1
EXHIBIT 2
CERTAIN PORTIONS HAVE BEEN OMITTED BASED ON A REQUEST
FOR CONFIDENTIAL TREATMENT; OMITTED PORTIONS FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION")
MARKETING AGREEMENT
BETWEEN
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,
ADMINISTAFF, INC.,
ADMINISTAFF COMPANIES, INC.
AND
ADMINISTAFF OF TEXAS, INC.
DATED
MARCH 10, 1998
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INDEX OF EXHIBITS
EXHIBIT PAGE
------- ----
A Client Service Agreement....................................25
B Quality Standards...........................................26
C Description of Services.....................................28
D AMEX Audit Rights...........................................30
E AMEX Data Access Document...................................31
F Confidentiality/Data Security...............................34
G Customer Data and Data-Related Rights.......................36
H Security....................................................37
I Confidentiality Agreement...................................39
J Non-Disclosure..............................................40
K Insurance...................................................42
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MARKETING AGREEMENT
This Marketing Agreement (this "Agreement") is entered into this 10th day of
March 1998, by ADMINISTAFF, INC., a Delaware corporation, ADMINISTAFF COMPANIES,
INC., a Delaware corporation, ADMINISTAFF OF TEXAS, INC., a Texas corporation
and AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., a New York
corporation.
RECITALS:
A. This Agreement is entered into in connection with the Securities
Purchase Agreement between AMEX and ASF DE dated January 27, 1998.
B. ASF is engaged in the business of providing professional employer
services.
C. ASF and AMEX wish to cooperate in the marketing of the Services.
D. AMEX intends to utilize its resources, including access to AMEX
Customers, to generate AMEX Leads and/or Appointments.
E. ASF and AMEX intend to contact the AMEX Leads, in order to generate
Appointments.
F. ASF and AMEX intend to solicit AMEX Leads to subscribe to the Services
and become AMEX Clients.
G. AMEX and ASF intend to market and promote Embedded Products.
H. ASF desires to utilize its resources and current and future client base
to provide ASF Referrals for services furnished by AMEX's business units
including AEFA and TBS.
I. The Parties wish to set forth in this Agreement the terms and
conditions under which they will undertake the marketing activities described
above.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement, the Parties hereto agree as follows:
1. DEFINITIONS:
AEFA: American Express Financial Advisors.
Agents: ASF or its officers, directors, employees, contractors or
agents.
Agreement: this Marketing Agreement.
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AMEX: AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,
a New York corporation.
AMEX Client: means any AMEX Customer that is a party to an AMEX PEO CSA
and is not a party to an ASF PEO CSA.
AMEX Customer: means any Business Entity that utilizes an AMEX product
or service (e.g., an American Express Corporate Card).
AMEX Indemnitee: AMEX, its parent, subsidiaries, affiliates, successors
and assignees, and their respective directors, officers, agents and
employees.
AMEX Lead: means: (a) any AMEX PEO Prospect that expresses to AMEX an
interest in the AMEX Product either in person, in writing, via
telephone or via the Internet (including, without limitation, accessing
any Web Site used by AMEX to describe, or solicit interest in, PEO
services); (b) any AMEX PEO Prospect that contacts ASF and indicates to
ASF that (1) such AMEX PEO Prospect is interested in purchasing, or
obtaining additional information regarding, the AMEX Product or (2)
such AMEX PEO Prospect is responding to an AMEX Product solicitation;
or (c) any Business Entity attending or participating in a joint
marketing activity as contemplated in Section 5(b).
AMEX Marketed PEO Prospect: means any AMEX PEO Prospect that: (a) AMEX
has specifically targeted regarding the Services or the AMEX Product
and with which AMEX has communicated by mail, telemarketing,
interactive media, direct sales force, seminars or otherwise; or (b)
has been referred by an AMEX business unit to ASF as being interested
in the AMEX Product; provided however, the status of AMEX Marketed PEO
Prospect shall cease when six months have lapsed from the later of the
Contact Date or the referral date.
AMEX PEO Prospect: means any AMEX Customer that is not a party to
either an ASF PEO CSA or an AMEX PEO CSA.
AMEX PEO CSA: means the agreement by which an AMEX Client engages ASF
to provide the AMEX Product to such AMEX Client.
***
Appointment: means the meeting of an AMEX Lead with an ASF salesperson
to discuss the Services.
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ASF: ASF DE, ASF COMP and ASF TX.
ASF Client: means any ASF Customer that is a party to an ASF PEO CSA
and is not a party to an AMEX PEO CSA.
ASF COMP: ADMINISTAFF COMPANIES, INC., a Delaware corporation.
ASF Customer: any Business Entity that engages ASF to provide PEO
services to such Business Entity in accordance with the terms of a
current and enforceable ASF PEO CSA.
ASF DE: ADMINISTAFF, INC., a Delaware corporation.
ASF Derivative Proprietary Work: proprietary interests in technology,
products or services that AMEX and ASF jointly develop that is an
improvement, enhancement, extension or derivative of ASF's preexisting
proprietary rights. The ASF Derivative Proprietary Work consists solely
of the improvement, enhancement, extension or derivative and will not
include the preexisting or underlying work.
ASF Indemnitee: ASF, its parent, subsidiaries, affiliates, successors
and assignees, and their respective directors, officers, agents and
employees.
ASF PEO CSA: the agreement by which ASF provides PEO services to ASF
Customers.
ASF TX: ADMINISTAFF OF TEXAS, INC., a Texas corporation.
ASF Referral: referral to AMEX for AEFA and TBS Services from past,
current and future customers of ASF.
Business Entity: any corporation, subchapter S corporation,
partnership, joint venture, trust, association, limited liability
company, sole proprietorship or un-incorporated organization engaged in
a commercial enterprise.
Business Records: business and financial records maintained by ASF that
detail the completeness and accuracy of the commissions paid to AMEX
and revenue related to embedded AMEX Products.
Change of Control: the occurrence of any of the following: (a) the
acquisition by a non-Affiliated Person (who is a Competitor of AMEX)
of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of 20% of the Outstanding Common Stock of ASF DE; or (b)
the acquisition by a non-Affiliated Person of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of 30% of
the Outstanding Common Stock of ASF DE, if AMEX reasonably believes
that the quality of the Services or the quality of the AMEX Product
will decrease due to the acquisition.
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Claim: any loss, damage, cost, expense, liability, and settlement,
including without limitation, any reasonable attorney fees and court
costs.
Client: includes AMEX Clients and ASF Clients.
Commission Report: A report which includes: (a) total number of AMEX
Clients; (b) AMEX Clients' names; (c) AMEX Clients' dates of
enrollment; (d) total number of worksite employees for each AMEX
Client; and (e) the related commissions due to AMEX.
Commissionable Client: Any AMEX Lead or AMEX Marketed PEO Prospect that
enters into an AMEX PEO CSA or ASF PEO CSA.
Competitor: any charge, credit or debit card business, financial
services business (not including insurers, accounting firms or
401(K) Plan providers) or any travel services business.
Contact Date: date of specific solicitation of the AMEX Product or
Services, including mail, telemarketing, direct or indirect sales
force, seminar and interactive e-mail.
CPR: the Center for Public Resources.
CSA: Client Service Agreement, as attached in Exhibit A.
Dedicated Staff: ASF sales personnel who: (a) are full-time salaried
employees of ASF; (b) have completed at least 30 days of sales training
in professional employer services; (c) and have at least 60 days
continuous sales experience of professional employer services with ASF;
and (d) only sell professional employer services.
Effective Date: March 10, 1998.
Embedded Products: certain AMEX products and services that are offered
to ASF clients and prospects in a seamless integrated manner embedded
in ASF's offering of Services.
Expiration Date: March 10, 2005 (including any renewal period as
provided).
Fifteen Month Period: first 15 months from the date of this Agreement.
Joint Work: any proprietary interests in technology, products or
services that is jointly developed by AMEX and ASF and is not an ASF
Derivative Proprietary Work. If the
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Joint Work consists of an improvement, enhancement, extension or
derivative of AMEX's preexisting proprietary rights, the Joint Work
shall consist solely of the improvement, enhancement, extension or
derivative and will not include the preexisting or underlying work.
Notice: all notices, consents, requests, instructions, approvals, and
other communications made, required or permitted.
Paid Worksite Employee: An employee with a unique Social Security
number or taxpayer identification number paid by ASF during a calendar
month.
Parties: AMEX and ASF.
