THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS
ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]."
AMENDMENT
THIS AMENDMENT is entered into by and between American Airlines, Inc. ("AA") and
Sabre Inc. (formerly known as The SABRE Group, Inc.; herein "Sabre" or "SG") on
March 15, 2000 with respect to the "Management Services Agreement" entered into
by and between American and Sabre and dated as of July 1, 1996. Capitalized
terms used herein but not defined have the same meaning given in the Management
Services Agreement.
BACKGROUND
1. The Management Services Agreement (hereafter, "MSA") establishes the
terms and conditions under which AA would provide a range of
administrative and support services for varying terms;
2. Sabre has been operating as an independent company for over three years
since the Effective Date of the MSA, and, as a result of certain
separate transactions expected to occur on or about Xxxxx 00, 0000,
Xxxxx and its parent company, Sabre Holdings Corporation, will no
longer be affiliates under common control with AA; and
3. Rather than terminate all of the Services as provided in the MSA, AA is
willing to assist Sabre in continuing to transition to independent
capabilities in respect of the Services by extending their terms beyond
the date of disaffiliation of AA and Sabre under the terms and
conditions of the MSA as modified by this Amendment.
CLAUSES
NOW THEREFORE, AA and Sabre agree as follows:
1. SERVICES TERM (SECTION 2.1); SERVICES SCHEDULES APPENDIX. AA and Sabre
have already agreed to terminate some Services before the effective
date of this Agreement. Other Services are terminated effective the
same date of this Agreement or at different times after the date of
this Agreement. The last of any Services provided under the MSA will
terminate effective June 30, 2001. Certain Services (principally
payroll related) will likely continue beyond that date, but will be
incorporated into separate contracts before that time. Therefore, the
MSA will Expire as of 11:59 p.m. CST, June 30, 2001. The December 1,
1999 "Appendix to the Management Services Agreement" containing
Services Schedules for the year 2000 is replaced in its entirety by the
attached March 15, 2000 Appendix to the Management Services Agreement
(the "Services Appendix"). For the avoidance of doubt, the Parties may
mutually agree to terminate any individual Service before the
termination date given in the Services Appendix. In such case, Sabre
may request, and AA will provide transition assistance in accordance
with SECTION 2.3 of the MSA up until the date the Service was
to have terminated, but not beyond that date. AA will not be ---
obligated to provide transition assistance after the termination dates
for any Service as specified in the Services Appendix, nor after the
date of final Expiration or termination of the MSA as a whole, under
SECTIONS 2.3, 5 or 13.3 or otherwise under the MSA. However,
for up to ninety (90) days after the termination dates for any
Services as specified in the Services
Appendix, AA will comply with Sabre's reasonable requests for
assistance in data migration, and obtaining records and other
information relating to the Services rendered by AA preceding that
termination, provided that Sabre reimburses and pays AA's reasonable
expenses incurred in connection with the foregoing assistance against
invoices submitted to Sabre by AA.
2. INDEMNIFICATION FOR THIRD-PARTY CLAIMS (SECTIONS 14.4(a) AND (d)). The
following additional text is inserted after SECTION 14.4(a)(III):
FOR THE AVOIDANCE OF DOUBT, AA'S INDEMNITY OBLIGATIONS UNDER THIS
SECTION 14.4(a) FOR ANY THIRD-PARTY CLAIMS AGAINST SG ARE SUBJECT TO
THE EXCLUSION OF 14.2(a) AND THE LIMITATIONS OF SECTION 14.4(b)
REGARDING AGGREGATE AMOUNTS PAID TO AA FOR THE SPECIFIC SERVICE IN
RESPECT OF WHICH THE CLAIM AROSE.
The following new SECTION 14.4(d) is added after SECTION 14.4(c), and
existing paragraphs (d), (e) and (f) are reordered as (e), (f) and (g)
respectively:
(II SG SHALL INDEMNIFY AA AGAINST ALL DAMAGES IN RESPECT OF ANY
THIRD-PARTY CLAIM(S) ASSERTED AGAINST AA ARISING OUT OF ANY
SERVICE PERFORMED BY AA OR ITS SUBCONTRACTORS UNDER THIS
AGREEMENT TO THE EXTENT SUCH DAMAGES EXCEED THE AGGREGATE
PRICE ACTUALLY PAID TO AA (EXCLUDING MERE PASS-THROUGH
EXPENSES) IN THE CALENDAR YEAR IN WHICH THE THIRD PARTY
CLAIM(S) AROSE.
The references to "Sections 14.4(a), 14.4(b) and 14.4(c)" in existing
SECTION 14.4(d) shall be deemed to include the new Section 14.4(d)
above.
3. LABOR LIABILITIES FOR SECONDED EMPLOYEES (SECTION 14.4(c)). The
following new SECTION 14.4(c)(ii) is added and the existing SECTIONS
14.4(c)(ii), (iii) and (iv) are reordered as 14.4(c)(iii), (iv) and
(v), respectively.
(ii) [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
IN WITNESS WHEREOF, the parties have caused this AMENDMENT to be executed in two
or more identical counterparts by their duly authorized representatives.
AMERICAN AIRLINES, INC. SABRE INC.
