERVICES OR OTHER ITEMS PROVIDED UNDER THIS AGREEMENT.
11.2 LIMITATION OF LIABILITY. IN NO EVENT WILL A PARTY BE
LIABLE FOR INDIRECT, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES EVEN
IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. Additionally,
the total liability of the parties under or in connection with this Agreement
will be limited to the total charges paid by the Company to SCGroup during the
12 months preceding the event which is the subject of the claim (the "Liability
Cap"); provided, however, the Liability Cap will not apply with respect to (i)
damages occasioned by the willful misconduct of a party, (ii) claims that are
the subject of the indemnification provisions set forth herein, or (iii) the
failure to pay Charges due and owing to SCGroup under this Agreement.
Section 12. Indemnification.
12.1 By the Company. The Company shall indemnify, defend and
hold SCGroup, and its directors, officers, and employees harmless from and
against all damages, losses and reasonable out-of-pocket expenses (including
fees) incurred by SCGroup Incorporated in the course of performing the duties on
behalf of the Company and its subsidiaries as prescribed hereby, except for
matters covered by subsection 12.2 hereof.
12.2 By SCGroup. SCGroup shall indemnify, defend and hold the
Company, its trustees, officers and employees harmless from and against all
damages, losses and reasonable out-of-pocket expenses (including fees) caused by
or arising out of any willful misconduct or gross negligence by SCGroup in the
performance of its obligations under this Agreement.
12.3 Remedy. Except as otherwise provided in subsection 12.2
hereof, SCGroup does not assume any responsibility under this Agreement other
than to render the Services called for under this Agreement in good faith and in
a manner reasonably believed to be in the best interests of the Company. Except
as otherwise provided in subsection 12.2 hereof, the Company's sole remedy on
account of the failure of SCGroup to render the Services as and when required
hereunder shall be to procure services elsewhere.
Section 13. Relationship of the Parties.
13.1 Independent Contractor Status. SCGroup is an Independent
Contractor. This Agreement will not be construed as creating any partnership,
agency relationship or other form of legal association that would impose
liability upon one party for the other party?s actions or failure to act. Nor
will this Agreement be construed as providing either party with the right, power
or authority (express or implied) to create any duty for, or obligation of, the
other party.
13.2 Responsibility for Employees. Each party will be
responsible for the management, direction and control of its employees and other
agents. All SCGroup employees used in performing SCGroup?s obligations under
this contract shall be employed solely and exclusively by SCGroup, and all
Company employees used in performing the Company?s obligations under this
Agreement shall be employed solely and exclusively by the Company. Thus, SCGroup
and the Company shall not be considered a joint or single employer of any
employee.
13.3 SCGroup Control of Services. Except where this Agreement
expressly provides that SCGroup will perform certain identified Services as
agent for the Company, the Services will be under the control, management and
supervision of SCGroup.
Section 14. Notices.
14.1 Manner of Delivery. Each notice, demand, request,
consent, report, approval or communication (each a "Notice") which is or may
be required to be given by either party to the other party in connection with
this Agreement and the transactions contemplated hereby, shall be in writing,
and given by telecopy, personal delivery, receipted delivery service, or by
certified mail, return receipt requested, prepaid and properly addressed to
the party to be served.
14.2 Addresses. Notices shall be addressed as follows:
If to the Company:
Homestead Village Incorporated
0000 Xxxxxx Xxxxxx Xxxxxx
Xx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
If to SCGroup:
SCGroup Incorporated
0000 Xxxxxx Xxxxxx Xxxxxx
Xx Xxxx, Xxxxx 00000
Attention: J. Xxxxxx Xxxxxxxxx
14.3 Effective Date of Notice. Notices shall be effective on
the date sent via telecopy, the date delivered personally or by receipted
delivery service, or three (3) days after the date mailed.
14.4 Change of Address. Each party may designate by notice to
the others in writing, given in the foregoing manner, a new address to which
any notice may thereafter be so given, served or sent.
Section 15. Entire Agreement. This Agreement, together with the
Exhibits hereto, constitutes and sets forth the entire agreement and
understanding of the parties pertaining to the subject matter hereof, and no
prior or contemporaneous written or oral agreements, understandings,
undertakings, negotiations, promises, discussions, warranties or covenants not
specifically referred to or contained herein or attached hereto shall be valid
and enforceable. No supplement, modification, termination in whole or in part,
or waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provision hereof (whether or not similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
Section 16. Priority. If there is any apparent conflict or
inconsistency between the provisions set forth in this Agreement, and the
provisions set forth in any schedule, exhibit, attachment or supplement
attached hereto, to the extent possible such provisions will be interpreted in
a manner so as to make them consistent. If it is not possible to interpret
such provisions consistently, the provisions set forth in the body of this
Agreement will prevail.
Section 17. No Third Party Beneficiaries. The parties do not
intend, nor will any clause of this Agreement be interpreted to create, for any
third party any obligation to or benefit from the Company or SCGroup.
Section 18. Survival. All provisions of this Agreement which
contemplate performance or observance following the expiration or earlier
termination of this Agreement, will survive any such expiration or earlier
termination. Additionally, all provisions of this Agreement will survive the
expiration or earlier termination of this Agreement to the fullest extent
necessary to give the parties the full benefit of the bargain expressed
herein.
Section 19. Consents and Approvals. Where agreement, approval,
permission, acceptance, consent or similar action by either party is required
by any provision of this Agreement, such action will not be unreasonably
delayed, conditioned or withheld.
Section 20. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, each of their respective
successors and permitted assigns, but may not be assigned by either party
without the prior written consent of the other party, and no other persons
shall have or derive any right, benefit or obligation hereunder.
Section 21. Headings. The headings and titles of the various
paragraphs of this Agreement are inserted merely for the purpose of
convenience, and do not expressly or by implication limit, define, extend or
affect the meaning or interpretation of this Agreement or the specific terms
or text of the paragraph so designated.
Section 22. Governing Law. This Agreement shall be governed
in all respects, whether as to validity, construction, capacity, performance or
otherwise, by the laws of the State of Texas.
Section 23. Severability. If any provision of this Agreement shall be
held invalid by a court with jurisdiction over the parties to this Agreement,
then and in that event such provision shall be deleted from the Agreement,
which shall then be construed to give effect to the remaining provisions
thereof. If any one or more of the provisions contained in this Agreement or
in any other instrument referred to herein shall, for any reason, be held to
be invalid, illegal or unenforceable in any respect, then in that event, to
the maximum extent permitted by law, such invalidity, illegality or
enforceability shall not affect any other provisions of this Agreement or any
other such instrument.
