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].*
AmericanAirlines
The SABRE Group, Inc.
Attention: Xx. Xxxxxxx X. Xxxxxx
P.O. Box 619615
MD 4204
X/XX Xxxxxxx, Xxxxx 00000-0000
The SABRE Group, Inc.
Attention: Xx. Xxxxxx Xxxxxxxxx
P.O. Box 619615
MD 4204
X/XX Xxxxxxx, Xxxxx 00000-0000
Re: Management Services Agreement, dated July 1, 1996, by
and between American Airlines, Inc. and The SABRE Group, Inc. (the
"Agreement")
Dear Sirs:
Pursuant to Section 2.2 of the above referenced Agreement, American
Airlines concurs with The SABRE Group, Inc.'s intention to renew the
Agreement for an additional successive one-year term beginning on July 1, 1999
and ending at 11:59 p.m. on June 30, 2000, unless terminated earlier by one or
both of the Parties in accordance with Article 13 of the Agreement.
Sincerely,
/S/ XXXXX XXXXXX
Xxxxx Xxxxxx
Managing Director
Financial Planning
cc: Xxxxxxx XxxXxxx
Xxxxxxx Xxxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxx
APPENDIX TO
THE MANAGEMENT SERVICES AGREEMENT
TABLE OF CONTENTS
Tax Administration Service (Mandatory) 4
Human Resources Government Reporting Service (Mandatory) 6
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
Payroll Production Service 9
Payroll Tax Accounting Service 10
Payroll: Accounting and Reconciliation 12
Disbursements Production Service 13
Human Resources Administration 14
Employee Relations Service 16
Medical Services 17
Corporate Finance Service 18
Tax Administration Services (Optional) 19
SABRE Supply Management Service 17
Corporate Security Service 18
Safety Administration Service 19
Business Insurance Administration Service 20
Corporate Affairs Service 21
MCLA Division Services 22
AMR China Service 23
Legal Services 24
Audit Service 26
Corporate Real Estate Service 27
Corporate Communications Service 29
Other Airline (OA) Personal Travel Administration Service 30
Other Airline (OA) Business Travel Administration Service 31
International Division Services 32
General Services Department 33
General Services' Pass-Through Expenses Service 34
Corporate Travel Desk Service 35
Printing Services 36
Facilities Maintenance-CPIV 37
Facilities Maintenance Pass-Through Expense Service 38
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
AA Corporate Apartment Service 40
AASSET Card 41
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 1999: $58,435
FIXED AMOUNT FOR 1999: 17,635
HOURLY Rates during 1999:
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 the SABRE Group. 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 Tasks are dropped. The annual cost to provide the service
is the sum of the Fixed Amount and the usage at the hourly rate.
SCHEDULE II.
HUMAN RESOURCES GOVERNMENT REPORTING SERVICE (MANDATORY)
DESCRIPTION OF SERVICE: Tasks performed to ensure that the SABRE
Group is in compliance with US Federal human-resources-related
reporting statutes. The Tasks to be performed will consist of:
A) Summary Plan Descriptions
S) Pension Annual Reporting and Disclosure, maintaining
ERISA administration requirements, plan documentation,
research and analysis, ADA accommodations, and
Affirmative Action/Department of Labor/EEO
administration
FIXED PRICE FOR 1999: $96,137
MONTHLY INVOICED AMOUNT DURING 1999: 8,011
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
$2,318 for 1999), and will not vary with changes in the Service
Level of this Service.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
SCHEDULE VII.
PAYROLL PRODUCTION SERVICE
DESCRIPTION OF SERVICE: Responsible for the calculation and
distribution of payroll checks and incentive compensation checks.
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 and Canadian
employees.
B) Remote Checks-Processing of remote or supplemental paychecks
for adjustments.
C) Gross Pay Adjustments to be completed during the next
regular pay period.
D) Garnishments.
E) Stop Payments for lost or stolen paychecks.
F) Bonuses and Special Payments-Processing of special payments
that require development changes.
G) Replying to all subpoenas and payroll related inquiries from
legal and law enforcement agencies.
ESTIMATED COST FOR 1999: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
FIXED AMOUNT FOR 1999:[TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
RATE DURING 1999:
Payroll Production tasks: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
BASIS FOR PRICE: The Tasks to be performed are use-based. The
monthly invoiced amount will be the product of the AA Payroll
Production's rates and the volume of products used. The Fixed
Amount of the Payroll Production Service is the allocation of
unmargined Private Payroll representing the oversight
responsibility of the VP & Controller. The Fixed Amount of the
Payroll Production 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.