By: By:
------------------------ -------------------------
Title: Title:
---------------------- -------------------------
-2-
AA MANAGEMENT SERVICES AGREEMENT SCHEDULE OF SERVICES
--------------------------------------------------------------------------------
APPENDIX TO
THE MANAGEMENT SERVICES AGREEMENT
1
AA MANAGEMENT SERVICES AGREEMENT SCHEDULE OF SERVICES
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Tax Administration Service (Mandatory).........................................3
Human Resources Government Reporting Service (Mandatory).......................5
[TEXT OMITTED -CONFIDENTIAL TREATMENT REQUESTED]
Payroll Production Service.....................................................8
Payroll Tax Accounting Service.................................................9
Payroll: Accounting and Reconciliation.......................................10
Human Resources Administration................................................13
Medical Services..............................................................15
Tax Administration Services (Optional)........................................17
Sabre Supply Management Service (updated).....................................19
Corporate Security Service....................................................20
Safety Administration Service.................................................21
Business Insurance Administration Service.....................................22
MCLA Division Services........................................................23
AMR China Service.............................................................24
Audit Service.................................................................25
Corporate Communications Service..............................................26
Other Airline (OA) Personal Travel Administration Service.....................27
Other Airline (OA) Business Travel Administration Service.....................28
International Division Services...............................................29
General Services Department...................................................31
General Services' Pass-Through Expenses Service...............................32
Printing Services.............................................................34
Facilities Maintenance--CPIV..................................................35
Facilities Maintenance Pass-Through Expense Service...........................36
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
AA Corporate Apartment Service................................................38
AASSET Card...................................................................39
2
AA MANAGEMENT SERVICES AGREEMENT SCHEDULE OF SERVICES
-----------------------------------------------------------------------------
SCHEDULE I.
TAX ADMINISTRATION SERVICE (MANDATORY)
DESCRIPTION OF SERVICE: Tax Administration is defined as tax research and
planning and tax return preparation in compliance with tax statutes and
regulations. Tax Administration related to US federal and state income tax
planning and compliance will be a Mandatory Service. All other Tax
Administration Services will be Optional Services and are described on Schedule
XVI. The Tasks to be performed under Tax Administration Service (Mandatory)
include, without limitation:
A) US federal and state income tax compliance
i) tax return preparation and tax payment processing
ii) representation on audits and contests
iii) management of development of tax and accounting systems to
minimize compliance costs
B) US federal and state income tax accounting and reporting
i) income tax account analysis
ii) tax provision accounting
C) US federal and state income tax planning and projects
i) research and planning to assess impact of taxes on operations and
on proposed transactions
ii) legislative and regulatory monitoring
TOTAL ESTIMATED COST FOR 2000: $58,788
FIXED AMOUNT FOR 2000: $17,988
HOURLY RATES DURING 2000:
Level 8 $115
Xxxxx 0 00
Xxxxx 0 00
Xxxxx 5 67
Xxxxx 0 00
Xxxxx 0 00
XXXXX FOR PRICE: The Tasks to be performed are use-based. The monthly invoiced
amount will be the product of the AA Tax department's hourly rate and the
billable hours required to perform the Tasks described above. The Tax Department
may Subcontract when necessary. All costs of Subcontracting will be
"passed-through" at AA cost to Sabre. The Fixed Amount of the Tax Administration
Service is the allocation of unmargined Private Payroll representing the
oversight responsibility of the VP Corporate Development & Treasury. The Fixed
Amount of the Tax
Administration Service will be invoiced in 12 equal installments, and the Fixed
Amount will not vary if
3
any one or more of the use-based Tasks are dropped. The annual cost to
provide the Service is the sum of the Fixed Amount and the usage at the
hourly rate.
TERMINATION: This Service will terminate effective March 15, 2000, by mutual
agreement. AA will invoice Sabre hourly rates and pass-through subcontracting
costs for Services rendered through that date, plus a prorated portion of the
Fixed Amount for year 2000 based on 2-1/2 months of Services rendered.
4
SCHEDULE II.
HUMAN RESOURCES GOVERNMENT REPORTING SERVICE (MANDATORY)
DESCRIPTION OF SERVICE: Tasks performed to ensure that Sabre is in compliance
with US Federal human-resources-related reporting statutes. The Tasks to be
performed will consist of:
A) Summary Plan Descriptions
S) Legal and regulatory compliance for all AMR pension (defined benefit
and defined contribution) annual reporting and disclosure, audits,
maintaining ERISA administration requirements, plan documentation,
research and analysis.
FIXED PRICE FOR 2000: $89,368
MONTHLY INVOICED AMOUNT: $ 7,447
BASIS FOR PRICE: The Tasks described above will be performed on a fixed-Price
basis. The Price is based on AA Human Resources' fully-allocated costs. The
fixed Price will be invoiced in 12 equal installments during the calendar year.
The annual Price of the Human Resources Service will include an allocation of
unmargined Private Payroll representing the oversight responsibility of the VP
Human Resources (equaling $2,364 for 2000), and will not vary with changes in
the Service Level of this Service.
TERMINATION: This Service will terminate effective December 31, 2000 by mutual
agreement.
5
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
6
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
7
SCHEDULE VII.
PAYROLL PRODUCTION SERVICE
DESCRIPTION OF SERVICE: Responsible for the calculation and distribution of
payroll checks and incentive compensation checks via SHARP. The Tasks to be
performed consist of:
A) Regular Checks--Processing of regular paychecks on a weekly, bi-weekly,
and semi-monthly basis for Domestic employees.
B) Off-Cycle Checks--Processing of off-cycle or supplemental paychecks for
adjustments.
C) Gross Pay Adjustments to be completed during the next
regular pay period.
D) Stop Payments for lost or stolen paychecks.
E) Bonuses and Special Payments--Processing of special payments that
require development changes.
F) Employee Receivables - The administration and collection of balances
from active employees for advances, uniforms, salary overpayments and
support.
G) Payroll Customer Service
H) Infrastructure maintenance and support
I) Oversight of the employment and salary verification process performed
by Xxxxx, Inc. - Completion of the wage and employment information
requested by lending institutions.
J) Special Projects performed by Payroll Customer Service and/or Payroll
Production that fall outside the normal scope of activities performed
for Sabre.
K) Special Projects performed by Payroll Infrastructure Team that fall
outside the normal scope of activities performed for Sabre.
