Exhibit 10.03
TELECOMMUNICATIONS, SOFTWARE AND
COMPUTING SERVICES AGREEMENT
This agreement is made as of _____ ______, 1997 by and between PepsiCo,
Inc., a North Carolina corporation ("PepsiCo"), and TRICON Global Restaurants,
Inc., a North Carolina corporation ("TRICON") and, as of the date hereof, a
wholly-owned subsidiary of PepsiCo.
WHEREAS, the PepsiCo Data Services Center ("PDS"), located at Hillcrest
Oak, 6600 and 0000 XXX Xxxxxxx, Xxxxxx, Xxxxx, is operated by [PepsiCo
Restaurant Services Group, Inc. ("PRSG")], a subsidiary of [TRICON]; and
WHEREAS, the PDS provides certain telecommunications and computing
services to (i) PepsiCo, its Pepsi-Cola division and subsidiaries of PepsiCo
other than TRICON and its subsidiaries (the "PepsiCo Organization") and (ii)
TRICON and its subsidiaries (the "TRICON Organization"); and
WHEREAS, PepsiCo has decided to consolidate its restaurant operations
and assets into TRICON and TRICON's subsidiaries and to distribute the Capital
Stock of TRICON to the holders of the Capital Stock of PepsiCo (the effective
date of such distribution shall hereinafter be referred to as the "Distribution
Date"); and
WHEREAS, pursuant to Section 8 of the Separation Agreement dated as of
______ ____, 1997 between PepsiCo and TRICON, the parties hereto have agreed to
set forth the arrangements between them with respect to software,
telecommunication services and computing services and third party agreements
relating thereto.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree as follows:
1. A. Until the Transfer (as hereinafter defined), TRICON shall cause the PDS
to provide computer services to the PepsiCo Organization, which such
services are described in Exhibit A attached hereto. TRICON shall cause the
PDS (a) to perform such services in a competent and timely manner using the
highest level of professional skill, care and diligence, and (b) to perform
such services in a manner which is consistent with the services currently
provided by the PDS to the PepsiCo Organization.
B. The parties hereto shall cooperate to effect a transfer of that
portion of the PDS sufficient to provide the computing services to the
PepsiCo Organization described in Section 1B, above, to the Frito-Lay data
center or some other new or existing data center chosen by PepsiCo (the
"Transfer"). The parties expect the Transfer to be completed by [March 31,
1998]. The hardware and software to be so transferred is listed on Exhibit
B, attached hereto. TRICON warrants that such hardware is currently leased
to, and the software licensed to, PepsiCo or a member of the PepsiCo
Organization. Each party will bear its own expenses incurred by it relating
to the Transfer including, by way of example, (i) expenses for consulting
services, additional personnel or duplicate hardware directly related to
preparation for the Transfer, and (ii) severance of excess personnel as a
result of the Transfer. There shall be no charge or cost to the PepsiCo
Organization for the physical Transfer other than reasonable out-of-pocket
costs for the physical move of the hardware.
C. TRICON warrants that the PDS currently has, and immediately after the
Transfer shall have, hardware and software owned, leased, or licensed by the
TRICON Organization which is adequate to provide all computer services to
the TRICON Organization at a level and in a manner consistent with services
provided currently and immediately prior to the Transfer, and TRICON agrees
that PepsiCo and the PepsiCo Organization shall have no liability or
responsibility with respect to any matters relating to the hardware,
software or services provided to the TRICON Organization.
D. From the Distribution Date until the Transfer PepsiCo shall pay to
TRICON for the PDS services provided hereunder $______ per PepsiCo
accounting period, payable at the beginning of each accounting period. Such
amount shall be apportioned for any partial accounting period during which
such services are performed. The foregoing fees include all applicable
federal, state, and local sales, use or similar taxes currently in force.
2. PepsiCo hereby assigns to TRICON the Services Agreement dated as of June
_____, 1997 by and between PepsiCo, Inc. and AmeriServe Distribution, Inc.
("AmeriServe") a copy of which is attached hereto, and all of PepsiCo's
rights, obligations and duties thereunder. The subject of the Services
Agreement is, in essence, the provision of PDS services to AmeriServe.