PEO: Professional Employer Organization.
Purchase Agreement: Securities Purchase Agreement between AMEX and ASF
dated January 27, 1998.
Reenrolled Client: any of the Clients that cancel the Services and have
reenrolled in the Services.
Required Embedding: AEFA and TBS services as specified by AMEX.
Services: the business of providing professional employer services, as
more particularly described on Exhibit C.
TBS: Tax and Business Services.
Ten Year Term: a ten year period from the date an AMEX Lead becomes a
Client.
2. PROMOTION OF THE SERVICES:
AMEX and ASF will cooperate in the joint marketing and promotion of the
Services including utilizing AMEX's technology, marketing and personnel
resources in order to generate AMEX Clients.
3. AMEX PRODUCT:
ASF will offer, at the expense of ASF, the AMEX Product to: (1) AMEX
Leads; (2) AMEX Marketed PEO Prospects; and (3) AMEX Customers. ASF and
AMEX agree to mutually develop value-added components to be integrated
into the AMEX Product, at ASF's expense, to differentiate the AMEX
Product (e.g. unique specialized training on
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small business topics, including planning and hiring) from the Services
offered to ASF Customers. The AMEX Product will be marketed exclusively
to AMEX Leads and AMEX Customers and will be marketed under the name
and brand of ASF, but at AMEX's discretion, will be identified as being
co-marketed by AMEX. ASF shall not market the AMEX Product other than
to AMEX Leads and AMEX Marketed PEO Prospects. At AMEX's discretion,
ASF will include in the AMEX Product, and make available to AMEX
Clients, any new products or services that ASF markets to ASF
Customers.
If the facts from the date of this Agreement regarding the IRS's audit
of ASF's single employer 401(k) plan change which may require ASF to
change its delivery of the 401(k) service, ASF covenants to: (1)
disclose, to AMEX's reasonable satisfaction, the proposed changes in
ASF's delivery of the 401(k) service; and (2) use commercially
reasonable efforts to make the transition seamless. ASF covenants to
use commercially reasonable efforts to ensure that the value of the
products and services offered to Clients shall not decrease due to a
change in the embedded benefits plan, provided that except as provided
in the CSA ASF shall have no obligation to hold Clients harmless from
any such decrease in value.
4. AMEX LEAD GENERATION ACTIVITIES:
a. AMEX Marketing Activities: AMEX will use commercially reasonable
efforts to generate AMEX Leads to ASF.
(1) Costs: All marketing and promotional costs incurred by AMEX in
connection with generating the AMEX Leads for ASF shall be
borne by AMEX. Once an AMEX PEO Prospect is generated to ASF
as an AMEX Lead, any costs incurred in converting the AMEX
Lead to an Appointment or an AMEX Client shall be borne by the
Party converting the AMEX Lead. ASF agrees that it will assist
AMEX in its ability to convert AMEX Leads to Appointments; if
any tools are needed by AMEX to convert AMEX Leads to
Appointments, such as meeting schedule software, ASF shall
provide the tools at ASF's expense.
(2) Activities: AMEX agrees to use commercially reasonable efforts
to target its marketing activities to AMEX PEO Prospects that
meet ASF's reasonable guidelines including size, location and
SIC code of prospects. AMEX may use any marketing channel to
generate leads including mail, telemarketing, newsletter,
direct or indirect sales force and interactive media. AMEX
will establish a yearly budget for supporting its activities
under this Agreement including generating leads. AMEX will
form a dedicated team of full-time employees to fulfill AMEX's
activities under this Agreement.
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(3) Quality Standards: ASF covenants that when marketing the
Services to AMEX Leads, ASF will comply with the Quality
Standards listed in Exhibit B.
(4) Planning: ***
b. Joint Marketing Activities: AMEX and ASF agree to conduct joint
marketing activities (such as customized seminars) in order to generate
AMEX Leads, whereby ASF provides experts and marketing materials at
ASF's expense and AMEX generates attendees at AMEX's expense. ASF
covenants that when conducting joint marketing activities, ASF will
comply with the Quality Standards listed in Exhibit B. AMEX is
responsible for meeting expenses associated with the customized
seminars.
c. Training: In order to enable AMEX employees and/or customer service
representatives to generate leads successfully, ASF and AMEX will
arrange for education and training of the AMEX employees whose job
responsibilities include generating AMEX Leads, including TBS, AEFA,
Small Business Services, Corporate Services and Establishment Services
employees. ASF shall provide the education and training as AMEX
reasonably requests, and without any costs to AMEX, other than the
costs of facilities and general meeting expenses. The location of the
education and training will be determined based upon business
necessities. Each Party will be responsible for the out of pocket
expenses incurred by that Party in connection with the education and
training, including housing, lodging and travel associated with such
Party's employees. Neither Party will compensate the other Party for
lost employee time.
d. Toll-Free Number: ASF will support dedicated toll-free numbers to
receive inquiries from prospective AMEX Leads and AMEX Clients which
toll-free numbers shall be wholly-owned by AMEX. ASF shall pay all
costs associated with such toll-free numbers, including monthly
maintenance fees and usage charges. The toll-free number(s) for this
service shall not be used for any other service or any other
client/program without express written consent of AMEX. AMEX shall have
all rights in and to the toll-free number(s) upon termination of this
Agreement and at that time shall assume any and all costs associated
with these toll-free numbers after any deposits on them, paid by ASF
are refunded to ASF. AMEX shall have the right to retain and reuse the
toll-free number(s). AMEX shall have the right to approve ASF's
telecommunications requirements for marketing response to maximize best
efforts and professionalism. At AMEX's discretion, ASF will provide, at
its sole cost and expense, a dedicated toll-free dial transfer number
with priority handling to AMEX. For a period of one year from the
termination of this Agreement for any reason, ASF shall continue to
provide AMEX the dedicated toll-free dial transfer number. After one
year from the termination of this Agreement, AMEX
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shall be responsible for the cost and expense of such toll-free number,
and AMEX may use such number in its own discretion.
5. ASF ACTIVITIES:
a. Embedded Activities:
(1) Embedded Product: At AMEX's discretion, AMEX may require ASF
to embed the Required Embedding in the Services provided to
AMEX Clients or other existing or potential ASF Clients, and
ASF shall use all reasonable commercial efforts to integrate
the Required Embedding into a seamless offering of the
Services. After mutually agreeable terms to both Parties are
reached, ASF may embed in the Services other AMEX products,
including Small Business Services, Corporate Card, Business
Travel and Purchasing Card services. Any AMEX Embedded
Products will, at AMEX's discretion, be clearly identified
under the name and brand that AMEX designates. AMEX will use
reasonable efforts to customize the AMEX products, at AMEX's
expense, that will be embedded in the Services. As mutually
agreed by the Parties, ASF may collect payment on any and all
Embedded Products as part of the fee structure established
with a Client and shall remit any payments so collected to
AMEX within 25 days following the end of the month.
(2) Referral Activities: During the term of this Agreement, ASF
agrees to use all reasonable commercial efforts to refer
to AMEX *** Clients generated *** for solicitation of AEFA
and TBS services as part of an integrated approach. ASF
will work with AMEX to identify referral candidates from
ASF's current customer base to provide to AMEX for
solicitation of AEFA and TBS services.
(3) Review and Audit: If both Parties agree to embed other AMEX
products in addition to the Required Embedding with respect to
which ASF is due commissions, ASF shall have the audit rights
as agreed by the Parties with respect to any commissions owed
to ASF by AMEX.
b. Sales Force Commitment: ASF acknowledges that an adequate and properly
trained sales force is essential to the successful marketing of the
Services and agrees that ASF's undertaking to maintain such a sales
force is a prime consideration of AMEX for entering into and continuing
this Agreement. *** Both Parties agree to discuss in good faith any
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reasonable requests by the other Party to modify the guidelines. At no
time will the guidelines provide for a lower standard than internal
guidelines used by ASF with respect to other activities. ASF covenants
not to pay the Dedicated Staff less commission or different
compensation for selling the AMEX Product when compared to other
Services (including Services marketed through third party
arrangements).
6. CUSTOMER PROTECTION:
a. AMEX Customer Protection: ASF acknowledges that unnecessary risk would
be caused to AMEX if ASF solicited AMEX Customers outside this
Agreement or otherwise intentionally diluted AMEX's ability to provide
AMEX Leads to ASF. ASF's agreement, as detailed in this Section, to
protect AMEX from this risk is a prime consideration of AMEX for
entering into and continuing this Agreement. ASF will not knowingly
market any products or services to AMEX Customers other than under the
terms of this Agreement. ASF covenants:
***
b. ASF Customer Protection: AMEX acknowledges that unnecessary risk would
be caused to ASF if AMEX solicited ASF Clients outside this Agreement.