Section 24. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which taken together shall be considered one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HOMESTEAD VILLAGE INCORPORATED
By:
Xxxxx X. Xxxxxxxx
Senior Vice President
SCGROUP INCORPORATED
By:
Xxxx X. Xxxxxx
Managing Director
SCHEDULE A
SCGroup shall provide the Company with the following services described in
Schedule E to this Agreement:
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PARAGRAPH
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Business Services
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Payroll Bank Reconciliation 1.4 - only
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Stock Option Administration & Reporting 1.8 - only
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Cash Management 2
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Corporate Tax Administration 3
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Disbursements 4
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Facilities Management 5
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Human Resources 6
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Internal Audit 7
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Legal 8
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MIS 9
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Payroll Processing 10
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Property Tax Administration 11
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Risk Management 12
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Special Projects 13 - as requested &
authorized in advance
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SCHEDULE B
SCGroup will provide the services listed in Schedule A to be billed at the
following rates:
SERVICE DESCRIPTION COST DRIVER RATE/COST DRIVER
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BUSINESS SERVICES:
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Financial Reporting and Analysis Services per hour $60
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G/L Accounting Services per hour $25
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Stock Option Administration & Reporting per account $100/year
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Registrar and Transfer Agent Services (for up to per month $1,000
300 shareholders/certificates; $5 per shareholder
transactions above 300; $2.30/check (dividend/
bond)
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Payroll/Bank Reconciliation per hour $30
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EIP Accounting per hour $25
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Budgeting and Forecasting per hour $40
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CASH MANAGEMENT:
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Bank Relationship Management bank accounts Monthly fee (plus $1,000 per
bank account)(1)
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Wire Transfers (special handling wires - $40/wire) # wires $16/wire
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CORPORATE TAX SERVICES:
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Income Tax Consulting Hours $85
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Tax Compliance Hours $60
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DISBURSEMENTS:
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Accounts Payable (including filing and retrieval) # invoices $2.30/invoice
($2.00 for invoices over 200,000)
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Help Desk per call $4.00
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Emergency checks per check $50
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A/P Rejects per reject $20
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Soda Stop Payments per stop payment $50
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T&E Processing # vouchers $9/voucher
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Corporate Travel Center (and Corporate Card T&E $ 1%
Administration)
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FACILITIES MANAGEMENT:
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El Paso only Headcount $1,600/year
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HUMAN RESOURCES:
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Performance Review & Compensation Services Headcount $60/year
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Database Management Headcount $25/year
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Health Benefits Administration Participants $100/year
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Retirement Plan Administration Participants $100/year
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Compliance Services Headcount $60/year
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Relocations (International $4,200) per relocation $700
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HRIS (special reports $65/per hour) per HR report $80
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Pre-employment Screening per candidate $60
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Recruitment (El Paso only) per new hire $2,230
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H/R Help Desk Headcount $15/year
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INTERNAL AUDIT SERVICES:
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Internal Audit Hours $65
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Audit Planning and Presentation Hours $125
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SERVICE DESCRIPTION COST DRIVER RATE/COST DRIVER
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LEGAL SERVICES:
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Lawyer per hour $180
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Paralegal per hour $90
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Associate per hour $45
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MIS SERVICES:
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Office Setup-Support per hour $75
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Data Center Operations per PC/per year $564
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Telecom Voice Networks per port/per year $190
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2nd Line Help Desk per call $25
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Training Offsite per day $2,800
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Training Onsite per 2-hour class $45
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On-line Training per student/year $100
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Vendor Management and Administration per PC/per year $220
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Applications Development (non-El Paso-$75) per hour $80
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PeopleSoft Financials, Support and Maintenance per user $225/month
(over 50 users, $100/month)
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PeopleSoft H/R-Payroll Support & Maintenance Headcount $100/year
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Technical Writing per hour $45
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PAYROLL (special handling checks/$50) # of pay checks $4.00
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PROPERTY TAX SERVICES:
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Property Tax Appeals/Administration per property per year $800
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Property Tax Research per hour $70
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RISK MANAGEMENT:
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Maintain and procure insurance coverage $ premium 4.25%
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Claims Management $ per claim $215
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Secure Performance Bonds $ per bond premium 12%
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(1) Property bank accounts are counted as one quarter of corporate bank
accounts. Cash Management fee based on customer revenues and is $0.25 per
$1,000 of revenue.
SCHEDULE C
Pass-Through Expenses are expenses and costs incurred by the
Company for which SCGroup has oversight responsibility for the third-party
vendor and will review and validate the invoiced charges. These Pass-Through
Expenses include but are not limited to the following:
- Independent audit expenses
- External tax-related services
- Insurance premiums and claims
- Banking fees
- External payroll processing fees
- Third-party vendors hired at the direction of the Company
- Out-of-pocket expenses
- All out-of-pocket expenses will be billed as incurred.
Applicable out-of-pocket expenses may include but
are not limited to: postage, envelopes, labels, forms
and stationery and delivery and freight charges
- Computer hardware, software or telephone equipment purchases
SCHEDULE D
Retained Expenses are costs and expenses incurred by the Company
from third parties which may provide the Company with administrative services in
an outsource arrangement. Retained expenses include, but are not limited to, the
following:
- Costs and expenses of third party service providers (eg:
IBM, CompuCom or Xxxxxxx Xxxxx), including fees and
out-of-pocket expenses.
SCHEDULE E
SERVICE LEVEL DESCRIPTION AND STANDARDS BETWEEN THE COMPANY AND SCGROUP
A. Purpose of Objective
The Company and SCGroup have jointly created this Schedule to detail
the conditions and expectations of the two parties regarding service
delivery by SCGroup to the Company.
No changes will be made to this Schedule without the agreement of both
parties. This Schedule will remain in force until explicitly
superseded, replaced or terminated.
B. Scope
SCGroup provides the services provided for in the Agreement to which
this Schedule is attached. Section E of this Schedule contains service
descriptions and standards to which SCGroup will adhere in providing
services during the term of this agreement.
From time to time, the Company may make requests for additional
services not covered by this Agreement ("out-of-scope" services). Upon
such request, the Company and SCGroup shall determine in good faith
whether such services requested by the Company were intended to be
included in paragraph D below or were out-of-scope. If the services
are determined to be out-of-scope, SCGroup personnel will notify
requesting Company personnel if they believe a service request is
out-of-scope. It a service request is determined to be out-of-scope,
an estimate of the cost will be provided to the Company Service
Manager and approval received from the Service Manager prior to
providing such service to the Company.
This Schedule pertains to all personnel in the home office, as well as
all regional offices within the United States.
C. Contact Personnel
The Company and SCGroup each shall designate a Service Manager who is
responsible for managing the respective rights and obligations of the
parties.
Contact information for the Service Managers and related personnel are
listed in Appendix A.
D. SCGroup agrees to provide the company with some or all of the
following services and adhere to the service standards described below
through the term of this agreement.
SCGroup will also provide the Company with standard, monthly
management reports to assist the Company with the analysis of the
Company's usage of SCGroup services. The reports will contain
budget-to-actual volume data and comparisons and information to enable
the Company to determine the source of demand for non-standard
services.
