Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
the related option is exercisable, and only upon
the occurrence of specified contingent events. During 2004, 2003 and 2002, no shares, 4,600 shares, and no shares of SARs were granted, respectively.
At December 31, 2004, 2003, and 2002, 17,736, 57,235 and 64,257 shares of SARs were outstanding, respectively, and we have recognized the associated
expense of $0.5 million, $0.6 million, and $0.2 million within Operating Costs for the years 2004, 2003 and 2002, respectively.
Compensation expense for stock appreciation rights is measured as the amount by which the quoted market value of the shares of our common stock exceeds
the base unit price at the date of the grant. Changes, either increases or decreases, in the quoted market value of these shares between the date of
grant and at the end of each subsequent quarter result in a change in the measure of compensation for the rights. The compensation expense is
recognized proportionally over the vesting period.
During 2004 and 2002, no shares of restricted stock
were granted, and during 2003, 147,870 shares of restricted stock were granted. During 2004 and 2003, 14,420 and 11,300 shares of restricted stock were
forfeited, respectively from previous plans. There were no forfeitures during 2002. The restrictions on the majority of such shares lapse over a period
of three years from the date of the grant, and the cost is charged to compensation expense ratably. We record compensation expense for the amortization
of restricted stock units issued to employees, utilizing the intrinsic-value method, which would result in the same amount of compensation expense that
would be recognized as if we had applied the fair value recognition provisions of SFAS 123. We recognized compensation expense recorded under APB 25
associated with the restricted stock of $1.4 million, $2.1 million, and $1.1 million in 2004, 2003 and 2002, respectively.
Beginning in 2004, certain employees were provided
an opportunity to receive an award of restricted stock in the future. That award is contingent on performance against the same goals that drive payout
of the annual bonus plan. The restricted stock award will be granted, if at all, after the one year performance goal has been met and will then vest
over a three-year period. In 2004, we recognized expense associated with the restricted stock opportunity of $8.3 million.
During 2004, 2003 and 2002, 9,238 shares, 27,550
shares, and 10,890 shares of restricted stock units were granted, respectively. During 2004 and 2003, 2,660 shares and 2,290 shares of restricted stock
units were forfeited, respectively. There were no forfeitures during 2002. The restrictions on the majority of such shares lapse over a period of three
years from the date of the grant. We recognized expense associated with the restricted stock units of $0.6 million, $0.7 million, and $0.4 million in
2004, 2003 and 2002, respectively.
Note 12. |
|
Lease Commitments and Contractual Obligations |
Most of our operations are conducted from leased
facilities, which are under operating leases that expire over the next 10 years, with the majority expiring within five years. We also lease certain
computer and other equipment under operating leases that expire over the next three years. These leases are frequently renegotiated or otherwise
changed as advancements in computer technology produce opportunities to lower costs and improve performance. Rental expenses under operating leases
(cancelable & non-cancelable) were $32.8 million, $34.7 million and $29.4 million for the years ended December 31, 2004, 2003 and 2002,
respectively.
In July 2002, we outsourced certain technology
functions to Computer Sciences Corporation (CSC) under a 10-year agreement, which we may terminate for a fee at any time effective after
July 2003 and under certain other conditions. Under the terms of the agreement, CSC will be responsible for the data center operations, technology help
desk and network management functions in the United States and in the United Kingdom and for certain application development and maintenance through
July 31, 2012. The obligation under the contract is based on our historical and expected future level of usage and volume. If our future volume
changes, payments under the contract could vary up or down based on specified formulas. Charges are subject to increases to partially offset inflation.
We incurred $63.0 million, $58.9 million, and $18.6 million in 2004, 2003 and 2002, respectively under this contract.
In December 2003, we signed a three-year agreement
with ICT Group, Inc. effective January 2004 to outsource certain marketing calling activities. We may terminate this agreement for a fee at any time.
Under
95
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
the terms of the agreement, ICT will be
responsible for performing certain marketing and credit calling activities previously performed by our own call centers in North America. The
obligation under the contract is based upon transmitted call volumes, but shall not be less than $3 million per contract year. In 2004, we incurred
$5.6 million under this contract.
On October 15, 2004, we entered into a seven-year
outsourcing agreement with IBM. Under the terms of the agreement, we will transition certain portions of our data acquisition and delivery, customer
service, and financial processes to IBM. In addition, we can terminate at our discretion, subject to payment of termination fees that decline over the
term, or for cause. In 2004, we incurred $2.2 million under this contract.
The following table quantifies our future
contractual obligations as discussed above as of December 31, 2004:
|
|
|
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
Thereafter
|
|
Total
|
Operating
Leases |
|
|
|
$ |
24.3 |
|
|
$ |
22.0 |
|
|
$ |
16.0 |
|
|
$ |
11.7 |
|
|
|
$9.4 |
|
|
$ |
20.5 |
|
|
$ |
103.9 |
|
Obligations to
Outsourcers |
|
|
|
$ |
75.3 |
|
|
$ |
76.5 |
|
|
$ |
76.1 |
|
|
$ |
77.6 |
|
|
$ |
77.4 |
|
|
$ |
197.7 |
|
|
$ |
580.6 |
|
Excludes pension obligations in which funding
requirements are uncertain and long-term contingent liabilities. Our obligations with respect to pension and post-retirement medical benefit plans are
described in Note 10 to these consolidated financial statements. Our long-term contingent liabilities with respect to tax matters are described in Note
13 to these consolidated financial statements.
We are involved in tax and legal proceedings, claims
and litigation arising in the ordinary course of business. We periodically assess our liabilities and contingencies in connection with these matters
based upon the latest information available. For those matters where it is probable that we have incurred a loss and the loss or range of loss can be
reasonably estimated, we have recorded reserves in our consolidated financial statements. In other instances, we are unable to make a reasonable
estimate of any liability because of the uncertainties related to the probability of the outcome and/or amount or range of loss. As additional
information becomes available, we adjust our assessment and estimates of such liabilities accordingly. It is possible that the ultimate resolution of
our liabilities and contingencies could be at amounts that are different from our currently recorded reserves and that such differences could be
material.
Based on our review of the latest information
available, we believe our ultimate liability in connection with pending tax and legal proceedings, claims and litigation will not have a material
effect on our results of operations, cash flows or financial position, with the possible exception of the matters described below.
In order to understand our exposure to the potential
liabilities described below, it is important to understand the relationship between us and Moodys Corporation, our predecessors and other parties
that, through various corporate reorganizations and contractual commitments, have assumed varying degrees of responsibility with respect to such
matters.
In November 1996, the company then known as The Dun
& Bradstreet Corporation (D&B1) separated through a spin-off into three separate public companies: D&B1, ACNielsen Corporation
(ACNielsen) and Cognizant Corporation (Cognizant) (the 1996 Distribution). This was accomplished through a spin-off
by D&B1 of its stock in ACNielsen and Cognizant. In June 1998, D&B1 separated through a spin-off into two separate public companies: D&B1,
which changed its name to R.H. Donnelley Corporation (Donnelley/D&B1), spun off its stock in a new company named The Dun &
Bradstreet Corporation (D&B2) (the 1998 Distribution). During 1998, Cognizant separated into two separate public companies:
IMS Health Incorporated (IMS) and Nielsen Media Research, Inc. (NMR) (the 1998 Cognizant Distribution). In
September 2000, D&B2 separated through a spin-off into two separate public companies: D&B2, which changed its name to Moodys Corporation
(Moodys and also referred to elsewhere in this Form 10-K as Moodys/D&B2), spun off its stock in a new company
named The Dun & Bradstreet Corporation (we or D&B3 and also referred to elsewhere in this Form 10-K as
D&B) (the 2000 Distribution).
96
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Tax Matters
Moodys/D&B2 and its predecessors entered
into global tax-planning initiatives in the normal course of business, principally through tax-free restructurings of both their foreign and domestic
operations. As further described below, we have contractual obligations to be financially responsible for a portion of certain liabilities arising from
three of these historical tax-planning initiatives (Legacy Tax Matters). The status of these Legacy Tax Matters is summarized below,
including our settlement of the matter referred to as Utilization of Capital Losses 19891990 (Capital Losses
Matter) during the fourth quarter of 2004.
Pursuant to a series of tax sharing agreements (the
Tax Sharing Agreements), IMS and NMR are jointly and severally liable for and must pay one-half, and we and Moodys/D&B2 are
jointly and severally liable for and must pay the other half, of any payments over $137 million for taxes, accrued interest and other amounts resulting
from the Legacy Tax Matters (other than the matter summarized under Amortization and Royalty Expense Deductions/Royalty Income
19972004, for which we and Moodys/D&B2 are solely responsible). Moodys/D&B2 was contractually obligated to pay, and did
pay, that $137 million in connection with the Capital Losses Matter.
As further described below, we currently believe
that we have adequate reserves for these matters and, as a result, the ultimate resolution of these Legacy Tax Matters is not expected to have a
material impact on our earnings.
Utilization of Capital Losses 19891990
The IRS completed its review of the utilization of
certain capital losses generated during 1989 and 1990 and, on June 26, 2000, issued a formal notice of adjustment. On May 12, 2000, an amended tax
return was filed for the 1989 and 1990 tax periods, which reflected $561.6 million of tax and interest due. Moodys/D&B2 paid the IRS
approximately $349.3 million of this amount on May 12, 2000, and IMS paid the IRS approximately $212.3 million on May 17, 2000. The payments were made
to the IRS to stop further interest from accruing. Donnelley/D&B1, the taxpayer of record, filed a complaint for a refund in the U.S. District
Court on September 21, 2000.
During the fourth quarter of 2004, the taxpayer
entered into a settlement agreement with the IRS resolving this matter. We expect the net impact of the settlement to our cash flow in 2005 will be
approximately $17.0 million (tax, interest, and penalties, net of tax benefits and inclusive of amounts in dispute with IMS and NMR as described
below), in line with our expectations. This amount will be payable to the IRS following our receipt of the related bills for the settlement. The IRS
has issued to the taxpayer of record a bill with respect to tax year 1990 for $11.6 million which was paid in full by February 24, 2005 by the
companies noted above. Of this amount, we paid $2.9 million. We expect the IRS to issue the bill or bills for the balance of the settlement during the
first half of 2005, based on representations from the IRS.
As stated above, the Tax Sharing Agreements provide
that IMS and NMR are jointly and severally liable and must pay one half, and we and Moodys/D&B2 are jointly and severally liable and must pay
the other half, of tax liabilities relating to this matter. IMS and NMR have indicated to us their belief that they are not responsible for certain
portions of the remaining settlement payment. Given our indemnification obligations to Donnelley/D&B1 (the taxpayer of record) we and
Moodys/D&B2 are required to pay to the IRS on behalf of Donnelley/D&B1 any portion of the settlement amount not paid by IMS and NMR.
Based on our discussions with IMS and NMR, we believe that this dispute with IMS and NMR will require that we pay the IRS approximately $4.5 million
(tax and interest, net of tax benefits) in excess of our allocable share of the settlement under the terms of the Tax Sharing Agreements. We believe
that the position of IMS and NMR on this issue is contrary to their obligations under the Tax Sharing Agreements. If we are unable to resolve this
dispute with IMS and NMR through the negotiation process contemplated by the Tax Sharing Agreements we will commence arbitration proceedings to enforce
our rights to collect these amounts from IMS and NMR. While we believe we will prevail in any such arbitration, we cannot predict with certainty that
we will ultimately achieve this result.
97
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Royalty Expense Deductions 19931997
In the second quarter of 2003, we received on behalf
of Donnelley/D&B1 a proposed notice of deficiency from the IRS proposing adjustments with respect to a partnership transaction entered into in
1993. Specifically, the IRS proposed to disallow certain royalty expense deductions claimed by Donnelley/D&Bl on its 19931996 tax returns. We
estimate that the disallowance of the 1993 and 1994 royalty expense deductions would result in a loss to us of up to $5.0 million in pending tax
refunds. We also estimate that the net impact to D&Bs cash flow with respect to the disallowance of the 1995 and 1996 royalty expense
deductions could be up to $46.2 million (tax, interest and penalties, net of tax benefits).