SCHEDULE VIII.
PAYROLL TAX ACCOUNTING SERVICE (UPDATED)
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) Payroll Tax Reporting-Charges for reporting for Federal and
State withholding and unemployment taxes. The costs are driven
by the number of states worked.
C) Unemployment taxes-Services are currently subcontracted to
Xxxxx, Inc. Xxxxx, Inc. is responsible for processing all claims
for unemployment compensation claims, the monitoring the charges
to SABRE GROUP unemployment accounts in each state, and the rates
assigned by the States.
D) 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.
E) 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 GROUP
employees.
ESTIMATED COST FOR 1999: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
FIXED AMOUNT FOR 1999:[TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
RATES DURING 1999:
A)Payroll Tax [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
B)Payroll Tax Reporting [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
C)Unemployment Tax [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
D)Payroll Tax Year End [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
BASIS FOR PRICE: The Tasks to be performed are use-based. The
price is based on AA Payroll Tax Accounting's fully-allocated
costs plus a margin. The Fixed Amount portion of the Payroll Tax
Accounting Service is the allocation of unmargined Private
Payroll representing the oversight responsibility of the VP &
Controller. The Fixed Amount of the Payroll Tax Accounting
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.
SCHEDULE IX.
PAYROLL: ACCOUNTING AND RECONCILIATION (UPDATED)
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 TSG related intercompany account within
thirty days of the month end and providing a copy of the reconciliation
to TSG.
2) AA Payroll reserves the right to charge TSG for
reconciling an out of balance in the TSG 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) Bank reconciliations, 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 libility based on information
provided by Cendant, memo and expense document handling and
interface application maintenance.
E) Employment Receivables-The administration and collection of
balances from active employees for advances, uniforms, and salary
overpayments, check distribution special handling.
F) Employment and Salary Verification - Completion of the wage
and employment information requested by lending institutions.
ESTIMATED COST FOR 1999: $142,288
RATES DURING 1999:
A-C) General Accounting and Reconciliations $9,180 per month
D) Relocation $60.00 per unit
E) Employee Receivables/Special Handling $1.38 per unit
Project Management/Special Projects $37.50 per hour
FIXED AMOUNT FOR 1999: $185
BASIS FOR PRICE: The Tasks to be performed are use-based. The
monthly invoiced amount will be the product of the AA Payroll
Customer Service's hourly rate and the number of hours to perform
the Tasks. The Fixed Amount of the Payroll Customer Service is
the allocation of unmargined Private Payroll representing the
oversight responsibility of the VP & Controller. The Fixed
Amount of the Payroll Customer 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 hourly rate.
SCHEDULE X.
DISBURSEMENTS PRODUCTION SERVICE
DESCRIPTION OF SERVICE: The Task to be performed by AA Corporate
Disbursements will consist of:
A) Usage of EDI Mailbox and translator, Federal Express
COST FOR 1999: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
RATE DURING 1999:
A)EDI Mailbox usage and translator Federal Express: [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
BASIS FOR PRICE: The Service described above will be performed
on a fixed-price basis. The fixed-price will be invoiced in
12 equal installments during the calendar year. The annual
price of the Disbursements Productions Service will include an
allocation of unmargined Private Payroll representing the
oversight responsibility of the VP & Controller [TEXT OMITTED
- CONFIDENTIAL TREATMENT REQUESTED].
SCHEDULE XI
HUMAN RESOURCES ADMINISTRATION
DESCRIPTION OF SERVICES: AA Human Resources Department is
responsible for performing the following Services (and not merely
Tasks) for the SABRE Group. Service BB (Evaluating Employees and
their Performance/Progress) will expire on March 1, 1999; its
fixed price reflects only two months of service.