1. Business Services
1.1 General Ledger Accounting Services
(a) General Ledger Accounting
- Maintain system master files including chart
of accounts and application security
- Generate and record standard general
ledger transactions Record non-standard
general ledger transactions provided by
management
- Update system with annual budget and
quarterly forecast data
- Produce standard system generated financial
statements
- Support external audit requirements
- Maintain transaction
documentation and closing files (trial
balance, current ledger, various account
analysis, reconciliations, sub-ledger
printouts, closing checklist)
(b) Property Accounting
- New property setup and on-going
maintenance from lease abstracts
- Produce and record monthly recurring charges
(rent roll)
- Record non-recurring charges provided by
management
- Record and apply cash receipts to open
charges
- Produce standard system generated receivable,
revenue and management reports
- Maintain transaction documentation and
closing files (account analysis and
sub-ledger to general ledger reconciliations)
(c) Project Cost
- Maintain system master files including job
data and cost codes
- Record job cost transactions
- Update system with job cost budget data
- Produce standard system generated job
cost reports
- Maintain transaction documentation and
closing files (account analysis and
sub-ledger to general ledger reconciliations)
1.2 Financial Reporting and Analysis
- Prepare Security Capital Group Incorporated
("SCG") flash and performance summary
internal reports
- Prepare standard company management financial
and operating reports (as they exist on the
date of this agreement)
- Prepare financial statements for external use
- Other ad hoc reports and analysis including
supporting schedules
- Report development and/or assistance with
third party report development
1.3 Budgeting and Forecasting
- Prepare budgets and forecasts at the
direction of the Company
- Prepare future cash flow or other forward
looking projections
1.4 Payroll Bank Reconciliations
- Reconcile Company payroll bank accounts on
a monthly basis utilizing
- SCGroup standard bank reconciliation forms
- Provide journal entries necessary to correct
company book cash balance by the end
of the following month
1.5 Service Level Standards (for paragraphs 1.1 through
1.4)
- Produce flash and performance summary reports
by the 5th business day and the 15th
day following the end of the month,
respectively
- Respond to questions and management requests
within twenty-four hours
1.6 EIP Accounting
(a) Services - The following services are
provided for each Employee Investment
partnership:
- Partner investments and withdrawals
are accounted for in total in the
PeopleSoft General Ledger System and
tracked by partner in an EIP Access
Database
- Fundings to the investment companies are
prepared for EIP partners as well
as accredited investors
- Dividends from the investment
companies are deposited and posted to
the general ledger in total and
allocated to each partner quarterly
- Cash accounts are monitored daily Bank
reconciliations are performed monthly
- EIP distributions are prepared and
processed semi-annually
(b) Service Level Standards
- Partner investments and withdrawals
will be posted to the general ledger
and the database within five working
days of receipt
- All partner checks will be delivered to Cash
Management the same day they
are received
- Distributions to investment companies will be
wired within one working day
of the funds being available
- Dividends will be posted to the
general ledger and allocated to each
partner within five working days of
receipt
- Cash accounts will be monitored daily via
Cash Management XRT electronic
files
- Bank reconciliations will be prepared
by the end of each subsequent month
- EIP distributions and/or statements to
partners will be processed and
mailed semi-annually on January 31 and
July 31, or five working days following
the receipt of the dividend checks,
whichever is later.
1.7 Registrar and Transfer Agent Services
(a) Account Maintenance (maintenance of
shareholders of record)
- Processing of new shareholder accounts
- Posting and acknowledging address changes
- Processing other routine file
maintenance adjustments Posting all
transactions, including debit and
credit certificates to the
stockholder
- Researching and responding to all registered
shareholder inquiries
- Responding to requests for audit
confirmations
(b) Routine Certificate Issuance (issuance,
cancellation and registration of certificates
- Production and mailing of certificates
- Processing of all legal transfers
- Combining certificates into large
and/or smaller denominations
- Replacing lost certificates Placing,
maintenance and removing stop-transfer
notations
(c) Mailing, Reporting and Miscellaneous
Services
- Addressing, enclosing and mailing to
registered shareholders company-provided
materials
- Preparing and mailing dividend and
interest checks Preparing standard
reports - Stockholder Activity Report,
- Certificate Detail Report, and Net Change
Report
- Preparing 1099s and corresponding end of year
reports
(d) Annual Meeting Services
- Preparing stockholder lists for mailing of
announcements
- Preparing mailing labels for proxies
(e) Service Level Standards
- SCGroup shall at all times act in good
faith and agrees to use its best
efforts within reasonable time limits
to ensure the accuracy of all services
performed under this Agreement
- Shareholder list will be mailed or
e-mailed by the 15th of the month
- Dividend payment checks that are
required to be signed by persons
located outside El Paso will be overnighted
to the Company for signature one day in
advance of the dividend payment date
- Where an authorized check signer
resides in El Paso, checks will be
mailed directly from the El Paso office
on the dividend payment date
1.8 Stock Option Administration and Reporting
(a) Account Maintenance
- Process of new stock option accounts
- Post and acknowledging address changes
- Process other routine file maintenance
adjustments
- Post all transactions,
grants, exercises/management questions
regarding the stock option database
- Provide "in the money" or exercise
calculations to employee/management
(b) Routine Grant Issuance
- Issuance of stock option grants,
cancellations and exercises
(c) Mailing, Reporting and Miscellaneous Services
- Prepare standard monthly reports -
options granted, options cancelled,
options exercised and options
outstanding
- Prepare standard year-end reports -
FAS 123 reports - expense allocation
report, outstanding exercisable by
price report, options/SAR grants in
last fiscal year report, valuation
disclosure recap and valuation of
options granted report
- Other standard year-end reports -
stock purchase loan statement summary,
statement of dividend equivalent units
("DEU") in the aggregate
- Standard end of year employee
statements - summary statement, option
award summary, option award summary
with vesting, supplemental DEU
calculation worksheet, statement of
dividend equivalent units, statement of
dividend equivalent units with vesting
and stock purchase loan statement
- New grant employee statements
(d) Additional Services
- Any additional services requested by
the customer, provided by SCGroup which
are not described above are to be
billed separtely at an hourly rate of
$50.00 per hour.
(e) Out-of-pocket Expenses
- All out-of-pocket expenses will be
billed as incurred. Applicable
out-of-pocket expenses may include but
are not limited to:
- postage, envelopes, labels, forms and
stationery and delivery and
freight charges.
(f) Service Level Standards
- SCGroup shall at all times act in good
faith and agrees to use its best
efforts within reasonable time limits
to ensure the accuracy of all services
performed under the Agreement.
- The following option reports will be
mailed or e-mailed by the 8th of the
following month:
- Options Granted, Options Cancelled, Options
Exercised and Options Outstanding
- End of year reports will be mailed
by January 31 of the following
year
- End of year employee
statements will be mailed by
January 31 of the following year
2. Cash Management
2.1 Cash Optimization Services
- Daily forecasting of cash needs and excess
cash.
- Invest and redeem excess cash, as deemed
prudent or necessary consistent with
Company guidelines.
- Manage line of credit borrowing and payment.
- Execute internal funds transfers to
concentrate cash efficiently.
- Facilitate payments for utilities, taxes,
payroll, and mortgages.
- Fund controlled disbursement checking
accounts.
- Prepare daily bank deposits & overnight
to concentration account.
- Provide NSF information.
- Provide deposit slips & endorsement stamps.
- Process research requests.
- Utilize bank earnings credits to the extent
possible or practicable.
2.2 Wire Transfers
- Process wire and ACH disbursements.
- Ensure that funds are available for payment.
2.3 Special Handling Wire Transfers
- Process cashiers checks, foreign currency
drafts, international wires, late wires,
tentative wires, federal reference numbers,
incoming wire tracking,and morning deadline
wires.
2.4 Bank Account Maintenance
- Opening, closing, and changing bank or
investment accounts.
- Maintain account records.
- Daily reconciliation of account activity and
balances.
- Changes to corporate banking resolutions,
certificates of incumbency, and account
signers.
