Exhibit 10
ENNIS BUSINESS FORMS, INC.
UPS GROUND, AIR AND SONICAIR INCENTIVE PROGRAM
CARRIER AGREEMENT
Ennis Business Forms, Inc. (Customer) and United Parcel Service,
Inc., an Ohio Corporation, (UPS) have entered into the following
Agreement.
UPS is authorized to provide carrier service described herein in
accordance with the terms and conditions contained in the Guide
to UPS Services and Tariff in effect at the time of shipping and
as outlined in Attachments A through F-1. Customer agrees that
the terms of this Agreement include the understanding that the
Agreement is based on the distinct needs of the Customer and
that UPS will be the Customer's preferred carrier of choice.
Attachments Description
----------- -----------
A Terms & Conditions
B Shipper List
C Domestic Incentive Program
D Ground & Air Discounts
E Specialized Incentive Program
F & F-1 SonicAir Incentive Program
This Agreement will remain in effect for a period of two (2)
years and three (3) months from the Effective Date below except
as otherwise provided.
This Agreement shall be considered withdrawn if not signed by
both parties on or before February 23, 2003.
(Customer) ENNIS BUSINESS (Carrier) UNITED PARCEL SERVICE,
FORMS, INC. INC.
By: /s/ Harve Cathey By: /s/ Michael L. Boring
--------------------- ------------------------
(An Authorized (An Authorized
Representative) Representative)
Title: VP - Finance Title: National Accounts Manager
Address:1510 N. Hampton, Address:4240 International Pkwy.
Suite 300 Carrollton, Texas 75007
DeSoto, TX 75115
Date Signed: 2-20-03 Date Signed: 2-24-03
Effective Date: 3-10-03
ATTACHMENT A
TERMS & CONDITIONS
1. This Agreement applies to eligible packages tendered by the
Customer at all U.S. 48 states origin shipping locations as
listed on Attachment B (Shipping Locations), to destinations
listed in the Guide to UPS Services. Shipping Locations may
be added or deleted from this Agreement only by mutual
written consent. To add a location, Customer must notify
their dedicated UPS National Account Manager seven business
days in advance. In the absence of notification, custom or
incented rates shall not be applicable.
2. Customer agrees to provide UPS daily with the shipping record
documentation as specified by UPS, including gross charges
for packages shipped. If Customer cannot supply UPS daily
with the gross package charges, charges will be based on a
calculation of total volume tendered (less service offerings
subject to incentive, e.g. Hundredweight) multiplied by
Customer's average package charge, as determined by UPS.
3. UPS will provide the following services to Customer during
the life of this Agreement:
Assistance of:
(bullet) Dedicated National Accounts Manager
(bullet) Dedicated Customer Service telephone contact
(bullet) Dedicated UPS National Account Executive(s)
(bullet) Business activity reports
4. UPS reserves the right to charge the Customer a minimum of
$50.00 per week in addition to any other charges due to UPS,
if the Customer does not tender to UPS a minimum of fifty
packages per week. This fee may not apply provided that the
Customer notifies UPS of closings due to vacations and
holidays.
5. Customer agrees to comply with the letter weight restriction
required under the Private Express Statute in its UPS Next
Day Air Saver, UPS 2nd Day Air A.M., and UPS 2nd Day Air
letters.
6. The rates, terms and conditions of this Agreement do not
apply to any shipper number used for drop shipping.
7. UPS and Customer agree that the rates, terms and conditions
of this Agreement may not be extended or resold to any third
party without prior written consent of UPS.
8. Customer agrees to supply UPS with electronic package level
detail in a form acceptable to UPS. Package level detail
includes, but is not limited to, consignee's full name,
complete delivery address, package weight and zone, and
package labeling that contains Maxicode, barcoded Zipcode and
appropriate service level icon, for every package tendered to
UPS. All shipping locations will be equipped with an
automated UPS compatible shipping system.