In addition, and also in the second quarter of 2003,
we received on behalf of the partnership associated with the above transaction a notice of proposed adjustment from the IRS challenging the tax
treatment of certain royalty payments received by the partnership in which Donnelley/D&B1 was a partner. In that notice, the IRS is seeking to
reallocate certain partnership income to Donnelley/D&B1. In January 2004, we received, on behalf of the partnership, a notice of proposed
partnership adjustment, and on behalf of Donnelley/D&B1 a notice of proposed adjustment (similar to those received in the second quarter of 2003)
associated with Donnelley/D&Bls remaining interest in the partnership transaction (as described above) for the three months in 1997 for which
the entities were partners. In April 2004, we received, on behalf of Donnelley/D&B1, a proposed notice of deficiency proposing the adjustments
described in the January 2004 notice. We estimate that the net impact to cash flow with respect to our share of this income for the Notices received in
2003 and 2004 could be up to $22.8 million (tax, interest, and penalties, net of tax benefits). We believe that the position of the IRS regarding the
partnership is inconsistent with its position with respect to the same royalty expense deductions described above and, therefore, the IRS is unlikely
to prevail on both positions. The $22.8 million referenced in this paragraph would be in addition to the $46.2 million noted above related to royalty
expense deductions discussed in the previous paragraph.
We previously reported in our Form 10-Q for the
quarter ended June 30, 2004, that we had negotiated with the IRS a tentative settlement of this matter for tax years 19951996 (the Proposed
Settlement). Per the terms of the Proposed Settlement, the taxpayer would retain approximately 15% of the tax benefit associated with this
transaction and pay a penalty of approximately 7%. During the third quarter of 2004, the IRS tendered to us a final settlement agreement for this
matter, reflecting the financial terms set forth in the related Proposed Settlement. In accordance with the Tax Sharing Agreements we sought consent to
execute the final settlement agreement for this matter from the relevant parties having financial responsibilities under the Tax Sharing Agreements
(i.e., Donnelley/D&B1, Moodys/D&B2, IMS, NMR and D&B). Only NMR and IMS did not consent to the final settlement agreement as tendered
by the IRS. As a result, the settlement agreement was not executed and the IRS withdrew its settlement offer.
The Tax Sharing Agreements, which govern each of the
parties rights and obligations under this situation, provide that, a party withholding consent to a proposed settlement shall continue or
initiate further proceedings with the IRS at its own expense, and the liability of [the party previously in control of such proceedings]
shall be limited to the liability that would have resulted from the proposed settlement agreement (including interest, additions to tax and penalties
which have accrued at that time.) We believe, therefore, as a result of the failure of NMR and IMS to provide their consent that in accordance
with the foregoing provisions (the Royalty Expense Indemnity & Defense Provisions) we have effectively capped our liability for this
matter with respect to tax years 19951996 at the amounts provided in the Royalty Expense Proposed Settlement (and related final
agreement).
Thus, we believe that the ultimate resolution of the
19951996 tax years will have a projected net impact to our cash flow of $37.7 million (tax, interest and penalties, net of tax benefits). We also
believe that in accordance with the terms of the Tax Sharing Agreements NMR would be contractually responsible to pay any excess amounts above the
Proposed Settlement that may ultimately be owing with respect to tax years 19951996.
98
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
IMS has alleged various breaches of our obligations
under the Tax Sharing Agreements related to our management and attempted settlement of this matter. In addition to reserving its rights
against D&B, IMS has urged NMR to:
|
|
challenge our application of the Royalty Expense Indemnity &
Defense Provisions of the Tax Sharing Agreements (namely, that NMR must now lead the defense and that NMR and IMS indemnify us for any financial
outcome that is less advantageous to us than the final settlement); and |
|
|
assert breaches of contract and to terminate the obligations of
IMS and NMR under the Tax Sharing Agreements generally. |
We believe that neither NMR nor IMS have any right
or the legal basis to terminate their obligations under the Tax Sharing Agreements and that any attempt to do so will be found to be without
merit.
We anticipate commencing arbitration proceedings to
enforce our rights under the Royalty Expense Indemnity & Defense Provisions should the negotiation process required by the Tax Sharing Agreements
fail to resolve the parties dispute. While we believe that we should prevail in such arbitration, and thereby effectively cap our exposure with
respect to tax years 19951996 at the levels described above, we cannot predict with certainty that we will ultimately achieve that
outcome.
As noted above, the IRS has withdrawn its settlement
offer with respect to tax years 19951996 and, accordingly, may issue notices preliminary to making assessments at any time. If we, on behalf of
Donnelley/D&B1 and Moodys/D&B2, were to challenge at any time, any of the IRS positions for years other than 1993 and 1994 described
above in U.S. District Court or the U.S. Court of Federal Claims, rather than in U.S. Tax Court, the disputed amounts for each applicable year would
need to be paid in advance for the Court to have jurisdiction over the case. It is possible that the IRS may seek to issue such notices with respect to
each of the inconsistent positions noted above.
Amortization and Royalty Expense Deductions/Royalty Income
19972004
In the fourth quarter of 2003, we received on behalf
of Donnelley/D&B1 and Moodys/D&B2, IRS Notices of Proposed Adjustment with respect to a partnership transaction entered into in 1997. In
addition, we received, on behalf of the partnership, various IRS materials further explaining the examining agents position with respect to the
activities of the partnership in 19971998.
In April 2004, we received on behalf of
Donnelley/D&B1 and Moodys/D&B2 proposed notices of deficiency from the IRS, proposing adjustments with respect to the 1997 partnership
transaction. The adjustments proposed in the notices reflect the notices of proposed adjustment and other IRS materials referred to
above.
Specifically, the IRS asserted that certain
amortization expense deductions claimed by Donnelley/D&Bl and Moodys/D&B2 on their 19971998 tax returns should be disallowed. We
estimate that the net impact to cash flow as a result of the disallowance of the 1997 and 1998 amortization deductions and the disallowance of such
deductions claimed from 1999 to date could be up to $59.9 million (tax, interest and penalties, net of tax benefits but not taking into account the
Moodys/D&B2 repayment to us of $37.2 million described below). This transaction is scheduled to expire in 2012 and, unless terminated by us,
the net impact to cash flow, based on current interest rates and tax rates would increase at a rate of approximately $2.1 million per quarter
(including potential penalties) as future amortization expenses are deducted. At the 2000 Distribution date, we paid Moodys/D&B2
approximately $55 million in cash representing the discounted value of future tax benefits associated with this transaction. However, pursuant to the
terms of the distribution agreement for the 2000 Distribution, should the transaction be terminated, Moodys/D&B2 would be required to repay
us an amount equal to the discounted value of its 50% share of the related future tax benefits. If the transaction was terminated at December 31, 2004,
the amount of such repayment from Moodys/D&B2 to us would be approximately $37.2 million and would decrease by approximately $4.0 million to
$5.0 million per year.
99
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
In addition, the IRS has asserted that royalty
expense deductions, claimed by Donnelley/D&B1 and Moodys/D&B2 on their tax returns for 19971998, for royalties paid to the
partnership, should be disallowed. Relatedly, the IRS has asserted that the receipt of these same royalties by the partnership should be reallocated to
and reported as royalty income by Donnelley/D&Bl and Moodys/D&B2, including the portions of the royalties that were allocated to
third-party partners in the partnership, and, thus, included in their taxable income. We believe that the IRS stated positions with respect to
the treatment of the royalty expense and royalty income are mutually inconsistent. If the IRS prevails on one of the positions with respect to the
royalty expense and royalty income, we believe that it is unlikely that it will prevail on the other position. As a result, we believe that after
taking into account certain other tax benefits resulting from the IRS position on the partnership it is unlikely that there will be any net
impact to cash flow in addition to the amounts noted above related to the amortization expense deduction.
In the unlikely event the IRS were to prevail on
both positions with respect to the royalty expense/income, we estimate that the net impact to cash flow as a result of the disallowance of the
19971998 royalty expense deductions, the disallowance of such deductions claimed from 1999 to date and the inclusion of the reallocated royalty
income for all relevant years could be up to $140.7 million (tax, interest, and penalties, net of tax benefits). This $140.7 million would be in
addition to the $59.9 million noted above related to the amortization expense deduction.
We have filed protests relating to this matter with
the IRS Office of Appeals. During the third quarter of 2004, we were informed by the IRS Office of Appeals that this matter was being returned to the
Examination Division of the IRS for further development of the issues. We are attempting to resolve this matter with the IRS before proceeding to
litigation, if necessary. If we, on behalf of Donnelley/D&B1 and Moodys/D&B2, were to challenge, at any time, any of these IRS positions
for years 1997 and 1998 in U.S. District Court or the U.S. Court of Federal Claims, rather than in U.S. Tax Court, the disputed amounts for each
applicable year would need to be paid in advance for the Court to have jurisdiction over the case. It is possible that the IRS may seek to issue such
notices with respect to each of the inconsistent positions noted above.
We have considered the foregoing Legacy Tax Matters
and the merits of the legal defenses and the various contractual obligations in our overall assessment of potential tax liabilities. We have net $108
million recorded in the consolidated financial statements, made up of the following components: $17 million of reserves in Accrued Income Tax and $91
million in Other Non-Current Liabilities. We believe that these reserves are adequate for our share of the liabilities in these Legacy Tax Matters. Any
payments that would be made for these exposures could be significant to our cash from operations in the period a cash payment took place, including any
payments for the purpose of obtaining jurisdiction in U.S. District Court or the U.S. Court of Federal Claims to challenge any of the IRSs
positions.
Legal Proceedings
Information Resources,
Inc.
Introduction
The following is a description of an antitrust
lawsuit filed in 1996 by Information Resources, Inc. (IRI). As more fully described below, VNU N.V., a publicly traded Dutch company
(VNU), and its U.S. subsidiaries VNU, Inc., ACNielsen, AC Nielsen (US), Inc. (ACN (US)), and Nielsen Media Research
(NMR) (collectively, the VNU Parties), have assumed exclusive joint and several liability for any judgment or settlement of
this antitrust lawsuit. As a result of the indemnity obligation, D&B does not have any exposure to a judgment or settlement of this lawsuit unless
the VNU Parties default on their obligations. In the event of such default, contractual commitments undertaken by D&B in connection with various
corporate reorganizations since 1996, including our spin-off from Moodys/D&B2 in 2000, require us to bear a portion of any amount not paid by
the VNU Parties. See below D&Bs Potential Exposure in the Lawsuit.
100
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Moreover, as described below, on February 1,
2005, the U.S. District Court for the Southern District of New York entered a final judgment against IRI dismissing IRIs claims. IRI filed a
notice of appeal to the Second Circuit Court of Appeals on February 2, 2005. The Court of Appeals for the Second Circuit has ordered that the appeal be
argued no earlier than the week of June 13, 2005.
Overview of the Lawsuit
In July 1996, IRI filed a complaint, subsequently
amended in 1997, in the U.S. District Court for the Southern District of New York, naming as defendants a company then known as The Dun &
Bradstreet Corporation and now known as R.H. Donnelley (referred to in this Form 10-K as Donnelley/D&B1), A.C. Nielsen Company (a subsidiary of
ACNielsen) and IMS International, Inc. (a subsidiary of the company then known as Cognizant Corporation). At the time of the filing of the complaint,
each of the other defendants was a wholly-owned subsidiary of Donnelley/D&B1.
The amended complaint alleges various violations of
United States antitrust laws under Sections 1 and 2 of the Sherman Antitrust Act. IRIs antitrust claims allege that defendants developed and
implemented a plan to undermine IRIs ability to compete within the United States and foreign markets in North America, Latin America, Asia,
Europe and Australia/New Zealand through a series of anti-competitive practices, including: unlawfully tying/bundling services in the markets in which
defendants allegedly had monopoly power with services in markets in which ACNielsen competed with IRI; entering into exclusionary contracts with
retailers in certain countries to deny IRIs access to sales data necessary to provide retail tracking services or to artificially raise the cost
of that data; predatory pricing; acquiring foreign market competitors with the intent of impeding IRIs efforts to expand; disparaging IRI to
financial analysts and clients; and denying IRI access to capital necessary for it to compete.
IRI is seeking damages in excess of $650 million,
which IRI also asked to be trebled. IRI has filed with the court the report of its expert who has opined that IRI suffered damages of between $582
million and $652 million from the defendants alleged practices. IRI also sought punitive damages in an unspecified amount, which the Company
believes are precluded as a result of the dismissal of one of IRIs claims.