ESTIMATED COST FOR 2000: [TEXT OMITTED-CONFIDENTIAL TREATMENT
REQUESTED]
FIXED TOTAL AMOUNT FOR 2000: TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
RATES DURING 2000:
Payroll Production (including SHARP): [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
Special Projects (Services J and K): [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
TERMINATION: These Services will be terminated under this Agreement effective
March 15, 2000, by mutual agreement, and incorporated into a separate services
contract effective on the same date. The same pricing will be integrated into
the new contract.
8
SCHEDULE VIII.
PAYROLL TAX ACCOUNTING SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by the AA Payroll Tax
Accounting Department will consist of:
A) Payroll Taxes--Charges for the collection, remittance and accounting
for payroll taxes and other moneys collected from employee paychecks.
The cost is driven by the number of payroll checks that are processed
in one calendar year.
B) Replying to all subpoenas and payroll related inquiries from legal and
law enforcement agencies.
C) Payroll Tax Reporting--Charges for reporting for Federal and State
withholding and unemployment taxes. The costs are driven by the number
of states worked.
D) Unemployment taxes--Xxxxx, Inc. is currently responsible for processing
all claims for unemployment compensation claims, the monitoring the
charges to Sabre unemployment accounts in each state, and the rates
assigned by the States.
E) Payroll Tax Year End--Charges for the year end production of annual
wage and tax statements. The cost is driven by the number of W-2s
issued in one calendar year, and the number of states worked.
F) W-2 Reissues--$10 Fee for current year W-2 copy issued 4/15 to 12/31.
$20 fee for past year W-2. Additional $5.00 expedite fee for fax of Fed
Ex delivery. All fees are paid by Sabre employees.
ESTIMATED COST FOR 2000: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
FIXED AMOUNT FOR 2000: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
RATES DURING 2000:
A) Payroll Tax Reporting [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
B) Unemployment Tax [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
C) Payroll Tax Year End [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
BASIS FOR PRICE: The Tasks to be performed are use-based. The annual cost to
provide the service is the estimated usage at the rates specified above.
TERMINATION: This Service will be terminated under the Agreement effective March
15, 2000, by mutual agreement, and incorporated into a separate contract
effective the same date. The same pricing will be integrated into the new
contract.
9
SCHEDULE IX.
PAYROLL: ACCOUNTING AND RECONCILIATION
DESCRIPTION OF SERVICE: The Tasks to be performed by the AA Payroll Department
for Accounting and Reconciliation will consist of:
A) General accounting, reconciliation and research of payroll account
transactions including 401(k) and PAC contributions.
1) Reconciling the SG related intercompany account (184206) within
thirty days of the month end and providing a copy of the
reconciliation to SG.
2) AA Payroll reserves the right to charge SG for reconciling an out
of balance in the SG FICO where such out of balance is not the result
of error on the part of AA Payroll.
B) Processing, reconciliation, and the generation of checks for payroll
related disbursements.
C) Domestic bank reconciliation of the payroll cash account, reporting,
and clearing of prepaid items for payroll, and payroll related
disbursements.
D) Relocation--Exchange of employee information with Cendant, recording
and payment of tax liability based on information provided by Cendant,
memo and expense document handling and interface application
maintenance.
E) Employee Receivables--The administration and collection of balances
from active employees for advances, uniforms, salary overpayments, and
check distribution special handling.
F) Garnishments - The deduction from the paychecks and the remittance to
the various authorities for garnishments imposed on SG employees.
G) Special projects that fall outside the normal scope of activities
performed for SG.
ESTIMATED COST FOR 2000: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
FIXED AMOUNT FOR 2000: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
RATES DURING 2000:
A) Relocation [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
B) Employee Receivables/Special Handling [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
C) Garnishments [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
D) Project Management/Special Projects [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
BASIS FOR PRICE: The Tasks to be performed are use-based. The annual cost to
provide the Service is the estimated usage at the hourly rate.
TERMINATION: These Services will be terminated under the Agreement effective
March 15, 2000, by mutual agreement, and incorporated into a separate contract
effective the same date.
10
SCHEDULE XI.
HUMAN RESOURCES ADMINISTRATION
DESCRIPTION OF SERVICES: AA Human Resources Department is responsible for
performing the following Services (and not merely Tasks) for Sabre. Certain
Services will be concluded during the year. The effective cancellation dates
are annotated and the stated Prices are only for the given period of time the
Service will be performed.
SERVICE DESCRIPTION FIXED PRICE
------- ----------- -----------
A) Managing Health and Welfare Benefits $332,345
B) Administering Retirement Benefits 241,239
C) SHARP incl. in Schedule VII.
D) Managing Workers Compensation and First Report 145,736
E) Supporting International Locations (Benefit Plan Renewal Administration) 32,599
F) Admin. Travel Policy (The billing for this service will be incorporated into [TEXT OMITTED -
the Travel Privileges Agreement effective March 15, 2000.) CONFIDENTIAL TREATMENT REQUESTED]*
G) Employee Resource Center 264,696
TOTAL FIXED PRICE FOR 2000: $1,016,615
MONTHLY INVOICED AMOUNT: $84,718
* not included in price, terminates in this agreement effective March 15, 2000
BASIS FOR PRICES: Each of the Services described above will be performed on a
fixed Price basis. The Price is based on AA Human Resources fully allocated
costs plus a margin. The fixed Price will be invoiced in 12 installments
during the calendar year.
TERMINATION: Services A, B, E, and G above will terminate effective December
31, 2000. With respect to Services A and B, AA will invoice Sabre hourly fees
for transition assistance and ad hoc services that may be required by Sabre.
For Service B, Sabre will pay AA's reasonable fees and costs (e.g.
governmental registration) associated with AA becoming a third party or
unaffiliated Service provider. Service C listed above will be terminated
under this Agreement effective March 15, 2000, by mutual agreement and
incorporated into a separate contract effective the same date. Service D
listed above will be effective until July 31, 2000 or the date Sabre
terminates its relationship with Specialty Risk Services, whichever first
occurs, but the Supplemental Agreement Regarding Workers' Compensation
(attached as Exhibit XI-A to this Schedule) will remain in effect, with
respect to the accounting and liability for certain workers' compensation
contingencies during the term these Services have been provided.