- Negotiate bank prices, review fees and
process for payment.
- Support controlled disbursement/positive pay
accounts, investment accounts,
concentration accounts.
- Provide detailed reports on account activity.
- Low maintenance accounts such as property
accounts (including location codes), xxxxx
cash accounts, and security deposit accounts
are charged as only one-quarter of an account.
2.5 Service Level Standards
- Wires will be sent on time provided that
the wire request form is completed accurately
and submitted by the deadline (noon on
the day before for US wires, four days
ahead for international wires).
- Morning payments are executed subject
to receipt of any necessary funding. Late
requests will be processed on a best-efforts
basis.
- Special handling instructions will be
followed provided that the instructions are
included on the disbursement request form.
- Service levels are subject to external
constraints including, but not limited
to, receipt of information on large
dollar transactions, customer's operational
needs, bank availability schedules, bank
deadlines, borrowing provisions, and
transaction costs.
- Balance, activity, and NSF reports will be
provided daily.
- All investments executed by Cash Management
will adhere to Company investment
guidelines.
- Investment and borrowing decisions will be
made daily and executed in time to meet
financial institution deadlines.
- Checks received in cash management by 3 p.m.
will be sent overnight to the bank provided
that the transaction costs are lower than
the additional interest earnings.
2.6 Items Not Covered
- Substantive changes such as those resulting
from mergers and acquisitions, the addition
of new legal entities, the implementation
of new bank services, and new lines of
credit.
- Development of new cash management
services (such as direct debit, automated
journal entries).
- In addition to the wire charges above, AP
also charges a fee for processing all
disbursements.
- Bank fees are charged to the Company.
- Mail costs (for overnight deposits, deposit
supply mailings etc.) are charged to
the Company.
- Services requested by customer under this
paragraph are billed separately at an
hourly rate of $50 per hour.
3. Corporate Tax Administration
3.1 Tax Compliance Services
- Preparation of federal and state tax
workpapers for the Company and all domestic
subsidiaries/partnerships
- Coordination/scheduling of review of
workpapers and preparation of federal/state
tax returns by independent public accounting
firms
- Review of tax returns and timely filing with
appropriate federal/state taxing
jurisdictions
- Preparation and timely filing of annual
reports in order to maintain "good standing"
in states in which the Company is doing
business
- Correspondence with taxing authorities on
all routine matters Preparation of
filing extensions with all federal/state
jurisdictions for all appropriate entities.
- Timely preparation and filing of forms
1099 related to taxability of dividends,
reporting of dividend/interest payments,
and other miscellaneous payments.
3.2 Tax Consulting Services
- Calculation/monitoring of quarterly REIT
income and asset tests to ensure
compliance with REIT requirements
- Preparation/review of periodic taxability
forecasts both as requested and as
recommended to assist management in operating
the business
- Calculation of quarterly federal/state
estimated tax calculations and timely
remittance to appropriate taxing
jurisdictions
- Coordination/management and handling of
income tax audits. Will manage and consult
with external advisors as appropriate
- Asset optimization planning to include:
- Tax basis analysis
- 1031 issues
- Tracking tax basis of replacement
properties
- Responding to ad-hoc requests/projects for
tax planning consulting as engaged. Will
initiate tax planning issues with management
where deemed appropriate
3.3 Items Not Covered
- Items not included in the fees and services
set forth in this agreement will be
provided as requested at our normal hourly
rates.
3.4 Service Level Standards
- Compliance and consulting work will not
exceed budget without prior consent of the
Company through its designated tax matters
representative.
- All tax returns will be timely filed
provided information required to be
furnished by the Company is provided on a
timely basis.
4. Disbursements
4.1 Invoice Processing Services
(a) General
- Process all properly approved and coded
invoices for payment; issue check to
vendor
- Perform back-end audits for policy
compliance
- Enter all invoices into system
- Update master files
- Generate weekly check runs
- Match remittances
- Obtain authorized manual signature
if check amount over $10,000
- Overnight/Special Handling checks
processed daily
- Mail checks
- File "processed" invoices
- Issue positive-pay bank transmissions
daily
- Purchase Card Administration
- Issue/Change/Cancel P-Cards
- Issue Cardholders Statements Monthly
- Provide Standard P-Card reports on
an as-requested basis
- Provide one custom report (excess
reports to be billed at $50.00
each)
- Download MasterCard transactions to G/L
system monthly (more than once
monthly to be billed at $50.00 each)
- Prepare payment to Xxxxx Fargo for
P-Card transactions monthly
- Other Services
- Electronic funds processing
- Recurring payment processing
- Returned checks
- Issue void at bank and in system
- Reissue, if necessary
- 1099 reporting compliance
(b) Emergency (Manual) Check Services
- Process emergency or manual check as
requested by customer
- Overnight/Special Handling processing
- Mail checks per special handling
instructions
(c) AP Compliance (Reject) Program Services
- Prepare reject notification for improperly
completed vouchers; return to sender
- Oversee and administer the AP Compliance
Program
- Monitor compliance by company,
property and non-compliance type
- Review compliance on a monthly basis
with customer senior management Provide
monthly reports on all non-compliance
issues to customer senior management
(d) Stop Payments and Reissued Checks
- Process stop payments; void check in system
and at bank
(e) Service Level Standards
- Invoices processed within 3 business days
of receipt; payment generated according
to vendor payment terms
- AP Documentation filed within 48 hours (2
business days) of processing
- Checks disbursed one business day after
issuance
- Customer Service Calls returned within 2
business hours; research complete and
resolved within 48 hours (2 business days)
- Void Check and Stop Payment Requests
processed within 48 hours (2 business
days)
- SODA's processed within 3 business
days of receipt
- Emergency Checks disbursed same business
day after issuance per special
handling instructions
4.2 Accounts Payable Help Desk Services
(a) General
- Answer general accounts payable ("A/P")
Help Desk calls
- Provide payment status of invoices, date
paid, check numbers, etc.