On December 3, 2004, the Court entered In limine
Order No. 1, which bars IRI from arguing that Nielsens pricing practices or discounts were illegal or anti-competitive unless it can prove
they involved prices below short-run average variable cost, calculated without the inclusion of Nielsens ‘Fixed Operations
costs. On December 17, 2004, IRI issued a press release, which said, in relevant part, Without this evidence, IRI believes that little
would be left of IRIs case to take to trial. IRI has asked the Court to enter a final judgment against it so that it can take an immediate
appeal to the Second Circuit. The defendants did not object to this request. On February 1, 2005, the Court entered a final judgment dismissing
IRIs claims and on February 2, 2005, the Court entered IRIs notice of appeal to the Court of Appeals for the Second Circuit. The Court of
Appeals for the Second Circuit has ordered that the appeal be argued no earlier than the week of June 13, 2005.
The Indemnity and Joint Defense
Agreement
In connection with the 1996 Distribution, Cognizant
(now NMR), ACNielsen and Donnelley/D&B1 entered into an Indemnity and Joint Defense Agreement (the Original JDA), pursuant to which
they agreed to:
|
|
allocate potential liabilities that may relate to, arise out of
or result from the IRI lawsuit (IRI Liabilities); and |
|
|
conduct a joint defense of such action. |
101
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
VNUs and D&Bs Involvement in the
Lawsuit
In 2001, ACNielsen was acquired by VNU. VNU assumed
ACNielsens obligations under the Original JDA.
Under the terms of the 1998 Distribution, D&B2
assumed all potential liabilities of Donnelley/D&B1 arising from the IRI action and agreed to indemnify Donnelly/D&B1 in connection with such
potential liabilities. Under the terms of the 2000 Distribution, D&B undertook to be jointly and severally liable with Moodys/D&B2 for
D&B2s obligations to Donnelley/D&B1 under the 1998 Distribution, including for any liabilities arising under the Original JDA and arising
from the IRI action itself. However, as between us and Moodys/D&B2, we agreed that under the 2000 Distribution, each of us and
Moodys/D&B2 will be responsible for 50% of any payments required to be made by Moodys/D&B2 with respect to the IRI action under the
terms of the 1998 Distribution, including legal fees or expenses related to the IRI action.
The Amended and Restated JDA
On July 30, 2004, the VNU Parties,
Donnelley/D&B1, D&B, Moodys/D&B2 and IMS, entered into an Amended and Restated Indemnity and Joint Defense Agreement (the
Amended JDA).
Pursuant to the Amended JDA, any and all IRI
Liabilities incurred by Donnelley/D&B1, D&B, Moodys/D&B2 or IMS relating to a judgment (even if not final) or any settlement being
entered into in the IRI action will be jointly and severally assumed and fully discharged exclusively by the VNU Parties. Under the Amended JDA, the
VNU Parties have agreed to, jointly and severally, indemnify Donnelley/D&B1, D&B, Moodys/D&B2 and IMS from and against all IRI
Liabilities to which they become subject. As a result, the cap on ACNielsens liability for the IRI Liabilities, which the Original JDA provided
for, no longer exists, and all such liabilities are the responsibility of the VNU Parties pursuant to the Amended JDA.
In addition, the Amended JDA provides that if it
becomes necessary to post any bond pending an appeal of an adverse judgment, then the VNU Parties shall obtain the bond required for the appeal and
shall pay the full cost of such bond.
In connection with entering into the Amended JDA,
Donnelley/D&B1, D&B, Moodys/D&B2 and IMS agreed to amend certain covenants of the Original JDA to provide operational flexibility for
ACNielsen going forward. In addition, the Amended JDA includes certain amendments to the covenants of ACNielsen (which, under the Amended JDA, are now
also applicable to ACN (US), which we understand holds ACNielsens operating assets), which are designed to preserve such parties
claim-paying ability and protect Donnelley/D&B1, D&B, Moodys/D&B2 and IMS. Among other covenants, ACNielsen and ACN (US) agreed that
neither they nor any of their respective subsidiaries will incur any indebtedness to any affiliated person, except indebtedness which its payment will,
after a payment obligation under the Amended JDA comes due, be conditioned on, and subordinated to, the payment and performance of the obligations of
such parties under the Amended JDA. VNU has agreed to have a process agent in New York receive on its behalf service of any process concerning the
Amended JDA.
D&Bs Potential Exposure in the
Lawsuit
As described above, the VNU Parties have assumed
exclusive responsibility for the payment of all IRI Liabilities. However, because liability for violations of the antitrust laws is joint and several
and because the rights and obligations relating to the Amended JDA are based on contractual relationships, the failure of the VNU Parties to fulfill
their obligations under the Amended JDA could result in the other parties bearing all or a share of the IRI Liabilities.
Joint and several liability for the IRI action means
that even where more than one defendant is determined to have been responsible for an alleged wrongdoing, the plaintiff can collect all or part of the
judgment from just one of the defendants. This is true regardless of whatever contractual allocation of responsibility the defendants and any other
indemnifying parties may have made, including the allocations described above between the VNU Parties, Donnelly/D&B1, D&B,
Moodys/D&B2 and IMS.
102
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Accordingly, and as a result of the allocations of
liability described above, in the event the VNU Parties default on their obligations under the Amended JDA, each of Moodys/D&B2 and D&B
will be responsible for the payment of 50% of the portion of any judgment or settlement ultimately paid by Donnelley/D&B1 (which is a defendant in
the IRI action), which can be as high as all the IRI Liabilities.
While, as described above, the IRI lawsuit has been
dismissed, IRI has filed an appeal. Accordingly, we are unable to predict the outcome of the IRI action (including the appeal) or the financial
condition of any of the VNU Parties or the other defendants at the time of any such outcome (and hence we cannot estimate their ability to pay the IRI
Liabilities pursuant to the Amended JDA or the judgment or settlement in the IRI action). However, provided that the VNU Parties fulfill their
obligations under the Amended JDA, we believe that the resolution of this matter would not materially affect our results of operations, cash flows and
financial position. Accordingly, no amount in respect of this matter has been accrued in our consolidated financial statements. If, however, IRI were
to prevail in whole or in part in this action and if D&B is required to pay, notwithstanding such contractual obligations, a portion of any
significant settlement or judgment, the outcome of this matter could have a material adverse effect on D&Bs financial position, results of
operations and cash flows.
Hoovers Initial Public Offering
Litigation
On November 15, 2001, a putative shareholder class
action lawsuit was filed against Hoovers, certain of its then current and former officers and directors (the Individual Defendants),
and one of the investment banks that was an underwriter of Hoovers July 1999 initial public offering (IPO). The lawsuit was filed in
the United States District Court for the Southern District of New York and purports to be a class action filed on behalf of purchasers of the stock of
Hoovers during the period from July 20, 1999 through December 6, 2000.
A Consolidated Amended Complaint, which is now the
operative complaint, was filed on April 19, 2002. The purported class action alleges violations of Sections 11 and 15 of the Securities Act of 1933, as
amended, (the 1933 Act) and Sections 10(b), Rule 10b-5 and 20(a) of the Securities Exchange Act of 1934, as amended, against Hoovers
and Individual Defendants. Plaintiffs allege that the underwriter defendant agreed to allocate stock in Hoovers IPO to certain investors in
exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at
predetermined prices above the IPO price. Plaintiffs allege that the Prospectus for Hoovers IPO was false and misleading in violation of the
securities laws because it did not disclose these arrangements. The action seeks damages in an unspecified amount. The defense of the action is being
coordinated with more than 300 other nearly identical actions filed against other companies. On July 15, 2002, Hoovers moved to dismiss all
claims against it and the Individual Defendants. On October 9, 2002, the Court dismissed the Individual Defendants from the case based upon
Stipulations of Dismissal filed by the plaintiffs and the Individual Defendants. On February 19, 2003, the Court denied the motion to dismiss the
complaint against Hoovers. On October 13, 2004, the Court certified a class in six of the approximately 300 other nearly identical actions and
noted that the decision is intended to provide strong guidance to all parties regarding class certification in the remaining cases. Plaintiffs have not
yet moved to certify a class in the case involving Hoovers.
Hoovers has approved a settlement agreement
and related agreements that set forth the terms of a settlement between Hoovers, the plaintiff class and the vast majority of the other
approximately 300 issuer defendants. Among other provisions, the settlement provides for a release of Hoovers and the individual defendants for
the conduct alleged in the action to be wrongful. Hoovers would agree to undertake certain responsibilities, including agreeing to assign away,
not assert, or release certain potential claims Hoovers may have against its underwriters. The settlement agreement also provides a guaranteed
recovery of $1 billion to plaintiffs for the cases relating to all of the approximately 300 issuers. To the extent that the underwriter defendants
settle all of the cases for at least $1 billion, no payment will be required under the issuers settlement agreement. To the extent that the
underwriter defendants settle for less than $1 billion, the issuers are required to make up the difference. It is anticipated that any potential
financial obligation of Hoovers to plaintiffs pursuant to the terms of the settlement agreement and related agreements will be covered by
existing
103
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
insurance.
Hoovers currently is not aware of any material limitations on the expected
recovery of any potential financial obligation to plaintiffs from its insurance carriers.
Its carriers are solvent, and Hoovers is not aware of any uncertainties as to the
legal sufficiency of an insurance claim with respect to any recovery by plaintiffs.
Therefore, we do not expect that the settlement will involve any payment by Hoovers.
If material limitations on the expected recovery of any potential financial obligation
to the plaintiffs from Hoovers insurance carriers should arise, Hoovers
maximum financial obligation to plaintiffs pursuant to the settlement agreement is less
than $3.4 million. On February 15, 2005, the Court granted preliminary approval of the
settlement agreement, subject to certain modifications consistent with its opinion. The
Court ruled that the issuer defendants and the plaintiffs must submit a revised
settlement agreement that provides for a mutual bar of all contribution claims by the
settling and non-settling parties and does not bar the parties from pursuing other
claims. There is a conference scheduled with the judge on March 18, 2005 to discuss the
status of the revised settlement agreement. The underwriter defendants will have an
opportunity to object to the revised settlement agreement. There is no assurance that the
parties to the settlement will be able to agree to a revised settlement agreement
consistent with the courts opinion, or that the court will grant final approval to
the settlement to the extent the parties reach agreement.
As previously noted, if the settlement is ultimately
approved and implemented in its current form, Hoovers reasonably foreseeable exposure in this matter, if any, would be limited to amounts that
would be covered by existing insurance. If the settlement is not approved in its current form, we cannot predict the final outcome of this matter or
whether such outcome or ultimate resolution of this matter could materially affect our results of operations, cash flows or financial position. No
amount in respect of any potential judgment in this matter has been accrued in our consolidated financial statements.
Pension Plan
Litigation
In March 2003, a lawsuit seeking class action status
was filed against us in federal court in Connecticut on behalf of 46 specified former employees relating to our retirement plans. As noted below,
during the fourth quarter of 2004 most of the counts in the complaint were dismissed. The complaint, as amended in July 2003 (the Amended
Complaint), sets forth the following putative class:
|
|
current D&B employees who are participants in The Dun &
Bradstreet Corporation Retirement Account and were previously participants in its predecessor plan, The Dun & Bradstreet Master Retirement
Plan; |
|
|
current employees of Receivable Management Services Corporation
(RMSC) who are participants in The Dun & Bradstreet Corporation Retirement Account and were previously participants in its predecessor
plan, The Dun & Bradstreet Master Retirement Plan; |
|
|
former employees of D&B or D&Bs Receivable
Management Services (RMS) operations who received a deferred vested retirement benefit under either The Dun & Bradstreet Corporation
Retirement Account or The Dun & Bradstreet Master Retirement Plan; and |
|
|
former employees of D&Bs RMS operations whose
employment with D&B terminated after the sale of the RMS operations but who are not employees of RMSC and who, during their employment with
D&B, were Eligible Employees for purposes of The Dun & Bradstreet Career Transition Plan. |
The Amended Complaint estimates that the proposed
class covers over 5,000 individuals.
There are four counts in the Amended Complaint.