11
Service F listed above will be terminated under
this Agreement effective March 15, 2000, by mutual agreement and incorporated
into the Travel Privileges Agreement.
12
SCHEDULE XIV.
MEDICAL SERVICES
DESCRIPTION OF SERVICE: AA Medical Department is responsible for
performing the following Tasks for Sabre.
BASIC XXXXX 0000 RATE
----------- ---------
A) Employee Assistance Program Services (as required by the Federal
Drug-free Workplace Act)
B) Full Sabre Employee Access to all AMR Preventive Healthcare Programs
C) Family Medical Leave Act Application Processing and Program
Administration $ 1.21 per month per
D) Ergonomics Support Including Workstation Design and Other OSHA-Required TSG employee for all
Ergonomics Services basic tasks
E) ADA-Related Ergonomic Accommodations Work
F) Occupational Healthcare Litigation Support
G) Full Access to all AMR Travel Medicine Databases, and Applicable
Occupational Healthcare Record Keeping (but not OSHA Log Record
keeping).
TASKS 2000 RATE
----- ---------
A) New Hire Physicals--Non-Safety Sensitive $39
B) Clinic - Employee Visit 39
C) Employee Drug and Alcohol Testing 38
D) Other Services will be provided to TSG on a by-request basis (varies per Service)
ESTIMATED ANNUAL PRICING FOR 2000: $378,483
FIXED AMOUNT FOR 2000: $23,483
BASIS FOR PRICE: The Tasks to be performed are use-based. The cost for basic
Services will be $1.21 per month per Sabre employee, with employee count to
be based on Sabre's physical employee headcount on January 1, 1999 (for
January - June 2000 charges) and July 1, 1999 (for July - December 2000
charges). The monthly invoiced amount will be the product of the rates and
the volume of the Tasks performed. The Fixed Amount of the Medical Service is
the allocation of unmargined Private Payroll (equaling $23,483 for 2000)
representing the oversight responsibility of the Sr. VP Human Resources. The
Fixed Amount of the Medical Service will be invoiced in 12 equal
installments, and the Fixed Amount will not vary if any one or more of the
use-based Tasks are dropped. The annual cost to provide the Service is the
sum of the Fixed Amount and the usage at the rates specified above. The
estimate is based on an average of 1999 actual charges.
13
TERMINATION: This Service will terminate effective March 15, 2000 by mutual
agreement, and will be incorporated into a separate contract effective on the
same date.
14
SCHEDULE XVII.
TAX ADMINISTRATION SERVICES (OPTIONAL)
DESCRIPTION OF SERVICE: Tax Administration other than Tax
Administration (Mandatory) as described on Schedule I. Tax Administration
Services (Optional) includes the following tax Services:
A) Sales/use, excise, property and other transaction taxes
i) Tax return preparation and property tax rendition filing
ii) Tax payment processing
iii) Audits and contests
iv) Research and planning
v) Monitor legislation and regulations effecting the business
vi) Tax accounting
B) International
i) Manage tax return preparation and VAT collection calculations
ii) Foreign audits and contests
iii) Research and planning
iv) Monitor legislation and regulations effecting the business
v) Tax accounting
C) Systems Development
i) Develop design specifications for the new financial and logistics
systems to automate the tax functions
ii) Assisting in the developments of semi-automated accounting systems
iii) Maintenance and modifications of tax systems
TOTAL ESTIMATED COST FOR 2000: $182,300
FIXED AMOUNT FOR 2000: $16,760
HOURLY RATES DURING 2000:
Level 8 $115
Xxxxx 0 00
Xxxxx 0 00
Xxxxx 5 67
Xxxxx 0 00
Xxxxx 0 00
00
XXX ADMINISTRATION SERVICES (CONTINUED)
BASIS FOR PRICE: The Services to be performed are use-based. The monthly
invoiced amount will be the product of the AA Tax Department's hourly rate
and the billable hours required to perform the Tasks described above. The Tax
Department may Subcontract when necessary. All costs of Subcontracting will
be "passed-through" at AA cost to Sabre. The Fixed Amount of the Tax
Administration Service is the allocation of unmargined Private Payroll
representing the oversight responsibility of the VP Corporate Development &
Treasury. The Fixed Amount of the Tax Administration Service will be invoiced
in 12 equal installments, and the Fixed Amount will not vary if any one or
more of the use-based Services are dropped. The annual cost to provide each
of the Services is the sum of the Fixed Amount and the usage at the hourly
rate.
TERMINATION: These Services will terminate effective March 15, 2000, by
mutual agreement.
16
SCHEDULE XIX.
SABRE SUPPLY MANAGEMENT SERVICE (UPDATED)
DESCRIPTION OF SERVICE: The Sabre Supply Management Services that will
continue are as follows:
SERVICE PRICE
------- -----
C) National Contract Purchasing $39,916
FIXED PRICE FOR 2000: $96,417
FIXED AMOUNT FOR 2000: $56,501
MONTHLY INVOICED AMOUNT: $ 8,035
BASIS FOR PRICE: The Tasks described above will be performed on a fixed-Price
basis. The Price is based on Purchasing Sabre Supply Management's
fully-allocated costs plus a margin. The fixed Price will be invoiced in
installments in the above amounts during the calendar year. The annual Price of
the Sabre Supply Management Service will include an allocation of unmargined
Private Payroll representing the oversight responsibility of the VP Purchasing
(equaling $56,501 for 2000), and will not vary with changes in the Service Level
of this Service.