- Provide residents information on their
refunds
- Provide Signature Authorization
- Level information
- Provide A/P Manuals/Stamps (one Manual
per property; additional hard copy
manuals to be billed at $15.00 each and
Stamps to be billed at cost)
- Provide information on Common A/P Forms
- Provide information on A/P Policies and
Procedures
- Perform A/P research as required
(b) Vendor Management
- Process and enter New Vendor Setup Forms
(forms received must be complete and
accurate per A/P Manual)
- Update vendor information in vendor database
- MaintainFull-Risk/No-Risk Vendor
Compliance Program
- Maintain Insurance Certificates for
full-risk vendors
- Maintain filing system for full-risk/
no-risk vendors
- Prepare Vendor Credit Applications
- Maintain filing system for credit
applications
(c) Service Standards
- New Vendor Requests processed within 48
hours (2 business days) of receipt
- Customer Service Calls returned within 2
business hours; research complete and
resolved within 48 hours (2 business days)
4.3 Corporate Travel Center
(a) Corporate Charge Card Administration
- Corporate card application distribution,
processing, card distribution and
account maintenance
- Field calls from cardholders re: card losses
past due accounts, reconciliation questions
- Follow-up calls to delinquent cardholders
- Assistance in individual card
reconciliation and credit refund research
- Liaison to AMEX on behalf of cardholders
- Prepare and coordinate weekly wire
transfers to AMEX
(b) Corporate Travel
- Manage relationship with Travel Agency
Partner (AMEX)
- Establish and monitor operating service
and financial agreements and standards
with vendors and customers; monitor
compliance and performance periodically
- Provide timely updates to all travelers
and travel planners on industry and
vendor changes, as well as corporate
travel policy updates
- Receive, report and provide follow-up on
service issues from travelers and
travel planners
- Update and maintain corporate travel
policy manual
- Maintain Business Traveler
Profiles
- Approve, reconcile, pay and charge-back
travel partner's direct xxxxxxxx
- Analyze travel data by Company; provide
standard reports to each company on a
quarterly basis
- Monitor travel policy compliance by Company
and provide standard exception
reports to management
4.4 T & E Voucher Processing Services
(a) General
- Date stamp all vouchers received
- Process new employee account setups
- Code for correct general ledger account
- Enter all vouchers into system
- Perform back-end audits for Policy Compliance
- File "processed" expense reports
- Generate files for wire transfers to
American Express on behalf of employee
- Generate employee checks for out-of-pocket
expenses
- Emergency check processing and
American Express payments
- Process and reconcile employee cash
advances
- Archive files
(b) Service Level Standards
- T&E processed within 96 hours (4
business days) of receipt, payment
generated and prepared for distribution
- Customer Service inquiries acknowledged
within 2 business hours
4.5 Items Not Covered
- Special projects to include:
- Training of SCG affiliated company
employees on use of A/P system
- Setup and training of P-card, utilitY
outsourcing programs
- Change in business structure and
operation requiring process change
- Travel, lodging, car rentals and meals
related to special projects
- Meetings with customers for special
projects
- Consulting Time for special projects
- Major research projects
(requires time outside our service
description standards)
- Major copy projects (major copy
projects requiring time outside our
service description and standards)
- Requests from external auditors
- Special Reports and Logs
- Sales and Use Tax Compliance
- Copies of checks, invoices and employee
expense vouchers
- Copies to be billed at $ .20 each
- Full charge card account reconciliation
provided at a rate of $50.00 per hour
5. Facilities Management (Where services are required to be
performed in a specific location, this agreement refers to
the El Paso, Texas office at 0000 Xxxxxx Xxxxxx Xxxxxx)
(a) National Supply/Service Agreements
- Provide a centralized contact for the
purchase/lease of copy, fax, and
postage equipment in addition to Steelcase
cube components.
- Assist in the purchase process, and establish
national purchasing agreements for the
benefit of the Company.
(b) Access Control System
- Maintain an access control system for the
benefit of all associates and their guests.
- This is a 24 hour per-day 7 day a week
service
- Requests for visitor/guest access should
be made 24 hours in advance of the required
need.
(c) Reception
- Receive and redirect telephone calls.
- Greet visitors.
- Receive and log in deliveries.
- Switchboard and lobby hours:
- 7:30am - 5:30pm Monday through
Thursday
- 7:30am - 5:00pm Friday, or the last
workday of the week.
(d) Mail Center
- Receipt and distribution of USPS mail,
packages, and supplies.
- Prepare for shipment, various items, both
domestic and international, generated by
the Company.
- Track mail.
- Additional requirements/service cutoffs:
- All USPS mail items must be received in
the mail room by 4:30pm to guarantee
delivery to the Post Office on the same
day.
- All other shipments must be received in
the mailroom by 5:00pm to guarantee
delivery to the various carriers the
same day.
(e) Reprographics Center
- Provide bulk copy services and
booklet preparation. Special copy needs
can be accommodated with 24 hour advance
notice.
- Assist in the maintenance of self serve
copy equipment throughout the facility.
(f) Other
- Receive, catalog, and file documentation for
storage in the El Paso Center.
- Provide facsimile services.
- Fax receipts, i.e. incoming documents, to be
delivered within one hour of receipt
during normal business hours.
- Assist in the maintenance of self serve fax
machines throughout the facility.
- Local purchasing responsibility for day to
day operations need, including office
supplies.
- Provide basic new hire and associates cube
supplies.
- Special Order Items will be billed directly
to the requesting department.
- Housekeeping and janitorial responsibilities
in the Operations and the MIS facilities.
- Prepare coffee between the hours of 7:30am
- 2:00pm.
- Relocation of equipment and cube renovation/
modification
- Conference room set-up and tear down
as required.
- General facility maintenance as required.
- Replacement of printer toner cartridges.
- Provide ground transportation needs
for guests/visitors.
- Provide pick up and delivery of items and
documents.
- Provide basic beverage service for
meetings (six people minimum).
The services listed, and the respective service levels have
been reviewed, staffed, and budgeted accordingly. Service
levels or requests that fall outside of this document may be
subject to additional charges.
6. Human Resources
6.1 Health Plan Administration
(a) Administer Health Plan
- Communicate and administer plan
designs.
- Evaluate plans for compliance with
Section 125, federal and state
requirements.
- Update and distribute Summary Plan
Descriptions.
- Field and resolve complex employee
benefit related issues that can not be
resolved by the customer service desk.
- Assist the health plans insurance broker in
the development of accruals.
- Track enrollment information to ensure
compliance and that employees are
enrolled in a timely manner.
- COBRA administration. Develop
information packets; send notifications
to terminated employees in the required
time frame. Collect and track premium
payments.
- Reconcile premium statements, prepare
wires and allocate costs appropriately.
- Conduct enrollment meetings in the El
Paso office for all Company employees.
- Develop, distribute and convey annual
employee benefits survey results to
management.
- Coordinate and conduct Train the
Trainer sessions.
- Develop and distribute employee communication
packets and forms. Develop and produce
health plan videos for annual
enrollment and new hires.
- Develop presentation materials for all
companies on medical plans.
- Prepare and distribute employee communication
packets and forms for annual enrollment.
(b) Leaves of Absence Administration
- Administer leave plans.
- Determine eligibility for leaves.
- Ensure all proper notifications are
processed and employee is placed on
appropriate leave.
- Ensure legal compliance with any FMLA
leave.
- Ensure premium payments for
benefits are tracked and received.
- Monitor leave status.
- Process and forward claim paperwork
for STD and LTD.
- Work with carriers to ensure claims
processed timely and correctly.
(c) Vendor Management
- Negotiate contract and rate renewals.
- Manage vendors and ensure services
provided are meeting company standards.
(d) Items Not Covered
- Prepare presentation materials and
videos in foreign languages.
- Conduct welfare plan presentations outside of
El Paso.
- Ensure all name changes and mergers are
accurately reflected in benefit documents
and are handled properly and timely.
- Facilitate new companies joining plans.
- Coordinate and research alternate benefit
plans.
- Develop new plan designs or summary plan
descriptions.
6.2 401(k) & NSP Plan Administration
(a) Administer 401(k) plan & NSP plan.
- Track and audit eligibility status of
employees.
- Track and audit payroll deductions and
changes.
- Coordinate loan processing for 401(k) plan.
Ensure loan amortization schedules are
entered into the payroll system.
- Approve hardship withdrawals and ensure
compliance with IRS regulations.
- Process and deposit rollovers in 401(k) plan.
Ensure rollovers are eligible to be received
by the Plan.
