EXHIBIT B-1
SERVICE AGREEMENT
This Service Agreement (the "Service Agreement" or "Agreement")
is made and entered into this ___________, 2002 by and between
____________________, its subsidiaries, affiliates and associates
("Client", and together with other associate companies that have
or may in the future execute this form of Service Agreement, the
"Clients") and Great Plains Energy Services Incorporated("Service
Company").
WITNESSETH
WHEREAS, the Securities and Exchange Commission ("SEC") has
approved and authorized as meeting the requirements of Section
13(b) of the Public Utility Holding Company Act of 1935 ("Act")
the organization and conduct of the business of Service Company,
in accordance herewith, as a wholly-owned subsidiary service
company of Great Plains Energy Incorporated ("GPE"); and
WHEREAS, Client is an associate company of Service Company;
and
WHEREAS, Service Company and Client have entered into this
Service Agreement whereby Service Company agrees to provide and
Client agrees to accept and pay for various services as provided
herein at cost, with cost determined in accordance with
applicable rules and regulations under the Act, which require
Service Company to fairly and equitably allocate costs among all
associate Clients to which it renders services.
NOW THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties to this Service
Agreement covenant and agree as follows:
ARTICLE I - SERVICES
SECTION 1.1 Service Company shall supply to Client, as
requested by Client, consistent with the terms and conditions
hereinafter set forth, such of the services described in Appendix
A hereto, at such times, for such periods and in such manner as
Client may from time to time request and that Service Company
concludes it is able to perform. Except with respect to
"Corporate Services", as defined in Article V, the Service
Company shall perform only those services as are requested by the
Client. Service Company shall also provide Client with such
special services, in addition to those services described in
Appendix A hereto, as may be requested by Client and that Service
Company concludes it is able to perform.
Notwithstanding the foregoing paragraph, no change in the
type and character of the companies to be provided services, the
factors for allocating costs to associate companies, or in the
broad general categories of services to be rendered subject to
Section 13 of the Act, or any rule, regulation or order
thereunder, shall be made unless and until the Service Company
shall first have given the Securities and Exchange Commission
(the "SEC") written notice of the proposed change not less than
60 days prior to the proposed effectiveness of any such change.
If, upon the receipt of any such notice, the SEC shall notify the
Service Company within the 60-day period that a question exists
as to whether the proposed change is consistent with the
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provisions of Section 13 of the Act, or of any rule, regulation
or order thereunder, then the proposed change shall not become
effective unless and until the Service Company shall have filed
with the SEC an appropriate declaration regarding such proposed
change and the SEC shall have permitted such declaration to
become effective.
SECTION 1.2 The cost of the services described herein or
contemplated to be performed hereunder shall be directly
assigned, distributed or allocated by activity, project, program,
work order or other appropriate basis. Subject to the terms of
this Service Agreement, Client shall have the right from time to
time to amend or alter any activity, project, program or work
order provided that (i) any such amendment or alteration that
results in a material change in the scope of the services to be
performed or equipment to be provided is agreed to by Service
Company, (ii) the cost for the services covered by the activity,
project, program or work order shall include any expense incurred
by Service Company as a direct result of such amendment or
alteration of the activity, project, program or work order, and
(iii) no amendment or alteration of an activity, project, program
or work order shall release Client from liability for all costs
already incurred by or contracted for by Service Company pursuant
to the activity, project, program or work order, regardless of
whether the services associated with such costs have been
completed.
SECTION 1.3 Service Company shall use its best efforts to
maintain a staff trained and experienced in the services
described in Appendix A. If necessary, Service Company, after
consultation with the Client, may also arrange for the services
of nonaffiliated experts, consultants and attorneys in connection
with the performance of any of the services supplied under this
agreement.
ARTICLE II - COMPENSATION
SECTION 2.1 As compensation for the services to be
rendered hereunder, Client Company shall pay to Service Company
all costs, which reasonably can be identified and related to
particular services performed by Service Company for or on its
behalf. The methods for assigning or allocating Service Company
costs to Clients, as well as to other Clients, are set forth in
Appendix B. Any charges to Client on account of the use of
capital shall reflect a reasonable and efficient capital
structure.
