TRANSITION SERVICES AGREEMENT
This Transition Services Agreement ("Agreement") is entered into this
11th day of March, 1997 by and between NATIONAL SEMICONDUCTOR CORPORATION, a
Delaware corporation having a principal place of business at 0000
Xxxxxxxxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 (hereinafter "National")
and [XXXXXXXXX SEMICONDUCTOR CORPORATION], a Delaware corporation having a
principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxx, Xxxxx
00000 (hereinafter "Fairchild"). National and Fairchild may be referred to
herein as a "Party" and/or the "Parties" as the case may require.
RECITALS
WHEREAS, the parties have entered into that certain Asset Purchase
Agreement, dated the date hereof (hereinafter "Purchase Agreement"), under
which Fairchild is acquiring certain of the assets of National's Logic,
Memory, and Discrete Power and Signal Technologies Business Units as
historically conducted and accounted for (including Flash Memory but
excluding Public Networks, Programmable Products and Mil Logic Products) (the
"Business"); and
WHEREAS, pursuant to the transactions contemplated in the Purchase
Agreement, Fairchild is acquiring National's manufacturing facilities in
South Portland, Maine (excluding the 8-inch fab and related facilities); West
Jordan, Utah; Penang, Malaysia; and Cebu, Philippines (the "Facilities"); and
WHEREAS, after the Closing Date Fairchild will own and operate the
Facilities; and
WHEREAS, National has provided certain services to the Business in the
past; and
WHEREAS, in order to support the continued and uninterrupted operation of
the Business following the Closing, the parties desire to enter into this
Agreement, pursuant to which National will provide, for the time periods and
consideration described below, certain of the services that have been
provided by National to the Business prior to the Closing Date.
NOW, THEREFORE, in furtherance of the foregoing premises and in
consideration of the mutual covenants and obligations hereinafter set forth,
the parties hereto, intending to be legally bound hereby, do agree as follows:
1. DEFINITIONS
1.1 Closing Date: The date of closing of the trans-
actions described in the Purchase Agreement. 1.2 Capitalized terms not
defined herein shall have the meaning set forth in the Purchase Agreement.
1.3 Fairchild: [Xxxxxxxxx Semiconductor Corporation] and its Subsidiaries.
1.4 National: National Semiconductor Corporation and its Subsidiaries. 1.5
Subsidiary: Any corporation, partnership, joint venture or similar entity
more than fifty percent (50%) owned or controlled by a Party hereto, provided
that any such entity shall no longer be deemed a Subsidiary after such
ownership or control ceases to exist.
2. SERVICES TO BE PROVIDED BY NATIONAL
Following the Closing Date, National shall provide Fairchild the
following services (individually or collectively referred to herein as, the
"Service(s)") for a period not to extend beyond June 1, 1998, except as
otherwise provided herein:
2.1 Data processing and communications services and related support as
set forth in Schedule 2.1 hereto. National shall invoice Fairchild in the
manner and at the rates set forth herein.
2.2 Financial and administrative and related support as set forth in
Schedule 2.2 hereto. National shall invoice Fairchild in the manner and at
the rates set forth herein.
2.3 Purchasing services and related support as set forth in Schedule 2.3
hereto. National shall invoice Fairchild in the manner and at the rates set
forth herein.
2.4 Marketing and Sales services and related support as set forth in
Schedule 2.4 hereto. National shall invoice Fairchild in the manner and at
the rates set forth herein.
2.5 Logistics and Operational services and related support as set forth
in Schedule 2.5 hereto. National shall invoice Fairchild in the manner and at
the rates set forth herein.
2.6 Human resources and benefits services and related support as set
forth in Schedule 2.6 hereto. National shall invoice Fairchild in the manner
and at the rates set forth
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herein.
2.7 Security assistance and consulting services as set forth in Schedule
2.7 hereto. National shall invoice Fairchild in the manner and at the rates
set forth herein.
2.8 Certain additional services at the South Portland, Maine site will be
provided by Fairchild to National and by National to Fairchild, and at the
West Jordan, Utah site by Fairchild to National, under separate agreements
regarding shared facilities and services. The parties will also enter into
separate agreements regarding office space in Santa Xxxxx to be leased by
National to Fairchild, office space in West Jordan to be leased by Fairchild
to National, and the lease of buildings in South Portland. In addition, the
Parties will enter into a letter agreement regarding certain environmental
matters, including the cleanup underway in South Portland and West Jordan.
2.9 Under another separate agreement, Fairchild will reimburse National
for lease payments to be made following the Closing by National in respect to
certain leased manufacturing and computer equipment used in Fairchild
facilities and used in the operation of the Business including but not
limited to that leased from GE Capital. Notwithstanding anything to the
contrary contained herein, Fairchild shall not be charged under this
Agreement for any Service that is specifically required to be performed under
any other agreement between National and Fairchild and any such other Service
shall be performed and charged for in accordance with the terms of such other
agreement.
3. TERMS OF SERVICE
3.1 The attached Schedules of Services and costs are subject to change with
the Parties' mutual written consent consistent with change methodologies applied
to National. Wherever practical, charges to Fairchild for Services shall be
based on actual incurred costs, not budgeted or estimated costs. The Parties
shall use good faith efforts to discuss any situation in which the actual charge
for a Service is reasonably expected to exceed the estimated charge, if any, set
forth on a Schedule for a particular Service; provided, however, that the
incurrence of charges in excess of any such estimate shall not justify stopping
a provision of, or payment for, Services under this Agreement. The Parties have
made good faith efforts as of the date hereof to identify each Service and to
complete the content of each Schedule to this Agreement. To the extent a
Schedule has not been prepared for a Service or a Schedule is otherwise
incomplete as of the date hereof, the Parties shall use good faith efforts to
prepare or complete Schedules as promptly as practicable. Any
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Service reflected on any such additional or amended Schedule shall be deemed
a "Schedule" as if set forth on such Schedule as of the date hereof.
3.2 National will have in place by the Closing Date all legal entities
necessary at each location to import and ship product and invoice customers
on behalf of Fairchild. The legal entity structure will be equivalent to
National's legal structure unless otherwise agreed in writing by Fairchild.
In the event that at any time any change is made by Xxxxxxxxx to the legal
structure which adversely affects National's provision of Services under this
Agreement, National shall, in its sole discretion, have the right to cease
provision of such affected Service(s). Fairchild will operate under the
National systems, logistics and accounting calendar and observe all National
system cutoff schedules. With respect to Xxxxxxxxx products for which
National performs an invoicing function, except in Japan, invoices will be
issued in Xxxxxxxxx'x name after the Closing Date, such invoices to
incorporate on behalf of Fairchild the same terms and conditions of sale as
used by National. While on National's systems, Fairchild will use National's
published company rates for foreign currency exchange and National's
practices with respect to use of currency.
3.3 Fairchild is contracting for use of National's system on an "as-is"
basis. It will be at National's discretion as to whether enhancements or
modifications to these systems will be made available to Fairchild. After the
Closing Date, there will be no modifications to National's systems at
Xxxxxxxxx'x request, except in National's sole discretion and at a price to
be agreed between the Parties and paid by Fairchild.
3.4 Prices to be paid by Fairchild for Services rendered by National
hereunder are listed in the Schedules hereto. One time systems and services
costs incurred to establish the capability of National and Xxxxxxxxx to
operate as separate companies using common systems will be paid entirely by
National. Costs to support the ultimate separation of Fairchild and the
implementation of Xxxxxxxxx'x own independent systems and services will be
paid entirely by Fairchild. National agrees to cooperate as reasonably
requested by Fairchild in order to effectuate such separation.
4. ADDITIONAL SERVICES, SOFTWARE TRANSFERS AND SOFTWARE LICENSES
4.1 In addition to the specific services and facilities described above,
the parties hereto acknowledge that there may be additional services and
facilities which have not been
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identified herein but which have been used by the Business prior to the
Closing Date and which shall continue to be required or desired by Fairchild
until June 1, 1998, or such later date as the Parties may agree upon. If any
such additional services or facilities are identified and requested by
Fairchild, and National agrees to provide such services, Fairchild will be
charged at the rate paid by National for said services.
4.2 Upon the written request of Fairchild, National shall assign to
Xxxxxxxxx, to the extent possible and subject to vendor legal or contractual
restrictions, all of its right, title, and interest in and to any software
licensed programs which between National and Fairchild are used solely and
exclusively for the benefit of Fairchild and are listed in Schedule 4.2
hereto.
4.3 National hereby grants Fairchild a paid-up, royalty-free, perpetual,
nonexclusive, irrevocable, worldwide, multi-site license to use, or have used
for its own benefit, National in-house developed business, engineering and
manufacturing systems software, as listed on Schedule 4.3 hereto, which is or
has been used by or for Fairchild, whether user or MIS developed and/or
supported (hereinafter "NS Software"). No termination of any Services
provided pursuant to this Agreement shall terminate or revoke Xxxxxxxxx'x
license to use, or have used for its own benefit, the NS Software.
4.4 Fairchild, its agents, it subsidiaries and its subsidiaries' agents
may make such copies of the NS Software as may be reasonably necessary for
their needs. Subject to 3.3 above, and during the term of this Agreement, if
National develops changes, modifications, enhancements or improvements to the
NS Software, National will use its best efforts to promptly disclose them to
Fairchild in accordance with National's current notification methods and they
shall be included within the scope of this license.
4.5 After discontinuation of the Service provided by National,
modifications or enhancements may be made by Fairchild, its subsidiaries or
their respective employees or agents which shall be the sole and exclusive
property of Fairchild (including all worldwide copyrights, trade secrets,
patents or other proprietary rights relating thereto). National is the owner
of the NS Software and any copyrights, trade secrets, patents or other
proprietary rights relating thereto and has the right to grant to Fairchild
the license to use the NS Software under this Agreement, in each case free of
any claim of any third party.
4.6 Any NS Software wrongly omitted from Schedule 3.3 shall be added with
both Parties' written consent. National
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shall not unreasonably withhold such consent.
5. INDEMNIFICATION
In the event any act or omission of either Party or its directors,
officers, employees, servants, agents or representatives causes or directly
results in (i) loss, damage to, destruction of property of the other Party or
third Parties, and/or (ii) death or injury to persons including, but not
limited to, employees or invitees of either Party, then such Party shall
indemnify, defend and hold the other Party harmless from and against any and
all claims, actions, damages, demands, liabilities, costs and expenses
resulting therefrom. The indemnifying Party or its agent or representative
shall pay or reimburse the other Party promptly for any such loss, damage,
destruction, death or injury when notified promptly in writing of any claim
made hereunder and when given full and complete authority, information and
assistance (at the indemnifying Party's expense) for the defense of same. The
indemnifying Party shall not be responsible for any compromise or settlement
made without its written consent. With respect to third party claims, the
right of contribution shall exist as between the Parties.
6. NO WARRANTY
The level and quality of the Services shall be provided in good faith and
at a level and quality comparable to that performed for the benefit of
National prior to the date of execution of this Agreement. National shall not
be liable for any loss or damage suffered by Fairchild on account of any
failure by National to perform such service so long as such failure was not a
result of National's willful intent to breach this Agreement. Except as may
otherwise be explicitly set forth herein, National makes no representation or
warranty whatsoever with respect to the Services to be provided hereunder.
7. TERM AND TERMINATION
7.1 THE TERM OF THIS AGREEMENT SHALL BEGIN ON THE CLOSING DATE.
Services shall be provided by National hereunder until June 1, 1998, unless
otherwise provided herein.
7.2 Subject to the provisions of the Schedules hereto, Fairchild may
terminate any Service(s) provided pursuant to this Agreement on ninety (90)
days prior written notice to National, unless otherwise specified in the
Schedules hereto. If Fairchild elects to terminate a service, it will bear
the costs of
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interfacing any new system to the remaining National systems which it
continues to use. Fairchild shall no longer be obligated to pay National the
fee attributable to such cancelled Service(s) following the effective
termination date of such Service(s). Fairchild shall be liable for any
outstanding purchase orders placed with third parties by National on
Xxxxxxxxx'x behalf prior to National's receipt of the aforesaid written
notice of termination provided that any purchase order in an amount greater
than $1,000 shall have been issued with Xxxxxxxxx'x written consent.
7.3 Subject to the provisions of the Schedules hereto, in the event of a
material breach under this Agreement, the non-defaulting Party may terminate
the specific Service(s) to which such breach relates if the defaulting Party
fails to cure such breach within thirty (30) days of its receipt of a written
notice from the non-defaulting Party of such breach, provided that the duties
and obligations of the defaulting Party which have accrued prior to the
termination of such Service shall not be released or discharged by such
termination. During the pendency of any dispute resolution process with
respect to such purported default, the Service(s) in dispute will continue to
be provided and paid for.
7.4 Prior to termination of this Agreement, the Parties shall cooperate
with one another to maintain an orderly transfer of Services provided
hereunder and shall provide necessary assistance for an orderly transfer
thereof.
8. OWNERSHIP AND MAINTENANCE OF DATA
All records, data files (and the data contained therein), input
materials, reports and other materials received, computed, developed,
processed or stored for Fairchild by National (collectively the "Data")
pursuant to this Agreement after the Closing Date will be the exclusive
property of Fairchild, and National shall not possess any interest, title,
lien or right in connection therewith. National shall safeguard the Data to
the same extent it protects its own similar materials. Data shall not be
utilized by National for any purpose other than in support of National's
obligations hereunder. Neither the Data nor any part thereof shall be
disclosed, sold, assigned, leased or otherwise disposed of to third parties
by National or commercially exploited by or on behalf of National, its
employees or agents. In the event that either Party either determines on the
advice of its counsel that it is required to disclose any information
pursuant to applicable law or receives any demand under lawful process to
disclose or provide information of the other Party that is subject to the
confidentiality provisions hereof, such Party shall notify the other Party
prior
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to disclosing and providing such information and shall cooperate at the
expense of the requesting Party in seeking any reasonable protective
arrangements requested by such other Party. Subject to the foregoing, the
Party that receives such request may thereafter disclose or provide
information to the extent required by such law (as so advised by counsel) or
by lawful process. Upon termination of any Service provided hereunder,
National shall provide Fairchild reasonable access to retained Data for a
period not to exceed twelve (12) months following said termination whereupon
such Data will be transferred to Fairchild or otherwise made available to
Fairchild as Fairchild may reasonably request.
9. PAYMENT
9.1 During the term of the provision of any Service(s) hereunder,
National shall invoice Fairchild monthly, unless otherwise specified in the
Schedules hereto, itemizing the basis for each invoice amount.
9.2 Any out-of-pocket expense paid to a third party by National as result
of Services provided hereunder by National to Fairchild shall be invoiced
separately in National's customary form and detail and reimbursed by
Xxxxxxxxx to National. The foregoing reimbursement shall be in addition to
the fees provided for in Section 9.1 above. In the event that any such
expense exceeds $1000, it must be approved in writing by Fairchild prior to
incurrence by National. Fairchild will not unreasonably withhold approval.
9.3 Unless otherwise provided in the Schedules, payment terms are Net,
thirty (30) days from date of invoice and payments shall be made in United
States Dollars. Each Party shall have the option to net payment obligations
owed to it against amounts due from the other Party. If payment amounts are
netted against receivable amounts, the netting Party will provide the
receiving Party with a reconciliation referencing the specific invoices
involved in the netting transaction. Netting shall not apply against payments
to be made under the Recapitalization or Asset Purchase Agreement.
10. CONFIDENTIALITY
The parties acknowledge that in the course of performance of their
respective obligations pursuant to this Agreement, each may obtain certain
confidential and/or proprietary information of the other or its affiliates or
customers, including the terms and conditions of this Agreement. Except as
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otherwise provided in the Technology Licensing and Transfer Agreement, dated
the date hereof, between National and Fairchild, each Party hereby agrees
that all information communicated to it by the other, its affiliates or
customers, whether before or after the Closing Date, shall be kept and was
received in strict confidence and shall be used only in accordance with this
Agreement, and shall not be disclosed by the other Party, its agents or
employees without the prior written consent of the first Party. In the event
that either Party either determines on the advice of its counsel that it is
required to disclosure any information pursuant to applicable law or receives
any demand under lawful process to disclose or provide information of the
other Party that is subject to the confidentiality provisions hereof, such
Party shall notify the other Party prior to disclosing and providing such
information and shall cooperate at the expense of the requesting Party in
seeking any reasonable protective arrangements requested by such other Party.
Subject to the foregoing, the Party that receives such request may thereafter
disclose or provide information to the extent required by such law (as so
advised by counsel) or by lawful process. Furthermore, the Parties shall take
reasonable steps necessary to ensure that all information and records
relating to the business of National and Fairchild are kept strictly
confidential. Notwithstanding the above, this Agreement imposes no obligation
on either Party with respect to information that is or becomes a matter of
public knowledge through no fault of that Party, is rightfully obtained by
either Party from a third party not in violation of any duty of
confidentiality, is disclosed by either Party to a third party without a duty
of confidentiality imposed upon the third party, or is independently
developed by either Party without reference to any proprietary or
confidential information of the other Party.