TRICON hereby accepts such assignment, and agrees to abide by the terms of
the Services Agreement and to properly perform all of PepsiCo's obligations
and duties thereunder.
3. A. The PepsiCo Organization and the TRICON Organization shall each
continue to use and pay for AT&T telecommunications services pursuant to
the Virtual Telecommunications Network Services Agreement, as amended,
between AT&T Corp. and PepsiCo which became effective on July 23, 1990 (the
"Tariff 12 Contract") in a manner and at a level consistent with current
utilization, in order to continue to meet the volume commitments and other
requirements thereof. This obligation shall continue through the term of
the Tariff 12 Contract, which such term ends October 8, 1998. As presently
in place, the Tariff 12 Contract provides for a total of 13 dedicated AT&T
support people, no more than 4 of which will be dedicated to the TRICON
Organization. All dedicated support personnel will be accountable to the
PepsiCo National Account Manager of AT&T. Those support people dedicated to
the TRICON Organization may be assigned in cities designated by TRICON
provided that major TRICON operations or divisional headquarters are
retained in such cities. TRICON understands that AT&T Corp. considers that
PepsiCo is acting as a "reseller" with respect to the provision of services
by AT&T, and the parties hereto agree to cooperate in all matters relating
to such services. The parties hereto understand and agree that AT&T
services under PepsiCo's Tariff 12 Contract shall not be extended to the
TRICON Organization after October 8, 1998 unless otherwise agreed in
writing between the parties.
B. The Pizza Hut, Taco Xxxx and KFC businesses of the TRICON Organization
can continue as active (non-terminated) Passport Customers under the
PepsiCo, Inc. Lotus Passport Program agreement dated as of May __, 1995,
incorporated herein by reference, through its extended termination date of
May __, 1998 subject to their performance of all of their duties and
obligations thereunder.
4. PepsiCo shall allow the TRICON Organization to continue to use the PepsiCo
e-mail hub ("hub") for the purpose of maintaining e-mail service among the
divisions of the TRICON Organization until 1/1/98. TRICON's use and
management of the hub, and PepsiCo's maintenance thereof, shall be in a
manner consistent with such use, management and maintenance currently
provided. TRICON shall pay PepsiCo a one-time fee of $110,000 at the
Distribution Date for the use of the hub from that time until December 31,
1997.
TRICON will arrange to remove all users other than the PepsiCo Organization
from the hub not later than 12/31/97, and shall cooperate with the PepsiCo
Organization so that the hub is physically moved to a location within the
PepsiCo Organization chosen by PepsiCo not later than 1/1/98, with
continuity of use by the PepsiCo Organization to be maintained throughout.
PepsiCo shall pay TRICON $10,000 per PepsiCo accounting period, prorated for
any partial period, from the Distribution Date until the physical move, for
the management of the hub.
5. A. Programs and systems developed in-house by PepsiCo and utilized
(exclusively or non-exclusively) in the restaurant business ("Internal
Software") are listed on Exhibit D1 hereto. Each Internal Software
application with respect to which it has been agreed to transfer a copy to
TRICON for its use in the restaurant business ("Transferred Internal
Application" or "Application") is noted on Exhibit D1. With respect to each
Transferred Internal Application:
i) PepsiCo grants to TRICON a non-transferable and non-exclusive
right and license to use the Application in its restaurant business;
ii) The transfer to TRICON shall be accomplished no later than December
31, 1997, and PepsiCo shall not be responsible for running or maintaining
such Application after the transfer;
iii) Certain Applications require licenses from third parties as
identified on Schedule D1, and the parties shall cooperate to arrange for
the additional licenses needed, any addtional license cost to be borne by
TRICON;
iv) Each Application is provided "as is", and without warranty of any
kind;
v) PEPSICO DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
THE IMPLIED WARRANTIES OF MERCHANTIBILITY AND FITNESS FOR A PARTICULAR
PURPOSE; AND
vi) PepsiCo and TRICON each assumes responsibility for its own use of
such Application, and will indemnify and defend the other party (including
reasonable attorneys fees) against any claim of a third party resulting from
such use, and the party seeking such indemnity will give the other prompt
written notice of all such claims and reasonably cooperate in the defense
thereof.