9. With the exception of UPS's right to assign some or all of
this Agreement to its affiliates or subsidiaries, this
Agreement and the Customer's rights and obligations hereunder
are not assignable or transferable. Any attempted assignment
or transfer hereof without the prior written consent of UPS
shall be void and without force or effect.
10. If a dispute arises out of or relates to this contract, or
the breach thereof, and if said dispute cannot be settled
through direct discussions, the parties agree to first
endeavor to settle the dispute in an amicable manner by
mediation administered by the American Arbitration
Association under its Commercial Mediation Rules, before
resorting to arbitration. If mediation is unsuccessful after
thirty (30) days, any unresolved controversy or claim arising
out of or relating to this contract, or breach thereof, shall
be settled by arbitration administered by the American
Arbitration Association in accordance with its Commercial
Arbitration Rules, and judgment upon the Award rendered by
the arbitrator(s) may be entered in any court having
jurisdiction thereof. All mediation and arbitration shall be
held in Atlanta, GA.
11. This Agreement, its Attachments, the Guide to UPS Services
and the UPS Tariff in effect at the time of shipping, contain
all the terms and conditions agreed to by the parties and
supersede any prior agreements between the parties with
respect to UPS transportation services. The UPS Service
Guide and Tariff are maintained at local UPS offices and on
the Web at http://www.ups.com.
12. Customer and UPS agree to maintain the confidentiality of
this Agreement, both its existence and the conditions, unless
disclosure is required by law.
13. This contract and its provisions will be governed by and
interpreted in accordance with the laws of the State of
New York, without regard to its conflicts of law provisions.
14. This Agreement may be terminated at any time by either party
by written notice to the other at the address below given at
least thirty (30) days prior to any termination date.
15. At the termination date of this Agreement, UPS may extend,
at its option, and continue this Agreement on a month to
month basis, subject to any or all rate increases in effect
and thereafter.
16. UPS, at its option, has the right to accept, decline or
adjust incentives for special shipments that substantially
exceed the average weekly volume by location tendered by
the customer during the prior twelve months. In addition,
UPS may accept special shipments subject to a waiver of the
UPS Service Guarantee.
17. Except as otherwise provided herein, all notices, requests,
demands or other communications required or permitted to
be given or made under this Agreement shall be in writing,
submitted to the parties' addresses set forth below and
given by personal service, (in which case notice shall be
deemed effective on the date it is delivered); UPS Next Day
Air (registered trademark) (in which case notice shall be
deemed effective one Business Day after dispatch); or United
States certified mail, return receipt requested, postage
prepaid, (in which case notice shall be deemed effective on
the third Business Day following its placement in the mail).
UPS and Customer may change, from time to time, their named
respective representatives and addresses for the purpose of
this section by written notice each to the other as herein
provided.
Ennis Attachment B
Shipper # Account Address City ST Zip +4
*
* Confidential information omitted and filed separately with the
SEC.
ATTACHMENT C
DOMESTIC INCENTIVE PROGRAM
1. The discount amounts below are contingent upon the revenue
tendered to UPS by the Customer and upon the Customer
maintaining its current shipping characteristics under this
Agreement.
Customer further agrees that discounts do not apply to
Additional Charges which are defined as those additional and
accessorial charges set forth in the UPS Rate Charts in effect
at the time of shipping, which are subject to change at any
time.
2. UPS will calculate the discount for all locations once per
week and will bill the Customer net after discount. The
incentive applied each week will be calculated using the
average weekly revenue from the previous 13 weeks, once 13
weeks have accumulated.
3. With respect to Prepaid Outbound and Freight Collect
Commercial Ground packages, UPS agrees to grant the Customer
the following discounts from the published UPS Commercial
Ground Service Rate Chart in effect at the time of shipping.
The discounts do not apply to Third Party shipments.
*
An additional discount from the published UPS Commercial
Ground Service Rates in effect at the time of shipping may
apply based on the revenue tier on Attachment D.
The minimum net package charge for a UPS Commercial Ground
package will be the same as the rate for a one pound zone two
package published in the UPS Commercial Ground Service Rate
Chart in effect at the time of shipping.