11. GENERAL
11.1 AMENDMENT: This Agreement may be modified only by a written document
signed by duly authorized representatives of the Parties.
11.2 FORCE MAJEURE: A Party shall not be liable for a failure or delay in
the performance of any of its obligations under this Agreement where such
failure or delay is the result of fire, flood, or other natural disaster, act
of God, war, embargo, riot, labor dispute, unavailability of raw materials,
or the intervention of any government authority, providing that the Party
failing in or delaying its performance promptly notifies the other Party of
its inability to perform and states the reason for such inability.
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11.3 ASSIGNMENT: This Agreement may not be assigned by any Party hereto
without the written consent of the other Party; provided that Fairchild may
assign its rights but not its obligations hereunder as collateral security to
any bona fide financial institution engaged in financing in the ordinary
course providing financing to consummate the transactions contemplated by the
Purchase Agreement or any bona fide financial institution engaged in
acquisition financing in the ordinary course through whom such financing is
refunded, replaced, or refinanced and any of the foregoing financial
institutions may assign such rights in connection with a sale of Fairchild or
the Business in the form then being conducted by Fairchild substantially as
an entirety. Subject to the foregoing, all of the terms and provisions of
this Agreement shall be binding upon, and inure to the benefit of, and shall
be enforceable by, the respective successors and assigns of the Parties
hereto.
11.4 COUNTERPARTS: This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
11.5 CHOICE OF LAW: This Agreement, and the rights and obligations of the
Parties, shall be interpreted and governed in accordance with the laws of the
State of California, without giving effect to its conflicts of law
provisions.
11.6 WAIVER: Should either of the Parties fail to exercise or enforce any
provision of this Agreement, or waive any right in respect thereto, such
failure or waiver shall not be construed as constituting a waiver or a
continuing waiver of its rights to enforce any other provision or right.
11.7 SEVERABILITY: If any provision of this Agreement or the application
thereof to any situation or circumstance shall be invalid or unenforceable,
the remainder of this Agreement shall not be affected, and each remaining
provision shall be valid and enforceable to the fullest extent.
11.8 LIMITATION OF LIABILITY: IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM
THE OTHER PARTY'S PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT, OR
THE FURNISHING, PERFORMANCE, OR USE OF ANY GOODS OR SERVICES SOLD PURSUANT
HERETO, WHETHER DUE TO BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE OR
OTHERWISE, REGARDLESS OF WHETHER THE NONPERFORMING PARTY WAS ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR NOT.
11.9 EFFECT OF HEADINGS: The headings and sub-head-
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ings contained herein are for information purposes only and shall have no
effect upon the intended purpose or interpretation of the provisions of this
Agreement.
11.10 INTEGRATION: This Agreement, the Recapitalization and Purchase
Agreement, the Operating Agreements (as defined in the Recap Agreement) and
Schedules hereto and thereto, constitute the entire agreement and
understanding between the Parties with respect to the subject matter of this
Agreement and integrates all prior discussions and proposals (whether oral or
written) between them related to the subject matter hereof, provided that any
provisions hereof allowing for netting or offsetting of any payments to be
made hereunder shall not be deemed to permit that such netting or offsetting
apply against any payments to be made under the Recapitalization or Purchase
Agreement.
11.11 PUBLIC ANNOUNCEMENT: Prior to the closing of the transactions
contemplated under the Purchase Agreement, neither Fairchild nor National
shall, without the approval of the other Party hereto, make any press release
or other public announcement concerning the terms of the transactions
contemplated by this Agreement, except as and to the extent that any such
Party shall be so obligated by law, in which case the Party shall use its
Best Efforts to advise the other Party thereof and the Parties shall use
their Best Efforts to cause a mutually agreeable release or announcement to
be issued; provided that the foregoing shall not preclude communications or
disclosures necessary to (a) implement the provisions of this Agreement or
(b) comply with accounting, securities laws and Securities and Exchange
Commission disclosure obligations. Fairchild shall provide National with a
reasonable opportunity to review and comment on any references to National
made by Fairchild (and shall not include any such references to National
without the written consent of National, which consent shall not be
unreasonably withheld or delayed) in any written materials that are intended
to be filed with the Securities and Exchange Commission in connection with
obtaining financing required to effect the transactions contemplated in
connection with the Purchase Agreement or intended to be distributed to
prospective purchasers pursuant to an offering made under Rule 144A
promulgated under the Securities Act of 1933 in connection with obtaining
such financing.
11.12 NO PARTNERSHIP OR AGENCY CREATED: The relationship of National and
Fairchild shall be that of independent contractors only. Nothing in this
Agreement shall be construed as making one Party an agent or legal
representative of the other or otherwise as having the power or authority to
bind the other in any manner.
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11.13 BINDING EFFECT: This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the Parties
hereto and to their respective successors and permitted assigns. 11.14 EXPORT
CONTROL: The Parties shall comply with any and all export regulations now in
effect or as may be issued from time to time by the Office of Export
Administration of the United States Department of Commerce or any other
governmental authority which has jurisdiction relating to the export of
technology from the United States of America. 11.15 NOTICES: Any notice to be
made in connection with any right or obligation arising under this Agreement,
shall be provided by registered mail, telegram, facsimile or telex by one
Party to the other at the following addresses. Said notices shall be deemed
to be effective upon receipt by the receiving Party thereof.
National: National Semiconductor Corporation
0000 Xxxxxxxxxxxxx Xxxxx
X.X. Xxx 00000
M/S 16-135 (Attn: General Counsel)
Xxxxx Xxxxx, XX 00000-0000
FAX: (000) 000-0000
Fairchild: Xxxxxxxxx Semiconductor Corporation
MS 01-00 (General Counsel)
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
FAX: (000) 000-0000
Either Party may change its address by written notice given to the other
Party in the manner set forth above.
IN WITNESS WHEREOF, The Parties have had this Agreement executed by their
respective authorized officers on the date written below. The persons signing
warrant and represent that they are duly authorized to sign for and on behalf
of the respective Parties.
By and on behalf of By and on behalf of
NATIONAL SEMICONDUCTOR XXXXXXXXX SEMICONDUCTOR
CORPORATION CORPORATION
By: ____________________________ By: ____________________________
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Its: ___________________________ Its: ___________________________
Date: __________________________ Date: __________________________
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SCHEDULE 2.1
DATA PROCESSING AND COMMUNICATIONS SERVICES
Up to and including June 1, 1998, unless otherwise agreed to in writing,
Fairchild will have access to and ability to use those National computer and
communications systems in use by Fairchild at the Closing Date. For all IS
services, unless otherwise agreed to in writing, Fairchild will be charged at
rates equal to those charged other National internal customers. National
shall invoice Fairchild each National period as part of the period closing
cycle. National shall invoice Fairchild for direct IS services in a
separately itemized and consolidated invoice.
Fairchild will be charged on a "pay for use,, model.
- "Pay for use" will be at regular IS usage rates set for all National
Corporate IS customers. As Fairchild migrates off of National systems,
Fairchild will no longer be charged for their use.
- For FY97 only, National Corporate Information Services over-absorption
will be passed back to Fairchild just like any other National division
on a fiscal quarter basis. Calculation of the Fairchild share of the
over-absorption will exclude the use of these funds to support
corporate initiatives where Fairchild is not a participant or
beneficiary. By the end of January 1997, National will establish and
publish new charge rates for FY98.
Fairchild will develop a detailed systems conversion plan for review with
National in March of 1997. Any conversion date on the plan which extends
beyond June 1, 1998 must be approved by National. If National elects not to
approve an extended date, the schedule will revert to the latter of June 1,
1998 or an alternative date determined by National. National agrees to
provide the resources necessary to allow Xxxxxxxxx to meet the mutually
agreed upon milestones, timelines and resource requirements identified in the
final detailed systems conversion plan. Following this process the plan will
be considered firm and will be used by both National and Xxxxxxxxx to
synchronize their own related project efforts. Any schedule modifications
occurring after the plan is firm will require joint approval by Fairchild and
National. National will provide Fairchild with a one-time automatic extension
of any schedule of up to ninety (90) days to ensure that all schedules are
protected by a reasonable contingency period. Should Xxxxxxxxx not be
satisfied by any of the dates determined through the process of creating a
firm plan, National will, if requested by Xxxxxxxxx and at Xxxxxxxxx'x
expense, create and technically implement a Xxxxxxxxx-only version of the
system operating on a service bureau of Xxxxxxxxx'x choice.
If Xxxxxxxxx materially increases its use of National's systems
and such increased use contributes to the need for National to purchase
additional computing capacity that National will not utilize after final
separation, Xxxxxxxxx will be financially responsible for that computing
capacity. National will provide Xxxxxxxxx with periodic reporting on
performance metrics and give Xxxxxxxxx advanced notice of capacity issues to
allow Xxxxxxxxx to respond and possibly discontinue use of certain National
systems in advance of any additional purchases.
National will be responsible for resolving any third party mainframe and SAP
software restrictions on Xxxxxxxxx use with costs paid as described below.
Xxxxxxxxx will be responsible for resolving all other software license
issues, with costs paid as described below. National will be responsible for
any one-time up front third party software vendor costs associated with
Xxxxxxxxx'x use of National's mainframe computers and any one-time up front
costs associated with Xxxxxxxxx'x use of SAP on National's computers.
Xxxxxxxxx will be responsible for all other one-time and all on-going third
party vendor software costs associated with their use. National will
reimburse Xxxxxxxxx completely for up to $1.3 million of one-time up front
third party vendor software costs incurred to sustain current capabilities.
Should Xxxxxxxxx spend more than $1.3 million in one-time up front third
party software costs to sustain current capabilities, National will reimburse
Xxxxxxxxx 50% of its costs above $1.3 million up to a limit of $2.0 million.
National may elect to pay one or more of the vendors involved directly.
National will provide wide-area network support and help facilitate the
transition to a stand-alone Xxxxxxxxx wide-area network.
Xxxxxxxxx will elect either to be included or not included in National
Corporate IS projects. If included, costs will be determined on the same
basis as other National divisions and sites. If not included, Xxxxxxxxx will
not be charged.
- National will continue to provide Electronic Mail access including:
- Continued Lotus NOTES support
- Continued MailHub support
National will continue to provide Video Conferencing capabilities.
National has negotiated into current contracts the grandfathering of network
and telephone deals to Xxxxxxxxx. Xxxxxxxxx has the option of utilizing those
arrangements or establishing separate arrangements.
National will continue to provide Internet services and access. These
services will be provided at no charge in fiscal year 1997
2
and will be charged at internal National rates in fiscal year 1998.
Xxxxxxxxx will continue to be able to use National's help desk services.
MBayse support may at National's option, be offered to Xxxxxxxxx beyond June
1, 1998. National will provide Xxxxxxxxx with a minimum of twelve (12) months
notice prior to terminating this extended service.
National charges for MBayse, EBS and RETGEN systems and support will be based
on current allocation processes.
Use of MBayse data will be governed by rules developed by National's MBayse
group and approved by Xxxxxxxxx.
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FY97 IS RATES AND FEES
Rev. 2.0
4
CORPORATE INFORMATION SERVICES
COMPUTING RATES
SC VAX DATA CENTER (Account 908)
NON-
DATA BASE SERVICES PRIME PRIME
--------------------------------------- --------- ---------
-13 MIP processor/second-on-line....... .01560 .01170
-13 MIP processor/second-batch......... .0078 .0078
-26 MIP processor/second-on-line....... .0312 .02234
-26 MIP processor/second-batch......... .0156 .0156
-Connect time/minute-on-line........... .0052 .0039
-Connect time/minute-batch............. .0026 .0026
-Input/output per thousand............. .0625 .0625
-512K bytes storage/day................ .07 .07
Interactive Services
-13 MIP processor/second-on-line....... .012 .009
-26 MIP processor/second-on-line....... .024 .018
-Connect time/minute-on-line........... .004 .003
-Input/output per thousand............. .05 .05
-512K bytes storage/day................ .05 .05
Batch Services
-13 MIP processor/second-batch......... .000 .000
-00 MIP processor/second batch......... .012 .,012
-Connect time/batch.................... .002 .002
-Input/Output per thousand............. .05 .05
-512K bytes storage/day................ .05 .05
Prime Time is 0600 to 1800 Monday thru Sunday
Non-Prime Time is 1800 to 0600 Monday thru Sunday
5
CORPORATE INFORMATION SERVICES
COMPUTING RATES
BUSINESS DATA PROCESSING (Account 915)
SERVICES
DATA INTERACT
CPU TIME PER HOUR BASE IVE BATCH
--------------------------------- ---------- ----------- ---------
HDS 8424......................... $1200.00 $1125.00 $900.00
Connect Time per Hour............ 1.00
Disk Reads/Writes per 1000....... .13 .10 .10
Tape Reads/Writes per 1000....... .50 .50 .50
Tape Mounts per Mount............ .50 .50 .50
Usage of the above resources on weekends (6:00 PM Friday to 6:00 AM Monday)
is charged at 25% of weekday rates.
Disk Space Storage
Megabytes per week............... .60 .30 .30
Paper Output
-Stock forms per page............ .02 .02 .02
-Custom forms per page
form dependent
Microfiche
-Originals....................... 1.20
-Duplicates...................... .12
6
CORPORATE INFORMATION SERVICES
COMPUTING RATES
END USER COMPUTING (ACCOUNT 973)1
SERVICES
--------------------
INTERACTIVE BATCH
-------------------- --------------------
NON- NON-
CPU TIME PER HOUR PRIME PRIME PRIME PRIME
----------------------------------------- --------- --------- --------- ---------
20 MIP Processor $ 310.50 $ 62.10 $ 93.15 $ 31.05
Connect Time per Hour.................... .863 .173 .259 .0863
Disk Space Storage
712K Bytes per Day .0345 .0345 .0345 .0345
Disk Read/Writes per 1000................ .092 .023 .0276 .0115
Lines Printed per 1000................... .431 .086 .129 .0426
ENGINEERING COMPUTATION (Account 973)
20 MIP Processor $ 310.50 $ 62.10 $ 93.15 $ 31.05
Xxxx 00 MIP Processor.................... 53.82 53.82 53.82 53.82
Xxxx 0000 Compute Server................. 12.42 12.42 12.42 12.42
Connect Time per Hour.................... 0 0 0 0
Disk Space Storage
712K Bytes per Day .0345 .0345 .0345 .0345
Disk Read/Writes per 1000................ 0 0 0 0
Lines Printed per 1000................... 0 0 0 0
Prime Time = 6:00 AM to 6:00 PM Monday thru Friday
Non-Prime Time = 6:00 PM to 6:00 Am Monday thru Thursday
Weekend Use = 6:00 PM Friday to 6:00 AM Monday is "no charge"
------------------------
(1) Includes Email
7
SUBACCOUNT 922--DESKTOP SERVICES
(A) BASIC SERVICES FEES
SANTA XXXXX & NA SALES OFFICES: $120.00 PER CALENDAR MONTH PER KNOWLEDGE
WORKER
ALL OTHER LOCATIONS: $218.50 PER CALENDAR MONTH PER NODE
KNOWLEDGE WORKERS DEFINED EXEMPTS EMPLOYEES
(B) ENHANCED SERVICES (PER USER):
- LOTUS NOTES MAIL HIGH- END $9.00 PER WEEK $3.00 PER WEEK
OPTION LOW-END OPTION
- GRAPEVINE $5.00 PER WEEK
- BUSINESS OBJECT $40.00 PER CALENDAR MONTH
- SUBACCT 944--VOICE MAIL (PER $6--$8 CALENDAR MONTH
ACCT)
SUBACCOUNT 974--CLIENT/ SERVER
(A) CPU MEMORY $0.65 PER MB PER DAY
(B) DISK SPACE $7.83 PER GB PER DAY
(C) AIX/NFS FEE PER ACCOUNT $15.00 PER CALENDAR MONTH
SUBACCOUNT 977 -
PHONE DEPR/LEASE/MAINT (PER EXT) $35.75 PER CALENDAR MONTH
8
SCHEDULE 2.2
CORPORATE FINANCIAL SERVICES
National will provide Xxxxxxxxx with the systems and services to value
inventory, physically ship & invoice material and intangibles, compute and
pay disbursements (ACCTS. payable, Payroll, Travel, etc.) and the ability to
produce, maintain and report stand-alone financial statements. Credit and
collection services will be provided by National as more fully set forth in
Schedule 2.4.