B. Prepackaged systems commercially available from third-party vendors
utilized by PepsiCo at Purchase, NY in the restaurant business ("Commercial
Systems") are listed on Exhibit D2 hereto. No transfer to TRICON is being
made of Commercial Systems. TRICON is solely responsible for obtaining its
own license(s) at its cost and expense for any Commercial Licenses it
desires to utilize after the Distribution Date.
6. The PepsiCo Organization shall continue to provide vendor information
management ("VIM") services for TRICON Organization employee benefits after
the Distribution for a mutually agreed time not to extend past 12/31/97.
Such services, and the costs therefor, shall be as outlined in Exhibit C
attached hereto, but no services shall include anything to do with 1998
"flexible benefits".
7. The parties will also furnish such other telecommunications, software and
/or computing services as may be necessary or appropriate to carry out the
terms, conditions and intent of the Employee Benefits Agreement entered into
pursuant to Section 7 of the Separation Agreement.
8. TRICON agrees to indemnify and hold harmless PepsiCo and the PepsiCo
Organization and its and their officers, employees and agents against any
losses, claims, damages, judgments, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from (i) any negligent act
or omission or willful misconduct of TRICON, the TRICON Organization, the
PDS or any of its or their directors, officers, employees, consultants,
contractors, or agents in performing their obligations hereunder; or (ii)
any failure by TRICON or the PDS to properly provide the services described
herein or any other default by TRICON or the PDS hereunder, including,
without limitations, losses incurred as a result of any violations of
software or other intellectual property rights on the part of TRICON, the
TRICON Organization or the PDS, or (iii) the failure to utilize or pay for
AT&T services pursuant to paragraph 3, except for the force majeure causes
described in Section 9 below. PepsiCo agrees to indemnify and hold harmless
TRICON and the TRICON Organization and its and their officers, employees
and agents against any losses, claims, damages, judgments, liabilities or
expenses (including reasonable counsel fees and expenses) resulting from
any negligent act or omission or willful misconduct of PepsiCo or the
PepsiCo Organization or any of its or their officers, employees,
consultants, contractors, or agents in performing their obligations
hereunder, or any default by PepsiCo hereunder, except for the force
majeure causes described in Section 9 below. The provisions of this Section
8 shall survive the expiration or prior termination of this Agreement.
9. Delays in performance by TRICON and PepsiCo hereunder will be excused due
solely to circumstances beyond its reasonable control, including but not
limited to acts of God, fluctuations or non-availability of electrical
power, heat, light or air conditioning.
10. All notices and requests in connection with this Agreement shall be made
upon the respective parties in writing and shall be deemed given by hand
delivery, effective upon receipt thereof, or via overnight courier,
effective upon receipt. All notices shall be addressed as follows:
If to PepsiCo: PepsiCo, Inc.
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: [ ]
If to TRICON: TRICON Global Restaurants, Inc.
---------------------------
---------------------------
---------------------------
or to such other address as the party to receive the notice so designates by
written notice to the other party.
11. This Agreement and performance hereunder shall be governed by and construed
in accordance with the laws of the State of North Carolina.
12. It is expressly understood that neither PepsiCo nor TRICON has the authority
to bind the other to any third person, or otherwise to act in any way as the
representative of the other, unless otherwise expressly agreed to in writing
signed by both parties hereto.
13. This Agreement and the rights and duties hereunder shall not be assignable
by the other party except with the prior written consent to such assignment
by the other party.
14. Each party shall keep confidential all information relating to the business
of the other party which it obtains as a result of the services provided
under this Agreement. The foregoing shall not apply with respect to any
information (i) that is or becomes publicly known through no fault of the
party receiving the information (the "Receiver"); (ii) that is legally
obtained by the Receiver from a third party believed by the Receiver to be
legally entitled to disclose it; (iii) that is required to be disclosed
pursuant to a requirement of a government agency or law; (iv) that can be
documented through the Receiver's files as known to the Receiver prior to
receipt pursuant to this Agreement, expect with respect to data processed by
PDS under this Agreement; or (v) that is developed by or for the Receiver,
independent of activities under this Agreement.