AMEX understands that
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to protect ASF from this risk is a prime consideration of ASF for
entering into and continuing this Agreement. AMEX will not knowingly
market another PEO's products or services to ASF Customers other than
under the terms of this Agreement. AMEX covenants:
***
7. FINANCIAL ARRANGEMENT:
a. Commission Revenues:
(1) ASF agrees to pay AMEX a commission based on ***
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***
(3) Payments shall be due and payable by ASF to AMEX ***
(the "due date") for *** commission.
(4) ASF shall pay interest at the rate of *** per annum on all
commissions paid after the due date.
(5) ASF shall deliver to AMEX the Commission Report for each month
together with the payments required hereunder for such month.
(6) ***
b. ASF Referrals: ASF will provide AMEX with ASF Referrals. ***
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***
c. Billing and Records: ASF shall be responsible for billing and
processing any fees associated with providing the Services. ASF shall
maintain the Business Records which shall contain sufficient
information to verify the completeness and accuracy of the commissions
paid to AMEX. The Business Records shall be kept for a period of at
least three years beyond the end of the fiscal year to which they
relate.
d. Review and Audit: AMEX shall have those review and audit rights
contained in Exhibit D.
e. Survival: The terms of this Section 7 shall survive the termination of
this Agreement.
8. MOST FAVORED NATION:
a. ASF agrees that AMEX shall have "most favored nation" status with
respect to investment and marketing and other terms at least equal to
or better than any other terms ASF has in existence or may negotiate in
the future when taken as a whole with respect to any other marketing
agreement and purchase agreement or similar agreement that also
involves an investment or financing arrangement in ASF.
b. ASF shall provide written notice to AMEX of all agreements and
arrangements it enters into that may impact AMEX's rights under this
Section 8, within 10 days prior to entering into such agreements and
arrangements, unless such agreement or arrangement is: (1) presented
during an ASF's Board of Directors meeting; and (2) at the time of
presentation the AMEX designated board member serves on the Board.
***
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***
10. INDEMNIFICATION AND HOLD HARMLESS:
a. ASF DE, ASF COMP and ASF TX shall jointly and severally indemnify and
hold harmless AMEX and each AMEX Indemnitee from and against any
material Claim incurred by any AMEX Indemnitee which Claim arises out
of or in connection with: (1) the intentional or negligent act or
omission of ASF or its Agents in the course of the performance of ASF's
duties and obligations under this Agreement; (2) the failure of ASF or
its Agents, as the case may be, to comply with the terms of this
Agreement; (3) the failure of ASF (including without limitation its
Agents who perform on behalf of ASF hereunder) to comply with its
obligations under any and all laws, rules, or regulations applicable to
ASF, its Agents or the Services, as the case may be; (4) the marketing,
promotion, sale or provision of any services offered by ASF (other than
the Embedded Products provided by AMEX), including without limitation
any federal, state or local taxes, penalties or interest, and
liabilities to employees of ASF (including liabilities based upon joint
employer or other theories); or (5) any state or local taxing authority
which relates to ASF Services excluding any embedded AMEX products.
Each AMEX Indemnitee seeking indemnification under this Agreement shall
give prompt notice to ASF along with such AMEX Indemnitee's request for
indemnification, of any Claim for which it is seeking indemnification.
The Parties understand and further agree that no settlement of an
indemnified Claim shall be made by an AMEX Indemnitee without the
concurrence of ASF. ASF shall control the settlement or defense of any
Claim; provided, however, that the AMEX Indemnitee may, at its cost,
engage its own attorneys. The AMEX Indemnitee will fully cooperate with
ASF to enable it to fulfill its obligations with respect to such Claim.
All of the provisions in this Section 10(a) shall survive the
termination of this Agreement.
b. AMEX shall indemnify and hold harmless ASF and each ASF Indemnitee from
and against any material Claim reasonably incurred by any ASF
Indemnitee which Claim arises out of or in connection with the
intentional or negligent act or omission of AMEX in the course of the
performance of AMEX's duties and obligations under this Agreement.
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Each ASF Indemnitee seeking indemnification under this Agreement shall
give prompt notice to AMEX along with such ASF Indemnitee's request for
indemnification, of any Claim for which it is seeking indemnification.
The Parties understand and further agree that no settlement of an
indemnified Claim shall be made by an ASF Indemnitee without the
concurrence of AMEX. AMEX shall control the settlement or defense of
any Claim; provided, however, that the ASF Indemnitee may, at its cost,
engage its own attorneys. The ASF Indemnitee will fully cooperate with
AMEX to enable it to fulfill its obligations with respect to such
Claim. All of the provisions in this Section 10(b) shall survive the
termination of this Agreement.
11. CUSTOMER SERVICES:
ASF agrees to provide customer services to Clients in accordance with
the Quality Standards set forth in Exhibit B.
12. REPORTS:
a. ASF shall provide AMEX with the following reports, at the time and in
the form and substance mutually agreed upon by the Parties hereto:
(1) AMEX Lead Report including: (a) detail list of all AMEX Leads;
(b) dates of contact on a per AMEX Lead basis; (c) number of
business days for AMEX Leads to be contacted by an ASF
salesperson; (d) status of all AMEX Leads; (e) date of
Appointment for each AMEX Lead; (f) results from Appointment
for each AMEX Lead; and (g) any other relevant information
gained on each AMEX Lead;
(2) Commission Report;
(3) Quality Standards Report including: (a) number of inbound
marketing calls; (b) number of mail and e-mail responses; and
(c) response time to customer complaints transferred by AMEX
to ASF; when ASF implements the tracking technology, this
report will include average time taken to answer inbound calls
and percentage of calls that are abandoned;
(4) Attrition Report including total number and names of the
Clients that: (a) cancel their enrollment in the Services; (b)
reasons disclosed to ASF for such Clients' discontinuing their
respective enrollment in the Services; and (c) date of
cancellation by such Clients or the last date such Client used
the Services. Further, this Attrition report shall track
previous Clients to determine the Reenrolled Client.
(5) Embedded Product Report including: (a) number of contacts with
Clients regarding sales of Embedded Products; and (b) status
of each contact.
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ASF covenants to make reasonable efforts throughout the term of this
Agreement to: (a) improve the quality and timing of information made
available to AMEX as required in this Section; and (b) provide any
additional information or reports that AMEX reasonably requests.
b. AMEX shall provide ASF with reports on marketing activities with
respect to generating AMEX Leads at the time and in the form and
substance mutually agreed upon by the Parties. AMEX covenants to make
reasonable efforts throughout the term of this Agreement to: (1)
improve the quality and timing of information made available to ASF as
required in this Section; and (2) provide any additional information or
reports that ASF reasonably requests.
c. The reports required above will be provided to AMEX and ASF
respectively on a monthly basis or as otherwise mutually agreed by AMEX
and ASF.
13. PUBLICITY:
Neither ASF nor AMEX shall issue advertising, promotional activity or
publicity release relating to the Services without securing the prior
written consent of the other Party. Further, neither ASF nor AMEX may
use any of the other Party's registered or unregistered trademarks,
tradenames or service marks in the marketing and promotional materials
or otherwise in connection with the promotion of the Services, except
with the prior written consent of the other Party and then, only in
accordance with such guidelines as the other Party may from
time-to-time reasonably establish concerning such use.
14. CONFIDENTIALITY:
a. ASF and AMEX acknowledge that as a result of the performance of their
responsibilities under this Agreement, both ASF and AMEX will obtain
access to confidential and proprietary information of the other Party.