Xxxxxxxxx will be charged a flat periodic service fee based on the rates
contained herein. These rates are determined on a department by department
basis. In general the applicable cost pool is charged out to Xxxxxxxxx at 30%
of the total pool, which is based on the last twelve periods' Total Cost of
Sales for Xxxxxxxxx as a percent of National's Total Cost of Sales. In
addition, direct expenses incurred on behalf of Xxxxxxxxx will be reimbursed
100% by Xxxxxxxxx.
Currently National and Xxxxxxxxx share a common database and
infrastructure for financial systems. When Xxxxxxxxx elects to terminate use
of a National system it will bear 100% of the cost to interface its
replacement system to other non-National systems. Likewise, Xxxxxxxxx wi11
pay 100% of the cost to interface National systems to Xxxxxxxxx systems at a
predetermined hourly rate.
Should National discontinue use of a system for its own purposes,
Xxxxxxxxx will be allowed to continue to operate the system bearing the same
historical operating cost of the system, plus one-time cost for setup (if
any) for the term of this Agreement. Alternatively, at Xxxxxxxxx'x request,
National will transfer the discontinued system software to Xxxxxxxxx or its
service provider in an orderly fashion, pursuant to the terms and conditions
set forth in paragraph 3.0 and 4.0 of the Transition Services Agreement.
GENERAL NON-EXCLUSIVE DESCRIPTION OF SERVICES BY FUNCTION
The description of services to be provided captures substantially all of
the services intended to be provided; however, the parties acknowledge that
such description may inadvertently be incomplete, and that additional
services closely related or ancillary to those described below shall also be
provided at Xxxxxxxxx'x request upon the same terms and conditions as apply
to the services described below.
9
Department Name: Accounts Payable
Department Number: 99-011
1. Description of Services to be Provided:
Provide system support and capability to enable South Portland (NSFM) and
Salt Lake City (NSSL) facilities to process accounts payable via XxXxxxxxx &
Dodge accounts payable system. The system will enable personnel at both sites
to process invoices, check requests and other payment instructions as they
currently do today within National. The system will be modified so that
checks will be processed in South Portland for both Salt Lake City and South
Portland disbursements. Santa Xxxxx will not process accounts payable
disbursements for the Salt Lake City facility for liabilities recorded after
the Closing Date. If processing is required by National, processing of
National retained accounts payable liabilities will be performed in Salt Lake
City and South Portland on behalf of National. The system will be partitioned
so that Xxxxxxxxx transactions will be segregated within the National system.
As such payables vouchered after the Closing Date will be paid under the
Xxxxxxxxx tax identification number and checks will be drawn on a new
Xxxxxxxxx bank account. Xxxxxxxxx will be charged for a proportional share
of: all Information Services charges to department SC-99-0111, for management
time to address system-wide issues and support and annual maintenance for
system software. The costs to support Santa Xxxxx payables such as A/P
processor's payroll, facilities cost and SC department operating expense will
not be charged to Xxxxxxxxx.
Basic Services include:
1.1 IS Application and production support for IS jobs #800 and 801
1.2 Duplicate 800 & 801 jobs, and full cost will be absorbed by Xxxxxxxxx.
1.3 Acquisition and implementation of software maintenance license and upgrades.
1.4 Annual system generation of Form 1099 Misc. for Xxxxxxxxx U.S.
2. One-Time Actions Required to Modify IS Systems:
2.1 Set up new Group corporate for Xxxxxxxxx
2.2 Set up new corporate code for Spor & SL
2.3 Set up new company code for NSME under National
10
2.4 Convert open PO & unmatched Invoices to new company codes
2.5 Close converted PO & Invoices from old corporate code
2.6 Review & assess all AP/PO online, batch, security programs/jobs for special
company code processing. (vendor Master usage)
2.7 Modify GL & other interfaces (SMS)
Stock
CIS
Marcom
PTS/FAS
3. List of Systems Utilized
3.1 System Number: S800 M&D (APPO)
Department Name: Payroll
Department Number 99-0114
4. DESCRIPTION OF SERVICES TO BE PROVIDED
National will provide IS programming support for Ceridian Inc. payroll
processing, and payroll tax, systems and related interfaces. National will
provide support and maintenance for timecard collection system and related
interfaces. Service includes the management of the network interfaces with
Ceridian, management of system interfaces to payroll (e.g. HR's MSA system),
management of vendor relationship including driving customer support of
special scheduling requests, payroll cycle management and customer service
problems/issues. Costs to be charged to Xxxxxxxxx include the proportional
share of all IS costs, outside service fees to Ceridian where applicable and
the SC payroll manager's cost. The cost of payroll processing personnel,
department operating expense and facility expense related to the SC payroll
department will not be charged to Xxxxxxxxx.
National may elect to replace the current payroll processor, Ceridian, with
another outside vendor or in-house software application prior to June 1, 1998.
If this occurs, National will provide Xxxxxxxxx with 90 days notice of its
intent to terminate the Ceridian contract. National will use its best efforts to
transfer the terms and conditions of the Ceridian
11
contract to Xxxxxxxxx if Xxxxxxxxx wishes to continue to utilize Ceridian as
its payroll processing vendor. National will not be responsible to Xxxxxxxxx
for damages caused by failure of Ceridian to continue providing payroll
processing services to Xxxxxxxxx upon termination of the Ceridian contract by
National.
Additional services to be provided for Santa Xxxxx-based Xxxxxxxxx
employees include:
4.1 Payroll processing
4.2 File Review & transfer & Interface
4.3 Answer Questions
4.4 Hand Checks
4.5 X0, X0X
4.6 Maintain deduction file
4.7 Tax Filing
4.8 Set up employees
4.9 Set up employee history & current earns/deduction
5. One-Time Actions Required to Modify IS Systems:
5.1 Set up Xxxxxxxxx company code
5.2 Change bank account payment information
5.3 Change auto deposit instructions
5.4 Change benefit vendor files
5.5 Set up General Ledger entries
5.6 Set up stock administration interface (if necessary).
6. List of Systems Utilized
6.1 Ceridian Payroll System--Signature--Encore
6.2 MSA--weekly updates
6.3 G/L--weekly updates/edits
6.4 Stock Administration--Weekly updates
6.5 Deduction Files
12
6.6 HR SAP--N/A if applicable
6.7 Timecard System--All part of one system
6.8 SSIP/XXXX System--NIA
6.9 Travel Systems--Monthly updates to G/L, to P/R
6.10 Nova
6.11 Deja View
Department Name: Fixed Assets
Department Number: 99-0172
7. DESCRIPTION OF SERVICES TO BE PROVIDED
Setup, maintenance and ongoing support for Global Fixed Asset System
(FAS), Project Tracking System (PTS) and I schedule reporting. Service
includes upgrades to new releases of software, table maintenance and
establishment of new company reporting. Costs to be charged to Xxxxxxxxx
include the proportional share of IS costs, software maintenance fees and the
SC fixed asset manager's cost. Xxxxxxxxx will pay directly, or reimburse
National, for the cost to establish new tax-basis values for Xxxxxxxxx fixed
assets including, but not limited to, appraisal costs and outside service
fees to implement the new asset values in FAS.
Basic Services include:
7.1 Job Testing: PTS
7.2 FAS/GL Interface (GL's location)
7.3 Table Updates FAS: Company table, cost center table (location)
7.4 Security for company and personnel
7.5 Training
7.6 Provide historical data
7.7 Provide reporting for tax compliance
8. One-Time Actions Required to Modify IS Systems;
8.1 PTS--Add new location/change present location (FM/SL domestic
13
sites only)
Change programs coding (TE, SL, FM, SC)
8.2 FAS--New companies/keep the same location (FM, EP, CB, SL) (company table) (cost
center)
8.3 I-Sched--Testing and change programs, batch job
8.4 FAS--Update table and transfer assets to new company: update cost center table
(location), add new company, set up security.
8.5 I-Sched--FM, CB, EP, SL
8.6 FAS/PTS--Create new location code for ME and company code FC
8.7 FAS/PTS--Security for new location
8.8 PTS--Transfer procedure for FC projects
8.9 FAS--Transfer of assets between corporate codes. Test interface with G/L, CIS and APPO
9. List of Systems Utilized:
9.1 623 PTS
9.2 271 FAS
9.3 271 Focus--I-Schedule
9.4 AP/PO
9.5 CIS
9.6 GIL
Department Name: Travel
Department Number: 99-0208
10. DESCRIPTION OF SERVICES TO BE PROVIDED
Maintenance and operation of Travelmaster software application for use by
South Portland and Salt Lake City. Costs charged to Xxxxxxxxx are
proportional share of IS costs and software maintenance fees.
Services include:
14
10.1 Provide disbursement files to Xxxxxxxxx in order for Xxxxxxxxx to pay
travel obligations
10.2 Running of Special request travel reports as needed (tuition,
relocation)
10.3 Access to on-line travelmaster system for Xxxxxxxxx until they go on
alternative system
10.4 Compliance to statutory requirements in: educational assistance,
relocation expenses, miscellaneous expense treated as personal income,
provided Xxxxxxxxx is utilizing National HR and payroll systems and policies
pursuant to this Agreement
11. ONE-TIME ACTIONS REQUIRED TO MODIFY IS SYSTEMS
11.1 Set up separate bank account 11.2 Modify EFT transmission
12. List of Systems Utilized:
12.1 Travel Master Daily input/Batch--weekly
cycle period end reports
12.2 Nova Weekly Interface
12.3 CIS Weekly Interface
12.4 G/L Weekly Edit, period end journal
12.5 Weekly Dept Update
12.6 Interrogator Period End 12.7 MSA Weekly Update
Department Name: Corporate Accounting (GL)
Department Number: 99-0109 & 99-0385
13. Description of Services to be Provided:
Establish ability to consolidate worldwide financial statements for
Xxxxxxxxx Semiconductor utilizing National's GL90 general ledger system.
Modify the Financial Reporting System ("FRS") to produce the Xxxxxxxxx
consolidated balance sheets and income statements. Reproduce existing
financial reporting books within Xxxxxxxxx ledger. Manage all interfaces into
and out of the general ledger, including to Interrogator reporting system and
Nova.
15
Costs charge to Xxxxxxxxx include: a proportional share of the entire
Santa Xxxxx General Ledger department consisting of one exempt manager and
two nonexempts, one current full-time IS programmer, one IS contractor,
department facilities and operating expenses and all IS costs. Also,
Xxxxxxxxx will pay for one-half the cost of a new full time contractor who
will be hired to support the added programming requirements arising out of
the need to support Xxxxxxxxx as an independent company. National will pay
for the other half of this added IS contract programmer.
Critical Services include:
13.1 Maintain Corporate Xxxxxxxxx Ledger
13.2 Maintain FRS reports for Xxxxxxxxx
13.3 Maintain WW Hierarchy for Xxxxxxxxx
13.4 GL Vendor Maintenance Agreement
14 One-Time Actions Required to Modify IS Systems:
14.1 Create Consolidated Xxxxxxxxx Ledger
14.2 Create Parallel FRS Systems
14.3 Add new legal entities for Xxxxxxxxx
14.4 Isolate National History in unique locations
14.5 Establish new ledger to segregate ME National
14.6 DETERMINE XXXXXXXXX VS. National Family Reporting Structure
14.7 Create new G/L reports-- Trial Balance, Transaction Analyzer's, etc.
14.8 Create parallel WW Hierarchy Files
14.9 Work with G/L Feeder Systems during Transition
14.10 Work with G/L End-users (Essbase, Interrogator, etc.) during transition
15. List of Systems Utilized:
15.1 J231 Financial Reporting
15.2 J111 General Ledger
16
15.3 J951 WW Hierarchy
Department Name: Corporate Interlocation
Accounting Department Number: 99-0119
Assumptions
1 Infrastructure/Licensing per National defined Legal Structure for Xxxxxxxxx
2 Fiscal Calendar Same As Today
3 Inter platform hardware relationships same as today.
4 Functional core processes of CIS remain the same as today.
16. Description of Services to be Provided:
Provide ability to generate commercial invoices for Xxxxxxxxx to enable
the global shipment & billing of physical product between: Xxxxxxxxx
entities, between Xxxxxxxxx entities and its subcontractors and between
Xxxxxxxxx entities and National entities. Allow for the creation of
intangible billing within Xxxxxxxxx entities. Maintain interfaces with key
upstream and downstream systems (Workstream, FLS, LOTS, General Ledger, SAP,
etc.). Generate shipping documents such as commercial invoices, attachments
and customs notices. Generate auto booking instructions to the General
Ledgers for both Xxxxxxxxx intercompany transactions and trade transactions
between Xxxxxxxxx and National. Maintain intracompany transfer price file to
enable legal transfer pricing for Xxxxxxxxx shipments between Xxxxxxxxx legal
entities. Establish and maintain new contract price files (and booking
instructions) for the flow of goods and services between Xxxxxxxxx and
National, based on contractual prices established in the supply and service
agreements between the two companies. Maintain historical transactions for
audit purposes. Xxxxxxxxx will have full access to the worldwide Access
To CIS History ("WATCH") system, a client/ server based access tool.
Xxxxxxxxx will be charged a proportional share of the entire Interlocation
Accounting department, including IS support for the systems listed below which
is charged directly to this department. Xxxxxxxxx will also pay for one-half
the cost of a new full-time programmer who will be hired to support the added
17
program requirements caused by the new, and complex, third-party relationship
for tangible and intangible flows between Xxxxxxxxx and National. National
will pay for the other half of this added IS contract programmer.
Service Summary:
16.1 J281 Maintain transfer pricing file(s).
16.2 J28X Create and maintain special contract pricing file for transactions
between Xxxxxxxxx and National. Develop and maintain jobs to capture, book
and report transactions.
16.3 J285 CIS: Maintain operational and reporting processes.
16.4 J686/J685 SEA Inbound & Outbound Accounting: Maintain operational and
reporting processes.
16.5 J286/J287 U.S./Europe/Japan Inbound & Outbound Accounting: Maintain
operational and reporting processes.
16.6 Support Xxxxxxxxx Corporate Consolidation Training
17. One-Time Actions Required to Modify ID Systems:
Establishment of Relationships:
National < --- > Xxxxxxxxx: Financial/Physical Flows (e.g., 2nd leg invoicing
NSIL)/Financial Relationships (e.g., Consignment/ Sell--Buy Back, etc.)
National < --- > SubK: Financial/Physical Flows (e.g., NRNL/consignment)
Xxxxxxxxx < --- Xxxxxxxxx Financial/Physical Flows (e.g., 2nd leg invoicing
NSIL)/Financial Relationships (e.g., Intercompany Sales, Cost of Goods
Sold/Margins)
Xxxxxxxxx < --- > SubK: Financial Relationships (e.g., Consignments/Sell BuyBack
etc.)
National < --- >SubK < --- > Xxxxxxxxx: Financial/Physical Flows/Financial
Relationships
Define the following for all flows:
17.1 #) Pricing (e.g., Contract Price/Std/Margins)
17.2 #) System Edits (e.g., Intangibles/NSIL Rules, etc.)
17.3 #) System Edits (e.g., Tangible Import/export, DOL, etc.)
18
17.4 #) General Ledger Journal vouchers (e.g., Separate Ledgers/2nd leg
entries, SAP, etc.)
17.5 #) Report
17.6 #) Interfaces (e.g., Workstream/TRS/Trade-Sale-Recon, FLS, LOTS, etc.)
17.7 #) Documents (e.g., Invoices/Attachments/Preclearence, etc.)
ASSESSMENT ANALYSIS ALIGN INTERCO-SHIP DATA WITH BUSINESS PROCESSES
DEVELOPMENT/IMPLEMENTATION PHASES
18. List of Systems Utilized:
18.1 J285 Commercial Invoicing System
18.2 J286 U.S. Europe/Japan Outbound Accounting
18.3 J287 U.S./Europe/Japan Inbound Accounting
18.4 J685 SEA Outbound Accounting
18.5 J281 Contract Prices/Transfer Prices
18.6 J686 SEA Inbound Accounting
18.7 Jxxx Interface Feeds from/to multiple systems. (e.g., Workstream, SMS, LOTS, TRS, SAP,
FLS, APPO, payroll, travel, mis etc.)
18.8 J285 Subcontractor Accounting
Department Name: Cost Accounting
Department Number: 99-0116
19. DESCRIPTION OF SERVICES TO BE PROVIDED
Provide the ability to: value in-line work in process inventory via the
280 standard cost system and the Transfer Reporting System (TRS) and its
related subsystems. Provide the ability to value finished goods at standard
cost utilizing the 280 standard cost systems, LOTS and related subsystems.
Generate standard cost files for use in transfer pricing intracompany
19
shipments. Provide the ability to change local and worldwide standard cost of
inventory. The support systems required to effect a global standard change
will be made available at a minimum of once per year. Global standards
changes for National and Xxxxxxxxx will be coordinated to achieve a common
schedule. Selected standard changes for particular Xxxxxxxxx product lines or
sites will be performed per schedules mutually agreed upon between Xxxxxxxxx
and the National Corporate Controller.
