EXHIBIT 10.45
[UBS LETTERHEAD]
MEMORANDUM
August 24, 2001
TO Emile Sanchez
cc Philip Freeborn, Kurt Wolf, Jean Lequarre, Wayne McGlashan, Geoff
Linnell
FROM Ian Malpas, UBS AG
SUBJECT PRIVATE BANKING, PEROT SYSTEMS RELATIONSHIP
1. COMMERCIAL FRAMEWORK
This document sets out a proposed evolution of the commercial framework
between UBS A.G. ("UBS") acting through UBS Private Banking ("UBS PB" which
term means the whole of UBS Private Banking division, both inside and
outside Switzerland) and Perot Systems Corporation ("PSC") with regard to
IT services provided under the Amended and Restated Master Operating
Agreement dated as of January 1, 1997 ("MOA"), the Master Project Agreement
dated as of January 1, 1996 ("MPA"), and the Second Amended and Restated
Agreement for EPI Operational Management Services dated as of June 28, 1998
("EPI Agreement"), all between Swiss Bank Corporation (the predecessor of
UBS) and PSC. This document is intended to be legally binding agreement
between UBS and PSC.
2. TERMS OF NEW ARRANGEMENT
The arrangements outlined in this document will remain in effect until the
termination of the EPI Agreement (currently due to expire on 1 January
2007) either because it is superseded by unit price contracts agreed in
writing by UBS and PSC, which terminate the EPI Agreement, or because it
terminates in accordance with its terms. It is expected that these unit
price contracts will be agreed by 30 November 2001.
3. CLASSIFICATION OF SERVICES
UBS PB and PSC accept that two classes of service have been identified: IT
Production Services and Other IT Services.
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PRIVATE BANKING, PEROT SYSTEMS RELATIONSHIP
AUGUST 24, 2001
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3.1 IT PRODUCTION SERVICES
3.1.1 For the purposes of this document "IT Production Services" means the
IT services supplied to "run the bank" which comprises services of
the type listed below being provided to UBS PB as at 1 January, 2001:
o Customer Services (Call Centre, Desktop Support, RFS, Moves)
o Compute Services (i.e. UNIX, AS/400, Win NT/Win 2000, Operations,
Disk Storage, Database, ESM)
o Software Distribution (Win NT and Win 2000)
o Distributed Systems Engineering (including LDIP development)
o Mobile-Computing Support (excluding remote access/VPN services)
o Internet/Intranet/Extranet Administration & Support (excluding
firewall service)
o Messaging Services (email)
o Production Tools for User Self-Help, Problem-Logging, Change
Management, Service Requests and Management information reporting.
3.1.2 IT Production Services will be provided by PSC to UBS PB on a "cost
only" basis, on the same basis as "Scope of Services" are provided
to UBS Warburg under the EPI Agreement, until such time as the
monthly cost of the services exceeds $50 million annualised as
stated in the "Additional Services Letter" dated June 15, 2000 from
Jim Champy to Philip Freeborn.
3.1.3 PSC will be the preferred supplier to UBS PB of all UBS PB's
requirements for IT Production Services (as defined above) and these
will be covered by the same exclusivity provisions as apply to Scope
of Services provided under the EPI Agreement (i.e. UBS PB will not
enter into any agreements with 3rd parties relating to IT Production
Services or, subject only to the next sentence, provide IT Production
Services internally, without prior written PSC approval or written
notification from PSC of intent to withdraw from provision of IT
Production Services). Both parties agree and acknowledge than UBS PB
will have the right to manage and operate its own IT Production
Services in house at the locations and to the extent they are
currently undertaken internally by UBS at the date of this agreement.
These locations will be reviewed annually by the parties and may be
changed by written agreement between UBS and PSC.
3.1.4 Individual task orders under the MPA will be signed, where possible
for 1 year, between PSC and UBS PB for all UBS PB's requirements for
IT Production Services. These will be renewable for one year periods
(corresponding to the UBS budget cycle). Taking into account (and
subject to) the provisions of section 3.1.3 above, UBS may terminate
a task order by giving not less than 90 days prior written notice to
PSC.
3.2 IT PRODUCTION SERVICES COMMERCIAL TERMS
3.2.1 Monthly billings, which are payable in advance, will be raised by
PSC directly to UBS PB, Annual budgeting requirements substantially
similar to those applicable to the EPI Agreement will apply to the
arrangements with UBS PB so as to ensure that UBS PB may adjust its
annual IT production requirements as it evolves.