SECTION 2.2 It is the intent of this Service Agreement
that charges for services shall be distributed among Clients, to
the extent possible, based upon direct assignment. The amounts
remaining after direct assignment shall be allocated among the
Clients using the methods identified in Appendix B. The method
of assignment or allocation of cost shall be subject to review
annually, or more frequently if appropriate. Such method of
assignment or allocation of costs may be modified or changed by
the Service Company without the necessity of an amendment to this
Service Agreement; provided that, in each instance, all services
rendered hereunder shall be at actual cost thereof, fairly and
equitably assigned or allocated, all in accordance with the
requirements of the Act and all applicable rules and orders
promulgated thereunder. The Service Company shall review with
the Client any proposed material change in the method of
assignment or allocation of costs hereunder.
SECTION 2.3 It is the intent of this Service Agreement
that the payment for services
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rendered by Service Company to Clients under Service Agreements
shall cover all the costs of its doing business (less the cost
of services provided to non-clients) including, but not limited
to, salaries and wages, office supplies and expenses, outside
services employed, property insurance, injuries and damages,
employee pensions and benefits, miscellaneous general expenses,
rents, maintenance of structures and equipment, depreciation
and amortization, and compensation for use of capital.
SECTION 2.4 Labor and labor-related costs will likely be
the most significant costs that Service Company incurs.
Accordingly, Service Company will maintain and use a time-entry
system that enables Service Company employees to accurately
assign hours worked to the appropriate Accounting Codes. Time-
entries will be entered as required by payroll schedules.
SECTION 2.5 In the event disputes arise between Service
Company and the Client, representatives of the Service Company
and Client will attempt to resolve the issues. Unresolved
disputes will be referred to the GPE Advisory Committee
(comprised of the GPE executives and presidents of Clients using
services provided by the Service Company) for final disposition.
SECTION 2.6 Services provided by Service Company to the
Client under this Agreement shall be evidenced by one or more
Service Requests signed by both parties. Service Company and
Client shall, simultaneously with the execution of this
Agreement, execute Service Requests covering all services
initially to be provided to the Client. Each Service Request
will contain one or more accounting codes (each a "Project ID")
which will be used to accumulate the costs to the Service Company
of providing the services under the Service Request. A new
Service Request will be executed by Service Company and Client in
the event a new service category is added to Appendix A (subject,
however, to the provisions of Section 1.1). A new Service
Request, establishing new or different Project IDs, may be also
appropriate for a project or activity falling within the
categories of services contained in Appendix A. However, the
cost of the activity or project may be able to be captured in an
existing Service Request. The following items, among others, may
be considered in determining the need for a new Service Request:
1. No existing Service Request uses a billing methodology
that is appropriate for the activity or project.
2. No existing Service Request distributes costs to GPE,
the desired Client Company or affiliates for the activity
or project.
3. The total estimated annual cost of the activity or project
is greater than $100,000.
4. There is a regulatory or corporate requirement to allocate
or accumulate costs in a specific manner for an activity
or project.
SECTION 2.7 Service Company shall render a monthly
statement to Client. Payment shall be made by remittance of the
amount billed within thirty (30) days of the dated of the
statement or by making appropriate accounting entries on Service
Company's and Client's books. Statements submitted to the Client
will contain the following information:
- Client Name
- Type of Service Provided: Corporate or Shared
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- Project ID
- Description of Service Provided
- Total Amount of Charges
Detailed information such as source documents, labor hours and
accounts charged are also available on Service Request detailed
charge reports. This information will also be made available on
hard copy reports and on-line computer report screens.