Xxxxxxxxx will also have use of
the National Inventory Reserve systems, the O/A (aged and obsolete inventory)
and LCM (Lower of Cost or Market) systems as long as Xxxxxxxxx utilizes
National's inventory tracking system (LOTS) and inventory valuations systems.
Xxxxxxxxx will be charged a proportional share of the whole Corporate
Cost Accounting department. IS support for the systems listed below is
charged directly to this department.
Summary list of Services:
19.1 J280 Standard Cost File System
19.2 maintain/Run jobs for separate on-line standard update maintenance table
19.3 Maintain/Run jobs for local, matrix, and worldwide files
19.4 J282 Standard Cost File for Transfer Price System
19.5 Maintain/Run jobs for separate journal vouchers and worldwide transaction code
listings
19.6 J500 CWIP and RDS files
19.7 J265 TRS inventory records
19.8 J563 MPE/NMPE/CCIM earnings records for function 09
19.9 J975 OA File records
19.10 J975 LCM file records
19.11 Provide access to, and maintenance for, the on-line Inventory Analysis System (IAS)
20. One Time Actions Required to Modify IS Systems:
20.1 J280 Standard Cost File System--Create and set up
20.2 Build on-line standard update maintenance table
20
20.3 Set up local, matrix, and worldwide files
20.4 J282 Standard Cost File for Transfer Price System--Create and set up
20.5 Separate TVS and Worldwide transaction code listings--Create and set up
20.6 J500 CWIP and RDS files--Extract and build
20.7 J265 TRS Inventory records--Extract and build
20.8 J563 MPE/NMPE/CCIM earnings records for function 09--Extract and build
20.9 J975 OA file records--Extract and build
20.10 J975 LCM file records--Extract and build
21. List of Systems Utilized:
21.1 J280 Standard Cost for Local, Matrix, and Worldwide files
21.2 J500 CWIP, RDS for Inventory Report System
21.3 J282 Standard Cost file for Transfer Price System
21.4 J284 Transaction Value System
21.5 J281 Transfer Price File
21.6 J265 Transfer Reporting System (TRS)--Inventory Report
21.7 J291 Intransit System.
21.8 J9750A System
21.9 J975 LCM System
21.10 J563 MPE/NMPE/CCIM Earnings (Function 09) Worldwide Transaction Code Listing
21.11 J281 Inventory Analysis System (IAS)
21.12 J281 Worldwide Standard Revision Impact Study
21
Department Name: Interrogator
Department Number: 99-0420
Services Provided:
Xxxxxxxxx will have access to its corporate financial information through
the Interrogator client/server based information access application. National
will modify and maintain the organization table for Xxxxxxxxx, monitor and
maintain all the interfaced data loads to the database. Xxxxxxxxx will pay a
proportional share of the cost of this department as it does for the General
Ledger department.
Department Name: Inpat/Expat Accounting
Department Number: 99-0205
Services Provided:
National will provide Inpatriate & Expatriate accounting services to
Xxxxxxxxx as requested. Xxxxxxxxx will be charged based on the number of
expatriate and inpatriated personnel as a percentage of the combined
Xxxxxxxxx and National expatriate/inpatriate personnel.
Department Name: Risk Management
Department Number: 99-0108
Services Provided:
Approximately 20% of one National employee's time to support health
insurance, life insurance and accidental death insurance coverage for
Xxxxxxxxx personnel. Xxxxxxxxx will be charged based on the estimated
percentage of effort required to support the above mentioned insurance
programs.
Department Name: Treasury
Department Number: 99-0179
Services Provided:
National will provide cash transfer services including remittance of
collected North American receivables to Xxxxxxxxx designated bank accounts on
mutually agreed upon remittance schedule, and will provide Xxxxxxxxx with
access to credit reporting services used by it as defined in Schedule 2.4.
22
National will also provide accounting services related to the bank transfers.
National will service the GE Capital leases of production equipment which are
subleased by National to Xxxxxxxxx. Xxxxxxxxx will reimburse National for the
monthly equipment lease payments. Xxxxxxxxx will be charged an annual fee per
the attached rate schedule. The service fee covers labor and related overhead
including bank fees for lockbox services and on-line banking software
licenses.
Department Name: SC Site Accounting
Department Number: 99-0425
Services provided:
Support for the Semiconductor Material System, including raw material
excess analysis. Support from the Human Resources Controller regarding Health
and Life Insurance charges, administration of charges for common benefit
services provided to Xxxxxxxxx as described in the Corporate Human Resources
Services Agreement, paragraph A. 1. "Description of Benefit Services".
Xxxxxxxxx will be charged a proportional share of the loaded labor cost of
these two employees only. Xxxxxxxxx will not be charged for other SC Site
Service accounting costs or National Corporate Division accounting costs.
23
HQ FINANCIAL SERVICES PROPOSAL
-----------------------------------
SC SITE FINANCE FY97
YEAR FY97 FIXED 4TH QTR TOTAL
ACCOUNTING RATE FY97
------------------- -------------- --------- ------------- ---------
DEPT
0111 Corp AP $114 $29 $29
0114 Payroll $172 $43 $43
0138 Archives $0 $0 $0
0172 Property $100 $25 $25
0208 Travel $7 $2 $2
0425 SC Supp $24 $6 $6
Sub Total $417 $104 $104
-------------- --------- ------------- ---------
CORPORATE FINANCE
YEAR FY97
DEPT
0106 Ext Report $0 $0 $0
0109 GL $210 $53 $53
0116 Cost Acctg $371 $93 $93
0118 Corp Cont $0 $0 $0
0119 Interlocation $164 $41 $41
0205 Expat/Inpat $75 $19 $19
0236 ABM $0 $0 $0
0385 GL Proj $8 $2 $2
Sub Total $828 $207 $207
-------------- --------- ------------- ---------
RISK
YEAR FY97
0108 Risk Mgmt $45 $11 $11
TREASURY
YEAR FY97
0179 Treasury $77 $19 $19
INTERROGATORY
YEAR FY97
0420 Interrogatory $75 $19 $19
OTHER
YEAR FY97
0107 Int'l Audit $0 $0 $0
0110 VP Finance $0 $0 $0
0424 Plan/Anal $0 $0 $0
0430 COO VP Fin $0 $0 $0
0431 COO VP Sup $0 $0 $0
02-2431 VP Op's Fin $0 $0 $0
0117 Corp Tax $0 $0 $0
Dept
Sub Total $0 $0 $0
Total W/O IS $1,442 $361 $361
-------------- --------- ------------- ---------
1/2 IS person $68 $17 $17
1/2 IS person $68 $17 $17
Adm Support $100 $25 $25
24
Total All $1,610 $403 $403
Charges
-------------- --------- ----------- ---------
-------------- --------- ----------- ---------
HQ FINANCIAL SERVICES PROPOSAL
SC SITE FINANCE FY98
YEAR FY98/99 FIXED 0XX 0XX XXX 0XX 0XX XXX
ACCOUNTING RATE
DEPT
----------------- -------------- --------- --------- ----------- --------- ---------
0111 Corp AP $116 $ 29 $ 29 $ 29 $ 29
0114 Payroll $173 $ 43 $ 43 $ 43 $ 43
0138 Archives $ 0 $ 0 $ 0 $ 0 $ 0
0172 Property $101 $ 25 $ 25 $ 25 $ 25
0208 Travel $ 8 $ 2 $ 2 $ 2 $ 2
0425 SC Supp $ 18 $ 5 $ 5 $ 5 $ 5
Sub Total $416 $104 $104 $104 $104
CORPORATE FINANCE
YEAR FY98/99
DEPT
0106 Ext Report $ 0 $ 0 $ 0 $ 0 $ 0
0109 GL $223 $ 56 $ 56 $ 56 $ 56
0116 Cost Acctg $378 $ 95 $ 95 $ 95 $ 95
0118 Corp Cont $ 0 $ 0 $ 0 $ 0 $ 0
0119 Interlocution $178 $ 45 $ 45 $ 45 $ 45
0205 Expat/Inpat $ 0 $ 0 $ 0 $ 0 $ 0
0236 ABM $ 0 $ 0 $ 0 $ 0 $ 0
0385 GL Proj $ 8 $ 2 $ 2 $ 2 $ 2
Sub - Total $787 $197 $197 $197 $197
-------------- --------- --------- ----- --------- ----
RISK
YEAR FY98/99
0108 Risk Mgmt $45 $11 $11 $11 $11
TREASURY
YEAR FY98/99
0179 Treasury $80 $20 $20 $20 $20
INTERROGATORY
YEAR FY98/99
0420 Interrogatory $150 $38 $38 $38 $38
OTHER
YEAR FY98/99
0107 Int'l Audit $ 0 $0 $0 $0 $0
0110 VP Finance $ 0 $0 $0 $0 $0
0424 Plan/Anal $ 0 $0 $0 $0 $0
0430 COO VP Fin $ 0 $0 $0 $0 $0
0431 COO VP Sup $ 0 $0 $0 $0 $0
02-2431 VP Op's Fin $ 0 $0 $0 $0 $0
0117 Corp Tax $ 0 $0 $0 $0 $0
Dept
Sub-Total $ 0 $0 $ 0 $0 $0
Total W/O IS $1.478 $370 $370 $370 $370
1/2 IS person $ 68 $17 $ 17 $ 17 $ 17
1/2 IS person $ 68 $17 $ 17 $ 17 $ 17
25
SC SITE FINANCE
ACCOUNTING
--------------------------------- FY98
YEAR FIXED
DEPT FY98/99 RATE 0XX 0XX XXX 0XX 0XX XXX
----------------- -------------- --------- --------- ----------- --------- -------------
Adm Support.. $100 $25 $25 $25 $25
Total All
Charges $1,714 $429 $429 $429 $429
-------------- --------- --------- ----- --------- ---
-------------- --------- --------- ----- --------- ---
26
SCHEDULE 2.3
PURCHASING SERVICES
Joint purchasing arrangements will be established by National as set
forth below. Said arrangements will include all Xxxxxxxxx sites which are
defined as FM, EP, SL and CB and the following National sites defined as SC, TE,
ME, UK and EM.
Costs charged to Xxxxxxxxx will be direct out-of-pocket for systems.
Commodity Management Team expenses will be shared equally.
Access to National owned crystal grower capacity will be controlled by
National on the basis set forth below. Agreement will be made to provide access
to approx. 30% of available capacity to Xxxxxxxxx for the term of this
Agreement.
SILICON CRYSTAL GROWER PROGRAM
It is recognized that Xxxxxxxxx is potentially vulnerable for silicon
support due to its dependence upon both four inch and five inch silicon wafers
at its South Portland wafer fabrication facility.
The Parties recognize that the primary silicon producers have notified
the semiconductor industry that production of these smaller diameter wafers will
diminish and eventually be discontinued.
Based upon these market conditions, National will cooperatively work
with Xxxxxxxxx to increase its supply base and assist it in securing these types
of products. It is incumbent upon Xxxxxxxxx to exercise its full resources to
qualify additional suppliers identified by National.
In the event that normal market capacity cannot be found to provide
adequate support to Xxxxxxxxx, National will make available a portion of its
dedicated capacity from the MEMC Crystal Grower Program.
This portion will be 12,800,000 grams of Zero Dislocation annually, to
be taken on a linear basis. The access to this material will be directly
through National's Central Purchasing Group in Santa Clara, CA. Xxxxxxxxx may
not directly contact National's supplier with respect to the puller program.
If Xxxxxxxxx requires more than the allocated material, National will
review its then current requirements and if possible provide additional short
term support.
27
National will not renegotiate any supplier agreements as part of this
contract. This agreement will allow access to Xxxxxxxxx to the grower program
through National until July 31, 1999, which is the end of the puller program.
JOINT PURCHASING ARRANGEMENTS
1.0 Commodity Management and Purchasing
1.1 National and Xxxxxxxxx will combine their purchasing requirements,
where practical, and apply National's Commodity Management Team (CMT)
approach to material purchases for the benefit of both parties. This
process requires that each Party assign CMT members, commodity
managers and team leaders with sufficient knowledge, dedicated time
and authority to effectively represent their respective companies.
1.2 Due to the geographic distances involved each Party will support all
required travel for team member attendance at bid evaluation meetings,
commodity team meetings, supplier negotiations and other meetings
required to support the process. Expenses for meetings (conference
rooms, meal service, copying expense etc.) will be shared on a 50/50
basis between the parties.
1.3 The CMT process requires a team approach to decision making. In the
event that a CMT is unable to reach a decision the assigned commodity
manager will make the final decision. All appeals will be reviewed
and decided upon by the Directors or Purchasing for Xxxxxxxxx and
National.
1.4 The types of commodities to be included in the this agreement will be
mutually agreed upon on an annual basis by the respective Directors of
Purchasing. It also understood that as business conditions change the
parties may alter or review the commodities included in this process.
However, once a commodity has been negotiated with the suppliers and
an agreement signed by Xxxxxxxxx, National and the supplier, both
parties will remain bound for the duration of the agreement.
2.0 Quest for Gold Supplier Quality Rating Program
2.1 National and Xxxxxxxxx will consolidate their effort to conduct Quest
for Gold (QFG) supplier rating and rankings. This is a parallel
effort to the CMT Process and is a part of the basis of supplier
selection and supplier business share. It is expected that the CMT
leader for each commodity will collect data from each site and report
the QFG results to QFG coordinator in
28
National's Central Purchasing Group in Santa Clara, Ca.
2.2 Any costs associated in supporting this program will be shared as
mutually agreed by the Directors of Purchasing.
3.0 Purchasing Support for Xxxxxxxxx Personnel Located at NSSC
3.1 National will provide necessary purchasing support for Xxxxxxxxx
personnel located at the Santa Clara, Ca. site, the cost of which will
be the same allocation method used for all National personnel. The
allocation will be based upon either $8/ invoice or 0.75% of the
requisition dollars.
4.0 Termination
4.1 The above joint purchasing arrangements can be terminated by mutual
consent of the parties with a minimum ninety (90) days written notice
to allow sufficient time for both parties to make alternate
arrangements for material support. In the event that one party takes
unilateral action to breach or renegotiate a specific commodity
agreement, the other party, at its discretion, may terminate its
participation in said commodity agreement upon thirty (30) days
written notice.
NATIONAL OWNED STAMPING TOOLS AT DCI
National will make shared tools available for Xxxxxxxxx use for the
life of the tool, subject to National's needs. Maintenance and refurbishment
shall be shared pro rata between the Parties based on use. In the case of
shared matrix tools, neither party may unilaterally allow a supplier to treat a
shared tool as open tooling. All tools used exclusively by Xxxxxxxxx for
Xxxxxxxxx products will be Xxxxxxxxx owned and will be made available for
National's use upon request subject to Xxxxxxxxx needs.
OTHER NATIONAL OWNED TOOLS AT THIRD PARTIES
National will make available for use by Xxxxxxxxx all current tooling
in the possession of suppliers or subcontractors, subject to National's needs
without the right to modify, for the life of the existing tooling. Maintenance
and refurbishment costs shall be shared pro rata between the Parties based on
use. Upon request by Xxxxxxxxx, and subject to National's needs, National will
also make arrangements for the use of supplier owned tooling incorporating
National Intellectual Property, such as etched frame tooling or other production
equipment built to provide National's custom materials. All tools used
exclusively
29
by Xxxxxxxxx for Xxxxxxxxx products will be Xxxxxxxxx owned and will be made
available for National's use upon request subject to Xxxxxxxxx needs.
DCI LEAD FRAME COMMITMENT
The Parties will cooperate in the 80% lead frame purchasing commitment
made to DCI in a Supply Agreement dated January 20, 1996.
30
SCHEDULE 2.4
WW MARKETING & SALES
Below are assumptions common to the following six Service lists:
Assumptions:
-WWMS will create a Xxxxxxxxx Semiconductor legal entity at each of the
locations from which invoices are generated.
-Invoices in Xxxxxxxxx'x name will be issued from day one of the existence of
Xxxxxxxxx as a separate legal entity.
-Xxxxxxxxx will operate under National's systems and logistics practices.
-Xxxxxxxxx will operate under National's standard Ts & Cs and Financial Calendar
-Service agreements between National WWMS and Xxxxxxxxx may not be assigned to
third parties.
-All services end at the final separation date in June 1998.
-Up front one time set up costs will be paid by National.
-At final systems separation date, June 1998, all separation costs including
conversion of data to Xxxxxxxxx systems will be to Xxxxxxxxx'x account.
-WWMS Personnel dedicated to Xxxxxxxxx may be offered employment with the
corresponding Xxxxxxxxx legal entities in each WWMS region at close.