ASF acknowledges that AMEX's confidential information includes the
names of AMEX Customers and that AMEX has the sole ownership rights in
these names and that ASF has no rights to these names outside of this
Agreement. AMEX acknowledges that ASF's confidential information
includes the names of ASF Referrals and that ASF has the sole ownership
rights in these names and that AMEX has no rights to use these names
outside this Agreement. All such information shall be deemed to be
confidential unless it is clearly intended by the first Party for
public distribution in the public domain, information known to the
second Party prior to the receipt of such information from the first
Party, or information lawfully obtained from a third party by the other
Party. Except for marketing activities that mutually benefit both
Parties, this Agreement, along with all exhibits hereto, is hereby
designated as confidential within the meaning of this Section 14 and
shall not be
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disclosed to a third party unless required by law. ASF and AMEX shall
each take the same measures to protect the confidentiality of such
information received by them as they take with respect to their own
confidential information, including, but not limited to, instructing
their employees, vendors, agents, and independent contractors
(excluding only those retained to provide the Services) of the
foregoing and requiring them to be bound by appropriate confidentiality
agreements. ASF and AMEX shall not use any such information for any
purpose other than to perform their responsibilities under this
Agreement.
b. Each Party acknowledges that irreparable injury would be caused to the
other Party in the event of unauthorized use of the other Party's
confidential information, and agrees that preliminary and permanent
injunctive relief would be appropriate in the event of breach of
Section 14. Upon termination or expiration of this Agreement, each
Party agrees to promptly return the confidential information of the
other Party or to acknowledge in writing that all confidential
information of the other Party has been destroyed at the request and
option of the requesting Party.
c. It is understood and agreed by the Parties hereto that all lists of
AMEX Leads are and always have been the exclusive property of AMEX, and
will be turned over to AMEX, at no cost to AMEX, upon termination of
this Agreement.
d. Section 14, in its entirety, shall survive the termination of this
Agreement.
15. DATA AND RECORDS:
Acknowledging the confidentiality of Client data, ASF hereby agrees to
the terms of the AMEX Data Access Document attached hereto as Exhibit
E, the Confidentiality/Data Security schedule attached hereto as
Exhibit F and the Customer Data and Data-Related Rights schedule
attached hereto as Exhibit G the terms of which are hereby incorporated
herein and made a part hereof. ASF will limit the information it
obtains from Clients to information required by ASF to fulfill the
Services, and in any event only such information as approved by AMEX.
In addition, ASF will comply with the exhibits entitled Security
attached hereto as Exhibit H and AMEX Audit Rights attached hereto as
Exhibit D, the terms of both are incorporated herein by reference and
made a part hereof. In the event ASF uses the services of third party
vendors, representatives or subcontractors, ASF shall be responsible
for ensuring their compliance with the terms of this Agreement, and
shall ensure that all such vendors, representatives or subcontractors
execute the Confidentiality Agreement attached hereto as Exhibit I.
ASF's employees and agents shall execute the Non-Disclosure Agreement
attached hereto as Exhibit J, prior to gaining access to AMEX data.
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19
16. REPRESENTATIONS, WARRANTIES & COVENANTS:
a. Each of ASF and AMEX represents and warrants that it has full power and
authority to execute this Agreement and to take all actions required
by, and to perform the agreements contained in, this Agreement, and
that each Party's obligations under this Agreement do not conflict with
their obligations under any other agreement to which it may be a party.
b. Each of ASF and AMEX represents, warrants and covenants that the
performance of their obligations under this Agreement in connection
with the Services complies and will comply with all applicable federal,
state, local and foreign laws and regulations.
c. Each of ASF and AMEX represents, warrants and covenants that each of
its respective employees assigned to perform services with respect to
the Services under this Agreement has and will have the skill and
background to perform such assigned services in a competent and
professional manner, and to act in compliance with all applicable laws
and regulations.
d. ASF covenants to stay current with the law and to inform AMEX
immediately of any material changes in such laws or regulations which
may require a change in the Services.
17. INSURANCE:
During the term of this Agreement: (a) ASF shall continue to maintain,
at its own expense, insurance equal to or better than the insurance
policies listed on Exhibit K from insurers that maintain a rating of
B++ or higher from A.M. Best; and (b) ASF shall continue to require its
Clients to maintain insurance policies equal to or better than the
insurance policies as currently required of Clients as listed on
Exhibit K.
ASF shall, prior to the Effective Date and upon the renewal of each
coverage required pursuant to this Section, furnish certificates of
insurance or adequate proof of the foregoing insurance to AMEX. All
insurance policies required of ASF (except policies procured from
government sources which do not allow this provision) shall contain a
provision stating the name and address of AMEX and that AMEX is to be
notified in writing by the insurer at least 30 days prior to
cancellation of, or any material change in, the policy.
18. INTELLECTUAL PROPERTY OWNERSHIP:
AMEX acknowledges that as between ASF and AMEX, ASF shall have
exclusive and unlimited ownership rights of all proprietary interest in
technology, products or services that ASF owned before this Agreement
or that was developed independently by ASF during this Agreement. ASF
acknowledges that as between ASF and AMEX, AMEX shall have exclusive
and unlimited ownership rights of all proprietary interests in
technology, products or services that AMEX owned before this Agreement
or that was developed independently by AMEX during this Agreement.
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ASF acknowledges that any Joint Work shall belong exclusively to AMEX
without any duty of accounting, with AMEX having the sole right to
obtain, hold and renew, in its own name and/or for its own benefit,
patents, copyrights, registrations and/or appropriate protection. AMEX
shall grant to ASF a license to use in perpetuity the Joint Work,
without any costs to ASF. ASF covenants that during the term of this
Agreement, the Joint Work will not be used by ASF except in soliciting
AMEX Leads. After the termination of this Agreement, ASF shall be free
to use the Joint Work without any costs to ASF and without any duty of
accounting. All ASF Derivative Proprietary Work belongs exclusively to
ASF without any duty of accounting to AMEX. ASF has the sole right to
obtain, hold and renew, in its own name and/or for its own benefit, the
ASF Derivative Proprietary Work. ASF shall grant to AMEX a license to
use in perpetuity the ASF Derivative Proprietary Work, without any
costs to AMEX. AMEX covenants that during the term of this Agreement,
the ASF Derivative Proprietary Work will not be used by AMEX except in
soliciting AMEX Leads. After the termination of this Agreement, AMEX
shall be free to use the ASF Derivative Proprietary Work without any
costs to AMEX and without any duty of accounting.
19. NOTICES:
a. All Notices shall be given in writing and delivered to the receiving
Party to its respective address set forth below (1) by personal
delivery to a responsible officer of such Party, (2) by certified or
registered mail (return receipt requested), (3) by a nationally
recognized courier service or (4) by facsimile transmission (such to be
confirmed by mail). The effective date of such Notice shall be deemed
to be the date upon which any such Notice is personally delivered or,
if it is given by mail, courier service or facsimile transmission, the
date upon which it is received by the addressee. Any Party hereto may
change its address set forth below by written notice to the other Party
hereto in accordance with the terms of this Section:
b. If to AMEX:
American Express Travel Related Services Company, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: American Express Relationship Services
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Copy to:
American Express Travel Related Services Company, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: General Counsel's Office
AERS Counsel
c. If to ASF:
Administaff, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Copy to:
Administaff, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
20. TERM AND TERMINATION:
This Agreement shall take effect upon the Effective Date, and continue
until the Expiration Date unless earlier terminated in accordance with
this Section. Both Parties may agree in writing at least 90 days before
the Expiration Date to renew this Agreement for successive one year
periods. If both Parties elect to renew this Agreement, this Agreement
shall renew in accordance with the then current terms and conditions.
a. Early Termination: In accordance with the following, this Agreement may
be terminated by either Party prior to the Expiration Date as follows:
(1) Except as provided in Section 20(d) and (e), in the event that
the other Party commits a material breach or default under
this Agreement which breach is not cured by the breaching
Party 30 days from the receipt of notice to cure the breach
from the non-breaching Party, then the non-breaching Party may
terminate this Agreement in its discretion at any time after
such 30 day period.
(2) Either Party may terminate this Agreement with immediate
effect: (a) upon the institution by the other Party of
proceedings to be adjudicated a bankrupt or insolvent, or the
consent by the other Party to institution of bankruptcy or
insolvency proceedings against it or the filing by the other
Party of a petition or
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answer or consent seeking reorganization or release under the
Federal Bankruptcy Act, or any other applicable Federal or
state law, or the consent by the other Party to the filing of
any such petition or the appointment of a receiver,
liquidator, assignee, trustee, or other similar official of
the other Party or of any substantial part of its property, or
the making by the other Party of an assignment for the benefit
of creditors, or the admission in writing by the other Party
of an assignment for the benefit of creditors, or the
admission in writing by the other Party of its inability to
pay its debts generally as they become due or the taking of
corporate action by the other Party in furtherance of any such
actions; or (b) if, within 60 days after the commencement of
an action against the other Party seeking any bankruptcy,
insolvency, reorganization, liquidation, dissolution or
similar relief under any present or future law or regulation,
such action shall not have been dismissed or all orders or
proceedings thereunder affecting the operations or the
business of the other Party stayed, or if the stay of any such
order or proceeding shall thereafter be set aside; or if,
within 60 days after the appointment without the consent or
acquiescence of the other Party of any trustee, receiver or
liquidator or similar official of the other Party, or of all
or any substantial part of the property of the other Party,
such appointment shall not have been vacated.
b. Termination Due to Change of Control: AMEX may, in its sole
discretion, terminate this Agreement immediately upon a Change of
Control.
c. Termination Due to Competitive Activities: AMEX may, in its sole
discretion, terminate this Agreement if ASF or its affiliate enters
into the business of providing or provides a financial product or
service substantially similar to a Competitor.