Service DescriptionFixed Price
A) Providing and Managing Health and Welfare Benefits$468,438
E) Support Staff Recruitment 58,607
G) Managing Employee Information and Documentation 965
(excluding ad-hoc queries after 3/1/98)
O) Providing Retirement Benefits 114,882
R) sHaRp TBD
S) Assuring AMR is in compliance 46,960
T) Providing and Managing Workers Compensation 66,739
U) Supporting International Locations (Benefit
Plan Renewal Administration) 18,176
W) Facilitating Management Career Moves 67,379
AA) Admin. Travel Policy (Listed for Admin. billing
purposes only. No additional charge for this
service is imposed in the Travel Privileges
Agreement) 29,925
BB) Evaluating Employees and their Performance/Progress 5,534
EE) Relocating Employees 31,556
FF) Admin. and Cost Control 42,696
GG) Employee Resource Center 158,235
TOTAL FIXED PRICE FOR 1999: $1,163,164
MONTHLY INVOICED AMOUNT (JANUARY 1 - FEBRUARY 28):99,236
MONTHLY INVOICED AMOUNT (MARCH 1- DECEMBER 31): 96,469
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.
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
$53,074 for 1999), and will not vary with the discontinuance of
any one or more of the Services (unless all of the Services in
this Schedule are discontinued).
SCHEDULE XII.
EMPLOYEE RELATIONS SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by the AA
Employee Relations Department will consist of:
A) Negotiation of TWU Contracts
B) Labor Contract Administration
C) Formulate and Implement Labor Policy
D) Administration of Grievance Process
E) Representation of AMR Interests in Arbitration Proceedings
F) Coordination of AMR Policy toward Labor Law Legislation
G) Strategic Communication of Labor Initiatives
FIXED PRICE FOR 1999: $12,915
MONTHLY INVOICED AMOUNT DURING 1999: 1,076
BASIS FOR PRICE: The Task described above will be performed on
a fixed-price basis. The price is based on AA Employee
Relations' fully-allocated costs plus a margin. The fixed price
will be invoiced in 12 equal installments during the calendar
year.
SCHEDULE XIV.
MEDICAL SERVICES
DESCRIPTION OF SERVICE: AA Medical Department is responsible for
performing the following Tasks for the SABRE Group.
Basic Tasks 1999 Rate
A) Employee Assistance Program Services
(as required by the Federal Drugfree 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
TSG employee
for all
basic tasks
D) Ergonomics Support Including Workstation Design and Other
OSHA-Required 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 1999 Rate
A) New Hire Physicals-Non-Safety Sensitive $34
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 COST FOR 1999: $345,000
FIXED AMOUNT FOR 1999: 23,023
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 1-1-99 (for Jan-Jun 1999 charges) and
7-1-99 (for Jul-Dec 1999 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 $23,023 for
1999) 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 1998 actual charges.
SCHEDULE XVI.
CORPORATE FINANCE SERVICE (UPDATED)
DESCRIPTION OF SERVICE: The Tasks to be performed by the AA
Treasury Department until March 1, 1999 will consist of:
A) Coordination of Financing Decisions
B) Risk Assessment and Management
C) Financing Administration
FIXED PRICE FOR 1999: $5,256
MONTHLY INVOICED AMOUNT DURING 1999: 2,628
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 Corporate Finance Service
will include an allocation of unmargined Private Payroll
representing the oversight responsibility of the VP Corporate
Development & Treasury (equaling $418 for Jan - Feb 1999), and
will not vary with changes in the Service Level of this Service.
SCHEDULE XVII.
TAX ADMINISTRATION SERVICES (OPTIONAL) (UPDATED)
DESCRIPTION OF SERVICE: Tax Administration other than Tax
Administration (Mandatory) as described on Schedule I. Tax
Administration Services (Optional) includes the following tax
Services:
Services 1999 Estimate
A) Sales/use, excise, property and
other transaction taxes $99,185
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 18,193
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 14,555
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 1999: $131,971
FIXED AMOUNT FOR 1999: 16,431
HOURLY RATES DURING 1999:
Level 8 $115
Xxxxx 0 00
Xxxxx 0 00
Xxxxx 5 67
Level 4 57
Level 3 46
TAX 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 the SABRE Group. 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.
SCHEDULE XIX.
SABRE SUPPLY MANAGEMENT SERVICE
DESCRIPTION OF SERVICE: The SABRE Supply Management Services
that will continue are as follows:
Service Price
A) AAPICS $52,244
B) NATCOS $26,298
C) National Contract Purchasing $39,916
D) Diversified Supplier Program $31,206
FIXED PRICE FOR 1999: $205,057
MONTHLY INVOICED AMOUNT DURING 1999: 17,088
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 12 equal installments 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 $55,393 for 1999), and will not vary with changes in
the Service Level of this Service.