TERMINATION: This Service has terminated effective March 1, 2000, by mutual
agreement. AA will invoice Sabre for a pro-rated amount of the fees listed above
based on 2 months of Services being performed in the year 2000.
17
SCHEDULE XX.
CORPORATE SECURITY SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by AA Corporate Security
will consist of:
A) Investigations
B) Consultation & Representation
C) Ticket Loss Prevention
D) Audits & Tests
E) Instruction
F) Administration
FIXED PRICE FOR 2000: $404,103
MONTHLY INVOICED AMOUNT: $ 33,675
BASIS FOR PRICE: The Tasks described above will be performed on a fixed-Price
basis. The Price is based on AA Corporate Security's fully-allocated costs
plus a margin. The fixed Price will be invoiced in 12 equal installments
during the calendar year. The annual Price of the Corporate Security Service
will include an allocation of unmargined Private Payroll representing the
oversight responsibility of the Sr. VP Corporate Services (equaling $20,035
for 2000), and will not vary with changes in the Service Level of this
Service.
TERMINATION: This Service will terminate effective March 15, 2000, by mutual
agreement. AA will invoice Sabre for a pro-rated amount of the Fixed Price
for year 2000 based on 2-1/2 months of Services rendered.
18
SCHEDULE XXI.
SAFETY ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by AA Safety will
consist of:
A) Ground Safety
i) Employee Injury and Illness
ii) Ergonomic Program
iii) Safety Audits
iv) OSHA Administration
v) Industrial Hygiene Program
vi) Safety Training
B) Environmental Safety
i) Environmental Assessments
ii) Environmental Training
iii) Legal & Lobbying
iv) Environmental Regulations
v) Technical Assistance and Support
vi) Program and Professional Development Services
vii) Waste Minimization Programs
viii) Recycling Programs
FIXED PRICE FOR 2000: $55,308
MONTHLY INVOICED AMOUNT: $4,609
BASIS FOR PRICE: The Tasks described above will be performed on a fixed-Price
basis. The Price is based on AA Safety's fully-allocated costs plus a margin.
The fixed Price will be invoiced in 12 equal installments during the calendar
year.
TERMINATION: This Service will terminate effective March 15, 2000, by mutual
agreement. AA will invoice Sabre for a pro-rated amount of the Fixed Price
for year 2000 based on 2-1/2 months of Services rendered.
19
SCHEDULE XXII.
BUSINESS INSURANCE ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by the AA Treasury
Department will consist of:
A) Negotiation of Insurance Policy Terms and Premiums
B) Contract Review and Revisions
C) Claims Handling
D) Calculation for the allocation of insurance premiums to Sabre
Sabre may determine, in its discretion, whether to obtain its own business
insurance policies or to participate in one or more business insurance
policies obtained or arranged by AA or AMR. To the extent that Sabre elects
(by agreement with AA or AMR) to so participate, Sabre shall pay a portion of
the premiums for the insurance policies in which it participates based on an
allocation methodology agreed upon by the Parties for those policies.
FIXED PRICE FOR 2000: $83,581
MONTHLY INVOICED AMOUNT: $6,965
BASIS FOR PRICE: The Tasks described above will be performed on a fixed-Price
basis. The Price is based on the AA Treasury Department's fully-allocated
costs plus a margin. The fixed Price will be invoiced in 12 equal
installments during the calendar year. The annual Price of the Business
Insurance Administration Service will include an allocation of unmargined
Private Payroll representing the oversight responsibility of the VP Corporate
Development & Treasury (equaling $2,579 for 2000), and will not vary with
changes in the Service Level of this Service.
TERMINATION: This Service will terminate effective March 15, 2000, by mutual
agreement. AA will invoice Sabre for a pro-rated amount of the fees listed
above based on 2-1/2 months of Services being performed in year 2000.
20
SCHEDULE XXV.
MCLA DIVISION SERVICES
DESCRIPTION OF SERVICE: The Services (and not merely Tasks) to be performed
by AA MCLA Division from its Miami, Florida office will consist of the
following:
SERVICE 2000 PRICE
------- ----------
B) Accounting Functions performed for Sabre Inc. including its direct and
indirect subsidiaries, Sabre International, in the Caribbean and Latin
America (except in Ecuador and Nicaragua) served as of the Effective
Date of this contract which consists of: $54,000
i) Invoice distribution
ii) Processing of payments collected
iii) Tax forms prepared by local AMR Accounting Offices
iv) Statutory Invoicing procedures
C) Serve as Resident Agent for Service of Process and Attorney-in-Fact on
Powers of Attorney in the following countries: Pass-Through Expense
i) Costa Rica, Jamaica, Panama, Trinidad & Tobago, Barbados,
Grenada, Belize and Bermuda
FIXED PRICE FOR SERVICE B DURING 2000: $54,000
MONTHLY INVOICED AMOUNT FOR SERVICE B: $ 4,500
BASIS FOR PRICE: The Fixed Price is based on AA MCLA Division's
fully-allocated costs plus a margin. Pass-through expenses, for Services A
and C, represent costs incurred by AA to perform those Services to Sabre
(margin not applied). Pass-through expenses will be invoiced each month as
incurred. The Fixed Price will be invoiced in 12 equal installments during
the calendar year.
TERMINATION: AA and Sabre will terminate the Services listed above as soon
as practical, but in no event no later than September 1, 2000. The period
from March 15, 2000, through September 1, 2000, shall, in any event, be
considered a Transition Period during which AA will provide transition
assistance, including the full performance of the Services. However, the
Service will not be provided, nor will transition assistance be provided,
beyond September 1, 2000.
21
SCHEDULE XXVII.
AMR CHINA SERVICE
DESCRIPTION OF SERVICE: Tasks consist of supporting Sabre companies' business
development in the Peoples Republic of China from both the AA HDQ office and the
Beijing office.