4. With respect to UPS Prepaid and Freight Collect Ground
Hundredweight, UPS agrees to transport such shipments as
Customer may tender to UPS and to provide Customer such
transportation and additional services in accordance with the
rules of UPS Hundredweight Service in effect at the time of
shipping. The discounts do not apply to Third Party
shipments.
UPS agrees to transport UPS Ground Hundredweight packages
tendered by Customer and apply UPS Hundredweight pricing when
the actual aggregate weight of all ground packages in each
shipment delivered to one Consignee at one location on the
same day from the same shipper is 200 pounds or more.
UPS agrees to grant the Customer the following discounts from
the Tier 02 UPS Hundredweight Service Rate Chart in effect at
the time of shipping. Customer further agrees that no
discount applies to Additional Charges.
* Confidential information omitted and filed separately with the
SEC.
*
A minimum charge for a UPS Ground Hundredweight Service
shipment will be the greater of either a charge based on 25
pounds per package or the UPS Hundredweight published rate
minimum for applicable tier in effect at the time of shipping.
5. With respect to Prepaid and Freight Collect Air letters and
packages, UPS agrees to grant the Customer the following
discounts from the UPS published Air Service Rates in effect
at the time of shipping. The discounts do not apply to Third
Party shipments.
Cell by Cell Incentive Structure for Each Package
*
* Confidential information omitted and filed separately with the
SEC.
An additional discount from the published UPS Air Rates in
effect at the time of shipping may apply based on the revenue
tier on Attachment D.
In consideration of the above incentive matrix on Attachment
D, a minimum net package charge equal to * will apply
to all UPS Second Day Air Commercial packages.
In consideration of the above incentive matrix on Attachment
D, a minimum net package charge equal to * will apply to
all UPS Second Day Air Residential packages.
In consideration of the above incentive matrix on Attachment
D, a minimum net package charge equal to * will apply to
all UPS Three Day Select Commercial packages.
In consideration of the above incentive matrix on Attachment
D, a minimum net package charge equal to * will apply to
all UPS Three Day Select Residential packages.
6. With respect to UPS Prepaid and Freight Collect Air
Hundredweight packages, UPS agrees to transport such shipments
as Customer may tender to UPS and to provide Customer such
transportation and additional services in accordance with the
rules of UPS Hundredweight Service in effect at the time of
shipping. The discounts do not apply to Third Party
shipments.
UPS agrees to grant the Customer the following discounts from
the published UPS Hundredweight Service Rate Chart in effect
at the time of shipping:
*
UPS will apply Hundredweight pricing when the actual aggregate
weight of all air packages in each shipment delivered to one
Consignee at one location on the same day from the same
shipper is 100 pounds or more.
A minimum charge for a UPS Next day Air, UPS Next Day Air
Saver or UPS Second Day Air shipment will be based on an
average weight of 10 pounds per package.
If the dimensional weight of a package measuring over one
cubic foot exceeds the actual weight, the dimensional weight
of that package will be used in the calculation of the
shipment billed weight.
* Confidential information omitted and filed separately with the
SEC.
ATTACHMENT D
ENNIS BUSINESS FORMS
PREPAID & FREIGHT COLLECT GROUND AND AIR DISCOUNTS
UPS UPS UPS UPS UPS UPS UPS UPS
Commercial Commercial Commercial Commercial Commercial Commercial Commercial Commercial
Next Day Next Day Next Day Next Day Second Day Second Day Three Day Ground
Air Letter Air Package Air Saver Air Saver Air Letter Air Package Select Package
Letter Package Package
#
UPS UPS UPS UPS UPS UPS UPS
Residential Residential Residential Residential Residential Residential Residential
Next Day Next Day Next Day Next Day Second Day Second Day Three Day
Air Letter Air Package Air Saver Air Saver Air Letter Air Package Select
Letter Package Package
#
* The following products will be used to determine the above
Average Weekly Gross Revenue tier: Prepaid, Freight collect,
and Third Party Billing for UPS Next Day Air Letters and
Packages; UPS Next Day Air Hundredweight; UPS Next Day Air
Saver Letters and Packages; UPS Next Day Air Saver
Hundredweight; UPS Second Day Air A.M. Letters and Packages;
UPS Second Day Air A.M. Hundredweight; UPS Second Day Air
Letters and Packages; UPS Second Day Air Hundredweight;
UPS Three Day Select Commercial and Residential Packages;
UPS Three Day Select Hundredweight; UPS Ground Commercial
and Residential Packages; UPS Ground Hundredweight; UPS
Export Express Letters, Documents, and Packages UPS Export
Expedited Documents and Packages; and UPS Standard to Canada
Packages.