3.2.2 Travel plans will be approved in advance by UBS PB, in accordance
with UBS PB policy and margin will not be charged on expenses.
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AUGUST 24, 2001
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3.2.3 Based upon current task order requests, the terms outlined above have
a negative impact on PSC's 2001 P&L. In the spirit of the
relationship and in recognition of this concession by PSC to UBS as a
result of the variation in the current contractual arrangements
outlined by this document, UBS PB will pay one-half of this foregone
margin for IT Production Services provided by PSC between 1 January
and 31 December 2001. This will be billed by PSC as a 20% mark-up on
applicable IT Production Services provided to UBS PB, including
retroactive increased billing from 1 January 2001 if applicable. This
arrangement is wholly independent of the discount applicable under
section 4.5 of Amendment No. 1 to the EPI Agreement dated as of 15
September 2000 (the "NSS Agreement") and section 4.5 of the NSS
Agreement shall not apply to the mark-up chargeable under the
section.
3.2.4 The cost of IT Production Services provided to UBS PB under these
arrangements will count towards the $50 million cap set forth in the
Additional Services Letter.
3.2.5 Taking into account (and subject to) the provisions of sections 3.2.1
through 3.2.4 above, for clarity:
o IT Production Services provided between 1 Jan 01 to 31 Dec 01:
COST + 20% = Invoice amount
o IT Production Services provided from 1 Jan 02 onwards:
COST = Invoice amount
3.3 OTHER IT SERVICES
3.3.1 Scope of Services: Any services provided by PSC that are not IT
Production services. These will tend to be "change the bank"
activities, typical (but non-exhaustive) examples include:
o Resources developing the Executive Share Option Programme or
Employee Equity Plan.
o Resources supporting PBE Central Platform Product Upgrade
architecture design.
3.3.2 USB PB and PSC will sign individual task orders to cover each piece
of Other IT Services work, under the MPA.
3.4 OTHER IT SERVICES COMMERCIAL TERMS
3.4.1 Monthly billings, which are payable in advance, will be made by PSC
directly to UBS PB.
3.4.2 These services will be billed under the cost-plus default terms of
the MPA. UBS PB and PSC will seek to agree labour rates and, once
agreed in writing, the cost-plus billing will be replaced by labour
rate billing. The discounts set forth in section 4.5 of the NSS
Agreement will be applied in accordance with the provisions of that
section.
3.4.3 For Clarity the Other IT Services provided to UBS PB from 1 Jan 2001
onwards:
COST + O'HEAD + (MARGIN - DISCOUNT) = Invoice amount
Where:
COST = Cost to PSC of providing service
O'HEAD = Corporate overhead as specified in the Master Project
Agreement (10% to 14%)
MARGIN = Default margin as specified in the Master Project
Agreement (26.5%)
DISCOUNT = 50% of MARGIN as specified in section 4.5 the NSS
Agreement
3.4.4 Travel plans will be approved in advance by UBS PB, in accordance
with UBS PB policy and margin will not be charged on expenses.
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AUGUST 24, 2001
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4. ACCOUNT MANAGEMENT
UBS PB will be liable for the costs associated with PSC account management and
coordination. UBS PB propose the following project managers, who will allocate
part of their time to management duties:
o Tommy Attaway - Switzerland
o Tony Sze - Asia
o Hugh Cocks - Europe
o Richard Newman - European Wealth Management
In addition, UBS acknowledges the need for an overall account manager, currently
Geoff Linnell but to be transitioned to Claudio De Stefani, to manage the
interface between Perot and UBS and to co-ordinate the project managers above.
UBS will be liable for the costs associated with the portion of the time
allocated to the PB account for this overall account management. UBS PB reserves
the right to approve this individual, such approval not to be unreasonably
withheld or delayed.
It is acknowledged by UBS that the named personnel in the account and project
management roles above may change over time.
Please signify your consent to the provisions of this document by signing,
dating and returning to me the attached copy of this document.
UBS AG
/s/ IAN MALPAS /s/ KURT WOLF
Ian Malpas Kurt Wolf
Managing Director Managing Director
31st August 01 17th September, 01
Agreed:
Perot Systems Corporation
By:
/s/ DANIEL KARNUTA
Title:
Daniel Karnuta
Date: 28 September 01