-At the end of the service period in June 1998, records and books of Xxxxxxxxx
and functional responsibilities will be handed over to Xxxxxxxxx employees
Service duration and cost:
The attachment below identifies the cost and duration of services from National
WWMS to Xxxxxxxxx.
Should Xxxxxxxxx require a service after the scheduled end date, Xxxxxxxxx will
be charged at the annualized rate plus any additional costs incurred by
National.
31
(a)IS Function
Service to be provided:
(i)Swiss
Provide WW technical and business support to sustain the production
environment and day-to-day business needs and requirements, including:
-Swiss (on-line system and daily/weekly/periodic batch processing)
-ONLINE (SWISS order entry/maintenance/etc), CRS, CMF, MEDT
-Batch (allocation, packlist generation, ship confirmation & invoicing and
B/L reporting)
(ii)C-FAP
Provide WW continuous technical support for current customers on the CFAP
program and for continuous roll out of new customers using the standard
models or the standard models modified for specific customer requirements.
(iii)EDI
Provide continuous WW technical & business support for all existing EDI
messages in production and for the continuous roll out of new customers on
existing developed message. This also includes support and maintenance
(labor & contract) for the EDI translation packages (EDICS & QUANTUM) plus
participation in the Harbinger user group and the EIDX organization
meetings.
(iv)ACCORD/MPL
Provide WW technical support & business support for price management. This
includes maintenance of the existing functions and support of requirements
and needs necessary to sustain the day-to-day business needs/requirements,
including:
-ONLINE: ALL ACCORD & MPL processing for ALL regions
-BATCH: Interfaces to SWISS & prices books for NAD & EUR
-ONLINE & BATCH process for Southeast Asia's "SEA-SWISS"
system
32
(v)Other Systems
Provide WW technical & Business Support for all other systems in WW
Marketing & Sales and to sustain current functions and the day-to-day
business needs/requirements. This currently includes:
-Worldwide Contracts: ONLINE and Batch process to support contract
negotiation and WW maintenance
-Disti Resales and Inventory processing, plus reporting of information
(RCODES/CUBA/351 rpt/ASP margin/OSD rpt/ Marketing rpt/audit/OSS/ATS)
Decision Support Systems
Provide WW technical support & business support to sustain the production
environment and the day-to-day operations of the Information Warehouse that
supports EXPERTS and Business Objects including normal upgrades. Upon
separation from National, Xxxxxxxxx will be required to acquire its own
license for Business Objects.
IS Managers/Support
Provide managerial administration and support for all systems listed in
this agreement, as well as for IS components of Americas Region service
agreement (Arlington IS, Automotive Support, Building 16 infrastructure).
(b)MARCOM
Services to be provided shall include, without limitation:
(i)Technical Documentation
Document & Publishing: Replacing National with Xxxxxxxxx logo,
programming and transformation; New Coris Publisher Instance
(including ISDN line and Ascend router); CD-ROM Artwork; copyright
references, National references in text, last page logo and sales
office listing.
SGML: DTD & FOSI modification, package drawing and content manager
client license.
Inventory Management: Programming (Scopus & Crawfordville), move
inventory, programming.
Response Management: Need to capture inquiries, fulfillment and
analysis.
33
(ii)Internet
Server - Hardware, Cadis License, Sybase License, Netscape Server
License, Software Compiler, Development Workstation, Analysis License,
Analysis Server, Full Text Search License, Consulting & Training,
Installation & Configuration, Split Product Hierarchy in Cadis,
Physical Split Datasheet & Product Fold
(iii)Sales Force Automation
Charge for Lotus Notes connectivity
(c)SEA
One time Service to be provided:
(i)Set up legal entities
Subsidiaries: (Hong Kong, Singapore, NSFH holding the Cebu plant to
be taken over by Xxxxxxxxx)
(ii)Registration/License
Tax registration, business/company registration, customs registration,
labour registration, retirement/Provident fund registration, share
registration, obtain the necessary licenses (excluding export
distribution license)
(iii)Banking
Open bank accounts, negotiate and obtain banking facilities, set up
electronic banking system, pass banking resolution
(iv)Insurance Coverage
(v)Communications
Inform customers, distributors and other business partners of the
change
(vi)Staffing/Benefits Administration
As long as there are no legal constraints, National will use its best
efforts to set up at Close and administer on behalf of Xxxxxxxxx:
-. Payroll Function
34
National will perform payroll function including tax
reporting.
-. Leave Record
National will maintain a full leave record of each employee to
meet statutory requirements.
-. Individual Employee File
National will maintain employee record to meet statutory
requirements.
Service fees does not include any modification to current SAP and
HR/Payroll related computer system.
(vii)Other HR Functions
For HR function other than the above, such as recruiting, selection,
pay program design, training and employee relations matters, National
agrees to provide on needed basis and charge a project/consultant fee
for each request for services. The project/consultant fee has to be
approved by Xxxxxxxxx management prior to carrying out any activities.
(viii)Systems Setup/Modification
Quotation (ACCORD): Separate Xxxxxxxxx and National quotations, with
proper part number validation. Pricing (MPL), Order processing
(SWISS/SEA-SWISS, CMF): Separate Xxxxxxxxx and NS orders to be
captured, separate order acknowledgments. L/C (SWISS): Invoicing
(SWISS): Separate invoices and packing lists. Account (M&D, CIS,
LOTS): Separate ledgers. HR (HRIS, IPL): Separate payroll. office
automation (Lotus Notes, MS Office, PC), Information Access (BO,
XPERTS)
(ix)Set up new ledgers GL, FA, AP, EP, AR, CIS Payroll
(x)Credit Management
Set up credit limit and credit terms for customers common to both
Xxxxxxxxx and National
(xi)Initial financial statements
Prepare initial Balance Sheet and P&L upon acquisition.
(xii)Stationery/Signage
35
(xiii)Facility
Move Xxxxxxxxx employees to a suitable centralized location in the
office
(xiv)Due Diligence Audit
ON-GOING SERVICES:
(1)Accounting
A/P, E/P, A/R, interco, inventory, FA, GL payroll, incentive data, P
Fund, customer claims/returns, CN, DN, travel authorization & expense
reimbursement, approval matrix management, PI of inventory and fixed
assets, financial statements and statutory accounts.
(2)Cash management
Receipt, disbursement and remittance, bank reconciliation, bank
accounts management, cash forecast, xxxxx cash and traveler
cheque/travel advance.
(3)Insurance
Renewal of policy, review coverage with insurance broker and provision
of regular and ad hoe information to insurer.
(4)Purchasing
PR, PO, receiving processes and capital expenditure management.
(5)Tax
VAT/GST/Sales/Turnover Tax; employee/payroll tax/levy #; income tax #,
customs and ad valorem duty. Tax planning service will not be
provided.
(6)Audit
Coordinate with auditor on statutory audit process, prepare supporting
schedules and provide information and answer queries as requested.
(7)Record Retention
Compliance with local legal requirements.
36
(8)Management reporting
Financial statements, expense management, performance evaluation
reports and provide data to Xxxxxxxxx for the purpose of its
management of incentive scheme.
(9)C&C
Credit evaluation, approval and control, setting credit terms and
limits; Collection: L/C, DA, DP, OA, cash collection forecast and bad
debt provision.
(10)Order Processing
RFQ/Quotation, order acknowledgment, order entry and backlog
scheduling, change and cancellation, sample, datasheet and literature
fulfillment.
(11)Shipping
Delivery and return, import and export documentation.
(12)Warehousing: Storage
(13)Export Control: Compliance
(14)Facility
Telecom, Telephone, Office space/existing furniture, existing office
equipment and mailing and document collection/delivery.
(15)Systems Use & Support
Transaction systems, office automation tools (Lotus Notes, MS Office),
data warehouse (BO), data query tools (EXPERTS) and system security
and operation.
(16)Staffing/Benefits Administration
As long as there are no legal constraints, National will use its best
efforts to set up at Close and administer on behalf of Xxxxxxxxx:
-. Payroll Function
National will perform payroll function including tax reporting.
-. Leave Record
37
National will maintain a full leave record of each employee to
meet statutory requirements.
-. Individual Employee File
National will maintain employee record to meet statutory
requirements.
Service fees does not include any modification to current SAP and
HR/Payroll related computer system.
(17)Other HR Functions
For HR function other than the above, such as recruiting, selection,
pay program design, training and employee relations matters, National
agrees to provide on needed basis and charge a project/consultant fee
for each request for services. The project/consultant fee has to be
approved by Xxxxxxxxx management prior to carrying out any activities.
(d)Europe Division
One time services to be provided:
(i)Customer Communication
(ii)Due Diligence Audit
National Internal Audit to coordinate process. Audit to be made
by independent third party, level of materiality $100K, (Scope:
Account records, balance sheet, revenue, reserves, inventory,
expenses, accruals and liabilities).
ON-GOING SUPPORT SERVICES
(1)External FSE/FAE
If either party's employees cover the other party's accounts, a
cost per hour charge will be negotiated.
(2)Inside Sales Support
Order entry, quoting, backlog management, contract compliance and
maintenance, administrative work and sales support functions.
(iii)Marcom
PR activities, BAS fulfillment, Internet, production,
38
advertising.
(iv)Finance
Accounting, set up two Xxxxxxxxx locations in SAP, Xxxxxxxxx
departments, payroll, accounts payable, intercompany, fixed asset
transfer and maintenance, close for both ledgers and legal
entities, accruals, reserves, special sales reserves, discounts,
revaluation of balance sheet and backlog; data for sales
incentives, rep commissions, SSIP; interface with Xxxxxxxxx
management, quarterly reserve review, annual audit support,
establishment and review of approval procedures; setting up two
bank accounts with B of A, cash administration reconciliations;
tax, VAT, corporation tax filing and tax accrual calculations,
coordination with Xxxxxxxxx tax advisors, annual meeting minutes
(Note: assume no tax planning); treasury; reporting, FX;
credit and accounts receivable, ship and debit & export
compliance, customer account contract, collection, cash
forecasting, credit monitoring, credit reporting, D&B credit
checks, S&D processing, distribution audit and export compliance.
(v)MIS and Systems
EDI, Operations, LAN/WAN support, network and desktop.
(vi)Facilities
Reach agreement on facilities, FFB, LN, FR, IT, based on
headcount and sq. ft., termination period, base price agreement,
support infrastructure, travel agency, insurance coverage for
business and transactions, utility charges, parking, use of phone
system. Transfer of car leases, reception service, canteen,
security. Physically separate two businesses, signage and
records retention.
(vii)Logistics & Warehouse
Agree process for inventory movement, inventory level required
and export control procedures, establish customs office contact,
agree product flow and carrier, run monthly duty reports,
inventory control, carrier rate negotiation and delivery
performance.
(e)AMERICAS DIVISION
39
(i)Outside Sales
ASSUMPTIONS: National will provide data for Xxxxxxxxx
commissionable sales, but will assume no responsibility for
commission calculation or payment. Any use of field offices
required by Xxxxxxxxx will need to be negotiated separately.
Xxxxxxxxx will have own reps with own contract.
ONE TIME: Positioning National/Xxxxxxxxx with customer. Keeping
customer informed on transition. Incorporate clause in new
National rep contract limiting National liability for existing
Xxxxxxxxx backlog.
(ii)Latin American Sales
ASSUMPTIONS: Separate Xxxxxxxxx rep contract will be
established.
SERVICES: Xxxxxxxxx will utilize the existing services being
provided, including: applications support, sales channel
development for countries outside Brazil and local manufacturing
development.
(iii)Contract Administration
ASSUMPTIONS: Only looking at active NA awarded contracts prior
to closing date.
SERVICES: Current support consists of: contract process from
pre-RFQ through award load, changes to active NA contracts,
ensure the worldwide contract system is updated and correct,
provide a central repository for all approved NA corporate
contracts.
(iv)Distribution
ASSUMPTIONS: Xxxxxxxxx pick up full liability and balance sheet
reserves for inventory. National/Xxxxxxxxx will cooperate to
support the transition of some products and some Distributors to
a Market Price Program. Xxxxxxxxx will require separate
franchise agreement. No systems development will be done to
accommodate Xxxxxxxxx unique disti programs.
SERVICES: Generation of unique Xxxxxxxxx pricebook(s) at
Xxxxxxxxx expense. Asset management training in progress on
services delivered by Asset Management group-anticipate 3 months
support will be required from National AM group to Xxxxxxxxx AM
group to familiarize them with systems/procedures. Asset
management-systems Experts/BO/DDF, SWISS and ACCORD.
40
(v)CSC, TRG, CRG
ASSUMPTIONS: CSC: Assume business as usual/no separation of
inside sales force. Quote/Acknowledge/Order
Schedule/Change/Cancellation. CRG/TRG: National provides service
to Xxxxxxxxx.
SERVICES: Customer response group. Technical response group.
Field marketing group. OEM group. Ops (telecom, network,
applications, finance, training). Administration.
(vi)NMPE
ASSUMPTIONS: Planning-dedicated resources have been identified.
This includes the management of consignment warehouses. Special
programs at Lucent, Nortel, IBM. Export control.
SERVICES: Provide continued service to the Core Automotive
Customers in the US, Europe & Asia, to include Delco Electronics,
Ford, Chrysler, Delphi Energy & Engine Management, Xxxxxxx
Electronics, TRW/XXX Transportation Electronics, Motorola AIEG,
ITT Delmex. Support for the Automotive field sales force: act as
the corrective action focal point on unresolved service related
issues - delivery, response, etc. Develop and implement service
programs both customer and National initiated directed at
building and maintaining service relationship. Act as contact
point for bookings, billing, backlog and forecasts as well as
allocation disbursements if required. Contact with customers
Material/Production control planning organization as well as
secondary contact for purchasing. Huntsville warehouse for
support of Chrysler JIT system. Span warehouses used to service
Ford locations.
(vii)Finance
ASSUMPTIONS: Independent Xxxxxxxxx entity will require separate
invoicing. No unique customer codes in SWISS. CARMS
accommodates Xxxxxxxxx balances through separate "business".
SERVICES: Distribution audit. Distribution
accounting/reserves/resales & inventory data - Xxxxxxxxx accounts
for disproportionate amount of workload. Credit & Collections -
cash application, cash forecast, credit evaluation/
approval/control, setting credit terms and limits, collections,
bad debt
41
provisions. Modify CARMS - new "businesses". Set up Xxxxxxxxx
location modify interface. New Xxxxxxxxx BofA account/lock
boxes. Report modification to provide cash management
visibility. EDI - modification of messages for Xxxxxxxxx -
invoice, payment, contract sales debit, CSD, disti resales and
inventory.
(f)JAPAN
Similar Services will be provided as in Sections 3, 4 and 5 of this
Schedule. In addition, Japan division will provide all sales and
marketing headcount and act as the Xxxxxxxxx agent under a Xxxxx
agreement.
All employees, even if Xxxxxxxxx dedicated, will be employees of NSJK
until May 1998.
One time Service to be provided to set up the operations:
(i)Registration/License#
Tax registration, business/company registration, customs
registration, labor registration, retirement/Provident fund
registration, share registration, obtain the necessary licenses
(excluding export distribution license)
(ii)Banking
Open bank accounts (with Bank of America), negotiate and obtain
banking facilities (may require Xxxxxxxxx parent guarantee), set
up electronic banking system (with Bank of America)
(iii)Authorization
Design approval matrix for Xxxxxxxxx
(iv)New Agreements
Distributor agreements, Business contracts, Supplier contracts
and Intercompany service agreements
(v)Insurance Coverage
(vi)Communications
Inform customers, distributors and other business partners of the
change, remind them to place orders under and pay invoices to
different companies
42
(vii)Systems Setup/Modification
Quotation (ACCORD): Separate Xxxxxxxxx and National quotations,
with proper part number validation. Pricing (MPL), Order
processing (SWISS/ SEA-SWISS, CMF): Separate Xxxxxxxxx and
National orders to be captured; separate order acknowledgments.
Invoicing (SWISS): Separate invoices and packing lists. A/R
(MSA): Accounting (M&D, CIS, LOTS): Separate ledgers. HR (HRIS,
IPL). Set up new ledgers: GL, FA, AP, EP, AR, CIS
(viii)Credit Management
Set up credit limit and credit terms for customers common to both
Xxxxxxxxx and National. Tailored credit limit and terms
Distributors
(ix)Initial financial statements
Prepare initial Balance Sheet and P&L upon acquisition.
(x)Stationery/Signage
(xi)Facility
Move Xxxxxxxxx employees to a centralized location in the office.
ON-GOING SERVICES:
(1)Sales & Marketing
Dedicated 2OH/C S&M which included small allocated sales work for
Xxxxxxxxx business.
