FORM OF AGREEMENT
GENERAL SERVICES AGREEMENT
BETWEEN
SERVICE COMPANY
AND
HOLDING COMPANY
KANSAS CITY POWER AND LIGHT COMPANY
KLT, INC.
GREAT PLAINS POWER COMPANY
THIS AGREEMENT, made and entered into this __ day of _________,
2001, by and between the following Parties: SERVICE COMPANY (hereinafter
sometimes referred to as "Service Company"), a Missouri corporation;
HOLDING COMPANY, and its subsidiaries, KANSAS CITY POWER AND LIGHT COMPANY
and its subsidiaries; KLT, INC. and its subsidiaries, GREAT PLAINS POWER
COMPANY and its subsidiaries, hereinafter sometimes referred to
collectively as "Client Companies");
WITNESSETH:
WHEREAS, Client Companies, including HOLDING COMPANY, which has
filed for registration under the terms of the Public Utility Holding
Company Act of 1935 (the "Act") and its other subsidiaries, desire to enter
into this agreement providing for the performance by Service Company for
the Client Companies of certain services as more particularly set forth
herein;
WHEREAS, Service Company is organized, staffed and equipped and
has filed with the Securities and Exchange Commission (the "SEC") to be a
subsidiary service company under Section 13 of the Act to render to HOLDING
COMPANY, and other subsidiaries of HOLDING COMPANY, certain services as
herein provided; and
WHEREAS, to maximize efficiency, and to achieve reorganization
related savings, the Client Companies desire to avail themselves of the
advisory, professional, technical and other services of persons employed or
to be retained by Service Company, and to compensate Service Company
appropriately for such services;
NOW, THEREFORE, in consideration of these premises and of the
mutual agreements set forth herein, the Parties agree as follows:
Section 1. Agreement to Provide Services
Service Company agrees to provide to Client Companies and their
subsidiaries, if any, upon the terms and conditions set forth herein, the
services hereinafter referred to and described in Section 2, at such times,
for such period and in such manner as Client Companies may from time to
time request. Service Company will keep itself and its personnel available
and competent to provide to Client Companies such services so long as it is
authorized to do so by the appropriate federal and state regulatory
agencies. In providing such services, Service Company may arrange, where it
deems appropriate, for the services of such experts, consultants, advisers
and other persons with necessary qualifications as are required for or
pertinent to the provision of such services.
Section 2. Services to be Provided
The services expected to be provided by Service Company hereunder
may, upon request by a Client Company, include the services as set out in
Schedule 2, attached hereto and made a part hereof. In addition to those
identified in Schedule 2, Service Company shall provide such additional
general or special services, whether or not now contemplated, as Client
Companies may request from time to time and Service Company determines it
is able to provide.
Notwithstanding the foregoing paragraph, no change in the
organization of the Service Company, the type and character of the
companies to be serviced, 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 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 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 3. New Subsidiaries
New direct or indirect subsidiaries of HOLDING COMPANY, which may
come into existence after the effective date of this Service Agreement, may
become additional client companies of Service Company and subject to this
General Services Agreement with Service Company. The parties hereto shall
make such changes in the scope and character of the services to be provided
and the method of assigning, distributing or allocating costs of such
services as may become necessary to achieve a fair and equitable
assignment, distribution, or allocation of Service Company costs among
associate companies including the new subsidiaries.
Section 4. Compensation of Service Company
As compensation for such services rendered to it by Service
Company, Client Companies hereby agree to pay Service Company the cost of
such services, computed in accordance with applicable rules and regulations
(including, but not limited to, Rules 90 and 91) under the Act and
appropriate accounting standards.
The factors for assigning or allocating Service Company costs to
Client Company, as well as to other associate companies, are set forth in
Schedules 1 and 2 attached hereto. Attachment A and Schedules 1 and 2 are
each expressly incorporated herein and made a part hereof.
Section 5. Securities and Exchange Commission Rules
It is the intent of the parties to this Agreement that the
determination of the costs as used in this Agreement shall be consistent
with, and in compliance with, the rules and regulations of the SEC, as they
now read or hereafter may be modified by the Commission.
Section 6. Service Requests
The services described herein or contemplated to be provided
hereunder shall be directly assigned, distributed or allocated by activity,
project, program, work order or other appropriate basis.
Section 7. Payment
Payment shall be by making remittance of the amount billed or by
making appropriate accounting entries on the books of the companies
involved. Invoices shall be prepared on a monthly basis for services
provided hereunder.
Section 8. Holding Company
Except as authorized by rule, regulation, or order of the SEC,
nothing in this Agreement shall be read to permit HOLDING COMPANY, or any
person employed by or acting for HOLDING COMPANY, to provide services for
other Parties, or any companies associated with said Parties.
Section 9. Client Companies
Except as limited by Section 8, nothing in this Agreement shall be
read to prohibit Client Companies or their subsidiaries from furnishing to
other Client Companies or their subsidiaries services herein referred to,
under the same terms and conditions as set out for Service Company.