** In consideration of the above incentive matrix, a minimum
net package charge equal to # will apply to all UPS
Second Day Air Commercial packages.
** In consideration of the above incentive matrix, a minimum
net package charge equal to # will apply to all UPS Second
Day Air Residential packages.
** In consideration of the above incentive matrix, a minimum
net package charge equal to # will apply to all UPS Three
Day Select Commercial packages.
** In consideration of the above incentive matrix, a minimum
net package charge equal to # will apply to all UPS Three
Day Select Residential packages.
** In consideration of the above incentive matrix, a minimum
net package charge equal to a published zone two one pound
package will apply to all UPS Ground Commercial packages.
# Confidential information omitted and filed separately with
the SEC.
ATTACHMENT E
SPECIALIZED INCENTIVE PROGRAM
1. At the end of each Calendar Quarter, UPS will average the
Customer's Net Revenue for Prepaid, Freight Collect, and
Third Party Billing for UPS Next Day Air Letter, Package, and
Hundredweight; UPS Next Day Air Saver Letter, Package, and
Hundredweight; UPS Second Day Air A.M. Letter, Package, and
Hundredweight; UPS Second Day Air Letter, Package, and
Hundredweight; UPS Three Day Select Package and
Hundredweight; UPS Ground Package and Hundredweight; UPS
Export Express Letter, Document, and Package; UPS Export
Expedited Document and Package; and UPS Export Standard
Package (less Additional Charges and service offerings
subject to incentive, e.g. ARS), and if exceeds the revenue
listed below, an additional incentive will be calculated
from that revenue. UPS will issue a single check to the
Customer representing the total amount of the additional
incentive earned within thirty (30) days after the end of
each Calendar Quarter and forward to the address below.
Average Weekly Net Additional
Transportation Charges Incentive
--------------------- ---------
*
2. Customer and UPS have agreed to implement a Guaranteed
Service Refund procedure for Customer for shippers listed on
Attachment B. This procedure will begin on the effective
date as stated below and will be administered for the life of
the current UPS/Customer transportation Agreement that
includes the products as identified by this Addendum. UPS
reserves the right to use any new automated refund procedures
when they become available.
Customer shall be entitled to a refund of the package
shipping charges when the overall on-time delivery for all of
Customer's outbound ( i.e., packages picked up daily at
Customer locations) Ground and Air packages fall below the
agreed upon performance threshold of 97% for Ground and 98%
for Air products.
Both parties agree that in the event UPS does not meet the
agreed upon performance threshold, Customer will receive
reimbursement of shipping charges for the performance
shortfall. Shortfall performance consists of only those
packages not delivered on time as set forth. Customer agrees
to place a UPS compatible bar code "smart label" on every
package shipped and transmit 100% PLD at end of day for
packages tendered to UPS. Only packages with the UPS
traceable barcode "smart label" and with matching PLD
information will be eligible for this service level
performance guarantee. Compensation will be made by UPS to
Customer every quarter. The performance standards listed
below will be used to calculate the refund. If our
performance is equal or better than the thresholds stated
below, no refund will be due.
Committed Percent
Product On Time
------ -------
Ground *
Air *
* Confidential information omitted and filed separately with the
SEC.