- Develop standard presentation materials for
all companies on 401(k) plans.
- Conduct enrollment meetings in the El Paso
office for all local SCG affiliated
companies.
- Ensure appropriate participation
eligibility and termination information
is distributed on a timely basis.
- Prepare necessary paperwork,
calculations and prepare distribution
checks from NSP plans.
(b) Communications
- Coordinate and conduct Train the
Trainer sessions.
- Develop and distribute employee
communication packets and forms.
- Develop and produce 401(k) for annual
enrollment and new hires.
(c) Vendor Management
- Negotiate contract and rate renewals.
- Manage vendors and ensure services
provided are meeting Company standards.
(d) Items Not Covered
- Prepare presentation materials and
videos in foreign languages.
- Conduct 401(k) plan presentations outside of
El Paso.
- Ensure all name changes and mergers are
accurately reflected in benefit documents
and are handled properly and timely.
- Facilitate new companies joining plans.
- Coordinate and research alternate benefit
plans.
- Develop new plan designs.
6.3 Pre-Employment Services
- Receive pre-employment forms.
- Review for completeness and correctness.
- Create pre-employment file.
- Evaluate results (credit, criminal, ssn,
employment, education, DL, drug test)
- Note results on pre-employment coversheet.
- Communicate results to hiring manager via
phone or e-mail.
- Communicate any questionable results via
phone to hiring manager or HR manager.
- Record recommendation for approval
or non-approval.
- Communicate recommendation to hiring manager
via phone or e-mail.
- Track results in monthly activity report.
- Send report to appropriate HR personnel.
- Follow up on non-approved applicants that
show an active status in ADP.
- Set up property accounts with
pre-employment vendors.
- Verify charges on invoices from
pre-employment vendors.
(a) Other Customized Services
HOMESTEAD VILLAGE
- Drug testing done at property level only.
- Background information is only evaluated
going back four years.
- El Paso must communicate questionable
results directly to the applicant.
- Monthly activity report is sent to VP's of
Operation.
- Do not inquire on questionable credit.
6.4 Compliance
(a) Unemployment claims services.
- Receive and research unemployment claim.
- Contact appropriate manager for additional
information.
- Process claims.
- Notify manager when an appeal hearing is
scheduled.
- Arrange for consultation with vendor.
- Track activity in monthly report.
- Complete wage audits as received.
(b) HR File Room Services
- General customer support - retrieve
information from files. Receive and
facilitate orders for HR forms and
supplies, including transition boxes.
- Create personnel files as paperwork is
received.
- Process all filing received, including;
active, terminated, and benefits filing.
- Maintain current state and federal posters.
(c) Compliance Services
- Assist HR representatives with employee
relations issues.
- Manage employee relations issues within the
El Paso Center for all companies.
- Investigate and prepare
responses for EEOC claims for all
companies.
- Track and report all pending
claims monthly to each company, and Risk
Management.
- Coordinate all issues involving attorney
representation.
(d) Other Customized Services
ALL COMPANIES
- Variations on standard new hire
packet/forms.
6.5 HR Help Desk
- Provide customer service via telephone,
e-mail, and voice mail.
- Track incoming calls by logging into
Utopia system.
- Requests processed within 24 hours of
receipt.
- Customer service calls returned
within 2 business hours. Research completed
and resolved within 48 business hours.
6.6 Performance Review & Compensation Services
(a) External and Internal Market Data Analysis
- Identify and participate in compensation
surveys.
- Prepare salary recommendations for
new-hires.
- Provide job matching and market
interpretation.
(b) Job Classification/Documentation
- Consult on classification of new/existing
positions.
- Provide advice and assistance on preparation
of job descriptions.
- Maintain organization-wide file of
descriptions/classifications currently in
use.
- Assist in implementation and maintenance of
position coding system on the HRIS.
(c) Data Management/Analysis
- Process and provide current and historical
employee compensation information.
- Serve as liaison between payroll, HRIS and
affiliates on year-end or other
periodic salary and bonus processing.
- International compensation process, initial
expatriate compensation schedule, and
quarterly updates.
(d) Items Not Covered
- Provide consulting on salary
administration, performance management,
compensation compliance (e.g. FLSA) and
related matters. (Most services require
significant involvement of appropriate line
and/or HR personnel within the affiliate.)
- Job Descriptions
- Design and Implementation of Job
Classification System Establishment of
Salary Ranges; Salary Administration
Guidelines Participation in Additional
Salary Surveys Requested by Affiliate
- Incentive Plan Design, Administration, or
Oversight
- Extensive, Fully-customized
Periodic Salary Increase or Bonus
Worksheets
- Ad-hoc Analyses of High
Complexity or Broad Scope and Duration
- Establish expatriates with foreign payroll
company Consult with expatriates on variety
of issues; provide information to all
involved parties.
- Compensation Trend Analysis (limited by
available data and historical
consistency of job classification system)
6.7 Relocation Services
(a) Domestic and International Relocation Services
- Make initial contact with relocatee and
explain eligible benefits.
- Serve as the Company contact for all outside
vendors to apply Company policy.
- Set up all travel for relocating employees.
- Locally issue all relocation funds or stipends.
- Arrange for U-Haul moves.
- Oversee employee home buyout program.
- Sponsor all international secondment activities
for overseas assignments.
- Forward appropriate forms for expense
processing and audit all bills from
outsourced vendors.
- Prepare relocation accruals.
- Complete relocation data for budget forecasts.
- Facilitate the payroll department's
year-end tax gross-ups for all taxable
relocation expenses.
- Provide vendor management services.
- Provide or coordinate through vendor,
rental assistance, household goods,
move management, expense processing,
policy counseling, temporary living,
and home search assistance.
(b) Items Not Covered
- Resubmission of immigration paperwork
for employees re-seconded to a new
international sight while currently on
international assignment.
- Process international wire transfers
(international "swift" numbers) for
rent payments abroad.
- Rewriting or transferring incorrectly filed
relocation expense reports.
- Processing two or more homes through the Home
Buy Out program for one employee transfer.
- Processing requests for itemized
year-end tax "gross-up" information
beyond what the law requires us to
provide.
- Providing regional Cost of Living
Analysis (COLAS) acquired and charged
through the Associates Relocation
Management Group.
- Specialty Immigration Services.
- H1B's, processing of expired work or student
visas.
6.8 Database Management Services
- Maintain database information on employee
documentation.
- System Administration for human resources,
benefits and payroll.
- Prepare and comply with government
reporting: XXX-0, XXXX000 and Census Bureau.
- Process Employment Verifications.
- Review hiring paperwork for company
compliance (I-9's, W-4's, Applications,
etc.).
- Maintain current new hire forms via
public folders, corporate service intranet.
- Maintain company wide telephone directory.
- Administer exit surveys.
6.9 HRIS Reports
- Standard report processing delivered
by PeopleSoft as defined by the
HR/Payroll Implementation Team.
(a) Items Not Covered
- Additional reports not delivered by
PeopleSoft.
6.10 Recruitment Services (Where services are required to
be performed in a specific location, this agreement
refers to the El Paso, Texas office at 0000 Xxxxxx
Xxxxxx Xxxxxx.)
(a) Resume Management
- Receive resumes, log into central database
and send notification cards to all
applicants.