ARTICLE III - TERM
This Service Agreement shall become effective as of the date
first written above and shall continue in force until terminated
by Service Company or Client, upon not less than one year's prior
written notice to the other party. This Service Agreement shall
also be subject to termination or modification at any time,
without notice, if and to the extent performance under this
Service Agreement may conflict with the Act or with any rule,
regulation or order of the SEC or other regulatory body adopted
before or after the date of this Service Agreement. Further,
this Service Agreement shall be terminated with respect to any
Client immediately upon such Client ceasing to be an associate
company of the Service Company. The parties' obligations under
this Service Agreement which by their nature are intended to
continue beyond the termination or expiration of this Service
Agreement shall survive such termination or expiration.
ARTICLE IV -SERVICE REVIEW
SECTION 4.1 On an annual basis, the Service Company and
the Client shall meet to assess the quality of services being
provided pursuant to this Service Agreement and to determine the
continued need therefor and shall, subject to Section 1.1, above,
amend the scope of services, delete services entirely from this
Service Agreement, and/or decline services which are not
"Corporate Services" as defined in Article V, below, as they
determine to be necessary or desirable.
SECTION 4.2 The Internal Audit Department will conduct
periodic audits of the Service Company administration and
accounting processes. The audits will include examinations of
Service Agreements, accounting systems, source documents,
allocation methods and xxxxxxxx to determine if services are
authorized and properly accounted for. In addition, Service
Request and Service Agreement policies, operating procedures and
controls will be evaluated annually.
ARTICLE V - CORPORATE SERVICES
Whether or not requested by the Client, the Service Company
may provide to the Client, and the Client shall pay Service
Company for, "Corporate Services". Corporate Services consist of
those activities and services reasonably determined to be
necessary for the lawful and effective management of GPE
businesses. Corporate Governance Services may include, but are
not limited to, the services set forth under the heading
"Corporate Governance Services" in Appendix A.
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ARTICLE VI - MISCELLANEOUS
SECTION 6.1 New direct or indirect subsidiaries,
affiliates or associates of GPE, which may come into existence
after the effective date of this Service Agreement, may become
additional Clients of Service Company and subject to a service
agreement with Service Company. The parties hereto shall make
such changes in the scope and character of the services to be
rendered and the method of assigning, distributing or allocating
costs of such services as specified in Appendix A, subject to the
requirements of Section 2.1, as may become necessary to achieve a
fair and equitable assignment, distribution, or allocation of
Service Company costs among all Clients.
SECTION 6.2 Service Company shall permit Client access to
its accounts and records including the basis and computation of
allocations.
SECTION 6.3 Service Company and each Client shall comply
with the terms and conditions of all applicable contracts managed
by the Service Company for such Client Companies, including
without limitation terms and conditions preserving the
confidentiality and security of proprietary information of
vendors.
SECTION 6.4 No amendment, change, or modification of this
Service Agreement shall be valid, unless made in writing and
signed by all parties hereto.
SECTION 6.5 Except as limited by law or order of the SEC,
Client Companies, their subsidiaries, affiliates and associates
may provide services described herein to other Client Companies,
their subsidiaries, affiliates and associates on the same terms
and conditions as set out for the Service Company.
SECTION 6.6 The following paragraph shall apply in the
event Kansas City Power & Light Company ("KCPL") is a signatory
to this Service Agreement:
Neither KCPL nor any of its affiliates, will seek to
overturn, reverse, set aside, change or enjoin, whether
through appeal or the initiation or maintenance of any
action in any forum, a decision or order of the Commission
which pertains to recovery, disallowance, deferral or
ratemaking treatment of any expense, charge, cost (including
cost of capital) or allocation incurred or accrued by KCPL
in, or as a result of, a contract, agreement, arrangement or
transaction with Service Company on the basis that such
expense, charge, cost (including cost of capital) or
allocation has itself been filed with or approved by the SEC
or was incurred pursuant to a contract, arrangement,
agreement or allocation method that was filed with or
approved by the SEC.
As used in this Section, "Commission" shall be deemed to mean
both the Missouri Public Service Commission and the Kansas
Corporation Commission.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this
Service Agreement to be executed as of the date and year first
above written.