15. Each party acknowledges that it has read this Agreement, understands it, and
agrees to be bound by its terms and further agrees that it is the complete
and exclusive statement of the agreement between the parties, which
supersedes and merges all prior proposals, understandings and all other
agreements, oral and written between the parties relating to the subject
matter of this Agreement. The Agreement may not be modified or altered
except by written instrument duly executed by both parties.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date and year first written above.
TRICON Global Restaurants, Inc. PepsiCo, Inc.
By: ______________________________ By: ________________________________
EXHIBIT A TO TELECOMMUNICATIONS, SOFTWARE AND
COMPUTING SERVICES AGREEMENT
PDS SERVICES AND SUPPORT
TABLE OF CONTENTS TO EXHIBIT A
I. PDS Obligations
II. PDS Support Areas
III. Maintenance Activities
IV. PDS-PepsiCo Organization Management Contacts
V. Problem Resolution Procedures
VI. Hours of Operation
VII. Project Accountability
VIII. Hardware/Software Strategy
I. PDS Obligations
The PDS shall provide cost effective information processing services to
the PepsiCo Organization to enable the PepsiCo Organization to attain
its business objectives, based upon the scope of the work set forth in
this Exhibit A, and for the fees (and based upon the other terms and
conditions) set forth in the attached Telecommunications, Software and
Computing Services Agreement (the "Services Agreement"). The parties
hereby confirm their mutual intention that, unless expressly provided to
the contrary herein, the services to be provided by PDS to the PepsiCo
Organization during the term of this Agreement shall be substantially
the same services as have been provided by PDS to the PepsiCo
Organization prior to the effective date of this Agreement. The parties
shall execute and deliver such further instruments, documents,
conveyances and assurances, and take such other action (including,
without limitation, amending, modifying or supplementing this
Agreement), as may be necessary or appropriate to carry out the
foregoing intention of the parties.
II. PDS Support Areas
The PDS will provide support to the PepsiCo Organization in the
following major categories:
Technical Services: This group supports the mainframe operating systems
(MVS & VM) along with 400 different products that run on the mainframes.
Software standardization, keeping all products on supported releases,
and maximum availability are the group's primary services.
Computer Resources: This group supports the storage areas (DASD and
Tape) associated with mainframe data processing. Quarterly performance
reports are provided to each division, along with capacity planning and
disaster recovery.
Network Services: The network services group will continue to provide
expertise and management for the PepsiCo e-mail hub and support
mainframe networking software along with the routers, bridges, hubs and
other telecomm equipment associated with the PepsiCo Wide Area Network
(WAN) in a manner consistent with their current delivery of services. In
addition, the network services group will continue to provide polling
expertise for PCNA bottlers until other such arrangements can be made.
Network management will be provided according to the existing
arrangement with PCNA.
Computer Operations: This group monitors the system consoles, mounts
tapes, and coordinates all hardware installs and environmental changes
supporting the raised floor areas. In addition, this group handles the
mailing and receiving of tapes, coordinates the change control process
to ensure minimum service disruption when hardware and software changes
are implemented. This group takes the problem calls from divisional help
desks, open problem tickets, and assigns the ticket to the appropriate
technician.
III. Maintenance Activities
Standard software and hardware maintenance is scheduled on Sundays from
6:00 a.m. - 10:00 p.m. CST and documented weekly through PDS change
control system. Non-standard maintenance (CPU swapout, operating system
upgrades, etc.) require an extended outage time and is coordinated
through a divisional liaison.
IV. PDS-PepsiCo Organization Management Contacts
PDS and the PepsiCo Organization will each designate, and inform the
other of, a representative to resolve any issues with priority setting
or problem resolution.
V. Problem Resolution Procedures
Problems are phoned in to PDS operations and then assigned to one of the
PDS technicians. There are four severity levels which the division can
assign to a problem. The PDS provides guidelines for assigning the
severity level as well as problem resolution guidelines and timelines.
All PDS technicians and managers carry pagers, and the primary on-call
technician for the different functions carries a cell phone. The PepsiCo
Organization has access to the PDS change control system for data center
communications.