Count 1 claims that we violated ERISA by not paying severance benefits to plaintiffs under our Career Transition Plan. Count 2 claims a violation of
ERISA in that our sale of the RMS business to RMSC and the resulting termination of our employees constituted a prohibited discharge of the plaintiffs
and/or discrimination against the plaintiffs for the intentional purpose of interfering with their employment and/or attainment of employee
benefit rights which they might otherwise have attained. Count 3 claims that the plaintiffs were materially harmed by our alleged violation of
ERISAs
104
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
requirements that a summary plan description
reasonably apprise participants and beneficiaries of their rights and obligations under the plans and that, therefore, undisclosed plan provisions (in
this case, the actuarial deduction beneficiaries incur when they leave D&B before age 55 and elect to retire early) cannot be enforced against
them. Count 4 claims that the 6-3/5% interest rate (the rate is actually 6-3/4%) used to actuarially reduce early retirement benefits is unreasonable
and, therefore, results in a prohibited forfeiture of benefits under ERISA.
In the Amended Complaint, the plaintiffs sought
payment of severance benefits; equitable relief in the form of either reinstatement of employment with D&B or restoration of employee benefits
(including stock options); invalidation of the actuarial reductions applied to deferred vested early retirement benefits, including invalidation of the
plan rate of 6-3/5% (the actual rate is 6-3/4%) used to actuarially reduce former employees early retirement benefits; attorneys fees and
such other relief as the court may deem just.
We deny all allegations of wrongdoing and are
aggressively defending the case. In September 2003, we filed a motion to dismiss Counts 1, 3 and 4 of the Amended Complaint on the ground that
plaintiffs cannot prevail on those claims under any set of facts, and in February 2004, the Court heard oral argument on our motion. With respect to
Count 4, the Court requested that the parties conduct limited expert discovery and submit further briefing. In November 2004, after completion of
expert discovery on Count 4, we moved for summary judgment on Count 4 on the ground that an interest rate of 6.75% is reasonable as a matter of law.
Briefing on that motion is being completed. Meanwhile, on November 30, 2004 the Court issued a ruling granting our motion to dismiss Counts 1 and 3.
Shortly after that ruling, plaintiffs counsel stipulated to dismiss Count 2 (which challenged the sale of the RMS business as an intentional
interference with employee benefit rights, but which the motion to dismiss did not address). Plaintiffs counsel also stipulated to a dismissal of
Count 1, the severance pay claim, agreeing to forego any appeal of the Courts dismissal of that claim. Plaintiffs counsel did file a motion
to join party plaintiffs and to amend the amended complaint to add a new count challenging the adequacy of the retirement plans mortality tables.
The court granted the motion and we have filed our objections.
We are unable to predict at this time the final
outcome of this matter or whether the resolution of this matter could materially affect our results of operations, cash flows or financial position. No
amount in respect of this matter has been accrued in our consolidated financial statements.
Other Matters
In the normal course of business, D&B
indemnifies other parties, including customers, lessors and parties to other transactions with D&B, with respect to certain matters. D&B has
agreed to hold the other parties harmless against losses arising from a breach of representations or covenants, or out of other claims made against
certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. D&B has also
entered into indemnity obligations with its officers and directors of the Company. Additionally, in certain circumstances, D&B issues guarantee
letters on behalf of our wholly owned subsidiaries for specific situations. It is not possible to determine the maximum potential amount of future
payments under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances
involved in each particular agreement. Historically, payments made by D&B under these agreements have not had a material impact on our consolidated
financial statements.
105
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Note 14. |
|
Segment Information |
The segments reported below are our segments for
which separate financial information is available and upon which operating results are evaluated on a timely basis to assess performance and to
allocate resources. We manage our business on a geographical basis with two segments, North America and International. Our customer solution
sets are Risk Management Solutions, Sales & Marketing Solutions, Supply Management Solutions and E-Business Solutions. Inter-segment sales are
immaterial and no single customer accounted for 10% or more of our total revenues. For management reporting purposes, we evaluate business segment
performance before restructuring charges because they are not a component of our ongoing income or expenses and may have a disproportionate positive or
negative impact on the results of our ongoing underlying business (see Item 7. Managements Discussion and Analysis of Financial Condition
and Results of Operations, under the heading How We Manage Our Business for further details). Additionally, transition costs, which
are period costs such as consulting fees, costs of temporary employees, relocation costs and stay bonuses incurred to implement our Financial
Flexibility Program, are not allocated to our business segments.
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2004
|
|
2003
|
|
2002
|
Operating
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
1,038.3 |
|
|
$ |
960.1 |
|
|
$ |
912.1 |
|
International |
|
|
|
|
375.7 |
|
|
|
426.3 |
|
|
|
363.5 |
|
Consolidated
Total |
|
|
|
$ |
1,414.0 |
|
|
$ |
1,386.4 |
|
|
$ |
1,275.6 |
|
Operating
Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
365.3 |
|
|
$ |
329.9 |
|
|
$ |
313.1 |
|
International |
|
|
|
|
64.3 |
|
|
|
59.9 |
|
|
|
43.5 |
|
Total
Divisions |
|
|
|
|
429.6 |
|
|
|
389.8 |
|
|
|
356.6 |
|
All
Other(1) |
|
|
|
|
(110.8 |
) |
|
|
(98.0 |
) |
|
|
(100.7 |
) |
Consolidated
Total |
|
|
|
|
318.8 |
|
|
|
291.8 |
|
|
|
255.9 |
|
Non-Operating
Income (Expense) Net |
|
|
|
|
22.0 |
|
|
|
(11.4 |
) |
|
|
(16.7 |
) |
Income before
Provision for Income Taxes |
|
|
|
$ |
340.8 |
|
|
$ |
280.4 |
|
|
$ |
239.2 |
|
Depreciation and Amortization:(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
35.7 |
|
|
$ |
41.1 |
|
|
$ |
57.7 |
|
International |
|
|
|
|
10.9 |
|
|
|
19.6 |
|
|
|
23.9 |
|
Total
Divisions |
|
|
|
|
46.6 |
|
|
|
60.7 |
|
|
|
81.6 |
|
All
Other |
|
|
|
|
0.7 |
|
|
|
3.3 |
|
|
|
2.6 |
|
Consolidated
Total |
|
|
|
$ |
47.3 |
|
|
$ |
64.0 |
|
|
$ |
84.2 |
|
Capital
Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
7.3 |
|
|
$ |
7.7 |
|
|
$ |
10.6 |
|
International |
|
|
|
|
4.6 |
|
|
|
3.3 |
|
|
|
5.2 |
|
Total
Divisions |
|
|
|
|
11.9 |
|
|
|
11.0 |
|
|
|
15.8 |
|
All
Other |
|
|
|
|
0.2 |
|
|
|
|
|
|
|
|
|
Consolidated
Total |
|
|
|
$ |
12.1 |
|
|
$ |
11.0 |
|
|
$ |
15.8 |
|
106
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2004
|
|
2003
|
|
2002
|
Additions
to Computer Software and Other Intangibles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
14.0 |
|
|
$ |
16.5 |
|
|
$ |
29.8 |
|
International |
|
|
|
|
2.6 |
|
|
|
2.8 |
|
|
|
7.7 |
|
Total
Divisions |
|
|
|
|
16.6 |
|
|
|
19.3 |
|
|
|
37.5 |
|
All
Other |
|
|
|
|
0.1 |
|
|
|
|
|
|
|
0.2 |
|
Consolidated
Total |
|
|
|
$ |
16.7 |
|
|
$ |
19.3 |
|
|
$ |
37.7 |
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
467.3 |
|
|
$ |
456.8 |
|
|
$ |
366.0 |
|
International |
|
|
|
|
455.5 |
|
|
|
541.1 |
|
|
|
493.1 |
|
Total
Divisions |
|
|
|
|
922.8 |
|
|
|
997.9 |
|
|
|
859.1 |
|
All Other
(primarily domestic pensions and taxes) |
|
|
|
|
712.7 |
|
|
|
626.8 |
|
|
|
668.6 |
|
Consolidated
Total |
|
|
|
$ |
1,635.5 |
|
|
$ |
1,624.7 |
|
|
$ |
1,527.7 |
|
Goodwill:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
110.9 |
|
|
$ |
118.0 |
|
|
$ |
51.6 |
|
International |
|
|
|
|
106.1 |
|
|
|
138.9 |
|
|
|
131.7 |
|
Consolidated
Total |
|
|
|
$ |
217.0 |
|
|
$ |
256.9 |
|
|
$ |
183.3 |
|
Supplemental Geographic and Customer Solution Set Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Lived
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
580.6 |
|
|
$ |
642.8 |
|
|
$ |
534.8 |
|
International |
|
|
|
|
136.7 |
|
|
|
167.5 |
|
|
|
267.8 |
|
Consolidated
Total |
|
|
|
$ |
717.3 |
|
|
$ |
810.3 |
|
|
$ |
802.6 |
|
Customer
Solution Set Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk
Management Solutions |
|
|
|
$ |
639.7 |
|
|
$ |
603.6 |
|
|
$ |
594.3 |
|
Sales &
Marketing Solutions |
|
|
|
|
318.9 |
|
|
|
294.1 |
|
|
|
289.1 |
|
Supply
Management Solutions |
|
|
|
|
29.8 |
|
|
|
33.4 |
|
|
|
28.7 |
|
E-Business
Solutions |
|
|
|
|
49.9 |
|
|
|
29.0 |
|
|
|
|
|
Total North
America Core |
|
|
|
|
1,038.3 |
|
|
|
960.1 |
|
|
|
912.1 |
|
Other
Divested Businesses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total North
America |
|
|
|
|
1,038.3 |
|
|
|
960.1 |
|
|
|
912.1 |
|
International:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk
Management Solutions |
|
|
|
|
242.3 |
|
|
|
200.7 |
|
|
|
160.3 |
|
Sales &
Marketing Solutions |
|
|
|
|
49.3 |
|
|
|
48.3 |
|
|
|
42.0 |
|
Supply
Management Solutions |
|
|
|
|
4.5 |
|
|
|
4.6 |
|
|
|
2.7 |
|
E-Business
Solutions |
|
|
|
|
0.1 |
|
|
|
|
|
|
|
|
|
Total
International Core |
|
|
|
|
296.2 |
|
|
|
253.6 |
|
|
|
205.0 |
|
107
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2004
|
|
2003
|
|
2002
|
Other
Divested Businesses |
|
|
|
|
79.5 |
|
|
|
172.7 |
|
|
|
158.5 |
|
Total
International |
|
|
|
|
375.7 |
|
|
|
426.3 |
|
|
|
363.5 |
|
Consolidated Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk
Management Solutions |
|
|
|
|
882.0 |
|
|
|
804.3 |
|
|
|
754.6 |
|
Sales &
Marketing Solutions |
|
|
|
|
368.2 |
|
|
|
342.4 |
|
|
|
331.1 |
|
Supply
Management Solutions |
|
|
|
|
34.3 |
|
|
|
38.0 |
|
|
|
31.4 |
|
E-Business
Solutions |
|
|
|
|
50.0 |
|
|
|
29.0 |
|
|
|
|
|
Consolidated
Total Core |
|
|
|
|
1,334.5 |
|
|
|
1,213.7 |
|
|
|
1,117.1 |
|
Other
Divested Businesses |
|
|
|
|
79.5 |
|
|
|
172.7 |
|
|
|
158.5 |
|
Consolidated
Total |
|
|
|
$ |
1,414.0 |
|
|
$ |
1,386.4 |
|
|
$ |
1,275.6 |
|
(1) |
|
The following table itemizes All Other: |
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2004
|
|
2003
|
|
2002
|
Operating
Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Costs |
|
|
|
$ |
(58.2 |
) |
|
$ |
(44.5 |
) |
|
$ |
(38.4 |
) |
Transition
Costs (Costs to implement our Financial Flexibility Program) |
|
|
|
|
(20.6 |
) |
|
|
(22.3 |
) |
|
|
(31.4 |
) |
Restructuring
Expense |
|
|
|
|
(32.0 |
) |
|
|
(17.4 |
) |
|
|
(30.9 |
) |
Loss on High
Wycombe Building Sale |
|
|
|
|
|
|
|
|
(13.8 |
) |
|
|
|
|
Total
All Other |
|
|
|
$ |
(110.8 |
) |
|
$ |
(98.0 |
) |
|
$ |
(100.7 |
) |
(2) |
|
Includes depreciation and amortization of Property, Plant and
Equipment, Computer Software, Goodwill and Other Intangibles. |
(3) |
|
The decrease in goodwill in North America from $118.0 million at
December 31, 2003 to $110.9 million at December 31, 2004 is primarily attributed to an adjustment for additional net operating loss carryovers from the