ESTIMATED COST FOR 2000: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
MONTHLY INVOICED AMOUNT: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
ANNUAL FIXED AMOUNT FOR 2000: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
TERMINATION: This Service has terminated effective March 1, 2000, by mutual
agreement. AA will invoice Sabre commissions earned through that date and
only two monthly installments toward the Annual Fixed Amount for the year
2000.
22
SCHEDULE XXIX.
AUDIT SERVICE
DESCRIPTION OF SERVICE: Conducting internal audits and coordinating external
audit functions.
ESTIMATED COST FOR 2000: $0
HOURLY RATES DURING 2000:
IT Audits $100
Corporate Audits 73
BASIS FOR PRICE: The Tasks to be performed are use-based. The monthly
invoiced amount will be the product of the AA Audit's hourly rates and the
billable hours required to perform the Tasks described above. The AA Audit
Department may Subcontract when necessary. All costs of Subcontracting will
be "passed-through" at AA cost to Sabre.
TERMINATION: This Service has terminated effective March 1, 2000, by mutual
agreement.
23
SCHEDULE XXXI.
CORPORATE COMMUNICATIONS SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by AA Corporate
Communications will consist of:
A) Strategic Planning & Counseling
B) Media Relations
C) Marketing Communications
D) Issues Management
E) Project Management
F) Executive Support
G) Internal Communications
H) On-Line Communications
I) Financial Reporting Communications
J) Administration and Clerical Duties
K) Community Relations
ESTIMATED COST FOR 2000: $0
HOURLY RATES DURING 2000:
Management (level 6 and above) $97
Account Executive (level 3 - 5) 63
Jr. Account Executive (level 1 -2) 45
Support Staff 38
BASIS FOR PRICE: The Tasks to be performed are use-based. The monthly
invoiced Price will be the product of the AA Corporate Communication's
applicable hourly rates plus a margin and the billable hours required to
perform the Tasks described above.
TERMINATION: This Service has terminated effective March 1, 2000, by mutual
agreement.
24
SCHEDULE XXXII.
OTHER AIRLINE (OA) PERSONAL TRAVEL ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: AA International Affairs will provide
Administrative support for Sabre's personal travel on Other Airlines (OA).
Tasks include the following:
A) Secure of agreement with Other Airlines
i) Draft cover letters
ii) Revise AA ID agreement to include Sabre
iii) Negotiate new arrangements with each airline
iv) Conclude and execute revised agreements
B) Contract Maintenance
i) Ongoing negotiations
ii) Secure additional carriers
iii) Conflict resolution with OA's
iv) Contract preparation and filing
C) Administrative Support
i) Provide updates to Sabre reference material
ii) Respond to employee inquiries
iii) Prepare PNRs for ticketing
iv) Provide OA with pay-back passes on AA
FIXED PRICE FOR 2000: [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
MONTHLY INVOICED AMOUNT: [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
BASIS FOR PRICE: The Tasks described above will be performed on a fixed-Price
basis. The Price is based on AA International Affairs' fully-allocated costs
plus a margin. The fixed Price will be invoiced in 12 equal installments
during the calendar year. [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
TERMINATION: These Services will terminate effective March 15, 2000, by
mutual agreement. AA will invoice Sabre a pro-rated amount of the Fixed Price
for year 2000 based on 2-1/2 months of Services rendered.
25
SCHEDULE XXXIII.
OTHER AIRLINE (OA) BUSINESS TRAVEL ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: AA International Affairs will provide Administrative
support for Sabre's business travel on Other Airlines (OA). Tasks include the
following:
A) Secure Business Travel on Other Airlines
i) Negotiate arrangements with other airlines
ii) Provide other airlines travel on AA
B) Pass Bureau
i) Process Sabre pass requests
ii) Process OA business travel requests
C) Administrative Support
i) Provides updates to Sabre reference material
ii) Respond to employee inquires
iii) Prepare PNRs for ticketing
FIXED PRICE FOR 2000: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
INTERLINE TRAVEL EXPENSE FOR 2000: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
MONTHLY INVOICED AMOUNT: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
BASIS FOR PRICE: The OA Business Travel Administration Price is based on AA
International Department's fully-allocated costs plus a margin. The fixed Price
will be invoiced in 12 equal installments during the calendar year. The annual
Price of the OA Business Travel Administration Service will include an
allocation of unmargined Private Payroll representing the oversight
responsibility of the VP International Affairs[TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED], and will not vary with changes in the Service Level of
this Service. [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
TERMINATION: These Services will terminate effective March 15, 2000, by mutual
agreement. AA will invoice Sabre for pass-through expenses incurred through that
date and a prorated amount of the Fixed Price for year 2000 based on 2-1/2
months of Services rendered.
26
SCHEDULE XXXIV.
INTERNATIONAL DIVISION SERVICES
DESCRIPTION OF SERVICE: The Services will be performed by AA International
Division from the London, UK office. The Services will consist of the following
for the existing geographical areas served as of the Effective Date of the
Management Services Agreement (not including Madrid, Paris, Frankfurt, and
Stockholm). Personnel Services will only be conducted in Japan.
A) Accounting Functions
i) Disbursements and Refunds
ii) Payroll Tax
iii) C-Tax Claims and VAT
iv) Expat Management Accounting
v) Bank Reconciliations
vi) Credit Cards
vii) Sabre Leasing
B) Personnel (only for TYO)
i) Employee Relations
ii) Recruitment
iii) Career Development
iv) Compensation Standards
v) Benefits Administration
vi) Health and Safety Issues
C) EC Affairs
D) Purchasing
E) Pacific Sales
i) Interline Requests
ii) STIN Marketing
iii) STIN Related Issues with OALS
FIXED PRICE FOR 2000 $186,645
MONTHLY INVOICED AMOUNT: $ 15,554
BASIS FOR PRICE: The Services described above will be performed on a fixed-Price
basis. The Price is based on AA International Division's fully-allocated costs
plus a margin.