The following UPS developed reports will be utilized to
measure the performance standards:
(bullet) UPS "Shipping Performance Report" for percent
effectiveness report number N083CMR403
(bullet) UPS SIPPS Report (used to determine Average
Revenue per Piece per Product)
The following example is designed for illustrative use only:
Assume that Customer ships 100,000 Ground packages during a
quarter interval and UPS provided a service level of *
Customer will receive reimbursement on * (* committed
performance standard minus * actual) of the packages shipped
during this period. Reimbursement would, therefore, be
equal to the result of the following calculation:
* X * X (Average Net Revenue per Ground Piece received
for the current quarter)
This methodology for calculating potential service performance
refunds will be conducted for Ground and Air independently of
one another.
These performance standards will remain in effect during the
life of this contract as long as the current shipping
characteristics remain constant.
To define the UPS Service Guarantee and the terms and
conditions of this Addendum, the following guidelines are
defined for UPS and Customer:
(bullet) The UPS Service Guarantee does not apply to
drop shipments.
(bullet) Customer will not seek refunds from UPS via
any other methodologies.
(bullet) Customer agrees not to deduct actual or
anticipated refunds from UPS bills.
(bullet) Customer agrees to the tracking limitations
described in the current UPS Service Guide.
(bullet) Only volume tendered to UPS twilight sorts
will be eligible for Guaranteed Service
Refunds.
(bullet) Customer agrees that UPS is not responsible
for service which is precluded by an act of
God, authority of law, strikes, lockouts,
casualties, and other conditions beyond UPS'
control.
(bullet) Any payments due to Customer will be issued
within thirty (30) days following the end of
each quarter.
Either party reserves the right to terminate the Guaranteed
Service Refund portion of this Agreement without terminating
the entire Carrier Agreement as follows: (i) by either party
providing the other party with thirty (30) days' prior written
notice, which notice shall specify the effective date of
termination; and (ii) either party may terminate this
Agreement immediately if the other party fails to cure any
material breach of this Addendum within three (3) days of
receipt of notice of such breach.
3. UPS shall at all times during the term of this Agreement
protect, indemnify and hold harmless Customer, its agents and
employees from and against liability, loss, damage, penalties,
fines, costs and expenses of any kind whatsoever (including
reasonable attorney's fees and other legal costs and expenses)
except to the extent of the negligent acts or omissions of
Customer, its agents and employees caused by the negligence
acts or omissions of UPS, its agents or employees resulting in
bodily injury, death, damage to property, asserted against
Customer or its affiliates by any person during its
performance of the services provided under this Agreement
notwithstanding anything in this paragraph UPS's liability for
loss or damage to any package is limited to $100 per package.
Additional insurance is available if the package is declared
and the declared value charges are paid.
* Confidential information omitted and filed separately with the
SEC.
ATTACHMENT F
SONICAIR INCENTIVE PROGRAM
TRANSPORTATION AGREEMENT
1. In consideration of the rates set forth in Attachment F-1
("Rates"), UPS agrees to provide its SonicAir BestFlight
(service mark) same day delivery, rush and other shipping
services ("Services") to Customer on an on-demand basis in
accordance with the terms and conditions of this Agreement and
the terms and conditions of the UPS SonicAir BestFlight
Waybill, including limitations of liability, which are
incorporated herein by reference. In the event of a conflict
between this Incentive Program and the Waybill, this Incentive
Program will control.
2. UPS will make Services available to Customer twenty-four (24)
hours a day, seven (7) days a week and will perform the
Services according to the description contained in the
SonicAir BestFlight (service mark) Waybill. Customer
understands that UPS will not accept hazardous materials of
any kind for transport under this Incentive Program.
3. Customer must present any claims for loss or damage to
Customer's cargo in writing to UPS, at the address set forth
below, within reasonable time, but in no event longer than
ninety (90) days after such cargo has been tendered to UPS.
UPS
c/o Service Parts Logistics
35 Glenlake Parkway, N.E.
Suite 475
Atlanta, GA 30328
4. This Incentive Program will automatically be renewed for
additional one (1) year terms unless Customer provides written
notification of termination to UPS, at the address set forth
in item three (3).