Hoovers acquisition that resulted from an Internal Revenue Service pronouncement. The decrease in goodwill in International from $138.9 million
at December 31, 2003 to $106.1 million at December 31, 2004 is primarily attributed to the sales of operations in Iberia, France, Central Europe, the
Nordic region and, India (see Note 3 for more detail), partially offset by the positive effect of foreign currency translation and the acquisition of a
controlling interest in RIBES S.p.A (see Note 4 for more detail). The increase in goodwill in North America from $51.6 million at December 31, 2002
to $118.0 million at December 31, 2003 is primarily attributed to the acquisition of Hoovers. The increase in goodwill in International from
$131.7 million at December 31, 2002 to $138.9 million at December 31, 2003 is primarily attributed to the acquisition of Data House. (See Note 4 for
more detail). |
108
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Note 15. Supplemental Financial Data
Other Accrued and Current
Liabilities:
|
|
|
|
At December 31,
|
|
|
|
|
|
2004
|
|
2003
|
Restructuring
Accruals |
|
|
|
$ |
9.3 |
|
|
$ |
2.7 |
|
Professional
Fees |
|
|
|
|
27.5 |
|
|
|
29.5 |
|
Operating
Expenses |
|
|
|
|
31.5 |
|
|
|
37.0 |
|
Spin-Off
Obligation(1) |
|
|
|
|
21.3 |
|
|
|
|
|
Other Accrued
Liabilities |
|
|
|
|
51.2 |
|
|
|
60.1 |
|
|
|
|
|
$ |
140.8 |
|
|
$ |
129.3 |
|
(1) |
|
As part of our spin-off from Moodys/D&B2 in 2000,
Moodys and D&B entered into a Tax Allocation Agreement dated as of September 30, 2000 (the TAA). Under the TAA,
Moodys/D&B2 and D&B agreed that Moodys/D&B2 would be entitled to deduct compensation expense associated with the exercise of
Moodys/D&B2 stock options (including Moodys/D&B2 options exercised by D&B employees), and D&B would be entitled to deduct
the compensation expense associated with the exercise of D&B stock options (including D&B options exercised by employees of
Moodys/D&B2). Put simply, the tax deduction goes to the issuing company of the stock option. The TAA provides, however, that if the IRS
issues rules, regulations or other authority contrary to the agreed upon treatment of the tax deductions thereunder, then the party that becomes then
entitled to take the deduction may be required to indemnify the other party for the loss of such deduction. The IRS issued rulings discussing an
employers entitlement to stock option deductions after a spin-off or liquidation that appears to require that the tax deduction belongs to the
employer of the optionee and not the issuer of the option. Accordingly, under the TAA, we received the benefit of additional tax deductions and under
the TAA we may be required to reimburse Moodys/D&B2 for the loss of income tax deductions relating to 2003 and 2004 of approximately $21
million in the aggregate for such years. This potential reimbursement is a reduction to Shareholders Equity and has no impact on EPS. |
Property, Plant and Equipment Net, carried at cost:
|
|
|
|
At December 31,
|
|
|
|
|
|
2004
|
|
2003
|
Land |
|
|
|
$ |
4.7 |
|
|
$ |
4.7 |
|
Buildings |
|
|
|
|
29.1 |
|
|
|
28.9 |
|
Machinery and
Equipment |
|
|
|
|
196.3 |
|
|
|
221.0 |
|
|
|
|
|
|
230.1 |
|
|
|
254.6 |
|
Less:
Accumulated Depreciation |
|
|
|
|
186.9 |
|
|
|
209.7 |
|
|
|
|
|
|
43.2 |
|
|
|
44.9 |
|
Leasehold
Improvements, less:
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Amortization of $15.6 and $20.4 |
|
|
|
|
8.0 |
|
|
|
10.2 |
|
|
|
|
|
$ |
51.2 |
|
|
$ |
55.1 |
|
109
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Other Income (Expense) Net:
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2004
|
|
2003
|
|
2002
|
Miscellaneous
Other Income (Expense) Net |
|
|
|
$ |
1.0 |
|
|
$ |
(1.9 |
) |
|
$ |
(2.3 |
) |
Gains
(Losses) on Sales of Businesses(2) |
|
|
|
|
30.3 |
|
|
|
(2.5 |
) |
|
|
5.0 |
|
Gain on Sale
of Investment |
|
|
|
|
1.2 |
|
|
|
0.4 |
|
|
|
|
|
Write-off of
Non-Recoverable Investments(2) |
|
|
|
|
|
|
|
|
|
|
|
|
(2.9 |
) |
Insurance
Recovery |
|
|
|
|
|
|
|
|
7.0 |
|
|
|
|
|
|
|
|
|
$ |
32.5 |
|
|
$ |
3.0 |
|
|
$ |
(0.2 |
) |
(2) |
|
See Note 3 to these consolidated financial
statements. |
Computer Software and Goodwill:
|
|
|
|
Computer Software
|
|
Goodwill
|
January 1,
2003 |
|
|
|
$ |
69.5 |
|
|
$ |
183.3 |
|
Additions at
cost |
|
|
|
|
19.3 |
|
|
|
|
|
Amortization |
|
|
|
|
(40.9 |
) |
|
|
|
|
Divestitures |
|
|
|
|
|
|
|
|
(2.3 |
) |
Assets Held for
Sale |
|
|
|
|
|
|
|
|
(20.9 |
) |
Acquisitions |
|
|
|
|
0.2 |
|
|
|
71.3 |
|
Other(3) |
|
|
|
|
(0.9 |
) |
|
|
25.5 |
|
December 31,
2003 |
|
|
|
|
47.2 |
|
|
|
256.9 |
|
Additions at
cost |
|
|
|
|
16.4 |
|
|
|
|
|
Amortization |
|
|
|
|
(31.4 |
) |
|
|
|
|
Divestitures |
|
|
|
|
(0.1 |
) |
|
|
(44.0 |
) |
Acquisitions |
|
|
|
|
0.9 |
|
|
|
(3.8 |
) |
Other(3) |
|
|
|
|
(0.6 |
) |
|
|
7.9 |
|
December 31,
2004 |
|
|
|
$ |
32.4 |
|
|
$ |
217.0 |
|
(3) |
|
Impact of foreign currency fluctuations. |
110
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Other Intangibles:
|
|
|
|
Customer Lists
|
|
Trademarks, Patents and Other
|
|
Total
|
January 1,
2003 |
|
|
|
$ |
7.6 |
|
|
$ |
0.1 |
|
|
$ |
7.7 |
|
Additions at
cost |
|
|
|
|
9.4 |
|
|
|
5.1 |
|
|
|
14.5 |
|
Operating
Amortization |
|
|
|
|
(3.1 |
) |
|
|
|
|
|
|
(3.1 |
) |
Other(4) |
|
|
|
|
(6.3 |
) |
|
|
|
|
|
|
(6.3 |
) |
December 31,
2003 |
|
|
|
|
7.6 |
|
|
|
5.2 |
|
|
|
12.8 |
|
Additions at
cost |
|
|
|
|
3.1 |
|
|
|
|
|
|
|
3.1 |
|
Operating
Amortization |
|
|
|
|
(2.5 |
) |
|
|
|
|
|
|
(2.5 |
) |
Disposals |
|
|
|
|
|
|
|
|
1.4 |
|
|
|
1.4 |
|
Other(5) |
|
|
|
|
0.2 |
|
|
|
0.3 |
|
|
|
0.5 |
|
December
31, 2004 |
|
|
|
$ |
8.4 |
|
|
$ |
6.9 |
|
|
$ |
15.3 |
|
(4) |
|
Due to assets held for sale. |
(5) |
|
Impact of foreign currency fluctuations. |
Allowance
for Doubtful Accounts:
|
|
|
|
|
|
|
January 1,
2002 |
|
|
|
$ |
21.0 |
|
Additions
charged to costs and expenses |
|
|
|
|
15.3 |
|
Write-offs |
|
|
|
|
(13.3 |
) |
December 31,
2002 |
|
|
|
|
23.0 |
|
Additions
charged to costs and expenses |
|
|
|
|
4.1 |
|
Write-offs |
|
|
|
|
(5.3 |
) |
December 31,
2003 |
|
|
|
|
21.8 |
|
Additions
charged to costs and expenses |
|
|
|
|
6.5 |
|
Write-offs |
|
|
|
|
(7.9 |
) |
Divestitures |
|
|
|
|
(1.9 |
) |
Other |
|
|
|
|
0.9 |
|
December 31,
2004 |
|
|
|
$ |
19.4 |
|
Deferred
Tax Asset Valuation Allowance:
|
|
|
|
|
|
|
January 1,
2002 |
|
|
|
$ |
70.2 |
|
Additions
charged (credited) to costs and expenses |
|
|
|
|
(13.4 |
) |
December 31,
2002 |
|
|
|
|
56.8 |
|
Additions
charged (credited) to costs and expenses |
|
|
|
|
21.9 |
|
Additions
charged (credited) to other accounts(6) |
|
|
|
|
(2.3 |
) |
December 31,
2003 |
|
|
|
|
76.4 |
|
Additions
charged (credited) to costs and expenses |
|
|
|
|
9.3 |
|
Additions
charged (credited) due to divestitures |
|
|
|
|
(29.1 |
) |
Additions
charged (credited) to other accounts(6) |
|
|
|
|
(0.7 |
) |
December
31, 2004 |
|
|
|
$ |
55.9 |
|
(6) |
|
Amount represents a decrease to goodwill associated with the Data
House acquisition. See Note 4 Acquisitions and Other Investments to these consolidated financial statements. |
111
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
Note 16. |
|
Quarterly Financial Data (Unaudited) |
|
|
|
|
Three-Months Ended
|
|
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Year
|
2004
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
250.5 |
|
|
$ |
245.4 |
|
|
|
$247.8 |
|
|
|
$294.6 |
|
|
$ |
1,038.3 |
|
International |
|
|
|
|
92.9 |
|
|
|
104.5 |
|
|
|
85.4 |
|
|
|
92.9 |
|
|
|
375.7 |
|
Consolidated
Operating Revenues |
|
|
|
$ |
343.4 |
|
|
$ |
349.9 |
|
|
|
$333.2 |
|
|
|
$387.5 |
|
|
$ |
1,414.0 |
|
Operating
Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
87.5 |
|
|
$ |
73.0 |
|
|
|
$ 82.4 |
|
|
|
$122.4 |
|
|
$ |
365.3 |
|
International |
|
|
|
|
7.1 |
|
|
|
20.2 |
|
|
|
12.1 |
|
|
|
24.9 |
|
|
|
64.3 |
|
Total
Divisions |
|
|
|
|
94.6 |
|
|
|
93.2 |
|
|
|
94.5 |
|
|
|
147.3 |
|
|
|
429.6 |
|
All
Other(1) |
|
|
|
|
(29.1 |
) |
|
|
(28.6 |
) |
|
|
(21.6 |
) |
|
|
(31.5 |
) |
|
|
(110.8 |
) |
Consolidated
Operating Income |
|
|
|
$ |
65.5 |
|
|
$ |
64.6 |
|
|
|
$ 72.9 |
|
|
|
$115.8 |
|
|
$ |
318.8 |
|
Net
Income |
|
|
|
$ |
49.8 |
|
|
$ |
39.5 |
|
|
|
$ 47.5 |
|
|
|
$ 75.0 |
|
|
$ |
211.8 |
|
Basic
Earnings Per Share of Common Stock(2) |
|
|
|
$ |
.69 |
|
|
$ |
.56 |
|
|
|
$ .68 |
|
|
|
$ 1.09 |
|
|
$ |
3.01 |
|
Diluted
Earnings Per Share of Common Stock(2) |
|
|
|
$ |
.66 |
|
|
$ |
.54 |
|
|
|
$ .65 |
|
|
|
$ 1.04 |
|
|
$ |
2.90 |
|
2003
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
226.5 |
|
|
$ |
229.3 |
|
|
|
$229.2 |
|
|
|
$275.1 |
|
|
$ |
960.1 |
|
International |
|
|
|
|
88.2 |
|
|
|
105.7 |
|
|
|
103.1 |
|
|
|
129.3 |
|
|
|
426.3 |
|
Consolidated
Operating Revenues |
|
|
|
$ |
314.7 |
|
|
$ |
335.0 |
|
|
|
$332.3 |
|
|
|
$404.4 |
|
|
$ |
1,386.4 |
|
Operating
Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
|
|
$ |
80.3 |
|
|
$ |
68.4 |
|
|
|
$ 75.3 |
|
|
|
$105.9 |
|
|
$ |
329.9 |
|
International |
|
|
|
|
1.3 |
|
|
|
16.4 |
|
|
|
10.8 |
|
|
|
31.4 |
|
|
|
59.9 |
|
Total
Divisions |
|
|
|
|
81.6 |
|
|
|
84.8 |
|
|
|
86.1 |
|
|
|
137.3 |
|
|
|
389.8 |
|
All
Other(1) |
|
|
|
|
(26.0 |
) |
|
|
(23.7 |
) |
|
|
(32.0 |
) |
|
|
(16.3 |
) |
|
|
(98.0 |
) |
Consolidated
Operating Income |
|
|
|
$ |
55.6 |
|
|
$ |
61.1 |
|
|
|
$ 54.1 |
|
|
|
$121.0 |
|
|
$ |
291.8 |
|
Net
Income |
|
|
|
$ |
37.1 |
|
|
$ |
35.1 |
|
|
|
$ 28.8 |
|
|
|
$ 73.5 |
|
|
$ |
174.5 |
|
Basic
Earnings Per Share of Common Stock(2) |
|
|
|
$ |
.50 |
|
|
$ |
.47 |
|
|
|
$ .39 |
|
|
|
$ 1.01 |
|
|
$ |
2.37 |
|
Diluted
Earnings Per Share of Common Stock(2) |
|
|
|
$ |
.48 |
|
|
$ |
.46 |
|
|
|
$ .38 |
|
|
|
$ .98 |
|
|
$ |
2.30 |
|
(1) |
|
The following table itemizes the components of the All
Other category of Operating Income (Loss) (see Note 3 to these consolidated financial statements): |
112
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Year
|
Operating
Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Costs |
|
|
|
$ |
(14.8 |
) |
|
$ |
(14.6 |
) |
|
|
$(14.9 |
) |
|
|
$(13.9 |
) |
|
$ |
(58.2 |
) |
Restructuring
Expense |
|
|
|
|
(10.2 |
) |
|
|
(8.0 |
) |
|
|
(2.7 |
) |
|
|
(11.1 |
) |
|
|
(32.0 |
) |
Transition
Costs (Costs to implement our Financial Flexibility Program) |
|
|
|
|
(4.1 |
) |
|
|
(6.0 |
) |
|
|
(4.0 |
) |
|
|
(6.5 |
) |
|
|
(20.6 |
) |
Total |
|
|
|
$ |
(29.1 |
) |
|
$ |
(28.6 |
) |
|
|
$(21.6 |
) |
|
|
$(31.5 |
) |
|
$ |
(110.8 |
) |
2003:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Costs |
|
|
|
$ |
(9.7 |
) |
|
$ |
(11.3 |
) |
|
|
$ (9.9 |
) |
|
|
$(13.6 |
) |
|
$ |
(44.5 |
) |
Restructuring
Expense |
|
|
|
|
(10.9 |
) |
|
|
(4.9 |
) |
|
|
(1.6 |
) |
|
|
|
|
|
|
(17.4 |
) |
Loss on High
Wycombe, England, Building Sale |
|
|
|
|
|
|
|
|
|
|
|
|
(13.8 |
) |
|
|
|
|
|
|
(13.8 |
) |
Transition
Costs (Costs to implement our Financial Flexibility Program) |
|
|
|
|
(5.4 |
) |
|
|
(7.5 |
) |
|
|
(6.7 |
) |
|
|
(2.7 |
) |
|
|
(22.3 |
) |
Total |
|
|
|
$ |
(26.0 |
) |
|
$ |
(23.7 |
) |
|
|
$(32.0 |
) |
|
|
$(16.3 |
) |
|
$ |
(98.0 |
) |
(2) |
|
The number of weighted average shares outstanding changes as
common shares are issued for employee benefit plans and other purposes or as shares are repurchased. For this reason, the sum of quarterly earnings per
share may not be the same as earnings per share for the year. |
Note 17. |
|
Subsequent Events |
Share Repurchase Program
In February 2005, we announced that our Board of
Directors authorized a new $400 million two-year share repurchase program. This program is in addition to our existing repurchase program to offset the