21. MISCELLANEOUS:
a. Headings: Headings stated in this Agreement are for convenience of
reference only and are not intended as a summary of such sections and
do not affect, limit, modify, or construe the contents thereof.
b. 21st Century: No later than September, 1998, ASF shall: (1) manage and
manipulate data in connection with the Services involving all dates
from the 20th and 21st centuries without functional or data abnormality
related to such dates; (2) manage and manipulate data in connection
with the Services involving all dates from the 20th and 21st centuries
without inaccurate results related to such dates; (3) have user
interfaces and data fields in connection with the Services formatted to
distinguish between dates from the 20th and 21st centuries; and (4)
represent all data in connection with the Services to include
indications of the millennium, century, and decade as well as the
actual year.
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c. Alternative Dispute Resolution:
(1) Negotiation: The Parties shall attempt in good faith to
resolve any dispute arising out of or relating to this
Agreement (other than disputes regarding material breaches)
promptly by negotiations between executives who have authority
to settle the controversy. Any Party may give the other Party
written notice of any dispute not resolved in the normal
course of business. Within 20 days after delivery of said
notice, executives of both Parties shall meet at a mutually
acceptable time and place, and thereafter as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to resolve the dispute. If the matter has not
been resolved within 60 days of the disputing Party's notice,
or if the Parties fail to meet within 20 days, either Party
may initiate mediation of the controversy or claim as provided
hereinafter.
If a negotiator intends to be accompanied at a meeting by an
attorney, the other negotiator shall be given advance notice
of such intention and may also be accompanied by an attorney.
All negotiations pursuant to this clause are confidential and
shall be treated as compromise and settlement negotiations for
purposes of the Federal Rules of Evidence and state rules of
evidence.
(2) Mediation: If the above referenced dispute has not been
resolved by negotiation as provided above, the Parties shall
endeavor to settle the dispute by mediation under the then
current CPR Model Procedure for Mediation of Business
Disputes. One neutral third party will be selected from the
CPR Panels of Neutrals to mediate the dispute. If the Parties
encounter difficulty in agreeing on a neutral, they will seek
the assistance of CPR in the selection process.
(3) Other Remedies: In the event of a dispute arising out of or
relating to this contract or the breach, termination or
validity thereof, which has not been resolved by non-binding
means as provided in subsection (1) and (2) above within 60
days of the initiation of such procedure, either party may
seek any remedy available at law or equity, including recourse
to the courts.
d. ASF's Independent Contractor Status and Authority:
(1) ASF agrees and acknowledges that in its performance of its
obligations under this Agreement: (a) ASF is an independent
contractor of AMEX; and (b) AMEX is neither a joint employer
nor a co-employer of ASF's employees. ASF is solely
responsible for its own activities. ASF has no authority to
make commitments or enter into contracts on behalf of, bind or
otherwise obligate AMEX in any manner whatsoever except as
expressly stated in this Agreement.
(2) Since ASF is an independent contractor and not an agent of
AMEX, ASF represents, warrants and agrees that it shall be
liable for all taxes, withholdings,
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and imposts of any nature applicable to the payment of
compensation, whether current or deferred, for the work
performed on ASF's behalf in accordance with ASF's obligations
hereunder. Furthermore, ASF will indemnify and hold AMEX
harmless for any such taxes, withholding or imposts for which
AMEX may be determined to be liable.
e. AMEX's Independent Contractor Status and Authority:
(1) AMEX agrees and acknowledges that in its performance of its
obligations under this Agreement AMEX is an independent
contractor of ASF. AMEX is solely responsible for its own
activities. AMEX has no authority to make commitments or enter
into contracts on behalf of, bind or otherwise obligate ASF in
any manner whatsoever except as expressly stated in this
Agreement.
(2) Since AMEX is an independent contractor and not an agent of
ASF, AMEX represents, warrants and agrees that it shall be
liable for all taxes, withholdings, and imposts of any nature
applicable to the payment of compensation, whether current or
deferred, for the work performed on AMEX's behalf in
accordance with AMEX's obligations hereunder. Furthermore,
AMEX will indemnify and hold ASF harmless for any such taxes,
withholding or imposts for which ASF may be determined to be
liable.
f. Costs and Expenses: Each Party shall pay the fees and expenses incurred
by it in connection with the negotiation, preparation, execution, and
delivery of this Agreement and the related agreements and other
documents.
g. Survival of Representations: All representations, warranties, covenants
and agreements made by the Parties in this Agreement and pursuant to
the terms hereof shall survive the consummation of the transactions
contemplated hereby, notwithstanding any investigation heretofore or
hereafter made by any of them or on behalf of any of them.
h. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but all of
which together shall constitute one instrument notwithstanding that all
Parties are not signatories to the same counterparts.
i. Amendments; Waiver: No provision of this Agreement may be amended or
waived except by an instrument in writing signed by the Party sought to
be bound. No failure or delay by any Party in exercising any right or
remedy hereunder shall operate as a waiver thereof, nor shall a waiver
of a particular right or remedy on one occasion be deemed a waiver of
any other right or remedy or a waiver of the same right or remedy on
any subsequent occasion.
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j. New York Law: This Agreement shall be governed by and in accordance
with the laws of the State of New York, without reference to its
conflict of laws principles.
k. Non-Waiver; Cumulative Rights: No failure or delay (in whole or in
part) on the part of any Party to exercise any right or remedy, or
operate as a waiver thereof, nor effect any other right or remedy. All
rights and remedies hereunder are cumulative and are not exclusive of
any other rights or remedies provided hereunder or by law.
l. Severability: If any provision contained in this Agreement is or
becomes invalid, illegal, or unenforceable in whole or in part, such
invalidity, legality, or unenforceability shall not affect the
remaining provisions and portions of this Agreement.
m. Assignment: This Agreement may not be assigned by either Party without
the prior written consent of the other Party except that AMEX may
assign this Agreement to its parent, a subsidiary or an affiliate
without ASF's prior written consent.
n. Entire Agreement: This Agreement constitutes the entire Agreement
between the Parties with respect to the subject matter hereof and
supersedes all prior contemporaneous oral or written understandings or
Agreements among the Parties which relate to the subject matter hereof.
No modification or amendment of this Agreement or any of its provisions
shall be binding upon any Party unless made in writing and duly
executed by authorized representatives of all Parties.
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IN WITNESS WHEREOF, AMEX and ASF, intending to be legally bound by the terms of
this Agreement, have caused this Agreement to be executed by their duly
authorized representatives as of the date and year first above written.
AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: President, AERS
--------------------------------------
ADMINISTAFF, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: President
--------------------------------------
ADMINISTAFF COMPANIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: President
--------------------------------------
ADMINISTAFF OF TEXAS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: President
--------------------------------------
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EXHIBIT A
CLIENT SERVICE AGREEMENT
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EXHIBIT B
QUALITY STANDARDS
CUSTOMER SERVICE
Customer service shall be provided to Clients for the term of their respective
enrollment in the Services.
To ensure the continuous attainment of quality customer service, ASF agrees to
do the following:
- Strive for 100% accuracy and timely handling on all Client calls,
correspondence, and service requests.
- Train and have available sufficient staff to provide adequate customer
service to Clients.
- Dedicate to continuously improve upon its existing customer service
standards and measuring techniques, and develop additional standards as
reasonably requested by AMEX.
- Inform AMEX of any material customer service issues.
- Assist AMEX in conducting Client satisfaction research (for both AMEX
and ASF Clients) via surveys and other forms of client monitoring.
MARKETING
To ensure the continuous attainment of quality and marketing standards
described, ASF agrees to do the following:
- Strive for 100% accuracy and timely handling on all calls and
correspondence from prospective Clients.