(b) Employment Process
- Accept open position forms and post to the
weekly posting.
- Update the Career Opportunities Jobline,
Security Capital Group Incorporated
Web Page.
- Review and screen applicants for position
requirements.
- Schedule interviews with applicants,
prepare interview packets and forward to
hiring manager.
- If out of town applicant, ensure that all
receipts are received and expense form is
completed.
- In conjunction with hiring manager, make
conditional offers of employment to
candidate and generate offer letters.
- Schedule new hire for pre-employment
testing.
- Send rejection letters to
applicants after acceptance of offer.
(c) New Hire Process
- Ensure the candidate resume, offer letter,
and completed application are in employee's
file.
- Submit new hire to pre-employment for
processing.
- Create new hire agenda for orientation
(name, date, company, supervisor).
- Send out email announcing new hire (name,
title, supervisor, company, cube #).
- Notify candidate of pre-employment results
and new hire orientation.
- Conduct new hire orientation.
- Ensure new employees complete all required
paperwork and forward to HR File Room.
(d) Advertisement and Recruitment Strategies
- Manage, develop and implement recruiting
strategies. In conjunction with hiring
manager, prepare and place all
advertisements for open positions.
- Review Monster Board Internet system for
appropriate candidates.
- Attend Professional and College Job Fairs to
source candidates.
- Coordinate College Relations and Recruiting
activities including: on-campus
interviews, Co-op/Internship program, mentor
program, scholarship program, and
student/faculty relationships.
- Act as liaison with external search
agencies.
(e) Temporary Employee Requests
- Coordinate with manager to discuss
temporary position requirements and contact
temporary agencies to request personnel.
- Interview temporary employee candidates.
Process all temporary employee invoices.
(f) Voluntary Exits
- Receive notification or letter of resignation
from employee.
- Process exit paperwork and provide HR
Customer Service Representative with
exiting employee name to generate a Cobra
letter, if needed.
- Conduct Exit Interview with employee.
- Obtain building access card, credit and phone
cards, office equipment and
forward to facilities.
- Provide exit survey information to manager,
as necessary.
7. Internal Audit
The Internal Audit Department provides services to Shared
Service Clients based upon detailed Internal Audit Plans (the
"Audit Plan"). The Audit Plan will explain the type of
services to be provided, specific audit objectives and cost
to complete the plan.
To ensure the highest risks of the organization are
adequately addresses, audit plans are based upon a
comprehensive risk assessment model and management input. All
Audit Plans are presented to client management for review and
approval, and then to the Audit Committee (for publicly
traded companies) for final approval.
To provide the highest level of service in meeting the Audit
Plan, Internal Audit takes the following steps:
- Audits will be performed in an objective manner with
due professional care. Audits are conducted in
accordance with the Institute of Internal Auditors
Professional Standards.
- Significant departures from the audit plan will be
communicated to management for approval in advance of
completing the audit work.
- We will strive to conduct the audits in the most
efficient and effective manner possible, both in the
utilization of audit staff and travel expenditures.
- For any audit requests outside the Audit Plan, we will
prepare detailed audit proposals for management approval
prior to the performance of any audit work.
- We will coordinate our work with the Company's external
audit firm to ensure maximum audit coverage and prevent
duplication of effort.
- If the Internal Audit Department does not possess
specialized skills necessary for any audit, we will
retain professionals with the required skills to perform
the work.
- We will strive to constantly improve internal audit
services, by seeking customer input and monitoring "best
practice" audit techniques.
8. Legal
- Coordination, negotiation and review of securities
offering documentation Coordination, negotiation and
review of loan agreements and other financing matters
- Coordination of NASD compliance matters Coordination of
- SEC compliance matters and reports Coordination of
shareholder matters
- Coordination of stock exchanges'
compliance matters
- Coordination, negotiation and review of transaction and
contract matters
- Coordination of documentation for meetings of board of
directors or board of trustees
- Drafting of resolutions
for board of directors or board of trustees
- Review of employee benefit matters
- Review of employment policies
and matters
- Litigation coordination
- Review of press
releases Liaison with outside law firms
- Coordination of legal billing
9. Management Information Systems
9.1 Applications Integration
(a) Projects/ Support services include:
- Technology solution planning, design,
development and implementation services
- Application production support services
- Third level help desk support and inquiry
resolution
(b) Service Level Standards:
- Post implementation customer satisfaction
reviews at an average minimum score of
3.5 out of a possible 5, on-time and
on-budget within 20% for new projects
started after 3/1/99
9.2 Training
(a) Technology training services include:
- Conduct instructor-led classroom training
on desktop work products
- Administer training center classrooms for
internal and external technology-based classes
- Research, evaluate, administer, deploy and
maintain alternative training resources
to include computer based training,
video and audio based training
- Conduct off-site training as requested by
customer
- Administer third-party
instructors and curriculum
- Administer
computer training equipment pool
(b) Service Level Standards:
- For on-site training, post training
evaluations at an average minimum score
of 4 out of a possible 5.
9.3 Technical Writing
(a) A staff of three technical writers provide
services to customers including:
- Converting paper documents to professional
standard electronic, HTML format and
on-line help reference for electronic
publishing
- Develop and administer desktop
templates for document standards
- Work with applications integration
personnel in developing user training guides
(b) Service Level Standards
- Post implementation customer satisfaction
reviews at an average minimum score of
3.5 out of a possible 5, on-time and
on-budget within 20% for new projects
started after 3/1/99
9.4 Data Center Operations
(a) Data Center operations services include:
- Research, evaluate and support
enterprise-wide computer hardware and
software
- Install, monitor and maintain
network servers and systems software
- Integrate system hardware and software
with desktop hardware and software
- Disaster recovery planning Database
administration
- E-mail administration
- Internet access administration
- LAN/ WAN
administration
- Password/ security
administration
9.5 Telecommunications Voice Networks
- Acquisition and standardization of voice,
voicemail, video, networks, wiring,
paging and cellular services
- Implementation and administration of all
telephony services (limited to long
distance admin. at homestead properties)
- Enterprise wide strategic planning for
voice and data services National vendor
contract negotiations and administration
Disaster recovery planning
9.6 Office Setup and Support
- New office opening technology planning
- New office opening
technology set up and coordination
9.7 Vendor Management and Administration
- Equipment Purchasing coordination
- Desktop support oversight/administration for
adds, moves and changes and break, fix
- Shipping and receiving coordination
- Sourcing management, including RFP,
evaluation, negotiation and transition and
implementation coordination
9.8 Second line help desk
- Provide second call resolution for technology
related problems and questions as
they occur
- Provide first call resolution for PeopleSoft
and Telecommunications related problems and
questions as they occur
- Participate in service center activities and
disaster recovery planning
9.9 PeopleSoft Operations
- Manage operations for HP servers
- Performance/ capacity planning
- PeopleSoft production support
- DBA support for Oracle database
- Post production application enhancements/
upgrades and custom reports\
- Also included in the PeopleSoft Operations
costs is the Unix server depreciation,
Oracle license amortization and related
maintenance fees
10. Payroll Processing
(a) Administrative Services
- Administrative Services as Payroll Agent for
the Company.
- Collect and process time and other
payroll data (bonuses, commissions, etc).