VI. Hours of Operation
The PDS shall conduct its operations at all times, 24 hours a day, every
day until the Transfer (as defined in the Services Agreement). The
technicians are on-site during normal business hours.
(Monday through Friday and pageable at all times.)
VII. Project Accountability
In scope projects are agreed upon by each division and the PDS during
the budgeting cycle of the previous year. Out-of-scope projects are
handled on a best effort or at an additional cost to the division. The
PDS is project/lead coordinator and provides project plans as well as
the testing requirement that the division must provide.
VIII. Hardware/Software Strategy
PDS, in providing its services hereunder, shall implement a PepsiCo
Organization hardware and software strategy to isolate the PepsiCo
Organization from the rest of the divisions, providing the PepsiCo
Organization with its own CPU and non-shared DASD and Tape devices.
Other strategies to be implemented by PDS include hardware and software
asset management to complement the planned Transfer.
EXHIBIT B
HARDWARE AND SOFTWARE TO BE TRANSFERRED
Paradyne Pixnet
Xxxx RJE
E-Mail Hub (R/S/6000)
Routers
DSU's
Intelligent Hubs
[TO BE COMPLETED]
Exhibit C
Spin-off - Telecommunications, Software and
Computing Services Agreement
-Accept employee update files from the division, perform standard editing
and reporting back to the divisions, and perform data feeds to benefits
vendors via the VIM system. The following rates would apply:
-For regular ongoing fees according to the current production schedule to
the following vendors:
-$1,500 per division (Pizza Hut, Taco Xxxx and KFC Divisions) input
feed per period (VIMIN) $250 per vendor feed period
HBA Premium Reconciliation
Hyatt Group Legal
Eye Care Plan of America
Lenscrafters
-$1,500 per vendor feed per period
Aetna Inforce
United Healthcare Inforce
CIGNA DMO
Xxxx Xxxxxxx Managed STD
MetLife Dental
KPMG JumpStart
Xxxxxxx Xxxxx weekly demographics
State Street Bank demographics
-VIM will not provide services for the following vendor feeds. They will
stop as of the Distribution date:
Xxxxxx Pension Information Line
Xxxxxx Pension Valuation
Worker Compensation
Xxxxxxx Xxxxx Mini-Xxxxx updates
Xxxxxxx Xxxxx Annual SharePower Grant
Benefacts Mini Grant update statements
Benefacts Total Compensation Statement
Benefacts SharePower Statement
Group Insurance Billing
-Special processing, programming or general support above and beyond ongoing
vendor processing. These could be for example, reports, data dumps,
new programs, updates to current programs, VIM Reporter development.
$450 per day
-VIM Reporter Access $500 per period
Exhibit D
EXHIBIT D1
In-House Developed Applications Transition To TRICON
PEPSICO
Estimated Start
# Front Back Other License Up
Application Name Users -End End tools Size Vendor Fees Telecomm Effort
---- ----- ---- --- ----- ---- ------ ---- -------- ------
Accounting
----------
Data FDO Visual MS- Visual Microsoft, Remote MS
Collection Basic 3 Access/ Tools Oracle -Mail or FTP
Oracle
Personnel
---------
Executive ECLIPS 1-3 Power- Oracle Word/ 200MB F/S Sybase, 30
Comp. Builder Excel 1 GIG D/B Oracle,
MS-Access Microsoft
HR-EIS HR-EIS 10 Power- Oracle/ 50MB F/S Sybase, MS-Mail 10
Builder Watcom 100MB D/B Oracle,
Microsoft