(2)QRA
Dedicated 6H/C QRA work for QA activity (PQA etc) for Xxxxxxxxx
business.
(3)Planner
Dedicated 2H/C planner work for Xxxxxxxxx business.
(4)Procurement
Purchasing business like a Toshiba OEM products
(5)Accounting (Finance)
A/P, E/P, A/R, interco, inventory, FA, GL; payroll,
43
incentive programs, P Fund; customer claims/returns, CN, DN;
travel authorization & expense reimbursement; approval matrix
management; PI of inventory and fixed assets; financial
statements and statutory accounts.
(6)Cash management (Finance)
Receipt, disbursement and remittance, bank reconciliation, bank
accounts management, cash forecast, xxxxx cash and traveler
cheque/travel advance.
(7)Insurance (Finance)
Renewal of policy, review coverage with insurance broker and
provision of regular and ad hoc information to insurer.
(8)Purchasing (Finance)
PR, PO, receiving processes and capital expenditure management.
(9)Tax (HR/GA)
VAT/GST/Sales/Turnover Tax; employee/payroll tax/levy# income
tax#.
(10)Audit (Finance)
Coordinate with auditor on statutory audit process, prepare
supporting schedules and provide information and answer queries
as requested.
(11)Record Retention (Legal)
Compliance with local legal requirements.
(12)Management reporting (Finance)
Financial statements, expense management, performance evaluation
reports.
(13)C&C (Finance)
Credit evaluation, approval and control, setting credit terms and
limits; collection, cash collection forecast and bad debt
provision
(14)Order Processing (Sales & Marketing)
RFQ/Quotation; order acknowledgment; order entry;
44
backlog scheduling, change and cancellation; sample, datasheet
and literature fulfillment.
(15)Shipping (Logistics)
Delivery and return, import and export documentation.
(16)Warehousing# (Logistics)
Storage
(17)Export Control (Logistics) Compliance
(18)Facility (HR/GA)
Telecom, Telephone, Office space/existing furniture, existing
office equipment and mailing and document collection/delivery.
(19)Systems Use & Support (IS)
Transaction systems., office automation tools (Lotus Notes, MS
office), data warehouse (BO), data query tools (EXPERTS) and
system security and operation.
(20)HR (HF/GA)
Compliance with local HR related legislation, staffing
(recruitment, termination, transfer), payroll administration,
benefits management, expatriation/repatriation administration and
training management.
NOTE:
All direct expenses and disbursements, including fees and charges
paid to third-parties, notably legal, audit and tax fees and
facility setup expenses will be borne by Xxxxxxxxx directly;
these costs are not included in the proposed service fee.
"#" indicates that a service will be performed mainly by outside
professionals.
45
SCHEDULE 2.4
NSC WMS Transition Service Agreement with FSC cost and schedule
summary
EM, DH, DM, CB
FY98
Annual
Charge $M
CORPORATE MARCOM 1.39
Tech Doc 0.43
Internet 0.49
Sales Force Automation 0.48
AMERICAS 4.83
Latin America sales 0.25
Contract Admin 0.34
CSC 3.52
Automotive support 0.21
Huntsville/Span whse 0.03
Finance 0.49
EUROPE 2.69
CSC 1.60
Marcom 0.10
Finance/HR 0.54
Logistics 0.20
Facilities 0.25
SEA 2.72
CSC 1.07
Finance 0.98
Logistics 0.20
Facilities 0.25
HR 0.23
JAPAN 5.83
Outside Sales/Inside Sales 1.99
Marketing 0.89
Marcom 0.05
G&A 1.20
Planners/QA 1.26
Logistics 0.20
Procurement 0.24
TOTAL WORLD FSC 17.47
Sales & Marketing 11.91
GFXA 3.43
NMPE 1.89
MPE 0.24
Re total 17.47
46
Notes:
1. Japan -- KWE FY98 charges assumed direct to FSC @$600K -- if charged to
NSC then NSC will charge FSC at same allocation basis as in FY97
2. The attachment identifies the cost and duration of services from NSC WMS
to FSC. Should FSC require a service after the scheduled end date, FSC
will be charged at the annualized rate.
3. QA -- Europe costs are direct to FSC
4. Planning -- all regions except Japan -- all planners direct to FSC
5. Logistics -- FLS costs are assumed direct to FSC-Japan see note 1.
Through the end of fiscal year 97, Xxxxxxxxx will pay charges at the
same rate and under the same charging arrangements as prior to Close.
47
SCHEDULE 2.5
LOGISTIC AND OPERATIONAL SERVICES
National will provide to Xxxxxxxxx worldwide Logistics services and
support as needed, to sustain the Physical Receiving, Storage and
Distribution of Finished Goods and other materials from the Xxxxxxxxx and
National Factories and/or Subcontractors, to Xxxxxxxxx'x worldwide customer
base.
Service Agreement Terms
Xxxxxxxxx will have throughout the world a separate Legal Entity
with a similar structure to National's. In the case of Japan, National will
act as an agent on Xxxxxxxxx'x behalf under a Xxxxx agreement.
Xxxxxxxxx will be the importer of record for its products in any
country where National is currently the importer of record.
No Xxxxxxxxx inventory can be owned by a National entity in any
location of National.
RCW inventory of Xxxxxxxxx products will be owned by Xxxxxxxxx in the
USA.
Regional inventory will be owned by a local Xxxxxxxxx legal entity.
Products will be sold under their own name. Xxxxxxxxx products will
have separate Xxxxxxxxx invoices and documents.
Xxxxxxxxx products will have separate Terms and Conditions, which will
be the same as National's unless Xxxxxxxxx notifies National in writing of a
change that National can reasonably implement on behalf of Xxxxxxxxx.
There will be a single process for the systems that support the
physical distribution of product in the areas of Finance, Customs, Export
Control, Inventory Management and Importation. The system will differentiate
between Xxxxxxxxx and National product. Any change initiated by Xxxxxxxxx or
National or the successors supporting the physical distribution of products will
be done at the cost of the initiating Party providing the changes have been
mutually agreed in writing by both Parties.
National product at a Xxxxxxxxx origin will be shipped
48
under a separate AWB and logistics costs will be based on the T & Cs of the
purchase order. Xxxxxxxxx will pay for the transportation charges including
customs clearance and brokerage fees for all Xxxxxxxxx origin based product.
Xxxxxxxxx will not change the current product part numbers for their
product.
Xxxxxxxxx part marking with the National Worldmark Logo will change
over time and to the extent reasonably practicable.
The current inventory will not be remarked, relabeled or repacked
without a mutually agreed to process. Any re-label, re-xxxx or re-pack
activities will be paid for by Xxxxxxxxx.
Non-Finished Goods logistics cost will be included in the sale of the
goods and freight cost will be dependent on the terms of sale (xxxx collect
etc.)
All FOB point Logistics services, with the exception of No. America
(SC Bldg.26), will be charged according to the WW Sales & Marketing agreement
(Schedule 2.4).
Xxxxxxxxx and National will use their best efforts in connection with
the Federal Express contract in order to minimize costs to both companies and
pursue jointly to set-up separate contracts with Federal Express.
49
LOGISTICS SYSTEMS SERVICES
ONGOING TECHNICAL SUPPORT COSTS: (SEE FOLLOWING SERVICE AGREEMENT COST SCHEDULE)
A. CSTS J564SC
-Pack list tracking from allocation to POD
-Cycle time activity and reporting
-Pack list confirmation capability
-Pack list void capability
-Freight charge calculation/distribution
-Freight charge auditing
-Customer freight invoicing
-Shipment manifest reporting
-Advanced shipment notification (X.XX)
-Receiving labels - SC FOB Direct Ship
B. LOTS J563XX (XX=location)
-Global F/G inventory repository
-Lot level inventory tracking/visibility
-Lot level inventory transactions
-Lot allocation
-Pack list print for non-RCW locations
-Interface to CIS, SWISS, ASPC, IRIS
-Interface to costing systems
-Inventory aging
-HTB inventory monitoring
-Consignment Inventories
-Barcode Services
*WIP intermediate labels
*F/G Intermediate & shipping labels
*Customer specific labels
*Delco Pull Signal
C. GILS J566SC
-Customer instructions/Constraints
*Repository
*On-line update
*On-line visibility
-Demand Order Generator
-Direct Interface with FedEx Systems
D. CLM J454SC
-Import/Export license repository
-License validation
-License value and Quantity Tracking
-Problem Management and Reporting
-On-line access
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E. LTS J565SC
-Lot traceability from assy to P/L
-Access to lot level attributes die run code, date code, etc.
-Lot shipment history
-On line access
-Reporting
ONE TIME UP FRONT SEPARATION COSTS: (SEE FOLLOWING SERVICE AGREEMENT COST
SCHEDULE)
A. CSTS J564SC
-Batch system interface modifications
-Freight charge calculation and invoicing
-Report distribution modifications
-EDI shipment activity separation
-Shipment manifest reporting
B. LOTS J563XX (XX=location)
-Set up new batch process for (lot allocation, receiving, issues, etc.)
Xxxxxxxxx IL
-Set up new batch process for Xxxxxxxxx XX and SC
-online program modifications
-Pack list print program modifications
-DDN assignment program modifications
-Inventory conversion to new location
-Inventory aging enhancements
C. GILS J566SC
-Batch system interface modifications
-Demand order modifications
D. CLM J454SC
-Duplicate database environment and on-line data entry
-Modify "call" program
-Modify batch process
E. LTS J565SC
-Batch system interface modifications
-Access to lot level attributes die run code, date code, etc.
-Lot shipment history
-Reporting
-On line access
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ONE TIME FINAL SEPARATION COSTS: (SEE FOLLOWING SERVICE AGREEMENT COST
SCHEDULE)
A. CSTS J564SC
-Batch system interface modifications
-Freight charge calculation and invoicing
-Report distribution modifications
-EDI shipment activity separation
-Shipment manifest reporting
B. LOTS J563XX (XX=location)
-Set up new batch process for (lot allocation, receiving,
issues, etc.) Xxxxxxxxx IL
-Set up new batch process for Xxxxxxxxx XX and SC
-On-line program modifications
-Pack list print program modifications
-DDN assignment program modifications
-Inventory conversion to new location
-Inventory aging enhancements
C. GILS J566SC
-Batch system interface modifications
-Demand order modifications
D. CLM J454SC
-Duplicate database environment and on-line data entry
-Modify "call" program
-Modify batch process
E. LTS J565SC
-Batch system interface modifications
F. LEC&C (FLS)
-Develop capability to separate freight logically and physically for
Phase 2 and Phase 3 by location code
-Enhance document printing to accommodate 2 forms of each document
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Final Split to Xxxxxxxxx Systems
*Planning
*CLM -License extraction and clean-up of processing job and schedules
*GILS -Instruction extraction and clean-up
*LOTS-Inventory conversion to support physical move
-Provide inventory historical data
-Clean-up
*CSTS-Provide inventory historical data
LOGISTICS SERVICES: (SEE FOLLOWING SERVICE AGREEMENT COST SCHEDULE)
Shipments from National to Xxxxxxxxx
Service
Logistics to provide warehousing, packaging and transportation from
National Origin for Xxxxxxxxx destination for non-finished goods, materials.
This includes but is not limited to:
shipment preparation
export compliance
transportation costs
customs clearance
brokerage fees
Finished Goods Physical Distribution: (RCW)
Service:
To provide for the in-bound clearance and brokerage and in-bound
transportation cost of FG to the FedEx Regional Consolidated Warehouse from
Xxxxxxxxx origin Plants
National, in collaboration with Federal Express, will continue to
provide for the receiving, storage, customer order processing and shipment
preparation within the RCW. To support the management of the RCW process
through QA, Customer Service Inventory Control, R.O.S. and Scrap.
Information Systems and Engineering, including all 3rd Party charges for WMS
and Japan operations plus associated management fees, as well all other
National expenses to support the RCW operation.
53
Finished Goods Physical Distribution (Transportation)
Service
National, in collaboration with Federal Express, will provide Phase
2 freight services (including associated management fee) from the RCW to
National's point of destination in HK, England, USA and Japan
Provide Phase 3 International Priority Services (including
associated management fee) via FedEx from RCW direct to customer dock
Provide customs brokerage, freight forwarding and transportation
from point of destination to local FOB point, until Xxxxxxxxx has established
an alternative site or process. For Europe, SEA and Japan, National will
provide returns processing and storage until Xxxxxxxxx has established an
alternative process.
Finished Goods Physical Distribution (Strategic Inventory)
Service
Provide local warehousing, in Santa Xxxxx and AP FOB, of Xxxxxxxxx
strategic inventory returns, materials to National FOB points including
receiving, storage, traffic, customer order processing and transportation
from National's FOBS to the region's customers
Provide local warehousing in NSSC for Xxxxxxxxx sample inventory
including receiving, storage, customer order processing, inventory
procurement and global transportation until Xxxxxxxxx has established an
alternative site or process
Central Logistics Management
Service
Provide Central Logistics for Barcoding, Labeling Packaging 3rd
Party account management, Consignment Warehousing, External Customer
Logistics Solutions and specific projects
Incremental travel and program management costs to achieve
separation of data bases and establish separate processes
54
EXPORT ADMINISTRATION
Service to be Provided:
Export Administration to provide export compliance and licensing
support:
a. determine license requirements for Xxxxxxxxx product shipments
1. develop product matrix
2. determine license requirements
3. obtain licenses as required
b. install third Party vendor software for licensing, government filings, and
regulatory updates
1. set up OCR software (Xxxxxxxxx to purchase software)
2. train on use
c. develop and implement export management system (EMS) system
1. draft procedures:
classification
customer qualifications
regulatory updates
training procedures
reviews
government filings
recordkeeping
2. train on specific tasks
3. implement program
d. program CLM information to accommodate system changes Customs department to
provide customs support:
e. set up broker
f. implement Customs compliance program
1. draft procedures
classifications
recordkeeping
government filings
2. train of specific tasks
3. implement program
g. set up legal counsel for import and export
h. trip costs paid by Xxxxxxxxx as required
55
LOGISTICS SERVICES AND SUPPORT
COST SCHEDULE
Service to be provided Charges to be:
Fixed Annual Amount One Time Charge
Logistics Systems Services
STS Direct Prorated Costs $24K-Paid by
J564SC National
LOTS Direct Prorated Costs $78K-Paid by
J563XX National
(XX-
Iocation)
GILS Direct Prorated Costs $15K-Paid by
J566SC National
CLM J454SC Direct Prorated Costs $39K-Paid by
National
LTS J565SC Direct Prorated Costs $6K-Paid by
National
LEC&C
(FLS) Direct Prorated Costs $15OK-Paid by
National
Logistics Services
Logistics to provide warehousing, Direct billing to
packaging and transportation from Xxxxxxxxx
National origin to Xxxxxxxxx
destination
Inbound clearance, brokerage and Direct billing to
inbound transportation cost of XX Xxxxxxxxx
to Fedex Regional Consolidated
Warehouse
Receiving, storage, customer order
processing and shipment
preparation within the RCW:
Per each box received Same as paid by
National
Per each box stored per month Same as paid by
National
Per each box picked Same as paid by
National
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Transaction cost will be based on the total cost of the process, as
defined above under "Finished Goods Physical Distribution," related to the
actual number of transactions.
Xxxxxxxxx/National will work jointly to reduce overall cost of
services provided by Federal Express. Net cost changes will be reflected in
the mutually agreed rate structure, based on transactional pricing from
Federal Express.
Central Logistics Management (see above description) will be charged
to Xxxxxxxxx according to the current basis. These charges to include, in
addition to the services described above, logistics systems services costs.
The total costs, on an annual basis, are to be 22% of the departmental
spending determined in a manner consistent with past practice.
For those logistics Services provided in collaboration with Federal
Express, Section 7.2 of the Agreement is replaced by the following: Xxxxxxxxx
may terminate these agreed Services at any time without default by National
by giving written notice no less than three hundred and sixty five (365) days
prior to the effective date set forth in the notice. In the event that
Xxxxxxxxx terminates for convenience, Xxxxxxxxx shall be liable for any and
all pre-approved costs incurred by National under the terms of National's
contract with Federal Express from the date of notice of termination until
the date such services would otherwise have terminated. These would include,
but not be limited to, applicable costs specified in Article 3 and 8 of the
Logistics Service Agreement between National and Federal Express.