- Process Short Term Disability payments
- Process manual checks when necessary
- Maintain payroll
database
- Produce and distribute paychecks to
employees work location.
- Maintain and process vacation and sick
balances by employee
- Process benefit deductions
- Process garnishments and
remit funds to proper agency
(b) Direct Deposit/Ready Pay Administration
- Assure direct deposits are set up with
employees's bank and properly prenoted.
- Produce and distribute statement of earnings
(c) Payroll Tax Services
- Process tax deductions and remit funds to
appropriate taxing agency
- Ensure tax returns and government regulatory
reportings are filed
- Complete state applications and set up
appropriate withholding, unemployment and
other accounts are set up.
- Process and distribute W-2's
- Assist in Payroll Audits
(d) Items Not Covered
- Items not included in the services set forth
above including, but not limited to,
distribution of pamplets and other documents
with paychecks, Home address or special mailing
of checks to other than the work location, and
duplicate W2's, or any services associated with
a special project are to be billed separately.
(e) Service Level Standards
- Shared Services Payroll Department shall use
its best efforts within reasonable limits to
insure the accuracy of services performed and
the timeliness of paychecks delivered.
11. Property Tax Administration
11.1 Appeal Management and Administration
(a) Administration and Tax Xxxx Payment
- Addition of all customer properties to the
database for tracking upon receipt of all
necessary data from customer, ongoing
maintenance of the Property Tax database.
- Securing and auditing of all property tax
bills prior to delinquency date.
- Posting of payments at the latest practical
date for optimal cash management.
- Property tax bills processed and paid timely.
- Send, receive and respond to all
correspondence with
assessing authorities and taxing entities.
- Track and ensure that all refunds are
collected.
- Provide status reports to customers on a
monthly basis, summarizing assessed,
proposed and final values, with
corresponding tax amounts, including appeal
status information, on a property by
property basis.
(b) Appeal Management
- Annually review and negotiate consulting
agreements to ensure that the customer is
receiving the most comprehensive local
representation at the most reasonable cost.
- Coordinate with appropriate consultant or
governmental agency to ensure any necessary
personal property compliance and rendition
filing are completed timely.
- Request from customer all necessary
information and timely supply information to
designated consultant for review of appeal
possibilities.
- Analyze and determine the most aggressive
approach to limit customers property
tax liability
- Coordinate periodic meetings with
consultants to review appeal possibilities
and establish mutually agreed upon target
values.
- Monitor progress and communicate appeal
results to customer upon completion.
11.2 Research and Consulting
(a) Research - Pre-Acquisition/Development
- At customer's request, investigate and
inform customer units of certain proactive
options that can reduce or eliminate certain
taxes and fees.
- Assist in prorating calculations for
property closings.
(b) Consulting
- Provide budgeting and forecasting support
for customer units upon request. These
customized reports include but are not
limited to; cash flow projections, budget
and forecasts, accrual estimates and other
management reporting needs.
- Includes any requested services not
described in appeal management and
administration.
12. Risk Management
12.1 Insurance Policy Procurement
- Obtain new and renewal insurance quotations
for all property and casualty coverages Meet
with customer to determine coverage, limit,
deductible, and service
requirements
- Prepare underwriting submission and send to
markets
- Meet with key underwriters
- Answer underwriting questions
- Negotiate coverage, rates, policy terms and
conditions, and services
- Evaluate insurer reliability
- Prepare insurance proposal and present to
customer.
- Review policies for accuracy and maintain them
- Verify policy terms and conditions are
consistent with quote
- Review policy endorsements for accuracy and
file
- Maintain original policy
- Process certificate of insurance requests
- Process premium invoices and provide breakdown
of premium by property, company or
as applicable
- Prepare annual insurance budget
- Review insurance contracts for compliance
- Review insurance contracts and make
recommendations concerning risk
acceptability.
(The Risk Management Department does not
make management decisions.)
- Answer coverage questions
- Maintain standard SCGroup Underwriting
Database for all existing properties to
include:
- Property name, address and location code
- Building and contents values
- Estimated annual rent/revenue
- Square footage/number of units
- Construction type Roof composition
- Year built
- Flood and earthquake zones
- Payroll Vehicles
- Update underwriting database on a quarterly
basis to reflect newly acquired and developed
properties, sales, and other activity
12.2 Claims Administration
(a) Manage claim and litigation process for all
insured claims and lawsuits
- Report claims to appropriate carrier or third
party adminstrator
- Notify customer of losses in excess of $25,000
and keep apprised of claim status
- Set up claim file
- Enter claim in RMIS OMEGA system
- Assist with coverage determination
- Assign legal counsel on lawsuits
- Complete interrogatories as needed
- Assist legal counsel in obtaining discovery
documents
- Review and maintain copies of all
correspondence and related documents
associated with claim/lawsuit
- Participate in claim settlement discussions
- Request settlement approval from customer on
general liability claims of $2,500
and above
- Monitor insured claims and lawsuits to
conclusion
(b) Process Claim Payments
- Review invoices with claim documents to ensure
amounts are accurate and justified
- Obtain signatures for approval as required
- Complete check request form Enter invoice
data in RMIS OMEGA system
(c) Issue Loss Reports
- Issue monthly reports for workers'
compensation open claims
- Issue semi-annual
reports for property, casualty and workers'
compensation claims and lawsuits
(d) Maintain RMIS OMEGA claim database to include
- Claimant name
- Claim number
- Date of loss
- Property name and location code
- Claim amount (paid and reserved)
- Description of loss
- Status of claim (open or closed)
12.3 Bond Procurement and Maintenance
(a) Facilitate issuance and execution of bond
indemnification agreements
- Negotiate account rates annually
- Process requests for bonds
- Set up bond file and enter data in
RMIS OMEGA system
- Renew bonds as required by obligee
(b) Process Bond Invoices
- Review bond premium invoices for accuracy
- Enter invoice information in RMIS OMEGA system
- Complete check requests
(c) Maintain RMIS OMEGA bond database to include the
following
- Bond number
- Surety company
- Bond amount
- Bond type and description
- Property name and address
- Bond rate and premium
- Obligee name and address
- Effective dates of coverage
13. Special Projects
- Direction and support of all special
projects, as requested and authorized in
advance by the Company.
- Special projects are outside the scope of
services provided by SCGroup. If SCGroup and
Company determine that SCGroup has the personnel with the
qualifications and time necessary to complete the
special project requested by Company with due
professional care and competence, SCGroup and Company
will agree to an hourly billing rate for such services.
APPENDIX A
APPENDIX TO SCHEDULE E OF THE ADMINISTRATIVE SERVICES AGREEMENT BETWEEN SCGROUP
INCORPORATED (SCGROUP) AND HOMESTEAD VILLAGE INCORPORATED (COMPANY), ORIGINAL
AGREEMENT DATED OCTOBER 15, 1996.
SCGroup Service Manager responsible for managing the respective rights and
obligations of the parties:
J. Xxxxxx Xxxxxxxxx
SCGroup Incorporated
0000 Xxxxxx Xxxxxx Xxxxxx
Xx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Company Service Manager responsible for managing the respective rights and
obligations of the parties:
Xxxxx X. Xxxxxxxx
Homestead Village Incorporated
0000 Xxxxxx Xxxxxx Xxxxxx
Xx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