dilutive effect of shares issued under employee benefit plans. We expect that the share repurchase program will be funded from cash on hand and
executed evenly over the two-year period. Through February 28, 2005, we repurchased 168,000 shares at an aggregate cost of $10.0
million.
Financial Flexibility
Program
On January 31, 2005, the Board of Directors of
D&B approved our 2005 Financial Flexibility Program. The actions associated with this 2005 Financial Flexibility Program, which will be implemented
throughout 2005, include:
|
|
Improving operating efficiency with a focus on evaluating
opportunities in our International segment, and |
|
|
Leveraging current outsourcing partners and vendors to drive
quality and cost efficiencies primarily in the area of technology. |
We expect to complete all actions under the 2005
initiative by December 2005. On an annualized basis, these actions are expected to create $70 million to $80 million of financial flexibility
(approximately $50 million in 2005), before any restructuring charges and transition costs and before any reallocation of spending. To implement these
measures and complete our 2004 Program, we expect to incur transition costs of approximately $20 million to $22 million. In addition, we expect to
incur non-core restructuring charges totaling approximately $30 million to $35 million pre-tax, of which $28 million to $32 million relate
to
113
Notes to Consolidated Financial Statements(continued)
(Tabular dollar
amounts in millions, except per share data)
severance
and termination costs and $2 million to $3 million relate to lease termination
obligations and other exit costs, in 2005. The $30 million to $35 million pre-tax charge
includes approximately $10 million of restructuring charges to complete the IBM
outsourcing. Approximately $60 million to $65 million of these transition costs and
restructuring charges are expected to result in cash expenditures.
Medicare Prescription Drug, Improvement, and
Modernization Act of 2003
On January 21, 2005, the Centers for Medicare and
Medicaid Services (CMS) released final regulations implementing major provisions of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003. The regulations address key concepts, such as defining a plan, as well as the actuarial equivalence test for purposes of
obtaining a government subsidy. Pursuant to the guidance in FSP No. FAS 106-2, we have assessed the financial impact of the regulations and estimated
that our postretirement benefit plan will be qualified for the direct subsidies for an additional seven years and our APBO (as defined in notes to
these consolidated financial statements) is expected to decrease by an approximately additional $10 million. We also expect this additional APBO
reduction will result in a reduction of approximately $0.9 million in our 2005 postretirement benefit cost. Together with the impacts already included
in our December 31, 2004 results, the APBO is expected to decrease by a total of $41 million and our plan will be actuarially equivalent beginning in
2006 until 2023. Our plan will be remeasured in the first quarter of 2005 and the financial impact will be recorded at that time.
Italy
On February 1, 2005, regulations implementing new
tax legislation became effective in Italy that is expected to significantly increase the cost of conducting our Italian real estate information
business in 2005. Specifically, the regulations increase data acquisition costs for Italian real estate information and require that we pay a fee each
time we resell or license that data.
Our plan is to fully address these incremental costs
through price increases to our customers to mitigate the impact to our operating income in Italy. Accordingly, we began implementing these price
increases in February 2005.
At this time, we cannot predict with certainty the
final impact that this tax legislation and related regulations will have on our 2005 reported results because we cannot forecast:
1. |
|
customer acceptance of the price increases, |
2. |
|
the impact that such price increases may have on customers
utilization of our real estate and other products during the year, |
3. |
|
the full nature and impact of actions that we may take to
mitigate the operating income impact of the legislation, and |
4. |
|
the actions of our competitors. |
114
Item 9. Changes in and Disagreements with Accountants
on Auditing and Financial Disclosure
Not Applicable.
Item 9a. Controls and
Procedures
Evaluation of Disclosure
Controls
We evaluated the effectiveness of our disclosure
controls and procedures (Disclosure Controls) as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934
(Exchange Act) as of the end of the period covered by this report. This evaluation (Controls Evaluation) was done with the
participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO).
Disclosure Controls are controls and other
procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or
submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions
regarding required disclosure.
Our management also evaluated, with the
participation of our CEO and CFO, any change in our Disclosure Controls and determined that there were no changes in our Disclosure Controls during the
quarter ended December 31, 2004 that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Limitations on the Effectiveness of
Controls
Our management, including our CEO and CFO, does not
expect that our Disclosure Controls or our internal control over financial reporting (Internal Control) will prevent all error and all
fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a
control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative
to its costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within D&B have been detected. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more people, or by management override of a control. A design of a control system is also based
upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or
fraud may occur and may not be detected.
Conclusions regarding Disclosure
Controls
Based upon our Controls Evaluation, our CEO and CFO
have concluded that as of the end of the fourth quarter of our fiscal year ended December 31, 2004, the Disclosure Controls are effective in providing
reasonable assurance that material information relating to D&B is made known to management on a timely basis during the period when our periodic
reports are being prepared.
Managements Report on Internal Control over
Financial Reporting
Managements report on Internal Control for
Financial Reporting is incorporated herein by reference to page 62 of this Form 10-K
115
Change in Internal Control Over Financial
Reporting
There were no changes in our internal control over
financial reporting that occurred during the fourth quarter of 2004 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
Item 9b. Other Information
Not applicable.
116
PART III
Item 10. Directors and Executive Officers of the
Registrant*
Information concerning our
executive officers is included in this report after Item 4, under the caption Executive Officers of the Registrant.
Code of Ethics and Corporate Governance
Our Corporate Governance Principles, Code of Conduct
and the charters of our Audit, Board Affairs and Compensation & Benefits committees are available on our Web site and are available in print,
without charge, to any shareholder upon request by contacting our Corporate Secretary, c/o The Dun & Bradstreet Corporation 103 JFK Parkway, Short
Hills, New Jersey 07078-2708. Our website address is http://www.dnb.com.
We have adopted a Code of Conduct that applies to
all of our directors, officers and employees (including our chief executive officer, chief financial officer and corporate controller) and have posted
the Code of Conduct on our Web site. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers
from any provision of our Code of Conduct applicable to our chief executive officer, chief financial officer and corporate controller by posting this
information on our Web site. Our Web site address is listed above.
The information on our Web site is not, and shall
not be deemed to be, a part of this report or incorporated into any other filings we make with the SEC.
Because our common stock is listed on the New York
Stock Exchange (NYSE), our chief executive officer is required to make, and he has made, an annual certification to the NYSE stating that
he was not aware of any violation by us of the corporate governance listing standards of the NYSE. Mr. Allan Z. Loren who was our chief executive
officer through December 31, 2004, made his annual certification to that effect to the NYSE as of May 25, 2004. In addition, we have filed, as exhibits
to this Form 10-K, the certifications of our principal executive officer and principal financial officer required under Sections 906 and 302 of the
Sarbanes Oxley Act of 2002 to be filed with the Securities and Exchange Commission regarding the quality of our public disclosure.
Item 11. Executive Compensation*
Item 12. |
|
Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters* |
The following table provides information as of
December 31, 2004 regarding shares of our common stock that may be issued under our existing equity compensation plans.
Equity Compensation Plan Information
|
|
|
|
(A)
|
|
(B)
|
|
(C)
|
Plan Category |
|
|
|
Number of Securities to be Issued Upon Exercise of Outstanding
Options, Warrants and Rights
|
|
Weighted-Average Exercise Price of Outstanding
Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance
Under Equity Compensation Plans (Excluding Securities Reflected in Column (A))
|
Equity
compensation plans approved by security holders(1) |
|
|
|
|
8,352,348(2 |
) |
|
$ |
28.03 |
|
|
|
4,647,158(3 |
) |
(1) |
|
This table includes information for two equity compensation plans
adopted in connection with our separation from Moodys. As of December 31, 2004, a total of 2,466,154 shares of D&B common stock were issuable
upon exercise of outstanding options and other rights under those two plans. The weighted average exercise price of those outstanding options and other
rights is $14.62 per share. No additional options or other rights may be granted under those two plans. |
117
(2) |
|
Includes options for 8,300,473 shares of D&B common stock,
restricted stock units for 45,129 shares of D&B common stock and deferred performance shares for 6,746 shares of D&B common stock. This amount
does not include outstanding shares of restricted common stock of 122,150. |
(3) |
|
Includes shares available for future purchases under our 2000
Employee Stock Purchase Plan (the ESPP). As of December 31, 2004, an aggregate of 1,000,275 shares of D&B common stock were available
for purchase under the ESPP. |
Item 13. Certain Relationships and Related
Transactions*
Item 14. Principal Accountant Fees and
Services*
* Information regarding our Corporate Governance
Principles, Code of Conduct and Committee Charters is set forth in Item 10 of this Form 10-K. Information regarding our equity compensation plans is
set forth under Item 12. All other information called for by
Items 10-14 will be contained in our definitive proxy statement for use in connection with our annual meeting of shareholders scheduled to be held on
May 3, 2005. Such information is incorporated into this Form 10-K by reference. Such incorporation by reference shall not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of Regulation S-K.