CLIENT _______________ GREAT PLAINS ENERGY SERVICES INCORPORATED
By: By:
____________________ ____________________
Name Name
____________________ ____________________
Print Name and Title Print Name and Title
____________________ ____________________
Date Date
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APPENDIX A
DESCRIPTION OF EXPECTED SERVICES
TO BE PROVIDED BY GREAT PLAINS ENERGY SERVICES INCORPORATED AND
THE EXPECTED METHOD/BASIS OF BILLING
Descriptions of the expected services to be provided by Service
Company are detailed below. The descriptions are deemed to
include services associated with, or related or similar to, the
services contained in such descriptions.
For purposes of explanation, there are two classifications of
service costs: Corporate Services and Shared Services. Each
classification is described below.
There are two methods of billing Service Costs. The first is
DIRECT SERVICE BILLING (DSB), where the costs can be directly
assigned (i.e. charged directly to Project IDs specifically
assigned to a client company). The second is INDIRECT SERVICE
BILLING (ISB), where assigning the costs directly is impractical,
but the service provided has an easily identifiable causative
driver.
CORPORATE SERVICES
CORPORATE SERVICES are those related to corporate governance
and management and may not be refused by the Client. The
allocation method for each of the Corporate Services
provided, when not billed directly, is Capitalization Ratio.
1. CORPORATE SECRETARY
Service Description - maintains corporate documents;
prepares and files all documents necessary to maintain
corporate existence for Great Plains Energy and its
subsidiaries; assists, prepares and files all necessary
documents with the Securities Exchange Commission;
complies with listing requirements of the New York Stock
Exchange; acts as a liaison between the managements of
the Clients and their respective Boards of Directors.
2. CORPORATE ETHICS & GOVERNANCE
Service Description - reinforces corporate values by
promoting strategies that create a work climate of high
ethics and respect for others.
3. LEGAL LIABILITY ASSESSMENT AND PUHCA
Service Description - provides corporate liability
assessment of contracts and agreements; provides legal
services respecting compliance and other matters under
the Public Utility Holding Company Act of 1935 ("PUHCA").
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4. EXECUTIVE BENEFITS
Service Description - costs of administering supplemental
benefits provided to the executives of GPE and its
affiliates; includes the cost of supplemental benefits
provided to the executives of Service Company.
5. INTERNAL AUDITS
Service Description - identifies, reviews, and
prioritizes corporate risks, controls, and governance
processes.
6. INVESTOR RELATIONS
Service Description - responds to investor inquiries
(current and potential) and to the financial analyst
community and monitors and maintains all GPE stock
records.
7. CORPORATE COMMUNICATIONS
Service Description - enhances the relations of GPE and
its subsidiaries with shareholders, community, federal,
state and local governments, and GPE associates through
written and verbal communications.
8. CORPORATE FINANCE
Service Description - recommends, coordinates and
administers all financial decisions affecting GPE and its
subsidiaries, including capital structure, financings,
investments and dividends; manages enterprise-wide risk;
assists Investor Relations in educating and updating the
financial community on financial matters relating to GPE
and its subsidiaries.
9. EXTERNAL REPORTING
Service Description - develops and reports the Company's
external financial filings which include the quarterly
Financial Analysis for the Board of Directors and the SEC
Form 10-Q, the annual Federal Energy Regulatory
Commission (FERC) Form 1 report, the Consolidated
Financial Statements and footnotes, and management's
discussion and analysis for the Corporate Annual Report
and filings required under the Public Utility Holding
Company Act of 1935; ensures complete and adequate
financial disclosure in accordance with the SEC and
generally accepted accounting principles (GAAP) through
authoritative knowledge, research, and communication of
new exposure drafts and accounting pronouncements.
10. EXECUTIVE SERVICES
Service Description - provides executive management
services, service on Client boards of directors, and
general administrative services.
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11. ENVIRONMENTAL SERVICES - (Total Billing Ratio)
Service Description - manages, monitors, and provides
guidance on ensuring continuous compliance with all
environmental legislation and regulations; develops and
recommends environmental programs; performs remediation;
obtains required environmental permits.