TERMINATION: AA and Sabre will terminate these Services as soon as
practical, but in no event no later than September 1, 2000. The period from
March 15, 2000, through September 1, 2000, shall, in any event, be
considered a Transition Period during which AA will provide transition
assistance, including the full performance of the Services. However, the
Service will not be provided, nor will transition assistance be provided,
beyond September 1, 2000.
27
SCHEDULE XXXV.
GENERAL SERVICES DEPARTMENT
DESCRIPTION OF SERVICE: The Services and not merely Tasks to be performed by
AA General Services will consist of:
SERVICES ANNUAL PRICING
-------- --------------
D) Mail Services Includes mailings by USPS below 1,000 pieces, excludes
boardmail.
E) USPS Postage for orders exceeding 1,000 pieces not covered by Mail
Services.
F) HDQ Telephone Directory
i.) Maintain AMR Roster
ii.) Maintain Corporate Mailing List
iii.) Maintain Company Regulations
G) Administration of contracts executed between AA and subcontractors for
Services not performed by AA employees
BUILDINGS SERVED: American Airlines is offering General Services to Sabre at the
following locations: CPI, CPII, CPIV, CPV, Learning Center, Trinity Building
(STIN), SRO, and Flight Academy/SOC
FIXED PRICE FOR 2000: $335,920
MONTHLY INVOICED AMOUNT: $ 27,993
BASIS FOR PRICE: The Services described above will be performed on a fixed Price
basis. The Price is based on AA General Services' fully-allocated costs. The
fixed Price will be invoiced in 12 equal installments during the calendar year.
The Prices for the Services have been totaled, instead of separately stated, per
agreement by the parties. Annual Pricing may escalate on January 1 of each year.
The percentage of escalation of the Annual Pricing may not exceed 4%.
TERMINATION: Services D, E, & G will terminate effective June 30, 2001, by
mutual agreement, except for boardmail which terminates effective March 15,
2000. Service F will terminate effective March 15, 2000. AA will invoice Sabre a
prorated amount of the Fixed Price for Year 2001 based on 6 months of Services
rendered for these services. Notwithstanding the foregoing termination date and
the procedures of Section 5.1 of the Agreement, Sabre may, at any time upon no
less than 180 days advance notice to AA, or 30 days with mutual consent,
exercise early termination of all of the above Services, subject to Sections
5.2, 5.3, 5.4, and 5.5 of the Agreement.
28
SCHEDULE XXXVI.
GENERAL SERVICES' PASS-THROUGH EXPENSES SERVICE
DESCRIPTION: AA General Services pays AA's Subcontractors for the following
Services (which are not merely Tasks). The list below represents a pass-through
of expenses belonging to Sabre. Tasks (B) and (C) will only be conducted for
Sabre's employees located in CP5 and CP2.
SERVICES CURRENTLY SUBCONTRACTED TO: ANNUAL PRICING
A) Employee Shuttle Service DFW/HDQ/DFW Renzenberger, Inc.
B) Sabre Employees in CP2/5 Paper Supply Tri-Plex Industries, Inc.
C) Sabre Employees in CP2/5 Copiers Xerox Business Services Division
D) Mailing Services Pitney Xxxxx Management Services, Inc. [TEXT
OMITTED -
CONFIDENTIAL
TREATMENT
REQUESTED]
Price for each Service is a pass-through of expenses of Sabre for that Service.
BUILDINGS SERVED: American Airlines is offering General Services, Tasks (A) and
(D) to Sabre at the following locations : CPI, CPII, CPIV, CPV, Learning Center,
Trinity Building (STIN), SRO, Flight Academy/SOC. For Tasks (B) and (C),
American Airlines will only provide Service to Sabre employees at CPII and CPV
and charges will be passed-through based on Sabre's percentage of occupancy in
the properties.
TOTAL PASS-THROUGH EXPENSES FOR 2000: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
BASIS FOR PRICE: Sabre's portion of expenses incurred by AA for General Services
related subcontracted Services. Service D is considered a Fixed Price Services
for the purposes of the Agreement. The Annual Pricing provided in Service D may
escalate on January 1 of each year. The percentage of escalation of the Annual
Pricing may not exceed 4%. Similar to Services B and C, AA will pay Sabre
Sabre's pro-rated cost of paper and copier maintenance as long as AA employees
occupy CP4 and Sabre owns the building.
TERMINATION: Service A listed above will terminate effective March 15, 2000, the
date of the disaffiliation. Services B and C listed above will be terminated
under this Agreement effective no later than September 15, 2000, by mutual
agreement, and incorporated into a separate contract effective the same date.
The same pricing and payment for Services B and C will be integrated into the
new contract. The new contract will terminate when Sabre employees no longer
occupy CP2 and CP5 and AA employees no longer occupy CP4 and Sabre owns the
building. Service D listed above will terminate effective June 30, 2001 by
mutual agreement. However, Service D, and
29
the costs associated with this Service, may be revised by mutual agreement no
later than March 15, 2000. Notwithstanding the foregoing termination date and
the procedures of Section 5.1 of the Agreement, Sabre may, at any time upon no
less than 180 days advance Notice to AA, or 30 days with mutual consent,
exercise early termination of Service D listed above subject to Sections 5.2,
5.3, 5.4, and 5.5 of the Agreement. For each of the foregoing Services, AA will
invoice Sabre the Pass-Through Expenses incurred through the effective date of
termination.
30
SCHEDULE XXXVIII.
PRINTING SERVICES
DESCRIPTION OF SERVICE: Printing Services consists of photocopying. The Service
is currently subcontracted to Pitney Xxxxx and is performed from the basement of
the STIN Building.