Section 10. Effective Date and Termination
This Agreement is executed subject to the consent and approval of
all applicable regulatory agencies, and if so approved in its entirety,
shall become effective as of the date the reorganization of KCPL is
completed, and shall remain in effect from said date unless terminated by
mutual agreement or by any Party giving at least 60 days' written notice to
the other Parties prior to the beginning of any calendar year, each Party
fully reserving the right to so terminate this Agreement.
This Agreement may also be terminated or modified to the extent
that performance may conflict with any rule, regulation or order of the SEC
adopted before or after the making of this Agreement.
Section 11. Access to Records
For the seven years following a transaction under this Agreement,
the Client Company may request access to and inspect the accounts and
records of the Service Company, provided that the scope of access and
inspection is limited to accounts and records that are related to such
transaction.
Section 12. Assignment
This Agreement and the rights hereunder may not be assigned
without the mutual written consent of all Parties hereto.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be executed and attested by their authorized officers as of the day and
year first above written.
SERVICE COMPANY
By
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Title
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HOLDING COMPANY
By
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Title
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KANSAS CITY POWER AND LIGHT COMPANY
By
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Title
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KLT, INC.
By
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Title
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GREAT PLAINS POWER COMPANY
By
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Title
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Service Agreement Schedule 1
Allocation Ratios:
General:
Direct charges shall be made so far as costs can be identified and related
to the particular transactions involved with out excessive effort or
expense. Other elements of cost, including taxes, interest, other overhead,
and compensation for the use of capital procured by the issuance of capital
stock shall be fairly and equitably allocated using the ratios set forth
below.
Revenue (Xxxxxxxx) Related Ratios:
Revenues
Expenditure Related Ratios:
Total Expenditures
Capital Allocation:
Capital - all debt
Capital - equity/preferred stock
Capital - debt average
Labor/Payroll Related Ratios:
Labor/Payroll - 12 months ended
Labor/Payroll - current period
Number of Employees
Units Related Ratios:
Number of Telephones
Number of Personal Computers
Number of Square Feet (total/occupied)
Number of Hours Security Service Administered
Volume of Document Processing
Percentage of Disc Space Assigned
Number of Lines Accounts Payable Distribution
Number of Lines Purchase Order Distribution
Assets Related Ratios:
Total Assets
Composite Ratios:
Mail Services (Number Mail Runs, Distance to Mail Drops, Misc. Postage)
Massachusetts Method (Capital Assets, Revenue, Payroll)
Service Agreement Schedule 2
Services Including But Not Limited To:
General:
Direct charges shall be made so far as costs can be identified and related
to the particular transactions involved with out excessive effort or
expense. Other elements of cost, including taxes, interest, other overhead,
and compensation for the use of capital procured by the issuance of capital
stock shall be fairly and equitably allocated using the ratios set forth in
Schedule 1.
Corporate and Financial Services Including But Not Limited To:
Corporate Secretary
Strategic Planning
Environmental Services
Audit Services
Research and Development
Corporate Security Services
Shareholder Relations
Corporate Communications
Governmental Affairs
Treasury
Corporate Accounting
Tax Planning/Compliance
Corporate Budgeting
Expected allocation ratios: Revenue Related, Expenditure Related,
Labor/Payroll Related, Capital Allocation, Units Related; Assets Related,
Composite
Employee Services Including But Not Limited To:
Leadership Development
Diversity Initiatives
Employee Benefits
Employee Relations
Employee Compensation
Employee Involvement
Employee Training
Safety/Medical
Expected allocation ratios: Labor/Payroll Related, Composite
Support Services Including But Not Limited To:
Legal Services
Mail Services
Document Processing Services
Print Shop
Creative Services
Accounts Payable
Payroll Processing
Customer Billing
Cashier Services
Cash Management Services
Insurance Administration
Service Level Arrangement Management
Expected allocation ratios: Revenue Related, Expenditure Related,
Labor/Payroll Related, Capital Allocation, Units Related; Assets Related,
Composite
Purchasing Services Including But Not Limited To:
Identification/Qualification of Vendors
Initiation of Quotation Requests
Management of Investment Recovery
Management of Procurement/T&E Cards
Monitoring Vendor Performance
Negotiation/Administration of Vendor Contracts
Processing Vendor Invoices
Resolving Vendor Inquiries
Resolving Non-compliant Goods
Expected allocation ratios: Revenue Related, Labor/Payroll Related, Units
Related, Composite
Facilities Management Services Including But Not Limited To:
Construct Facilities
Maintain Facilities
Expected allocation ratios: Revenue Related, Labor/Payroll Related, Units
Related, Composite
Information Technology Services Including But Not Limited To:
Mapping & Drafting Services
Network Services
IT Security
System Delivery
System Operations
Infrastructure Management
Expected allocation ratios: Revenue Related, Labor/Payroll Related, Units
Related, Composite
Telecommunications Services Including But Not Limited To:
Data and Voice Infrastructure
Radio Services
Communications Hubs
Videoconferencing
Telephone Services
Pager/Cellular Phone Services
Expected allocation ratios: Revenue Related, Labor/Payroll Related, Units
Related, Composite