12. CORPORATE SECURITY SERVICES - (Capitalization Ratio)
Service Description - develops and monitors associate,
physical asset, and information technology security
policies and standards.
13. GOVERNMENTAL AFFAIRS SERVICES - (Capitalization Ratio)
Service Description - provides legislative support and
guidance on governmental matters.
14. COMMUNITY RELATIONS (Capitalization Ratio)
Service Description - coordinates and monitors corporate
contributions and corporate volunteer programs.
15. CORPORATE ACCOUNTING SERVICES (Total Billing Ratio)
Service Description - provides guidance regarding the
application of GAAP, SEC and/or FERC regulations; records
all known financial transactions in the period incurred;
provides and maintains accounting systems, including book
and tax property systems, with adequate detail to provide
sufficient reporting; allows for analysis of costs,
support of asset and liability balances and preparation
of tax returns; trains Client associates in the
analytical tools available to analyze their costs and
assist them in the understanding of the results of those
analyses.
16. CORPORATE DEVELOPMENT AND STRATEGIC PLANNING
(Capitalization Ratio)
Service Description - provides resource planning and
business analysis services, strategic planning, assist
GPE and its subsidiary companies to develop fundamental
short- and long-term business plans and actions which are
consistent or complementary throughout the system; assess
and adjust the decisions and direction of system
companies in response to changes in the marketplace;
provide consulting services related to cost reduction
opportunities, strategic acquisitions and investments,
and process enhancements to GPE and its subsidiaries.
17. TAX SERVICES - (Total Billing Ratio)
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Service Description - manages all GPE and subsidiary tax
issues, including research and analysis to quantify tax
opportunities, the preparation and filing of all federal,
state and local tax returns, and the accounting for such
taxes.
18. CORPORATE BUDGETING - (Capitalization Ratio)
Service Description - creates, coordinates, analyzes, and
revises all capital and operating budgets for all of GPE
and its subsidiaries.
19. INSURANCE SERVICES - (Capitalization Ratio)
Service Description - designs, implements and administers
insurance programs for GPE and its subsidiaries.
20. LEADERSHIP SERVICES - (Head Count Ratio)
Service Description - identifies and develops talent
throughout the organization.
21. DIVERSITY SERVICES - (Capitalization Ratio)
Service Description - fosters an environment that
promotes equity and fairness and encourages all
associates to succeed.
22. ASSOCIATE SERVICES - (Head Count Ratio)
Service Description - provides employee issue resolution
services, including but not limited to the ACCESS
program.
SHARED SERVICES
Shared Services are negotiable and may be amended, deleted
or declined pursuant to the terms of the Service Agreement.
The expected allocation method for each of the Shared
Services provided, when not billed directly, is indicated.
1. ASSOCIATE BENEFITS SERVICES - (Head Count Ratio)
Service Description - develops and designs associate
benefit programs and administers the programs fairly and
consistently.
2. ASSOCIATE RELATIONS SERVICES - (Head Count Ratio)
Service Description - negotiates union labor contracts,
advises on labor contract compliance, facilitates the
associate selection process (union and non-union
positions), and administers skills testing.
3. ASSOCIATE COMPENSATION SERVICES - (Head Count Ratio)
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Service Description - designs and administers
compensation programs (base salary and incentive plans);
maintains associate master information file.
4. ASSOCIATE COMMUNICATION SERVICES - (Head Count Ratio)
Service Description - provides written and oral
communication materials and programs for Client
associates.
5. EMPLOYMENT INVOLVEMENT SERVICES- (Head Count Ratio)
Service Description -facilitates associate participation
in work teams, committees, task forces, future search
teams, and decision making.
6. ASSOCIATE TRAINING SERVICES - (Capitalization Ratio)
Service Description - develops, administers, and presents
a variety of technical, job performance, and associate
development skills training.
7. SAFETY & MEDICAL SERVICES - (Head Count Ratio)
Service Description - provides information, education and
training for associates to comply with governmental
regulations and corporate policy and to provide
electrical safety information to the public; provides
medical services for treatment of associates sustaining
work related injuries and illnesses and administers
physical exams.