RATE FOR 2000: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
ESTIMATED COST FOR 2000: [TEXT OMITTED - CONFIDENTIAL TREATMENT
[REQUESTED]
BASIS FOR PRICE: The Services to be performed are use-based. The monthly
invoiced Price will be the product of the rate per impression applied to actual
consumption of impressions. The Annual Pricing for providing these Services may
escalate on January 1 of each year. The percentage of escalation of the Annual
Pricing may not exceed 4%.
TERMINATION: This Service will terminate effective June 30, 2001, upon mutual
agreement. Notwithstanding the foregoing termination date and the procedures of
Section 5.1 of the Agreement, Sabre may, at any time upon no less than 180 days
advance Notice to AA, or 30 days with mutual consent, exercise early termination
of this Optional Service, subject to Sections 5.2. 5.3, 5.4, and 5.5 of the
Agreement.
31
SCHEDULE XXXIX.
FACILITIES MAINTENANCE--CPIV
DESCRIPTION OF SERVICE: Responsible for the following Tasks to be performed
at CentrePort IV in Fort Worth, Texas:
A) Facilities Maintenance
i) Operation of CPIV Power Plant (Listed for billing
purposes only. This Task is covered by the Central Plant
Easement Agreement)
ESTIMATED TOTAL FOR 2000: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
ESTIMATED MONTHLY INVOICED AMOUNT: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
BASIS FOR PRICE: The Price is based on AA Facilities Maintenance Department's
fully-allocated costs. The Price will be invoiced in accordance with the
Easement Agreement.
TERMINATION: This Service will be terminated under this Agreement effective
March 15, 2000, by mutual agreement, and will be incorporated into a separate
contract effective on the same date.
32
SCHEDULE XLI.
FACILITIES MAINTENANCE PASS-THROUGH EXPENSE SERVICE
DESCRIPTION OF SERVICE: AA General Services pays AA's Subcontractors regarding
the Services (and not merely Tasks) described below, for Prices consisting only
of a pass-through of expenses (under the Service Subcontracts) belonging to
Sabre.
SERVICE CURRENTLY SUBCONTRACTED TO: ANNUAL PRICING
A) Hazardous Waste Removal Various Contractors [TEXT OMITTED -
CONFIDENTIAL
TREATMENT
REQUESTED]
O) Security Services Xxxxxx Security [TEXT OMITTED -
CONFIDENTIAL
TREATMENT
REQUESTED]
TOTAL PASS-THROUGH EXPENSES FOR 2000: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
MONTHLY INVOICED AMOUNT: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
BASIS FOR PRICE: Sabre's portion of expenses incurred by AA for General Services
related Subcontracted Services. The total Pass-Through Expense will be invoiced
in 12 equal installments. The Annual Pricing for Service O may escalate on
January 1 of each year. The percentage of escalation of the Annual Pricing may
not exceed 4%.
TERMINATION: Service A listed above will terminate effective March 15, 2000, by
mutual agreement. Service O listed above will terminate effective June 30, 2001,
by mutual agreement. Notwithstanding the foregoing termination date and the
procedures of Section 5.1 of the Agreement, Sabre may, at any time upon no less
than 180 days advance Notice to AA, terminate Service O as an Optional Service,
subject to Sections 5.2, 5.3, 5.4, and 5.5 of the Agreement. For each such
termination AA will invoice Sabre Pass-Through Expenses on a pro-rated basis or
as actually incurred through the effective date of termination, in accordance
with the method by which AA is invoiced by the respective Subcontractor.
33
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
34
SCHEDULE XLV.
AA CORPORATE APARTMENT SERVICE
DESCRIPTION OF SERVICE: Lodging provided at the AA Corporate Apartment in New
York City. The Service is not covered by the General Services Schedule in the
Management Services Agreement and will consist of:
A) Administration of the Corporate Apartment in New York City
i) Rent
ii) Utilities
iii) Communications
iv) Janitorial
v) Maintenance
FIXED PRICE FOR 2000: $34,023
MONTHLY INVOICED AMOUNT: $ 2,835
BASIS FOR PRICE: The Price is based on an AA's fully allocated cost of
maintaining the Apartment. Scheduling for use of the Corporate Apartment is
conducted by AA General Services. Sabre's occupancy is historically 32% of the
annual use of the Apartment. The fixed Price will be invoiced in 12 equal
installments during the calendar year.
TERMINATION: This Service will terminate effective March 15, 2000, by mutual
agreement. AA will invoice Sabre a pro-rated amount of the Fixed Price for year
2000 based on 2-1/2 months of Services rendered.
35
SCHEDULE XLVI.
ASSET CARD
DESCRIPTION OF SERVICE: The tasks to be performed by the AA Credit Card
Services Department will consist of:
A) Process all new applications, coordinate cancellations and activations
B) Enter new cardholder numbers into the AACCTS database
C) Work directly with GE Capital and employees in resolving collection
problems, including payroll deduction if necessary
D) Provide monthly AASSET card reports, and statistics in exactly the same
format as American
E) Coordinate with ATC to make requested report
changes that do not require programming dollars unless funded
by Sabre
F) Coordinate with programmers any changes that Sabre requests
G) Work with GE Capital to maintain the "good" working relationship
including tracking company credit limits, collections and customer
Service
AA Credit Card Services will NOT do the following:
A) Pay for ANY programming changes
B) Continue to administer program if Sabre requested changes result in
significant deviation from AA policies and procedures
FIXED PRICE FOR 2000: $33,456
MONTHLY INVOICED AMOUNT: $ 2,788
BASIS FOR PRICE: The Tasks described above will be performed on a fixed-Price
basis. The Price is based on AA Credit Card Service's marginal costs, primarily
salary and benefits. The fixed Price will be prorated and invoiced in equal
monthly installments (see above) during the calendar year.
TERMINATION: This Service will terminate effective March 15, 2000, by mutual
agreement. AA will invoice Sabre a pro-rated amount of the Fixed Price for year
2000 based on 2-1/2 months of Services rendered.
36