57
LOGISTICS SERVICES AND SUPPORT
COST SCHEDULE
Costs for the following services will be on the same basis as charged by
National business groups
Service to be Provided
Provide Phase 2 freight services: Cost based on weight shipped
Provide Phase 3 International Priority Services: Cost based on Fedex rates
Customs brokerage, freight forwarding and transportation to local FOB point:
Direct billing to Xxxxxxxxx
Provide local warehousing in Santa Xxxxx; provide local warehousing in AP
FOB; provide local warehousing in NSSC for Xxxxxxxxx sample: Cost based on
packlists
Incremental travel and program management: Paid by National
Export Administration
Export Administration to provide export compliance
and licensing support $80K per year
Customs department to provide customs support: $9K per year
Trip costs paid by National as required: $15K
58
SCHEDULE 2.6
CORPORATE HUMAN RESOURCES AND BENEFITS
A. Benefits
DESCRIPTION OF SERVICES
National will make available the services of its Corporate Benefits
department to administer such plans as set forth in this Schedule 2.6, and
will provide the following services, subject to the conditions set forth
below:
U.S. Health & Welfare Plans: Maintain vendor/carrier relations,
provide eligibility information to carriers, process invoices and either pay
obligations directly to vendors or administrators (to be reimbursed by
Xxxxxxxxx) or notify Xxxxxxxxx of amounts due, whereupon Xxxxxxxxx will pay
the obligations directly, respond to plan appeals, maintain information on
plan experience, provide plan administration, provide communications
(benefits statements, summary plan descriptions, etc.), continue review of
program design and provide recommendations for change.
U.S. Retirement and Savings Program: None.
Foreign Plans: Provide administrative services for all plans
established by Xxxxxxxxx that correspond to the Foreign Plans set forth on
Schedule 3.19(k) to the Asset Purchase Agreement, in exchange for a monthly
service fee equal to National's allocation for benefits services for the
appropriate fiscal year. Any special request considered outside the normal
services will be provided at the sole discretion of National. Such services
will be considered one-time activities and Xxxxxxxxx will be subject to
charge on a project basis. Such extraordinary services may be associated
with modifications to benefit systems and processes after the Closing Date.
Cost will be negotiated and agreed to by Xxxxxxxxx and National before any
work is initiated. National will determine in its sole discretion whether or
not requests to modify National systems or processes to accommodate Xxxxxxxxx
will be accepted.
Conditions; Duration: In consideration for the services provided by
National hereunder, Xxxxxxxxx will pay all costs and fees set forth in this
Schedule 2.6, and will indemnify and hold National harmless from any and all
claims, damages, liabilities, costs and expenses (including without
limitation reasonable attorneys fees) resulting or arising from National's
good faith administration of the plans. The foregoing services will only be
provided if, to the extent that and for so long as the employee benefit plans
of Xxxxxxxxx are, in National's reasonable
59
judgment, substantially similar to the corresponding National plans in all
features relevant to benefit administration. Xxxxxxxxx shall notify National
in writing at least 60 days before the effective date of any amendment to any
Xxxxxxxxx plan being administered by National hereunder, which notice shall
include a detailed summary of the amendment and any actual text of such
amendment or draft of such text then in existence, and as soon as
practicable, but in any event within 30 days after receipt of any such
notice, National shall notify Xxxxxxxxx in writing as to whether or not it
will continue to administer such plan after such amendment takes effect. In
addition, Xxxxxxxxx may terminate National's administration of any plan at
any time upon 30 days' written notice or such shorter period as the parties
may agree in writing. In any event, National will not be obligated to
provide any further administrative services under this Section 2.6 after
December 31, 1997.
Costs: Xxxxxxxxx will be responsible for all liabilities with
respect to or arising under Xxxxxxxxx'x plans, as more fully set forth in,
and subject to the terms and conditions of, Section 5.5 of the Asset Purchase
Agreement. In addition, in consideration of the services rendered by
National hereunder, Xxxxxxxxx will pay National a monthly service fee equal
to the appropriate fiscal year corporation allocation for benefits services
based on the allocation formula used in the 1997 fiscal year budget planning
process of National. The fee may be revised depending on allocations used in
National's FY98 budget planning process. Xxxxxxxxx will also be charged
postage expense for mailings to Xxxxxxxxx employees and for any special
services performed after the Closing Date (either by National or outside
vendors) specifically incurred in connection with the Xxxxxxxxx plans or in
connection with modifications to benefit systems and processes on or after
the Closing Date. Costs for these services will be negotiated and agreed
before any work is initiated. For purposes of this entire Schedule 2.6,
National and Xxxxxxxxx will cooperate in good faith to provide services and
exchange information necessary to enable Xxxxxxxxx plans to separate from
National plans at no cost to Xxxxxxxxx other than the corporate allocation.
Special costs and services necessary to create and sustain Xxxxxxxxx plans as
separate plans after the Closing Date shall be borne by Xxxxxxxxx or
reimbursed by Xxxxxxxxx to the extent borne by National. National will have
sole discretion to determine whether or not to accept requests to modify any
National system and/or process. Specific costs for each U.S. plan are
detailed below. If any plans are partially or fully funded by employee
contributions, Xxxxxxxxx will ensure that employee contributions are remitted
to National or to the appropriate trustee, as directed by National.
Payment Terms: The monthly service fee will be payable on thirty
(30) day terms. The precise arrangements for payment of plan costs will be
as agreed by National and Xxxxxxxxx. In
60
some instances, Xxxxxxxxx may pay costs directly to vendors. In other cases,
National will pay plan costs and seek reimbursement from Xxxxxxxxx. In the
latter instance, National will use its reasonable best efforts to advise
Xxxxxxxxx of amounts for which Xxxxxxxxx is liable in advance of any payments
being made by National on behalf of Xxxxxxxxx. However, once National has
advanced an amount for plan expense for which Xxxxxxxxx is liable, Xxxxxxxxx
will reimburse National within twenty-four hours of the later of the time the
payment was made or of the time Xxxxxxxxx is notified by National that the
payment has been made. Such payments shall be made by wire transfer of
immediately available funds.
Specific U.S. Plans:
(g)Medical and Dental Plans:
(i)Self-Insured Plans: Xxxxxxxxx will reimburse National for any payments
made by National with respect to benefits under Xxxxxxxxx'x plans or for
which Xxxxxxxxx'x plans are made responsible under Section 5.5 of the Asset
Purchase Agreement.
(ii)Insured Plans: Xxxxxxxxx is responsible for payment of all premiums
attributable to Xxxxxxxxx'x plans. To extent these are not paid by Xxxxxxxxx
directly, Xxxxxxxxx will reimburse National for any premium payments made by
National.
(iii)COBRA: National will administer COBRA continuation coverage under
Xxxxxxxxx'x plans for so long as it administers the underlying plans.
National will xxxx COBRA participants for the premium charges. With respect
to self-insured coverage under COBRA, Xxxxxxxxx will reimburse National for
any expenses incurred by National that exceed the monthly premium charged the
COBRA participants.
(h) Vision Service Plan ("VSP"): Xxxxxxxxx will reimburse National for its
monthly cost of $6.34 per participant.
(i) Prescription Plans: Xxxxxxxxx will reimburse National for prescription
claims paid by National.
(j) Employee Assistance Plan: Xxxxxxxxx will reimburse National for the
monthly employee charge imposed by the outside vendor (currently $29.99
per participant) for each Xxxxxxxxx employee participating in the plan.
(k) Family Care Referral: Xxxxxxxxx will reimburse National for its allocated
portion of the flat fee charged to National during the time, if any, that
National administers the plan for Xxxxxxxxx after the Closing Date.
Allocation will be based on number of Xxxxxxxxx employees to National
employees.
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(1)Life Insurance: Xxxxxxxxx will be responsible for all premium expense under
its plans.
Basic Life (Company Paid): Xxxxxxxxx will reimburse National for any
premiums paid by National promptly following each such payment.
Optional Life, Spouse, Dependent, and AD&D (Employee Paid):
Xxxxxxxxx will reimburse National for any premiums paid by National
on a basis coincident with each payroll cycle.
(m) Disability: During any period after the Closing Date when
Transferred Employees (as defined in the Asset Purchase Agreement)
continue to participate in either of the Out-of-California Short
Term Disability ("OOCSTD") and the Long Term Disability Plan
("LTD"), Xxxxxxxxx will insure that employee contributions are
remitted to National, if applicable, for deposit into the trust
accounts maintained for such plan(s). National will administer such
plan(s) and process disability claims, with claims paid by the
applicable trust. Xxxxxxxxx will reimburse National periodically
for expenses incurred by National in connection with such
administration (including without limitation trustee fees, auditor
fees, disability claims and administrator fees) based on the
relative headcount of Xxxxxxxxx employees and National employees
participating therein after the Closing Date.
California Voluntary Plan (CVP): If permitted by California law,
National will administer a California Voluntary Plan for Xxxxxxxxx
employees to provide for short term disability claims by California
residents, unless such plan is determined not to be necessary due to
any Xxxxxxxxx disability plan or until Xxxxxxxxx assumes
administration of such plan. Xxxxxxxxx will reimburse National for
actual claims paid. Plan expense fees (auditor fee, disability
claims administrator fee, state assessment fees) will be charged to
Xxxxxxxxx based on the relative headcount of Xxxxxxxxx employees and
National employees participating therein after the Closing Date. If
California does not permit a Voluntary Plan for Xxxxxxxxx, then to
the extent required by California law, California Xxxxxxxxx
employees will be enrolled in the State Disability Plan. In such
case, National will arrange for payment of amounts withheld from
employee pay to be paid to the State Disability Insurance fund and
will charge Xxxxxxxxx for reimbursement of same, to the extent
National has not received such amounts directly from employee pay.
Xxxxxxxxx will remit to National all employee withholdings for
transmittal to the State. Note: It is entirely possible that
California will not permit Xxxxxxxxx to have a voluntary plan,
because
62
Xxxxxxxxx may not meet the minimum state requirements.
(n) Retirement and Savings Program ("RASP"): The monthly service fee
charged to Xxxxxxxxx pursuant to the paragraph headed "Costs" above
will include the amount of expenses incurred by National in the
administration from and after the Closing Date of accounts of
Transferred Employees under the RASP. To the extent such expenses
do not include any legal fees paid by National with respect to QDRO
and joinder actions involving Xxxxxxxxx employees, Xxxxxxxxx will
also reimburse National for such legal fees. In addition, Xxxxxxxxx
will reimburse National for any expenses incurred by National in
connection with the disposition, as required by Section 5.5(e) of
the Asset Purchase Agreement, of National stock held in the RASP
accounts of Transferred Employees that is not registered as of the
date of the Asset Purchase Agreement
(o) Benefit Restoration Plan ("BRP"). National will provide
recordkeeping services for accounts under Xxxxxxxxx'x BRP, which
will be maintained by Xxxxxxxxx as liabilities on its books.
Xxxxxxxxx will reimburse National for fees of its outside
recordkeeper, based on the relative headcount of participants in
Xxxxxxxxx'x BRP to participants in National's BRP who are not
Transferred Employees.
(p) Tuition Reimbursement. Xxxxxxxxx will reimburse National for
tuition reimbursements made by National to Xxxxxxxxx employees for
classes completed on or after the Closing Date.
(q) National Semiconductor University ("NSU"). Xxxxxxxxx will pay
National for courses attended by Xxxxxxxxx employees at National
sites on and after the Closing Date to the extent provided in the
sections of this Schedule relating to National HR Services for
Xxxxxxxxx employees on the Santa Xxxxx site. National will pay
Xxxxxxxxx for courses attended by National employees at Xxxxxxxxx
sites on and after the Closing Date.
63
B. Human Resource Information Systems (HRIS) Services
1. Description of Ongoing Services. National will provide system
support to transact Human Resources data associated with maintaining human
resources and payroll records, applications used to manage various HR
processes and a core data base for reporting for the period of time defined
below. National will not participate in providing support to Xxxxxxxxx in
converting to an independent human resources system, other than maintaining
necessary records/files which eventually will be transferred to Xxxxxxxxx'x
new system. Systems to be maintained for limited duration defined below
include:
Dun & Bradstreet (MSA) - Core data base of Human Resource
information interfaced with Ceridian payroll system, time collection system,
HRS reporting data base and other business applications.
Training Audit System (TAS) - System maintains course catalog and
database of courses taken by US employees. Has multiple registration and
training management functions built in. Interfaces with HRS system to capture
employee data. Operates on corporate sync machine on VM environment.
(Transitioning to new platform TBD based on Nationals plan to eliminate VM
environment)
Reporting System: Human Resource System (HRS) - Extract file from
MSA supplemented by about a dozen stand alone tables and data base master
files used for focus reporting (both standard menu driven and user ad xxxx
query). Operates on corporate sync machine on VM environment. Feeds other
site sub systems such as the FM 360 Peer review system. (Transitioning to new
platform TBD based on Nationals plan to eliminate VM environment)
Call-Up Directory System - Maintains individual and organizational
data on employees. Has multiple search functionality and interfaces with
mail systems and other communication related and security processes.
Compensation Systems - Job code data base including all Jobs and
related data such as job titles, salaries, workers comp codes and EEO data.
Salary planning system, XXXX data base.
Time Collection System: Finance system co-owned by finance. System
interfaces with both employee core data base (D&B MSA) and Ceridian payroll
system. Maintains templates on work schedules, business rules related to pay
administration, a collection front end and storage capability.
2. Ongoing operating Costs. Xxxxxxxxx will be charged a monthly
fee for such services equal to the appropriate
64
fiscal year corporate allocation for HRIS services based on the allocation
formula used in the fiscal year budget planning process until August 15,
1997. These operating costs cover ongoing maintenance and operation of above
system's based on National schedules and programs. Any modification to
system will be captured in separation costs listed below. If National is no
longer using systems, Xxxxxxxxx'x charges will increase to cover the full
cost of maintaining and operating the systems after August 15, 1997.
3. Duration. National is in the process of discontinuing many of
its HRIS systems. Three factors are driving discontinuation of above
systems: 1.) Implementation of SAP core HR system-Targeted to be complete by
June 30 1997, but in no event later than June 1, 1998, 2.) Elimination of
underlying technical infrastructure on which system resides i.e. VM will be
eliminated by May 25 1997, and 3.) Replacement or upgrade of application due
to change in business requirements i.e. implementation of SAP training
application by May 25 1997. It is National's intent to discontinue each of
legacy systems between now and June 1997.
National will continue to maintain several HRIS systems beyond June
1997, a planned date of the SAP implementation. MSA will continue to be
supported through August 15, 1997 at the fiscal year allocated cost.
Associated sub-systems such as TAS, HRS, and Salary Planning will
also be maintained if National transitions them to post VM platforms. Upon
close of sale, any required licensing will be paid for by the company using
the license.
In the event that Xxxxxxxxx requires continued operation and
services of MSA and other HRIS systems which National is no longer using
after August 15, 1997, then Xxxxxxxxx will be required to pay the full loaded
cost. In no circumstance will any continuation of systems service or usage
be considered for extension beyond December 1, 1997.
4. Separation costs. Currently National and Xxxxxxxxx share a
common data base and infrastructure for each of the above systems.
Separating these systems will fall into three general categories.
-- One time activities aimed at making these systems usable in current
state by both entities. This would include items such as recoding
of employees to identify which entity employees belong in, setting
up appropriate security access and reconfiguring standard interfaces
to payroll and time collection systems. One time systems and
65
service costs incurred to establish the capability of National and
Xxxxxxxxx to operate as separate companies using common systems will
be paid by National. Detailed list of one time costs outlined in an
October 17, 1996 memo RE "Xxxxxxxxx Spin Off" authored by Xxxx
Xxxxxxxxxx HRIS Director.
-- Special Requests for systems modification based on changes to
Xxxxxxxxx'x programs or other business needs. Requests by Xxxxxxxxx
will be reviewed on a request basis. Given the pending elimination
of legacy systems National has not maintained the capacity to modify
these systems and changes will require negotiations with independent
systems contractors. National will reserve the right to refuse any
modification to system regardless of need or funding source based on
the potential impact to the systems integrity and operation. Any
costs associated with major modifications to the system requested by
Xxxxxxxxx and accepted by National, will be paid by Xxxxxxxxx.
-- Once National discontinues use of systems, the intent is to turn
these systems off. Xxxxxxxxx may negotiate to continue to operate a
system at full cost, plus one time cost for set up. Each
application will be unique and will be negotiated if and when the
need arises. National will determine whether or not continued
support can be provided. Costs to support the ultimate separation of
Xxxxxxxxx and the implementation of Xxxxxxxxx'x own independent
systems and services will be paid entirely by Xxxxxxxxx.
C. Compensation Services
1. Description of ongoing Services. National will continue to
provide the following services as long as Xxxxxxxxx is dependent upon Human
Resource systems support that stores compensation-related information, and
National's compensation programs are being utilized by Xxxxxxxxx. There is a
close connection between some services provided by Corporate Compensation and
data that may be utilized as a result of Xxxxxxxxx using National's Human
Resources Information Systems. Services provided include: Determine salary
ranges; establish merit increase budgets; determine market position;
establish salary administration guidelines including increase matrix - Focal
Review (All administrative and systems support during focal process);
maintain/develop Market Survey sources; maintain job descriptions/leveling
criteria; establish/maintain job codes; job
66
titling guidelines for Executives; establish targets by job level; XXXX
program development (pool building and distribution guidelines), coordinate
participation; Success Sharing - program design, payout administration; Stock
Options - determine grant ranges and participation by level, coordinate stock
option share approval by BOD, participate in surveys to establish competitive
stock option levels. National will also provide such other services that
have been administered by the Corporate Compensation department.