- Train and have available sufficient staff to provide adequate response
to prospective Clients.
- Inform AMEX of any material marketing issues.
- Designate a quality assurance individual to regularly measure and
report directly to AMEX results against quality standards in accordance
with the requirements of Exhibit B and any reporting requested by AMEX
and mutually agreed upon at a later date.
SALES FORCE
Comply with the Sales Force Commitment as outlined in the Marketing Agreement.
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Quality standards defined below will be aggregated through weighted measurement
to determine overall aggregate quality performance levels attained during each
quarter.
***
-27-
*** Confidential Treatment Requested; Omitted portions filed
separately with the Commission.
30
EXHIBIT C
DESCRIPTION OF SERVICES*
Service Category Services Offered
---------------- ----------------
1. Recruiting and Selection - Job descriptions
- Advertising
- Resume review
- Background checks
- Interviewing
- Pre-employment testing
- Profiling
- Drug testing
- Salary information
2. Performance Management - Organization structure
- Job design
- Performance measurement plans
- Compensation, incentive and review
- Employee relations
- Dispute resolution
- Supervisor training
3. Training and Development - Training programs (over 100 to date)
- Certified provider (IACET) for
continuing education credit
- CPE Providers for CPAs
- Needs analysis for performance
improvement
- Curriculum development for employee,
supervisory, and executive professional
growth
4. Benefit Management - Comprehensive health and benefit plans
- Employee assistance plans
- 401(k) plan
- Credit Union
- Disability plans
- Educational assistance
- Supplemental life insurance
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Service Category Services Offered
---------------- ----------------
5. Liability Management - Worker's compensation coverage and
claim service
- Safety inspection and policy development
- Employment claims
- Termination
- Conflict resolution
- Outplacement
- Employee handbooks
- Personnel guide
- Sample forms and policies
6. Owner Support - Business continuation planning
- Key man coverage
- Personnel consulting
- 401(k) planning and participation
- Employee communications
7. Government Compliance - Government reporting and agency
interface
- Unemployment claims management
- Employment records management
- Claims and audits
- EEOC, DOL, FMLA, DFWP, FLSA
Title VII, CRA '91, COBRA
8. Employment Administration - Payroll
- Payroll taxes
- Garnishments
- Insurance procurement
- Quarterly reports
- Employee files
- W2s and W4s
- Employment verification
- Human resource management reports
- Direct deposit
* The Services will be updated throughout the term of the Agreement.
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EXHIBIT D
AMEX AUDIT RIGHTS
ASF shall prepare and submit to AMEX periodic reports from the service data
collected relating to any or all of the Services described in this Agreement as
AMEX may reasonably request.
ASF shall keep all documents (excluding credit and monitoring reports and
information pertaining to the employer/employee relationship) relating to
Services provided under this Agreement for a period in conformance with ASF's
record retention policy. At AMEX's request, ASF shall promptly deliver a copy of
all such documents to AMEX upon the termination of this Agreement
AMEX shall have the right to monitor as outlined in the Marketing Agreement as
well as the right to inspect the business records required to confirm the
accounting of commissions payable to AMEX.
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EXHIBIT E
AMEX DATA ACCESS DOCUMENT
GENERAL
Each ASF employee, subcontractor, agent or representative with direct access to
AMEX data shall sign a Confidentiality Agreement or Non-Disclosure Agreement, as
applicable, and abide by all terms contained therein.
For purposes of review of security and data access issues, ASF shall allow site
audit visit by AMEX assigned staff during all periods of the relationship,
including unscheduled visits and reviews with 24 hours notice. AMEX reserves the
express right to make unscheduled visits to any and all ASF sites when there is
a suspicion of a security breach. ASF agrees to comply with any reasonable
recommendations from said audit and reviews.
ASF shall continue to maintain an adequate level of physical security controls
over ASF Service Location including, but not limited to: appropriate alarm
systems, access controls, fire suppression and video surveillance.
ASF shall maintain an adequate level of data security controls including, but
not limited to: proper safeguarding of AMEX data, logical access controls (e.g.
password protection of AMEX applications, data files and libraries, if any),
computer security software and a secure tape library. ASF will maintain controls
over AMEX data consistent with ASF standard controls on data.
ASF shall maintain an adequately secured computer room facility, with access
restricted to only approved personnel.
Upon request, ASF shall provide to AMEX Information Security management a copy
of the most recent third party data processing audit or review, conducted by
ASF's external auditors as well as management copies of any related data
processing audits from their internal audit team.
ASF agrees to abide by the Privacy Principles as described below:
1. COLLECT ONLY CUSTOMER INFORMATION THAT IS NEEDED.
Limit the collection of information about customers to what is needed
to be known to administer their accounts, to provide customer
services, to offer new products and services, and to fulfill any legal
and regulatory requirements.
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2. ENSURE INFORMATION QUALITY.
Use advanced technology and well-defined employee practices to help
ensure that customer data are processed promptly, accurately and
completely.
3. USE INFORMATION SECURITY SAFEGUARDS.
Access to customer data is limited to those who specifically need it
to conduct their business responsibilities. Use security techniques
designed to protect customer data --especially when certain data are
used by employees and business partners to fulfill customer services.
4. LIMIT THE RELEASE OF CUSTOMER INFORMATION.
In addition to providing customers with the opportunity to "opt-out"
of marketing offers, information is released only with the customers'
consent or request, or when required to do so by law or other
regulatory authority.
5. HOLD EMPLOYEES RESPONSIBLE FOR THESE PRIVACY PRINCIPLES.
Each employee is personally responsible for maintaining consumer
confidence in ASF. Provide training and communications programs
designed to educate employees about the meaning and requirements of
these Privacy Principles.
ASF shall have an appropriate sensitive-trash disposal program at each
operations center.
ASF shall return all magnetic media to the appropriate AMEX location
within seven business days of receipt of such magnetic media.
ASF shall ensure at each site that no shared environments exist with
other businesses for all WANs, LANs, Network connections, dial-up
connections, DASD, distributed systems, and that appropriate data
controls are implemented.
ASF shall follow standard industry practices in configuring and
operating voice systems to control fraudulent use of 800 numbers, PBX
switches and other voice networks.
EMPLOYEE RESPONSIBILITIES
ASF employees are encouraged to report suspected violations of any Privacy
Rules, or violations of Information Security Standards to their management for
investigation and action.
ASF policy will prohibit employees sharing their USERID/PASSWORD with any other
person.
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ASF employees must sign-off or envoke a password protected time-out feature when
leaving their workstation for any reason if such employee is working on AMEX
programs or accessing any AMEX data.
ASF shall execute background checks on all employees working on AMEX programs
including employment and criminal checks as permitted by all local, state and
federal laws.
In the event that AMEX commences an investigation of possible fraudulent
activity, or otherwise upon AMEX's reasonable request, ASF will cooperate with
the investigation.
SYSTEM SECURITY
ASF shall ensure all system connected terminals are equipped with access control
(password protection), time-out for non-use if such terminals have access to
AMEX programs or can access AMEX data..
If data is to reside on any ASF system, then standards and security practices
must be inserted, including host access control, personal computer access
control, virus protection and LAN access controls.
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EXHIBIT F
CONFIDENTIALITY/DATA SECURITY
1. Confidentiality: Definition "Confidential Data and Information" shall include
any information, data, or materials obtained by one party to this Agreement (the
"Receiving Party") from, or disclosed to such party by the other party (or, in
the case of AMEX, disclosed to or by AMEX, or any parent, subsidiary, or
affiliate to AMEX) (the "Disclosing Party"), or customer or service
establishment, which information, data, or materials relate to the Marketing
Agreement and their design and processes, or to the past, present, or future
business activities of the Disclosing Party or any of its subsidiaries,
affiliates, or clients, including methods, processes, telephone conversations,
financial data, systems, customer names, account numbers, and other customer
data, lists, apparatus, statistics, programs, and research and development
related information of such entities, except such information as:
(a) is already known to the Receiving Party prior to receipt from
Disclosing Party or any of its subsidiaries, affiliates or
clients, free of any confidentiality obligation at the time it
is obtained;
(b) is or becomes publicly known through no wrongful act of the
Receiving Party;
(c) is rightfully received by Receiving Party from a third party
without restriction and without breach of this Agreement; or
(d) is independently developed by the Receiving Party.