118
PART IV
Item 15. Exhibits and Financial Statement
Schedules
(a) List of documents filed as part of this
report.
|
|
(1) Financial Statements. |
|
|
See Index to Financial Statements and Schedules in Part II, Item
8 of this Form 10-K. |
|
|
(2) Financial Statement Schedules.
|
(b) Exhibits.
See Index to Exhibits on pages 121 to 125 of this
Form 10-K.
119
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on March 11, 2005.
|
|
THE
DUN & BRADSTREET CORPORATION
(Registrant)
|
|
By: |
/s/ STEVEN W. ALESIO |
|
|
STEVEN W. ALESIO
President and Chief Executive Officer |
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on March 11,
2005.
/s/
ALLAN Z. LOREN |
|
Director and Chairman of the Board |
Allan Z. Loren |
|
|
|
|
/s/ STEVEN W. ALESIO |
|
Director, President and Chief Executive Officer (principal executive
officer) |
Steven W. Alesio |
|
|
|
|
/s/
MARY JANE RAYMOND |
|
Corporate Controller (principal accounting officer) |
Mary Jane Raymond |
|
|
|
|
/s/
SARA MATHEW |
|
Chief Financial Officer (principal financial officer) |
Sara Mathew |
|
|
|
|
/s/
JOHN W. ALDEN |
|
Director |
John W. Alden |
|
|
|
|
/s/
CHRISTOPHER J. COUGHLIN |
|
Director |
Christopher J. Coughlin |
|
|
|
|
/s/
JAMES N. FERNANDEZ |
|
Director |
James N. Fernandez |
|
|
|
|
/s/
RONALD L. KUEHN, JR.
|
|
Director |
Ronald L. Kuehn, Jr. |
|
|
|
|
/s/
VICTOR A. PELSON |
|
Director |
Victor A. Pelson |
|
|
|
|
/s/
SANDRA E. PETERSON |
|
Director |
Sandra E. Peterson |
|
|
|
|
/s/
MICHAEL R. QUINLAN |
|
Director |
Michael R. Quinlan |
|
|
|
|
/s/
NAOMI O. SELIGMAN |
|
Director |
Naomi O. Seligman |
|
120
INDEX TO EXHIBITS
Regulation S-K Exhibit Number
|
|
|
|
3. |
|
|
|
Articles of Incorporation and By-laws |
3.1 |
|
|
|
Restated Certificate of Incorporation of the Registrant, as amended effective October 1, 2000 (incorporated by reference to Exhibit 3.1 to
Registrants Report on Form 8-K, file number 1-15967, filed October 4, 2000). |
3.2 |
|
|
|
Amended and Restated By-laws of the Registrant (incorporated by reference to Exhibit 3.2 to Registrants Registration Statement on Form
10, file number 1-15967, filed June 27, 2000). |
4. |
|
|
|
Instruments Defining the Rights of Security Holders, Including Indentures |
4.1 |
|
|
|
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrants Registration Statement on Form 10, file
number 1-15967, filed September 11, 2000). |
4.2 |
|
|
|
Rights Agreement, dated as of August 15, 2000, between the Registrant (f.k.a. The New D&B Corporation) and EquiServe Trust Company, N.A.,
as Rights Agent, which includes the Certificate of Designation for the Series A Junior Participating Preferred Stock as Exhibit A thereto, the Form of
Right Certificate as Exhibit B thereto and the Summary of Rights to Purchase Preferred Shares as Exhibit C thereto (incorporated by reference to
Exhibit 1 to the Registrants Registration Statement on Form 8-A, file number 1-15967, filed September 15, 2000). |
4.3 |
|
|
|
Five-Year Credit Agreement, dated September 1, 2004, among The Dun & Bradstreet Corporation, the Borrowing Subsidiaries Party thereto,
JPMorgan Chase Bank, as Administrative Agent, Bank of Tokyo-Mitsubishi Trust Company and Citicorp USA, Inc., as Syndication Agents, The Bank of New
York and Suntrust Bank, as Documentation Agents and the Lenders Party thereto (incorporated by reference to Exhibit 4.1 to Registrants Report on
Form 8-K, file number 1-15967, filed September 3, 2004). |
4.4 |
|
|
|
Indenture dated as of March 22, 2001 by and between the Registrant and The Bank of New York, as Trustee (incorporated by reference to Exhibit
4.1 to Registrants Quarterly Report on Form 10-Q, file number 1-15967, filed May 15, 2001). |
4.5 |
|
|
|
Forms of 6.625% Senior Notes due 2006 (incorporated by reference to Exhibit 4.2 to Registrants Quarterly Report on Form 10-Q, file
number 1-15967, filed May 15, 2001). |
10. |
|
|
|
Material Contracts |
10.1 |
|
|
|
Distribution Agreement, dated as of September 30, 2000, between Moodys Corporation (f.k.a. The Dun & Bradstreet Corporation) and the
Registrant (f.k.a. The New D&B Corporation) (incorporated by reference to Exhibit 10.1 to the Registrants Report on Form 8-K, file number
1-15967, filed October 4, 2000). |
10.2 |
|
|
|
Tax
Allocation Agreement, dated as of September 30, 2000, between Moodys Corporation (f.k.a. The Dun & Bradstreet Corporation) and the Registrant
(f.k.a. The New D&B Corporation) (incorporated by reference to Exhibit 10.2 to the Registrants Report on Form 8-K, file number 1-15967, filed
October 4, 2000). |
10.3 |
|
|
|
Employee Benefits Agreement, dated as of September 30, 2000, between Moodys Corporation (f.k.a. The Dun & Bradstreet Corporation)
and the Registrant (f.k.a. The New D&B Corporation) (incorporated by reference to Exhibit 10.3 to the Registrants Report on Form 8-K, file
number 1-15967, filed October 4, 2000). |
10.4 |
|
|
|
Undertaking of the Registrant (f.k.a. The New D&B Corporation), dated September 30, 2000, to Cognizant Corporation and ACNielsen
Corporation (incorporated by reference to Exhibit 10.9 to the Registrants Report on Form 8-K, file number 1-15967, filed October 4,
2000). |
121
Regulation S-K Exhibit Number
|
|
|
|
10.5 |
|
|
|
Undertaking of the Registrant (f.k.a. The New D&B Corporation), dated September 30, 2000, to R.H. Donnelley Corporation (incorporated by
reference to Exhibit 10.10 to the Registrants Report on Form 8-K, file number 1-15967, filed October 4, 2000). |
10.6 |
|
|
|
Distribution Agreement, dated as of June 30, 1998, between R.H. Donnelley Corporation (f.k.a. The Dun & Bradstreet Corporation) and
Moodys Corporation (f.k.a. The New Dun & Bradstreet Corporation) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form
10-Q of Moodys Corporation, file number 1-14037, filed August 14, 1998). |
10.7 |
|
|
|
Tax
Allocation Agreement, dated as of June 30, 1998, between R.H. Donnelley Corporation (f.k.a. The Dun & Bradstreet Corporation) and Moodys
Corporation (f.k.a. The New Dun & Bradstreet Corporation) (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of
Moodys Corporation, file number 1-14037, filed August 14, 1998). |
10.8 |
|
|
|
Employee Benefits Agreement, dated as of June 30, 1998, between R.H. Donnelley Corporation (f.k.a. The Dun & Bradstreet Corporation) and
Moodys Corporation (f.k.a. The New Dun & Bradstreet Corporation) (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form
10-Q of Moodys Corporation, file number 1-14037, filed August 14, 1998). |
10.9 |
|
|
|
Distribution Agreement, dated as of October 28, 1996, among R.H. Donnelley Corporation (f.k.a. The Dun & Bradstreet Corporation),
Cognizant Corporation and ACNielsen Corporation (incorporated by reference to Exhibit 10(x) to the Annual Report on Form 10-K of R.H. Donnelley
Corporation (f.k.a. The Dun & Bradstreet Corporation) for the year ended December 31, 1996, file number 1-7155, filed March 27,
1997). |
10.10 |
|
|
|
Tax
Allocation Agreement, dated as of October 28, 1996, among R.H. Donnelley Corporation (f.k.a. The Dun & Bradstreet Corporation), Cognizant
Corporation and ACNielsen Corporation (incorporated by reference to Exhibit 10(y) to the Annual Report on Form 10-K of R.H. Donnelley Corporation
(f.k.a. The Dun & Bradstreet Corporation) for the year ended December 31, 1996, file number 1-7155, filed March 27, 1997). |
10.11 |
|
|
|
Employee Benefits Agreement, dated as of October 28, 1996, among R.H. Donnelley Corporation (f.k.a. The Dun & Bradstreet Corporation),
Cognizant Corporation and ACNielsen Corporation (incorporated by reference to Exhibit 10(z) to the Annual Report on Form 10-K of R.H. Donnelley
Corporation (f.k.a. The Dun & Bradstreet Corporation) for the year ended December 31, 1996, file number 1-7155, filed March 27,
1997). |
10.12 |
|
|
|
Amended and Restated Indemnity and Joint Defense Agreement among the Registrant, VNU, N.V., VNU, Inc. ACNielsen Corporation, AC Nielsen (US),
Inc., Nielsen Media Research, Inc., R.H. Donnelley Corporation, Moodys Corporation and IMS Health Incorporated (incorporated by reference to
Exhibit 10.12 to the Registrants Quarterly Report on Form 10-Q, file number 1-15967, filed August 4, 2004). |
10.13 |
|
|
|
Amended and Restated Agreement of Limited Partnership of D&B Investors L.P., dated April 1, 1997 (incorporated by reference to Exhibit
10.14 to the Quarterly Report on Form 10-Q of Moodys Corporation, file number 1-14037, filed August 14, 1998). |
10.14 |
|
|
|
D&B Guaranty, dated as of April 1, 1997, given by The Dun & Bradstreet Corporation in favor of Utrecht-America Finance Co. and Leiden
Inc. (as assumed by the Registrant) (incorporated by reference to Exhibit 10.19 to the Registrants Quarterly Report on Form 10-Q, file number
1-15967, filed November 14, 2000). |
10.15 |
|
|
|
The
Dun & Bradstreet Executive Transition Plan (incorporated herein by reference to Exhibit 10.20 to the Registrants Quarterly Report on Form
10-Q, file number 1-15967, filed November 14, 2000) (incorporated by reference to Exhibit 10.20 to the Registrants Quarterly Report on Form 10-Q,
file number 1-15967, filed November 14, 2000). |
122
Regulation S-K Exhibit Number
|
|
|
|
10.16 |
|
|
|
Forms of Change in Control Severance Agreements (incorporated by reference to Exhibit 10.21 to the Registrants Quarterly Report on Form
10-Q, file number 1-15967, filed November 14, 2000). |
10.17 |
|
|
|
Pension Benefit Equalization Plan of The Dun & Bradstreet Corporation (incorporated by reference to Exhibit 10.22 to the Registrants
Quarterly Report on Form l0-Q, file number 1-15967, filed November 14, 2000). |
10.18 |
|
|
|
Supplemental Executive Benefit Plan of The Dun & Bradstreet Corporation (incorporated by reference to Exhibit 10.23 to the
Registrants Quarterly Report on Form 10-Q, file number 1-15967, filed November 14, 2000). |
10.19 |
|
|
|
Profit Participation Benefit Equalization Plan of The Dun & Bradstreet Corporation (incorporated by reference to Exhibit 10.24 to the
Registrants Quarterly Report on Form 10-Q, file number 1-15967, filed November 14, 2000). |
10.20 |
|
|
|
Employment Agreement, dated May 15, 2000, by and between Moodys Corporation (f.k.a. The Dun & Bradstreet Corporation) and Allan Z.