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 1999: $255,434
MONTHLY INVOICED AMOUNT DURING 1999: 21,286
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 $19,642 for 1999), and will not vary with changes in
the Service Level of this Service.
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 1999: $16,260
MONTHLY INVOICED AMOUNT DURING 1999: 1,355
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.
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 the
SABRE Group
SABRE Group 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 Group elects (by agreement with AA
or AMR) to so participate, SABRE Group shall pay a portion of the
premiums for the insurance policies in which it participates
based on an allocation methodology agree upon by the Parties for
those policies.
FIXED PRICE FOR 1999: $133,282
MONTHLY INVOICED AMOUNT DURING 1999: 11,107
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 $2,528 for 1999),
and will not vary with changes in the Service Level of this
Service.
SCHEDULE XXIV.
CORPORATE AFFAIRS SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by AA
Corporate Affairs until March 1, 1999 will consist of the
coordination of:
A) Community Relations
B) Federal and State Affairs
C) Airport Affairs
D) Administration
E) Coordination with Government Affairs
FIXED PRICE FOR JAN - FEB 1999: $9,834
MONTHLY INVOICED FROM JAN - FEB 1999: 4,917
BASIS FOR PRICE: The Tasks described above will be performed
on a fixed-price basis. The price is based on AA Corporate
Affairs' fully-allocated costs plus a margin. The annual Price of
the Corporate Affairs Service will include an allocation of
unmargined Private Payroll representing the oversight
responsibility of the VP Corporate Affairs (equaling $9,232 for
Jan - Feb 1999).
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 1999 PRICE
A) Charge to the SABRE Group all expenses related
to SG employees remaining on the AA payroll in
Latin America and the Caribbean, including
transferred employees in Mexico and Peru. Pass-through Expense
B) Accounting Functions performed for The SABRE
Group , 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: $54,004
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 1999: $54,004
MONTHLY INVOICED AMOUNT FOR SERVICE B DURING 1999: 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 the SABRE Group (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.
SCHEDULE XXVII.
AMR CHINA SERVICE
DESCRIPTION OF SERVICE: Tasks consist of supporting the SABRE
GROUP companies' business development in the Peoples Republic of
China from both the AA HDQ office and the Beijing office.
ESTIMATED COST FOR 1999: $125,000
ESTIMATED MONTHLY COST FOR 1999: 10,417
ANNUAL FIXED AMOUNT FOR 1999: 125,000
BASIS FOR PRICE: The Tasks to be performed are commission-
based. The monthly invoiced price will determined based on the
following commission schedule:
5% on license fees,
2% on consulting fees, and
2% on maintenance fees.
The fixed based portion ($100,000 for STIN and $25,000 for STS)
will be invoiced in 12 equal installments throughout the calendar
year.
SCHEDULE XXVIII.
LEGAL SERVICES
DESCRIPTION OF SERVICE: Tasks will consist of the rendering
professional legal services for matters in the following areas:
A) Labor and Employment Law
i) Labor Litigation
ii) Equal Employment Opportunity Commission Claims (EEOC)
iii) Department of Human Rights Claims (DHR)
iv) Railway Labor Act Issues and Claims
v) OSHA Issues and Claims
vi) Environmental Issues and Claims
vii) Immigration Filings
viii)Garnishments
ix) ERISA Issues
B) Litigation
i) Commercial Litigation
ii) Antitrust Litigation
iii) EC Regulation
iv) CRS Issues
v) Federal Aviation Administration Issues and Claims (FAA)
vi) Subpoenas
C) Corporate Law
i) Contract Review and Preparation
ii) Mergers and Acquisitions
iii) Corporate Registrations
iv) Corporate and Securities law compliance
v) Real Estate
vi) Bankruptcy
vii) Intellectual Properties
viii)Customs
D) Corporate Finance
i) Public Financing
ii) Private Financing
iii) SEC Regulations
E) Regulatory Matters
i) General Governmental Matters
ii) DOT Route Proceedings
iii) DOT Regulatory Matters
LEGAL SERVICES (CONTINUED)
ESTIMATED COST FOR 1999: $192,000
ESTIMATED MONTHLY COST FOR 1999: 16,000
HOURLY RATES DURING 1999:
Associate General Counsel$163
Sr. Attorney 140
Attorney 132
Paralegal 72
FIXED AMOUNT FOR 1999: 55,393
BASIS FOR PRICE: The Tasks to be performed are use-based. The
monthly invoiced amount will be the product of the AA Legal
Department's hourly rate and the billable hours required to
perform the Tasks described above. The AA Legal Department may
Subcontract when necessary. All costs of Subcontracting will be
"passed-through" at AA cost to the SABRE Group. The Fixed Amount
of the Legal Service is the allocation of unmargined Private
Payroll representing the oversight responsibility of the VP
Corporate Secretary. The Fixed Amount of the Legal 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 applicable cost to provide the Service is
the sum of the Fixed Amount and the usage at the hourly rates.