With respect to each party's access to customer files and related customer data
("Files"), each party specifically acknowledges the importance of maintaining
the security and confidentiality of the Files, and agrees to take whatever
reasonable steps are necessary to prevent the unauthorized transfer, disclosure
to, or use of the Files by any person or entity not a party to this Agreement.
2. Standard of Care: Neither party shall disclose, publish, release, transfer,
or otherwise make available Confidential Data and Information of the other party
in any form to, or for the use or benefit of, any person or entity without such
party's prior written consent. Each party, however, shall be permitted to
disclose relevant aspects of the other party's Confidential Data and Information
only to its officers and its employees on a need to know basis to the extent
that such disclosure is reasonably necessary for the performance of their duties
and obligations under the Agreement; provided, that such party shall take all
reasonable measures to ensure that Confidential Data and information of the
other party is not disclosed or duplicated in contravention of the provisions of
this Agreement by such officers and employees. Each party agrees to ensure that
the terms and conditions of this Agreement are strictly adhered to by all of its
employees and any third party representative. The obligations shall not restrict
any disclosure by either party mandated by any applicable law, or by order of
any court or government agency
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(provided that the disclosing party shall give prompt notice to the non-
disclosing party of such order).
3. Notice of Violations: Each party or its employees shall: (a) notify the other
party promptly of any material unauthorized possession, use or knowledge, or
attempt thereof, of the other party's Confidential Data and Information by any
person or entity which may become known to such party and encourage its
employees to do the same, (b) promptly furnish to the other party full details
of the unauthorized possession, use or knowledge, or attempt thereof, and use
reasonable efforts to investigate any unauthorized possession, use or knowledge,
or attempt thereof, of Confidential Data and Information, (c) use reasonable
efforts to cooperate with the other party in any litigation and investigation
against third parties deemed necessary by the other party to protect its
proprietary rights, and (d) promptly use all reasonable efforts to prevent a
recurrence of any such unauthorized possession, use or knowledge of Confidential
Data and Information. Each party shall bear the cost it incurs as a result of
compliance with the requirements set forth in these paragraphs.
4. Monitoring: AMEX reserves the right to monitor access to Confidential Data
and Information to prevent the improper or unauthorized use of such Confidential
Data and Information such monitoring may include, but is not limited to, on-site
inspection of ASF's locations providing Services for AMEX at any time, and
inserting decoy names and addresses in any lists provided to ASF. In addition,
AMEX reserves the right to visit, unannounced, any of the locations used by ASF
that provides the Services for AMEX and verify security procedures.
5. Remedy for Confidential Data and Information Loss: Each party agrees that if
there is any disclosure of the Confidential Data and Information by its
employees or the employees of any third party contacted by it, it will enforce
for the other party's benefit through litigation, if necessary, all rights
provided under law to compensate the former party for any reasonable damages
arising out of such disclosure and to protect the former party from additional
disclosure.
6. Remedy for Breach: Each party agrees that if a party, its officers, employees
or anyone obtaining access to the proprietary information of the other party by,
through or under them, breached any provision of this Exhibit, such other party
would suffer irreparable harm and the total amount of monetary damages for any
injury to such other party from any violation of this Exhibit would be
impossible to calculate and would therefore be an inadequate remedy.
Accordingly, each party agrees that the other party shall be entitled to
temporary and permanent injunctive relief against the breaching party, its
officers or employees, and such other rights and remedies to which such other
party may be entitled to at law, in equity and under this Agreement for any
violation of this Exhibit.
7. Survival: The provisions of this Exhibit shall survive the termination or
expiration of this Agreement.
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EXHIBIT G
CUSTOMER DATA AND DATA-RELATED RIGHTS
1. Limited Access to Client Data. ASF shall have limited access to certain data
of AMEX's clients and other relevant information solely for the purposes
consistent with meeting ASF's obligations under this Agreement.
2. Data and Reports
Ownership of Service Data. All data and information submitted to one party by
the other party in connection with the Services (the "Service Data") is and
shall remain the property of the originator of the data and information. The
Service Data shall: (a) not be used by either party other than in connection
with providing or analyzing the Services; (b) not be disclosed, sold, assigned,
leased or otherwise provided to third parties by either party; and (c) not be
commercially exploited by or on behalf of either party, its employees or agents
except as provided in this Agreement. Each party shall take all appropriate
actions to safeguard the Service Data. The database of Enrolled Clients shall
remain the sole property of AMEX save and except employer data which shall not
be disclosed to AMEX.
Return of Data. Upon request by the other party upon the termination or
expiration of this Agreement, each party shall (a) promptly return to the other
party, in a format agreed upon by the parties hereto and on the media reasonably
requested by, all Service Data belonging to that party and/or (b) erase or
destroy under the supervision of the owner of the Service Data, all such Service
Data.
Database Maintenance. ASF agrees to transmit information each month within
thirty (30) days of the end of the month on use of the Service by Clients/Client
(including, Client account number), to the AMEX location designated by AMEX. The
mechanism for this transmission to be agreed to by the parties.
Each party shall use best efforts for the accuracy and completeness of the data
and information submitted to the other party and shall promptly correct any
errors or inaccuracies in the data or information submitted.
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EXHIBIT H
SECURITY
1. Safety and Security Procedures: General - ASF shall have limited access to
certain Confidential Data and Information solely for the purposes consistent
with meeting ASF's obligations under this Agreement: (a) ASF shall require all
visitors to be identified at the front entrance of all operating centers and to
sign a visitor's log which includes the date, time in/out, firm represented and
signature. All visitors shall be issued badges; (b) ASF shall maintain a secure
environment for all Confidential Data and Information for such ASF service
location to prevent unauthorized access, damage, or destruction of Confidential
Data and Information, including, but not limited to: appropriate alarm systems,
access controls, fire suppression, video surveillance, plan material disposal
(e.g. sensitive trash disposal program); (c) All Confidential Data and
Information shall be securely stored for a mutually agreed to retention period,
either at ASF's service location or at an off-site location. Said off-site
storage location shall be subject to AMEX's approval. No party shall, without
the prior written consent of the Disclosing Party, use any of the Confidential
Data and Information supplied by the Disclosing Party for any purpose other than
to fulfill the terms of this Agreement; (d) ASF shall maintain an adequately
secured computer room facility and tape library, with access restricted to only
approved personnel; (e) Upon request by AMEX, ASF shall provide to AMEX
Information Security management copies of all internal security policies and
standards for review prior to commencing administration of the Service; and (f)
ASF shall return all magnetic media to the appropriate AMEX location within
seven (7) business days of receipt of such magnetic media.
2. Logical Security Controls: ASF shall maintain a secure environment for all
Confidential Data and Information which includes a level of logical security
controls at such ASF service location to prevent unauthorized access, damage, or
destruction of Confidential Data and Information, including, but not limited to:
individual user identifications, password protection of data files and
libraries, computer security software, and a secure tape library. In addition:
(a) ASF shall ensure at each site that to the extent shared environments exist
with other businesses for all WANS, LANS, Network connections, dial-up
connections, DASD and distributed systems, that all access to AMEX Confidential
Data and Information is restricted by employee function and position to only
those ASF employees who are involved in the administration of the Program; (b)
ASF shall ensure that all system connected terminals are equipped with access
control (password protection), time-out for non-use if such terminals have
access to AMEX programs or can access AMEX data; (c) if AMEX Confidential Data
and Information is to reside on any ASF system, then standards and security
practices must be resident, including host access control, personal computer
access control and virus protection, and LAN access controls; and (d) ASF shall
make every reasonable effort to ensure computer terminals displaying AMEX data
face away from common areas.
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3. Disaster Recovery: ASF shall provide to AMEX upon request a disaster recovery
plan with a maximum of 24 hour recovery for each operation center performing
services hereunder. ASF shall also provide information on hot site and cold
sites as requested. ASF shall provide AMEX written notification should there be
a material change or modification with respect to ASF's hot and cold sites. All
critical supporting applications at each ASF site performing services hereunder
shall have had a valid and documented test of the disaster recovery plan, and
ASF shall provide copies of such to AMEX.
4. Assignment and Successions: No party shall transfer or assign this Agreement,
or any right or obligation under it, by operation of law or otherwise, to any
person or entity without the prior written consent of the other party and any
such attempted assignment shall be void; provided, however, that each party may
assign this Agreement and any of its rights and obligations under it to its
parent, subsidiaries and affiliates without such written consent.
This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of each party, unless terminated as provided herein.