International
Personnel
-------------
International IPS 13-18 Power- SQL C++ 125MB D/B Sybase, PCI 30
Personnel Builder *Server; Microsoft WorldOne WAN
System NT
(includes
Bonus,
Benefits,
Pension)
Human HRP 00-00 XX- XX- 25MB Microsoft PCI 10
Resource Access 2 Access 2 WorldOne WAN
Planning (HRP)
Treasury
--------
Bank BAS 1 SQL*Forms Oracle 15MB Oracle 10
Administrator
Foreign FX 1 MS-Access MS-Access Word 11MB Microsoft terminal 3
Exchange 2 2 dependent
on Reuters
Capital CMS 2 MS-Access MS-Access 5MB Microsoft
Markets 2 2
Securities STS 2 Power Oracle Word 20MB Sybase, 20
Guarantee Builder 4 7.2 Oracle
Intl. Entity 1 MS-Access MS-Access 5MB Microsoft 2
Funding 2 2
Planning
--------
Capex Tracking Capex 2-3 MS-Access MS-Access 20MB Microsoft 1
7 7
Restaurant SLU 2-3 MS-Access MS-Access 50MB Microsoft 1
Unit 7 7
Audit
-----
Audit APT 12-16 Power Oracle 25MB Sybase, WAN to Hong 15
Planning & Builder 4 7.2 Oracle Kong and
Tracking Richmond
Law
---
International ISFD 2-6 Lotus Lotus 45MB IBM 1
Standards Notes 4 Notes 4
Form Document
Public Affairs
--------------
Corporate 3 Visual MS-Access Crystal 20MB Microsoft, 10
Contributions Basic 4 2 Reports Crystal
Reports
Political PGS 1-3 MS-Access MS-Access 30MB Microsoft 10
Grassroot 2 2
Note:
$19,200 for
legislative
data per year
EXHIBIT D2
PEPSICO Pre-Packaged/Commercially Available Applications Transition to TRICON
Application Name #Users Front-End Back-End Other Size Vendor Estimated Tele- Start
tools License comm. Up
Fees Effort
----------- ----------- ----- --------- --------- ------ ----- ------- ---------- ------ ------
Accounting
---------
Microcontrol Microcontrol 30 Proprietary Proprietary Excel 200MB Hyperion $85,000 - 60-
3.54 & 4.01 S/W $140,000 90
Lease Accounting FCS 6 FCS $58,000 Dial into
FCS M/F
Payroll HRM 11.02.36 CICS Cobol Cobol VSAM DBS HRM
Treasury
--------
Bank BRM 1 XX-Xxxxxx 0 XX-Xxxxxx 0 EDI 30MB Xxxxxxx $10,400 banks 5
Relationship thru M/F dial M/F
Manager
Treasury Resource I.Q. 2 MS-Access 2 MS-Access Crystal 97MB ADS $88,200 Dial-out 30
Workstation Btrieve Reports to banks
Upload
G/L to M/F
Resource Resource WB 2 XX-Xxxxxx 0 XX-Xxxxxx 0 20MB ADS 2
Workbench
Chase Insight Insight - 2 Gupta SQL*Base 50MB Chase Dial-out
wire trader installs to banks
and trains
Cash Cashcon 1 Chase Dial-out
Concentration to Chase
Tax
----
Corptax Corptax 97.03 10-15 Proprietary Proprietary 300-500MB Corptax $50,000 + 20
30%
maintenance
Law
----
Intellectual Trademark 4-8 XX-Xxxxxx 0 XX-Xxxxxx 0 40MB Computer $25,000 + WAN to 20
Property Packages 15,000 Hong
Inc. (CPI) customiza- Kong,
tions Richmond
and Dallas
Legal Entity Secretariat 1-3 Paradox Paradox 30MB Bridgeway $20,000 15
(credits)
Section 16B Insider 1 Proprietary Proprietary 6MB Bridgeway $3,000
$450 maint.
Case Management CaseTrack 20 Visual Sql*Server Crystal 200MB + Economic $18,500 for WAN to 20
Basic 3 Reports 15MB on Analysis 5 Irvine,
C: Drive Group concurrent Dallas,
users Louisville
Xxxxx EdgarEase 1-2 8MB Dtech $895 license dial-out 2
$230 maint.
Public Affairs
--------------
Institutional Anamate 1-2 FoxPro FoxPro 70MB Anamate $15,000 1
Investor
Tracking
Political CompuPac 2* 1 PC Cobol/DOS 5MB Transtronic $10,000
Contributions Software,
Inc.
Newsfeeds NYSENET
Newsedge
PR/Newswire
FirstCall
Bloomberg