5. Customer acknowledges that certain Conditions could alter
UPS's operating expenses on which the Rates are based. As
used herein, a Condition means the enactment or promulgation
of any new law, regulation or statute or the imposition of new
material requirements on the issuance or renewal of any
official permit, license or approval after the Effective Date,
which (a) affects the operating costs or the ability of UPS to
perform the Services, (b) is substantially more burdensome on
UPS than the requirements as of the Effective Date, or (c)
results in a substantial decrease in the Rates to which UPS
would otherwise be entitled. If any Condition occurs after
the Effective Date, UPS reserves the right to make such Rate
adjustments as it deems reasonably necessary to preserve for
UPS its intended benefits, by providing Customer with thirty
days prior written notice of such adjustments.
6. This Incentive Program, its Attachments and the SonicAir
BestFlight (service mark) Waybill contain all of the terms and
conditions agreed to by the parties and supersede any prior
agreement between the parties for the Service(s). Customer
shall not extend, assign or transfer any of its rights
hereunder, without the prior written consent of UPS. Any
assignment or attempt to assign, transfer or subcontract
thereof without the prior written consent UPS shall be void
and without force or effect.
7. Customer agrees that the pricing agreed to in this Incentive
Program is subject to increases proportionate to increases in
the SonicAir BestFlight (service mark) tariff rates. Tier
* Confidential information omitted and filed separately with the
SEC.
Discounts are based on Customer volume commitment levels as
shown on the attached rate sheet. In the event Customer fails
to meet its Volume commitments as required for the additional
tier discount, which will be reviewed periodically, UPSSPL
reserves the right to revert the Rates of this Agreement to
the appropriate tier or Published Rates upon thirty (30) days
written notice. Customer agrees that the tier discounts will
initially be based on a volume commitment between one and one-
hundred shipments per year.
ATTACHMENT F-1
UPS SonicAir BestFlight (service mark) Services Shipment Volume per Year
Door to Door Shipments picked up and delivered door to door *
1 to 10 pounds *
11 to 50 pounds *
51 to 70 pounds *
Hold for Pickup Shipments held for pickup at the
destination airport
1 to 10 pounds *
11 to 50 pounds *
51 to 70 pounds *
Additional Services
-------------------
Retrieval/Drive (within 15 miles) up to 50 pounds *
Shipments picked up and delivered to consignee *
Attempts (within 15 miles) up to 50 pounds
Shipments where delivery is attempted but consignee/
recipient was not available
Express Freight minimum of 100 pounds *
Freight shipments delivered door to door
Hand Carry *
High value shipments hand-carried every step of the way
Charter *
Shipments sent via chartered flight to destination
International BestFlight *
Shipments sent via BestFlight for immediate delivery
Refer to UPS SonicAir International Rate Chart
Additional Charges
------------------
Additional Airbill *
Commercial airline fee charged for packages over 70 lbs.
Or multiple pieces exceeding priority package guidelines
Additional Mileage *
For pickup and delivery beyond a 15-mile radius from
the airport
Additional Weight (Drive service only) *
For shipments over 50 lbs. Assessed in 50 lb. increments
Additional Weight *
For shipments within commercial airline priority package
guidelines over 25 lbs. and up to 70 lbs.
PM / Weekends *
For pickup or delivery before or after normal business
hours
8:00 AM - 8:00 PM Monday through Friday
Waiting Time *
When a courier waits in excess of 15 minutes; accrued
in 15 minute intervals
Holiday *
For pickup or delivery on holidays, including Christmas
Day, Thanksgiving Day, New Year's Day, July 4th,
Labor Day, Memorial Day and Easter
Declared Value *
For shipments of unusually high value requiring
insurance
Switch *
When direct flight is not available and two separate
airlines must be used. This does not refer to
connecting flights on the same airlines.
Tolls, Parking *
Fuel Surcharge
Visit our website for the most up-to-date information
regarding surcharges,
http://www.spl.upslogistics.com/best_flight.htm *
* Confidential information omitted and filed separately
with the SEC.