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EXHIBIT I
PERSONAL CONFIDENTIALITY AGREEMENT
The nature of your work at Administaff of Texas, Inc. ("ASF") for American
Express Travel Related Services, Inc., and its affiliates (collectively "AMEX")
involves your access to trade secrets, confidential information, files, records
and forms of AMEX and/or ASF (collectively "Confidential Information").
Confidential Information includes, but is not limited to, any information
relating to AMEX or ASF organizational structure, marketing philosophy and
objectives, project plans, data models, strategy and vision statements, business
initiatives, business requirements, systems design, methodologies, processes,
competitive advantages and disadvantages, financial results, product features,
systems, operations, technology, customer lists, customer account information,
products development, advertising or sales programs and any other information
which would give AMEX or ASF an opportunity to obtain an advantage over its
competitors or which AMEX or ASF is ethically obligated to protect from
unauthorized sources. None of such information shall be deemed to be in the
public domain.
Both AMEX and ASF desire to protect this Confidential Information and therefore
requires that you agree, as a condition of your performing services on the AMEX
project pursuant to AMEX's agreement with ASF, to safeguard all Confidential
Information and not to reveal Confidential Information to any third party
(including, without limitation, at conferences, seminars, meetings or
professional organizations or by publications in journals or granting of
interviews to journalists and other members of the news media) or use
Confidential Information for your own benefit or the benefit of any third party,
except to the extent necessarily required for the performance of your services
for the AMEX project.
You agree not to discuss Confidential Information of AMEX or ASF in public
places.
You agree that any work product produced or developed by you in the performance
of your services for AMEX and ASF shall be Confidential Information subject to
this Agreement and such work product is, and shall remain, the property of AMEX
and/or ASF.
You also agree to help safeguard AMEX's and ASF's customers' expectations of
privacy by exercising diligence and care in the handling of Confidential
Information relating to them, as more fully explained in the AMEX Data Access
Document.
By signing below, you indicate that you understand the above terms and that, as
a condition of performing Services for the AMEX project, you agree to adhere to
them.
--------------------------------------
Your Signature
-------------------------------------- ------------------------------
Print Your Name Date
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EXHIBIT J
NON-DISCLOSURE
[Subcontractor/Agent/Representative Name] ("Receiving Party") agrees that
Receiving Party is aware that American Express Travel Related Services, Inc.
("AMEX") and Administaff of Texas, Inc. ("ASF") have entered into a Marketing
Agreement ("Agreement") that imposes certain obligations on ASF, some of which
are specifically set forth below. Receiving Party understands that as part of
ASF's obligations under the Agreement, ASF is required to obtain this written
agreement from Receiving Party to further ensure understanding and compliance
with these obligations.
In consideration of Receiving Party's future assignment and/or responsibilities
in connection with ASF's performance under the Agreement, Receiving Party hereby
acknowledges, represents and confirms to ASF and AMEX as follows: (a) Receiving
Party has read the provisions of this Non-Disclosure Agreement, understands each
of them, agrees to them, and knows of no agreements, obligations or restrictions
which prevent or prohibit Receiving Party from complying with them; (b)
Receiving Party shall receive and maintain all AMEX information and perform
services in a manner consistent with these obligations; and (c) Receiving Party
agrees not to, directly or indirectly, engage in or assist others to engage in,
any activity or conduct which violates the provisions of this Non-Disclosure
Agreement.
1. General Obligations. All confidential or proprietary information and
documentation ("Confidential Information" (including the terms of this
Agreement, the AMEX data, AMEX software, ASF data, ASF software, processes,
modeling, pricing, etc.) relating to AMEX or ASF shall be held in confidence by
Receiving Party to the same extent and in at least the same manner as AMEX and
ASF protects its own confidential or proprietary information and as recommended
as a result of any facility audits or reviews. Receiving Party shall not
disclose, publish, release, transfer or otherwise make available Confidential
Information in any form to, or for the use or benefit of, any person or entity
without AMEX's or ASF's consent. Receiving Party shall, however, be permitted to
disclose relevant aspects of Confidential Information to its officers, agents,
subcontractors and employees and to the officers, agents, subcontractors and
employees of its corporate affiliates or subsidiaries to the extent that such
disclosure is reasonably necessary for the performance of its duties and
obligations under this Agreement; provided, that Receiving Party shall take all
reasonable measures to ensure that Confidential Information is not disclosed or
duplicated in contravention of the provisions of this Agreement by such
officers, agents, subcontractors and employees. The obligations in this Section
1 shall not restrict any disclosure by Receiving Party pursuant to any
applicable law, or by order of any court or government agency (provided that
Receiving Party shall give prompt notice to AMEX and ASF of such order) and
shall not apply with respect to information which (a) is developed by Receiving
Party without violating AMEX's or ASF's proprietary rights, (b) is or becomes
publicly known (other than through unauthorized disclosure), (c) is disclosed by
AMEX or ASF to a third-party free of any obligation of confidentiality, is
already known by Receiving Party without an obligation of confidentiality other
than pursuant to this Agreement or any confidentiality agreements entered into
before the Effective Date between AMEX and ASF, or (d) is rightfully received by
Receiving Party free of any obligation of confidentiality.
2. Unauthorized Acts. Receiving Party shall: (a) notify AMEX and ASF promptly at
the respective addresses below of any material unauthorized possession, use or
knowledge, or attempt thereof, of the Confidential Information by any person or
entity which may become known to Receiving Party, (b) promptly furnish to AMEX
and ASF full details of the unauthorized possession, use or knowledge, or
attempt thereof, and use reasonable efforts to investigate and prevent the
recurrence of any unauthorized possession, use or knowledge, or
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attempt thereof, of Confidential Information, (c) use reasonable efforts to
cooperate with AMEX and ASF in any litigation and investigation against third
parties deemed necessary by AMEX or ASF to protect its proprietary rights and
(d) promptly use all reasonable efforts to prevent a recurrence of any such
unauthorized possession, use or knowledge of Confidential Information.
Receiving Party agrees that if Receiving Party threatens to or actually breaches
or fails to observe any of the obligations set forth in this Non-Disclosure
Agreement, AMEX and ASF shall be subject to irreparable harm which shall not be
adequately satisfied by damages. Receiving Party therefore agrees that ASF
and/or AMEX shall be entitled to an injunction and/or any other remedies
permitted, to ensure and enforce Receiving Party's compliance with these
obligations; provided, however, that no specification herein of any particularly
legal or equitable remedy shall be construed as a waiver, prohibition or
limitation of any legal or equitable remedies.
By:
----------------------------------------
(Receiving Party's Name)
Name:
--------------------------------------
(Type, Stamp or Print)
Title:
-------------------------------------
Date:
--------------------------------------
Witness:
-----------------------------------
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EXHIBIT K
INSURANCE
TYPES AND AMOUNTS REQUIRED OF ASF:
1. workers' compensation, as prescribed by the law of any state in which
the Services are to be performed;
2. employer's liability insurance with limits of at least $1,000,000 per
occurrence, covering bodily injury by acciden t or disease, includin g
death;
3. employment practices liability insurance with limits of $5,000,000 per
insured event, with a $5,000,000 aggregate and a deductible amount of
$250,000. Employment practices liability insurance must cover, at a
minimum, claims of discrimination, sexual harassment or wrongful
termination, and must also cover, at a minimum, related allegations of
defamation, negligent infliction of emotional distress, and invasion of
privacy;
4. commercial general liability insurance, including contractual
liability, products liability and complete operations coverage and, if
the use of motor vehicles is required, comprehensive motor vehicle
liability insurance, each with limits of at least $1,000,000 for bodily
injury, including death to any one person, and $1,000,000 on account of
any one occurrence and $1,000,000 for each occurrence of property
damage;
5. errors and omissions liability insurance and other professional
liability insurance covering the acts, errors and omissions of ASF in
an amount combined with employment practices liability insurance of not
less than $25,000,000 per claim and a three year aggregate of
$50,000,000;
6. fire and casualty insurance including business interruption; and
7. excess liability insurance in excess of the insurance required in 2.
and 4. above in amounts of no less than $50,000,000 for each accident
or occurrence and $50,000,000 annual aggregate.
TYPES AND AMOUNTS REQUIRED OF CUSTOMERS OF ASF:
1. general liability insurance of $1,000,000;
2. comprehensive automobile liability insurance of $1,000,000; and
3. exceptions to, or required coverages in addition to, 1. and 2. above
may be made according to ASF's usual business practice and/or
judgement.
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