2. Ongoing Operating Costs. Xxxxxxxxx will be charged a monthly
fee for such services equal to the appropriate fiscal year corporate
allocation for Compensation services based on the allocation formula used in
the fiscal year budget planning process.
3. Duration. This service will be provided until Xxxxxxxxx no
longer remains on National's compensation programs and compensation
activities connected with National's Human Resources Information Systems, or
December 31, 1997, which ever comes first. In no event will services or
National's compensation programs be provided to Xxxxxxxxx beyond December 31,
1997.
4. Separation Cost. Any special request considered outside
Corporate Compensation normal services identified in section #1 above will be
considered one time activities and Xxxxxxxxx will be subject to charge on a
project basis. Such extraordinary services may be associated with separation
of Xxxxxxxxx and request for modifications to compensation systems and
processes. Cost will be negotiated and agreed to by Xxxxxxxxx and National
before any work is initiated. National will determine whether or not
requests to modify National systems or processes to accommodate Xxxxxxxxx
will be accepted.
D. Staffing Services
Description of Ongoing Services. None.
Ongoing Operating Costs. None.
Duration. Not applicable.
E. National University Services
None (except as provided below regarding HR Services on Santa Xxxxx site).
Services. None.
Ongoing Operating Costs. None.
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Duration. Not applicable.
F. N/News
Services. Basis news feed and specific information regarding the
semiconductor industry.
Costs. Services will be charged according to National's usual charge
policies. Also, Xxxxxxxxx will be responsible for any expense associated
with contractors and/or the purchasing of equipment necessary to provide
basic news feed, specific information regarding the semiconductor
industry and Xxxxxxxxx specific information.
Duration. Service will continue until June 1, 1998, but may be canceled
at any time on 60 days, notice.
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NATIONAL HR SERVICES
FOR XXXXXXXXX EMPLOYEES ON NATIONAL'S SANTA XXXXX SITE
Purpose: The purpose of this document is to define the areas,
duration, and cost methodology of HR services provided by
National to Xxxxxxxxx employees on National's site in Santa
Xxxxx.
A. Benefits
1. Service. Services are covered under Benefits section of Corporate
HR Services document.
2. Costs. See Benefits section in Corporate HR Services document.
3. Duration. See Benefits section in Corporate HR Services document.
B. Human Resources Information Systems (ERIS)
1. Services. National will provide systems support to transact HR data
associated with maintaining human resources and payroll records,
applications, and core database for recording for the period of time
defined in the Corporate RR Services document.
2. Costs. See HRIS section in Corporate HR Services document.
3. Duration. See HRIS section in Corporate HR Services document.
C. Compensation
1. Service. No day to day site services. Corporate compensation
services are covered under the compensation section of the Corporate
HR Services document, above.
2. Costs. See compensation section in Corporate HR Services document.
3. Duration. See compensation section in Corporate HR Services
document.
D. Staffing
1. Service. None.
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2. Costs. None.
E. National University
1. Services. Training Development activities and training facilities.
2. Costs. Xxxxxxxxx participation will be on a pay-as-you-go basis.
Certain proprietary classes will not be open to Xxxxxxxxx employees.
Overhead allocation will be charged according to National's usual
charge policy.
3. Duration. National will continue to offer National University
services until Xxxxxxxxx no longer requests services or June 1,
1998, whichever comes first.
F. Employee Relations
1. Services. None.
2. Costs. None.
G. Service Center
1. Services. None.
2. Costs. None.
H. Cafeteria
1. Services. Cafeteria services will be provided in Cafe 10.
2. Costs. To be charged according to National's usual charge policies.
3. Duration. National will offer cafeteria services in Cafe 10 until
Xxxxxxxxx no longer requests service, moves off site, or June 1,
1998, whichever comes first.
I. Fitness Center
1. Services. Health & Fitness - open to Xxxxxxxxx employees on site
according to current policies.
2. Costs. Parties will negotiate a monthly fee per employee for use.
3. Duration. National will continue to offer Health & Fitness Center
services until Xxxxxxxxx no longer requests services, moves off site,
or June 1, 1998,
70
whichever comes first.
J. Credit Union (Service provided subject to any applicable legal or
regulatory restrictions)
1. Services. Banking services.
2. Costs. Service costs will be charged according to National's usual
charge policies.
3. Duration. Xxxxxxxxx employees will be allowed to continue Credit
Union membership under the current rules and regulations of Credit
Union.
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SCHEDULE 2.7
SECURITY SERVICES
National will make available to Xxxxxxxxx consulting services and assistance
in the following areas of Corporate Security:
Logistics: Corporate Security will provide expertise in the risk analysis of
product movement via road or air both domestically and internationally.
Also, assistance in the investigation of losses.
Business Interruption Intelligence: Corporate Security monitors information
affecting National plants, and will provide similar services for Xxxxxxxxx
locations.
Site Evaluation: Corporate Security conducts site evaluations to identify
threats and risks, including to systems, processes and intellectual property.
Also, value enhancement studies of construction and expansion projects.
Security training: Corporate Security organizes an annual security managers
meeting for all National security managers.
Workplace violence: National will provide this program and training to
Xxxxxxxxx sites. In addition, the corporate Security and Workplace violence
Prevention Team will be available to assist with workplace violence issues.
Intellectual Property and Network security: Corporate security will advise on
policies and procedures to enhance security in these areas. Also, provide
assistance with investigations involving intellectual property and computer
crimes.
Xxxxxxxxx will elect the services it will use and will pay any direct
out-of-pocket expenses National will incur providing the services, on a case
by case basis.
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SCHEDULE 4.2
The general model is that Xxxxxxxxx will obtain the "Right to Use"
all systems necessary to run the business. These lists attempt to identify
all possible systems but others may be identified in the separation process
and systems can be added with written approval of Xxxxxxxxx and National.
Ownership
Xxxxxxxxx will receive ownership of the "Engineering Database" and
"Engineering Workbench." This explicitly excludes MBayse and RSTATS.
INSERT CHARTS
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SCHEDULE 4.2
System Function
Manufacturing Systems
Workstream Shop Floor Control System
Grapheq SECS Communication Tool
SAS Statistical Analysis Product
Suite
SQL Runner Database Access Tool
Xxxxxx Autocad Board design and layout
software
RWM/AI Realtime Wafer MAP from AI
Decision Support Systems
NOVA Mainframe based on-line report
viewing system.
Finance Systems
CHESS Cebu Financial System
Worldwide and Local Costing Inventory costing systems
Payroll Systems Employee payroll system.
Currently outsourced.
General Ledger Financial System
Invoicing and Accounts Rec. Invoicing and Accounts
Receivable Systems
Cebu Inventory Module, Accounts
Payable, MAS/Payroll/PLS,
Transaction History
Site Finance, Costing and Tax Local Audit support systems
Systems
Human Resources
MSA Old Payroll system. Need data
to update Ceridian payroll
system
Resumix Potential employee resume
tracking system.
HRS Human Resources System
COMCAL Compensation/Salary Planning
System (PC based)
Business and Production
Planning
FLS/Shipping Federal Express shipping and
warehouse management in
Singapore.
XxXxxxxxx & Dodge Accounts Payable, Purchasing,
Receiving, Shipping, Stores
CAS FAB Planning, Die Stores
Sales and Marketing
EDI General electronic data
interchange
SGML Electronic Data Sheets
Lotus Notes Mail
Scopus Customer Response Center System
Lotus Notes INFO Exchange
Product Line
a/Soft nuTPU - vaxTPU editor
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CADENCE Product Design
-Analog Artist
-Dracula DRC, ERC, LPE, LVS
-Dracula Plotting
-Dracula Fracture
-Verilog XL
-Spectre Spice/HDL
-Inquery and DLR
-Hspice Interface
-DIVA Systems
-Virtuoso
-OPUS
-Block Place and Route
-Edge
Hewlett Packard ICCAP
Hewlett Packard ICMS
Kiethley CV System Software
Leapfrog VHDL Simulator
Legato Networker Backup clients
MAE - Macintosh emulation
environment
Mentor
-Meta Hspice Software
-Synopsys Software
-TSSI Software
-EPIC Powermill
-CATS Software
Nutmeg Post Processor
PDF Solutions simulation
software
-PDFab
-PDPCA
-PD Worksheet
-PDX ess Spreadsheet
SoftQaud HotMetal Pro
Technology Modeling Associates
Simulators and Tools
-Suprem3
-Suprem4
-Depict
-Terrain
-Medici
-Davinci
-Raphael
-Michalengelo
-Visualizer
-Layout
-TMA Workbench
-Studio
TssTerm - terminal emulator
Summit Probe Control Software
Sun Showme
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Vista
Miscellaneous Systems
Digital Products Digital Software License
Documentum Document Control
Framemaker Word Processor
Hewlett-Packard Products HP Software Licenses
Microsoft Windows & Office
Netscape World-wide WEB Browser
Novell Network Operating System
Oracle DBMS & RDB
Personal Computer Products All personal computer software
running on Xxxxxxxxx PC's
SAS Products Statistical Analysis Package
SUN Products SUN Microsystems Software
Licenses
Sybase Relational Database
Tyecin MANSIM Modeling & Simulation
EP System Dependencies
Accounts Payable System Payment of local and foreign
vendors
IPPS Payroll System Payroll processing and
personnel records
76
SCHEDULE 4.3
System Function
Manufacturing Systems
All Workstream Maintenance Tool Tools and support the
Kit and System Enhancements, maintenance of Workstream and
including but not limited to: system enhancements
- ALL NSC Modifications
- RSPC
- STEP (Workstream and EDB Pieces)
- Inspection Database
- Mask Management
- ADAC
- CWI
- Costing
- All site developed code
Factory Automation Tool kit, Entire Suite of products to
including but not limited to: assist in equipment integration
- Grapheq DMQ Protocol efforts.
Process
- Grapheq Sybase Protocol
Process
- All Sybase Open Servers
- All developed equipment
interfaces
- ASM Job Transfer System
Engineering Analysis Systems, Suite of products to assist in
including yield enhancement
- Engineering DB
- Engineering Workbench
- STDF+
- Extracts
- Trendgraph
- TAM-NET
- Mbayse (executable code only)
- RSTATS (executable code only)
- ATSQC
- Program Writer, M2PW
- MRL
- Basicwriter
Best Pack Barcode System Barcode Label printing for
finished goods use
Pack Template Packing Instructions for
finished goods
CSPEC Customer Drawing - Work
instructions
Easyfind Easy flow instruction document
for Assembly and EOL (PT)
Eflow Electronic Flow book for Test
(PT instruction Document)
TDS Test Definition System
Replacement System for Eflow
PC/MCT PC/MCT Tester
PCMCT hardware
interface/controller cards
77
High voltage pin electronics
cards for
MCT2010/2020 testers
MIDAS Material Input and Data
Analysis System
JSS - Job Scheduling Systems
CWIP Combined Work In Process
Extract
ELVIS Electronic Logbook System
INCYTE Shop Floor/Equipment Tracking
System
TRSS Test Results Support System
TSO-IS Test Operator Interface
MRL MCT Execution libraries
WGTMAIN Auto-bench test equipment
operating system
Theta JC Software Thermal Data Collection
Software
MCT Program Writer Automated generation of test
programs
DC Bench Interactive Characterization
Software
TSSI Test vector
generation/translation software
Test for Strip for methodology Software/hardware
Decision Support Systems
Cost of Scrap Corporation-wide Scrap
reporting system
Delivery Performance Corporation-wide delivery
performance reporting system.
Cycle time Reporting Corporation-wide cycle time
reporting system
DASD Decision Support Database
DB Info Pull data from PDS/CRS Std Cost
System
HRDSS Human Resource Decision Support
System for Training history
Quality Systems
AQUARIUS Product Quality assurance and
Failure Analysis Tracking and
Reporting System.
Lot Trace-ability Log Genealogy reporting system,
Customer problem analysis.
QUIC Mainframe based on quality
reporting system, to eventually
be replaced by AQUARIUS.
ERDM Product Reliability Tracking and
Reporting System.
CARDS Cebu Advance Reliability
Database
Technical Document Tracking Data Sheet development,
tracking and display
QAAS PPM reporting for customer.
Soon to be replaced by QAS
MIDAS Material Information Data
Analysis System. Raw materials
vendor listing for purchaser
reference and ISO compliance
Finance Systems
Commercial Invoice System Inter-company invoicing system.
Fixed Asset System Fixed Asset Tracking System.
IAS Worldwide inventory analysis
system.
LOTS Back-end shelf inventory
tracking.
S337 Product Costing
78
SSIP - Success Sharing Success Sharing Tracking System
Customer Credit Customer Credit System
Timecard System Employee time tracking system.
Travel Process expense reports and
relocation.
Transfer Reporting System - TRS Costs of inventory moving
through WIP.
Interrogator Management reporting tool used
for financial analysis.
Inbound/Outbound Record in/out interco
transactions
SPG CLD Cost less die measurement
Workstream Costing Workstream costing
Wafer Sort Costing Wafer Sort costing
Accounts Trade Payable Record non-interco purchases
Human Resources
Career Opportunity Posting Internal employment opportunity
System - COPS tracking and notification
system.
Training Audit System TAS Training tracking system.
Salary Planning System Salary Planning System
Occupational Health System Health and Safety System
HRDS Employee training records for
human resource development
QOCS Qualified Operator
Certification system for
Manufacturing specialist skills
Business and Production
Planning
Product Definition System Defines characteristics of
product including high level of
routing.
Route Definition System Maps Shop Floor Control routing to
financial routing.
Semiconductor Materials System Stores inventory and material
control.
GILS Global Integrated Logistics
System
ASPC Factory production scheduling
TPF Transfer Price File
Subcontractor Database Tracking approved
subcontractors
APS Auto-purchasing system for PO
generation, Stores receiving &
payment reconciliation
ACAPS Test Auto capacity planning
system
Sales and Marketing
EXPERTS Bookings, Billing and Backlog
reporting system.
ACCORD Quoting System.
SWISS Order Entry and Tracking
CFAP EDI Customer Forecast to
Backlog
Contract Module Contract negotiation and
tracking
Channel Reservation System Product reservation and
allocation system
CSPEC Customer Specifications
MPL Price Management
Sales Commission System Calculated and tracks sales
commissions.
PCN/PDAA Process Change Note and Produce
Discontinuance Administration
CMR System Customer Material Returns
Worldwide WEB Presence Worldwide WEB Presence
Product Line
Alf
Backup (DCL Code)
79
Build-Barcode
COMPARE
Die Trace Lot Tracability on Finished
Goods
Dracula Verification, Fracture
and Plotting Tools
Dracula Yield Modules
EBS Electronic Build Sheet System
ICED CAD Software for Mask Making
JTS Job Transfer System
Jughead
Mask-Req
MDP
Minimos 5
Naspice Simulator
National Lint
Xxxxxx
Xxxxxx Timing Analyzer
NSSC - FSC Build Diagram
NSC Layde Post Processing Tool
for Layout
PCD Bulletin Board Customer Status of Change
Notices
PlotGDS
Retgen
Reticle-Build
Xxxxxx Xxxxx SELECT
SPAM Standard Cost Analysis
Vista
Miscellaneous Systems
PATS New Product ROI
DOC Access to Corporate
Specifications
Specwriter Customer Drawing - Work
Instructions
VM/FOCUS Reporting Ad-Hoc Reporting Capability
CALLUP (Web Based) Employee Directory
HelpDesk Problem/Resolution tracking
developed by Rainer
EP System Dependencies
LOTS & LOTS Interfaces Auto lot start, Shelf Inventory
module
Capacity Planning Module OBP/12 Qtr/Periodic capacity
request and frames forecast
Process Traveler Maintain marking engine and
packing template
GL-90 Global General Ledger Finance G/L
General Ledger Coop Uploads JV's into Global G/L
System
Activity Based Costing System Overhead Allocation & CLD
Activity Based Forecasting Financial forecast model,
System overhead allocation, CLD
Automatic Costing System Product costing, inventory
evaluation
Sub-contractor Costing System Product costing, inventory
evaluation
S333 Standards Revision Annual standards revision
Financial Reporting system Balance Sheet, P&L
Material Usage Module Allocation of material costs to
CLD
LOTS Costing Reports Shelf inventory report
REPS Equipment Performance Reporting
System
Employee Attendance System Tracks employee attendance
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