SCHEDULE XXIX.
AUDIT SERVICE
DESCRIPTION OF SERVICE: Conducting internal audits and
coordinating external audit functions.
ESTIMATED COST FOR 1999: $0
ESTIMATED MONTHLY COST FOR 1999: 0
HOURLY RATES DURING 1999:
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 the SABRE Group.
SCHEDULE XXX
CORPORATE REAL ESTATE SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by AA
Corporate Real Estate will consist of the following listed below
for all international areas and the United States, except
Dallas/Fort Worth, Texas and Tulsa, Oklahoma areas. The Tasks to
be performed by AA Corporate Real Estate will consist of the
following listed below in the Dallas/Fort Worth, Texas and Tulsa
Oklahoma areas for any projects in process as of August 31, 1997
until the projects are completed.
A) Facilities Support
i) Space Programming Studies
ii) Manage Design Professionals
iii) Cost Estimations/Refinement for new Projects
iv) Evaluate Requests for Proposals (RFPs)
v) Value Engineering
vi) Project Feasibility Studies
vii) Bidding and Contract Negotiations
viii)Project Management
ix) Contract Audit Control
x) Project Close Out
xi) HDQ Space Planning
B) Properties Support
i) Rate and Change Evaluation
ii) Tenant and Landlord Liaison
iii) Negotiation of New Leases
iv) Negotiation of Additional Services under Leases
v) Property Management
vi) Real Estate Market Analysis
C) Planning and Technical Support
i) Environmental Engineering
ii) Energy Audits
iii) Automation Environment
iv) Pre-Conditioned Air/Ground Power
v) Material Handling Systems
ESTIMATED COST FOR 1999: $184,158
ESTIMATE OF MONTHLY COST FOR 1999: 15,347
HOURLY RATE DURING 1999: 90
FIXED AMOUNT FOR 1999: 12,727
CORPORATE REAL ESTATE SERVICE (CONTINUED)
BASIS FOR PRICE: The Tasks to be performed are use-based. The
monthly invoiced amount will be the product of the AA Corporate
Real Estate's hourly rate plus a margin and the billable hours
required to perform the Tasks described above. The Fixed Amount
of the Corporate Real Estate Service is the allocation of
unmargined Private Payroll representing the oversight
responsibility of the Sr. VP Corporate Services. The Fixed
Amount of the Corporate Real Estate 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 the Service is the sum of the Fixed Amount and
the usage at the hourly rate.
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 1999: $0
ESTIMATE OF MONTHLY COST FOR 1999: 0
HOURLY RATES DURING 1999:
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.
SCHEDULE XXXII.
OTHER AIRLINE (OA) PERSONAL TRAVEL ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: AA International Affairs will provide
Administrative support for the SABRE Group'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 the SABRE Group
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 OAs
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 1999: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
MONTHLY INVOICED AMOUNT DURING 1999: [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. The annual price of the OA Personal 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.
SCHEDULE XXXIII.
OTHER AIRLINE (OA) BUSINESS TRAVEL ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: AA International Affairs will provide
Administrative support for the SABRE Group'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 Group pass requests
ii) Process OA business travel requests
C) Administrative Support
i) Provides updates to the SABRE Group reference material
ii) Respond to employee inquires
iii) Prepare PNRs for ticketing
FIXED PRICE FOR 1999: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
INTERLINE TRAVEL EXPENSE FOR 1999: [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].
SCHEDULE XXXIV.