8. MAIL SERVICES - (Head Count Ratio)
Service Description - provides mail receipt, sort and
delivery service inside and outside the corporation.
9. DOCUMENT PROCESSING SERVICES - (Head Count Ratio)
Service Description - provides document publishing and
document distribution services and provides graphic
design capabilities and design, layout and production of
signage and posters.
10. FACILITY SERVICES - (Square Footage Ratio)
Service Description -operates, maintains, leases and
subleases facilities and maintains building grounds and
equipment at acceptable and approved industry standards.
To the extent that leasing or subleasing arrangements are
established between Service Company and/or GPE and its
subsidiaries, lease costs will include rent for space
occupied and applicable services, such as operation and
maintenance of structures, capital improvements, interior
space planning, security and janitorial.
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11. LEGAL SERVICES - (Capitalization Ratio)
Service Description - provides client contract and
procedural review and negotiation, litigation, liability
assessment, financing support for bankruptcy and
collection, regulatory support through representation and
rule interpretation, and employment and labor relations
investigations, union contracting, EEOC issues, and other
associate matters.
12. SECURITY SERVICES - - (Square Footage Ratio)
Service Description - provides a variety of personal and
physical security services including facilities, property
ingress/egress, investigations, and background checks;
provides associate security awareness including workplace
violence prevention, emergency planning, drug abuse, and
security alerts; facilitates disaster recovery planning
and drills.
13. PURCHASING SERVICES - (Purchase Order Ratio)
Service Description - processes requisitions for stock
and non-stock materials, labor and contractors requested
by business units; negotiates material and contract labor
contracts to ensure quality and delivery of product and
services; disposes of obsolete assets; manages corporate
procurement and travel & entertainment card programs.
14. OPERATIONAL AUDIT SERVICES - (Capitalization Ratio)
Service Description - provides internal consulting
services focusing on efficiency, effectiveness and
economy to Clients; assists in designing control systems
to manage key business risks and related business
planning.
15. TELECOMMUNICATION SERVICES - (Head Count Ratio)
Service Description - monitors and operates the wide area
network infrastructure, voice and data networks,
telephone services, and broadcast teleconferencing
services.
16. NETWORK SERVICES - (PC Ratio)
Service Description - provides internet, intranet, and
extranet support and services, as well as web-enablement
support and electronic messaging and calendaring support.
17. MAPPING & DRAFTING SERVICES - (Total Billing Ratio)
Service Description - creates, revises, and maintains
maps, drawings, or blueprints related to generating
stations, transmission substations and systems, and the
distributions systems; maintains general office structure
documents.
18. IT SYSTEM DELIVERY SERVICES - (Total Billing Ratio)
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Service Description - provides user system support;
maintains computer systems by providing data fixes, ad-
hoc reporting, application extensions, program fixes,
interface monitoring/controls, and process exception
handling; develops new computer application systems by
gathering system requirements, software evaluation,
software installation and coding, data conversions,
system testing, system training, and system
implementation.
19. IT SYSTEM OPERATION SERVICES - (Total Billing Ratio)
Service Description - designs and manages local area
networks; procures and supports desktop devices; manages
data center; provides xxxx insert service; help desk
support; and database hardware and software operating
systems monitoring and support.
20. INFRASTRUCTURE SERVICES - (PC Ratio)
Service Description - plans, designs, procures, builds
and deploys, supports, troubleshoots, operates and
maintains servers, middleware, and networks.
21. ACCOUNTS PAYABLE SERVICES - (Invoice Ratio)
Service Description - processes vendor payments;
coordinates and resolves vendor inquiries; accrues
invoice sales & use tax; resolves invoice match
exceptions; corrects account distribution errors;
reconciles vendor statements; prepares and analyzes
daily, weekly, and monthly reports; prepares required
year-end reports; maintains data controls and data
integrity and compliance with applicable policies and
procedures; provides consultation and training.