INTERNATIONAL DIVISION SERVICES (REVISED)
DESCRIPTION OF SERVICE: The Services to be performed by AA
International Division from the London, UK office. Service (B)
Personnel (for all locations except Japan) will be discontinued
as of September 1, 1999. Human Resources support for Paris will
be discontinued on March 1, 1999. Human Resources support in
Frankfurt will be discontinued on May 1, 1999. 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):
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
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
MONTHLY PRICE FOR JAN - FEB 1999: 53,997
MONTHLY PRICE FOR MAR - DEC 1999: 46,759
MONTHLY PRICE FOR MAY - SEP 1999: 34,725
MONTHLY PRICE FOR SEP - DEC 1999: 20,394
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.
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
D)Mail Services Includes mailings by USPS below 1,000 pieces.
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 Lists
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 GROUP at the following locations: CPI, CPII, CPIV, CPV,
Learning Center, STIN, SRO, and Flight Academy/SOC
TOTAL FIXED PRICE FOR 1999: $485,502
MONTHLY INVOICED AMOUNT DURING 1999: 40,459
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 plus a margin. 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.
SCHEDULE XXXVI.
GENERAL SERVICES' PASS-THROUGH EXPENSES SERVICE (UPDATED)
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 the
SABRE Group.
Services Currently Subcontracted to:
A) Employee Shuttle Service DFW/HDQ/DFW Renzenberger, Inc.
B) Paper Supplier Tri-Plex Industries, Inc.
C) Installation and management of Copiers Xerox Business Services Division
D) Printing and Mailing Services Pitney Xxxxx Management
Services, Inc.
Price for each Service is a pass-through of expenses of the SABRE
Group for that Service.
BUILDINGS SERVED: American Airlines is offering General
Services to SABRE GROUP at the following locations until
September 1, 1999: CPI, CPII, CPIV, CPV, Learning Center,
STIN, SRO, Flight Academy/SOC. After September 1, 1999,
American Airlines will reduce its support of Tasks (B) and (C)
and will only provide service to SABRE GROUP for these Tasks
at CPII and CPV. Tasks (A) and (D) will be unaffected.
TOTAL PASS-THROUGH EXPENSES FOR 1999:[TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED]
MONTHLY INVOICED AMOUNT
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
BASIS FOR PRICE: The SABRE Group portion of expenses incurred
by AA for General Services-related Subcontracted Services.
Tasks (A) and (D) are considered Fixed Price Services for the
purposes of the Agreement. The prices for Tasks (B) and (C) are
estimates based on current real-time charges. The prices for the
Services have been totaled, instead of stated separately, per
agreement by the Parties.
SCHEDULE XXXVII.
CORPORATE TRAVEL DESK SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed by the AA
Flight Department will consist of the following except for Task
(B) which will be discontinued on March 1, 1999:
A) Booking of Hotels for Business Travel at Interline Rates
B) Booking of Rental Vehicles for Business Travel at Interline
Rates
FIXED PRICE FOR JAN - FEB 1999: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
Monthly Invoiced Amount Jan - Feb: [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED]
FIXED PRICE FOR MAR - DEC 1999: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
Monthly Invoiced Amount Mar - Dec: [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 Flight
Department's fully-allocated costs plus a margin. The fixed
price will be invoiced in 2 equal installments during January
and February and then 10 equal installments for the remainder
of the calendar year. The Fixed Amount of the Corporate
Travel Desk 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.
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 1999: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
ESTIMATED COST FOR 1999: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
BASIS FOR PRICE: The Tasks 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.
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 MONTHLY COST FOR 1999: [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED]
BASIS FOR PRICE: The price is based on AA Facilities Maintenance
Department's fully-allocated costs. [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED].
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 the SABRE
Group.
Service Currently Subcontracted to:
A) Hazardous Waste Removal Various Contractors
O) Security Services ABM Security Services
TOTAL PASS-THROUGH EXPENSES FOR 1999:$ 337,335
BASIS FOR PRICE: The SABRE Group portion of expenses incurred
by AA for General Services-related Subcontracted Services. The
Service is a Fixed Price Service for the purposes of the
Agreement. The total Pass-Through Expense will be invoiced in 12
equal installments.
SCHEDULE XLIV.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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 1999: $33,356
MONTHLY INVOICED AMOUNT DURING 1999: 2,780
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. The
SABRE Group'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.
SCHEDULE XLVI.
AASSET 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 Group
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 1999: [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
MONTHLY INVOICED AMOUNT DURING 1999: [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 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.