22. PAYROLL SERVICES - (Head Count Ratio)
Service Description - processes all wage and labor
related payments to active associates, including the
withholding and deposit of all applicable Federal, State
and Local associate and employer taxes; prepares
associate W-2's, maintains associate deduction selections
and subsequent disbursements, provides various labor cost
reporting and resolves miscellaneous information
requests.
23. CUSTOMER BILLING SERVICES - (Total Billing Ratio)
Service Description - produces and mails customer bills.
24. CASHIER SERVICES - (Total Billing Ratio)
Service Description - processes payments and ensures
proper posting to customers' accounts; handles exception
items, including returned checks; handles the printing of
all checks; reconciles payments to the customer
information system.
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25. CASH MANAGEMENT SERVICES - (Capitalization Ratio)
Service Description - manages funds including monitoring
the daily cash position and movement of funds; manages
liquidity including short-term borrowing and temporary
investments; manages bank relationships, including
compensation for banking services; forecasts cash
requirements, including projections for future cash
shortages and surpluses; evaluates, recommends and
implements cash management system alternatives to improve
available working capital.
26. CONTRACT MANAGEMENT SERVICES - (Total Billing Ratio)
Service Description - negotiates and manages intra-system
agreements and agreements between Clients and vendors.
27. ACCOUNT MANAGEMENT SERVICES - (Total Billing Ratio)
Service Description - provides close interaction with the
subsidiaries to ensure service levels (performance) are
in accordance with service level agreements and
anticipates service needs; resolves service level issues
and manages relationships with subsidiaries; provides
accountability reports to the service groups and
subsidiaries.
28. INVOICING/CHARGE-BACK SERVICES - (Total Billing Ratio)
Service Description - develops, recommends, and
implements appropriate and efficient processes to
appropriately xxxx clients of Service Company for the
various services rendered, adhering to guidelines
established by the SEC in accordance with the Public
Utilities Holding Company Act of 1935; maintains and
records necessary statistical information to allow the
creation of Service Company xxxxxxxx each month; provides
monthly xxxxxxxx to client companies on a timely basis,
with adequate detail to identify the service provided and
the associates providing such service.
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XXXXXXXX X
DESCRIPTION OF BASIS TO BE USED FOR INDIRECT SERVICE XXXXXXXX
Below are the various Ratios to be used to xxxx costs when the
Direct Service Billing methodology cannot be employed.
HEAD COUNT RATIO
A ratio where the numerator is the headcount of a Client and
the denominator that is the headcount of all Clients. These
ratios will be revised quarterly, based on figures as of
March 31, June 30, September 30 and December 31.
PURCHASE ORDER RATIO
A ratio where the numerator is the number of purchase order
lines (of selected PO types) created for the Client and the
denominator that is the total combined number of purchase
order lines created for all Clients. These ratios will be
developed monthly, using the current month data.
INVOICE RATIO
A ratio where the numerator is the number of voucher lines
(of selected types of vouchers) entered for the Client and
the denominator that is the total combined number of voucher
lines entered for all Clients. These ratios will be
developed monthly, using the current month data.
SQUARE FOOTAGE RATIO
A ratio where the numerator is the actual square footage of
a Client and the denominator is the total square footage of
the shared facility. The ratio will be revised annually,
based on figures as of December 31.
PC RATIO
A ratio where the numerator is the number of personal
computers assigned to a Client and the denominator is the
total number of personal computers assigned to all Clients.
These ratios will be revised quarterly, based on figures as
of March 31, June 30, September 30 and December 31.
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TOTAL BILLING RATIO
A ratio where the numerator is the actual expense charged to
a Client by the Service Company and the denominator that is
the total actual expenses charged to all Clients by the
Service Company. This ratio will be revised monthly based
upon prior month data.
CAPITALIZATION RATIO
A ratio where the numerator is the total capitalization
(total common stockholder's equity, preferred stock, and
long-term debt) of the Service Company or Client, and the
denominator that is the total combined capitalization (total
common stockholder's equity, preferred stock, and long-term
debt) of the Service Company and Clients. This ratio will
be revised quarterly based upon figures as of March 31, June
30, September 30, and December 31.
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