Loren (as assumed by the Registrant) (incorporated by reference to Exhibit 10.11 to the Registrants Registration Statement on Form 10/A-3, file
number 1-15967, filed September 14, 2000). |
10.21 |
|
|
|
The
Dun & Bradstreet Career Transition Plan (incorporated by reference to Exhibit 10.26 to the Registrants Annual Report on Form 10-K, file
number 1-15967, filed March 4, 2002). |
10.22 |
|
|
|
2000
Dun & Bradstreet Corporation Replacement Plan for Certain Directors Holding Dun & Bradstreet Corporation Equity-Based Awards (incorporated by
reference to Exhibit 10.27 to the Registrants Quarterly Report on Form 10-Q, file number 1-15967, filed November 14, 2000). |
10.23 |
|
|
|
2000
Dun & Bradstreet Corporation Replacement Plan for Certain Employees Holding Dun & Bradstreet Corporation Equity-Based Awards (incorporated by
reference to Exhibit 10.28 to the Registrants Quarterly Report on Form 10-Q, file number 1-15967, filed November 14, 2000). |
10.24 |
|
|
|
The
Dun & Bradstreet Corporation 2000 Stock Incentive Plan (as amended and restated June 20, 2001) (incorporated by reference to Exhibit 10.29 to the
Registrants Quarterly Report on Form 10-Q, file number 1-15967, filed August 1, 2001). |
10.25 |
|
|
|
2000
Dun & Bradstreet Corporation Non-Employee Directors Stock Incentive Plan (incorporated by reference to Exhibit 10.29 to the Registrants
Annual Report on Form 10-K, file number 1-15967, filed February 21, 2001). |
10.26 |
|
|
|
The
Dun & Bradstreet Corporation Nonfunded Deferred Compensation Plan for Non-Employee Directors (as assumed by the Registrant) (incorporated by
reference to Exhibit 10.18 to Moodys Corporation Quarterly Report on Form 10-Q, file number 1-14037, filed October 20, 1999). |
10.27 |
|
|
|
Form
of Limited Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.25 to Moodys Corporation Quarterly Report on Form 10-Q,
file number 1-14037, filed August 14, 1998). |
10.28 |
|
|
|
The
Dun & Bradstreet Corporation Covered Employee Cash Incentive Plan (incorporated by reference to Exhibit 10.29 to the Registrants Annual
Report on Form 10-K, file number 1-15967, filed February 21, 2001). |
10.29 |
|
|
|
The
Dun & Bradstreet Corporation Cash Incentive Plan (incorporated by reference to the Registrants Annual Report on Form 10-K, file number
1-15967, filed February 21, 2001). |
10.30 |
|
|
|
Form
of Detrimental Conduct Agreement (incorporated by reference to Exhibit 10.36 to the Registrants Annual Report on Form 10-K, file number 1-15967,
filed March 4, 2002). |
10.31 |
|
|
|
Amendment to Employment Agreement, dated December 31, 2004, between Allan Z. Loren and the Company (incorporated by reference to Exhibit 10.1
to the Registrants Report on Form 8-K, file number 1-15967, filed January 4, 2005). |
123
Regulation S-K Exhibit Number
|
|
|
|
10.32 |
|
|
|
Key
Employees Non-Qualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to the Registrants Quarterly Report on Form
10-Q, file number 1-15967, filed May 6, 2002). |
10.33 |
|
|
|
Employment Agreement, dated December 31, 2004, between Steven W. Alesio and the Company (incorporated by reference to Exhibit 10.2 to the
Registrants Report on Form 8-K, file number 1-15967, filed January 4, 2005). |
10.34 |
|
|
|
Technology Services Agreement between the Registrant and Computer Sciences Corporation, dated June 27, 2002 (incorporated by reference to
Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q, file number 1-15967, filed August 13, 2002). |
10.35 |
|
|
|
2005
and 2004 Non-Employee Director Compensation Program (incorporated by reference to Exhibit 10.1 to the Registrants Report on Form 8-K, file number
1-15967, filed December 8, 2004). |
10.36 |
|
|
|
Form
of Restricted Share Unit Award Agreement under the 2000 Non-employee Directors Plan (incorporated by reference to Exhibit 10.2 to the
Registrants Report on Form 8-K, file number 1-15967, filed December 8, 2004). |
10.37 |
|
|
|
The
Dun & Bradstreet Corporation 2000 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.36 to the Registrants Annual Report
on Form 10-K, file number 1-15967, filed March 28, 2003). |
10.38 |
|
|
|
Form
of Restricted Stock Award Agreement under the 2000 Employee Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrants
Report on Form 8-K, file number 1-15967, filed March 2, 2005). |
10.39 |
|
|
|
Form
of Stock Option Award Agreement under the 2000 Employee Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrants Report
on Form 8-K, file number 1-15967, filed March 2, 2005). |
10.40 |
|
|
|
Form
of Restricted Stock Unit Award Agreement under the 2000 Employee Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the
Registrants Report on Form 8-K, file number 1-15967, filed March 2, 2005). |
10.41 |
|
|
|
Form
of Stock Option Award Agreement under the 2000 Non-employee Directors Plan (incorporated by reference to Exhibit 10.4 to the Registrants
Report on Form 8-K, file number 1-15967, filed March 2, 2005). |
10.42 |
|
|
|
Form
of Restricted Stock Unit Award Agreement under the 2000 Non-employee Directors Plan (incorporated by reference to Exhibit 10.5 to the
Registrants Report on Form 8-K, file number 1-15967, filed March 2, 2005). |
10.43* |
|
|
|
Business Process Services Agreement made and effective as of October 15, 2004 by and between the Company and International Business Machines
Corporation. This Exhibit has been redacted pursuant to a confidentially request under Rule 24(b)-2 of the Securities Exchange Act of 1934, as
amended. |
21. |
|
|
|
Subsidiaries of the Registrant |
21.1* |
|
|
|
List
of Active Subsidiaries as of December 31, 2004. |
23. |
|
|
|
Consents of Experts and Counsel |
23.1* |
|
|
|
Consent of PricewaterhouseCoopers LLP. |
31. |
|
|
|
Rule 13a-14(a)/ 15(d)-14(a) Certifications |
124
Regulation S-K Exhibit Number
|
|
|
|
31.1* |
|
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
|
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32. |
|
|
|
Section 1350 Certifications |
32.1* |
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. |
32.2* |
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. |
|
|
Represents a management contract or compensatory
plan. |
125
EX-10.43
2
d15984_ex10-43.txt
- --------------------------------------------------------------------------------
BUSINESS PROCESS SERVICES AGREEMENT
BETWEEN
THE DUN & BRADSTREET CORPORATION (D&B)
AND
INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM)
----------------------------------
OCTOBER 15, 2004
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
1. OBJECTIVES.............................................................................................. 1
1.1 Background, Goals, and Objectives..................................................................... 1
2. DEFINITIONS............................................................................................. 2
2.1 Certain Defined Terms................................................................................. 2
2.2 Other Defined Terms................................................................................... 6
3. SERVICES................................................................................................ 6
3.1 General............................................................................................... 6
3.2 Implied Services...................................................................................... 7
3.3 Services Evolution.................................................................................... 7
3.4 Services Variable in Scope and Volume................................................................. 7
3.5 Services Performed by D&B or Third Parties............................................................ 7
3.6 Permitted Users of the Services....................................................................... 8
3.7 Service Locations..................................................................................... 8
3.8 Relationship and Agreement Structure.................................................................. 8
4. TERM OF AGREEMENT....................................................................................... 9
4.1 Term.................................................................................................. 9
4.2 Extension of Term..................................................................................... 9
5. TRANSITION AND TRANSFORMATION........................................................................... 10
5.1 Transition and Transformation, Generally.............................................................. 10
6. PERSONNEL............................................................................................... 10
6.1 Key IBM Positions..................................................................................... 10
6.2 IBM Project Executive................................................................................. 11
6.3 Qualifications, Retention and Removal of IBM Personnel................................................ 11
6.4 Restrictive Covenant.................................................................................. 12
7. HUMAN RESOURCES......................................................................................... 13
8. RESPONSIBILITY FOR RESOURCES............................................................................ 13
8.1 Generally............................................................................................. 13
8.2 Acquired Assets....................................................................................... 13
8.3 [Reserved]............................................................................................ 13
8.4 [Reserved]............................................................................................ 13
8.5 D&B Facilities........................................................................................ 13
9. RIGHTS IN MATERIALS..................................................................................... 14
9.1 D&B Materials......................................................................................... 14
9.2 Commercially Available IBM Materials.................................................................. 14
9.3 Non-Commercially Available IBM Materials.............................................................. 15
9.4 Developed Materials................................................................................... 16
9.5 Certain D&B Rights Following the Term................................................................. 17
9.6 Residual Knowledge.................................................................................... 17
10. REQUIRED CONSENTS....................................................................................... 18
11. PERFORMANCE STANDARDS/SERVICE LEVELS.................................................................... 18
11.1 General............................................................................................ 18
11.2 Priority of Recovery Following Interruption of Services............................................ 18
11.3 User Satisfaction.................................................................................. 18
11.4 Periodic Reviews................................................................................... 19
12. ACCEPTANCE.............................................................................................. 19
13. governance.............................................................................................. 19
13.1 Reports............................................................................................ 20
D&B / IBM Confidential
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13.2 Procedures Manual.................................................................................. 20
13.3 Change Control..................................................................................... 21
13.4 Subcontractors..................................................................................... 22
13.5 Quality Assurance and Improvement Programs......................................................... 22
14. AUDITS; RECORD RETENTION................................................................................ 22
14.1 Audit Rights....................................................................................... 22
14.2 IBM Audits......................................................................................... 23
14.3 Records Retention.................................................................................. 24
15. D&B RESPONSIBILITIES.................................................................................... 24
15.1 Designation of Certain D&B Personnel............................................................... 24
15.2 D&B Retained Functions............................................................................. 24
15.3 Savings Clause..................................................................................... 24
16. CHARGES................................................................................................. 24
17. SAFEGUARDING OF DATA; CONFIDENTIALITY................................................................... 25
17.1 D&B Information.................................................................................... 25
17.2 Safeguarding D&B Data.............................................................................. 25
17.3 Confidential Information........................................................................... 26
17.4 Obligations in Connection with Confidential Information............................................ 26
18. REPRESENTATIONS, WARRANTIES AND COVENANTS............................................................... 27
18.1 Work Standards..................................................................................... 27
18.2 Efficiency and Cost Effectiveness.................................................................. 27
18.3 Deliverables....................................................................................... 27
18.4 Technology......................................................................................... 27
18.5 Non-Infringement................................................................................... 27
18.6 Ownership and Use of Software and Related Material................................................. 28
18.7 Authorization and Other Consents................................................................... 28
18.8 Inducements........................................................................................ 28
18.9 Viruses............................................................................................ 28
18.10 Disabling Code..................................................................................... 29
18.11 DISCLAIMERS........................................................................................ 29
19. INSURANCE............................................................................................... 29
20. INDEMNITIES............................................................................................. 29
20.1 IBM Indemnities.................................................................................... 29
20.2 D&B Indemnities.................................................................................... 31
20.3 Additional Indemnities............................................................................. 31
20.4 Infringement....................................................................................... 32
20.5 Indemnification Procedures......................................................................... 32
20.6 Subrogation........................................................................................ 33
21. LIABILITY............................................................................................... 33
21.1 General Intent..................................................................................... 33
21.2 Liability Restrictions............................................................................. 33
21.3 Direct Damages..................................................................................... 34
21.4 Duty to Mitigate................................................................................... 34
21.5 Force Majeure...................................................................................... 34
22. DISPUTE RESOLUTION...................................................................................... 35
22.1 Dispute Resolution Process......................................................................... 35
22.2 Consolidation of Disputes.......................................................................... 36
22.3 Continued Performance.............................................................................. 37
22.4 Governing Law...................................................................................... 37
23. TERMINATION............................................................................................. 37
D&B / IBM Confidential
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23.1 Termination For Cause By D&B....................................................................... 37
23.2 Termination by IBM................................................................................. 38
23.3 Termination for Convenience by D&B................................................................. 38
23.4 Termination for Change of Control.................................................................. 39
23.5 Special Termination Conditions..................................................................... 39
23.6 Extension of Termination Effective Date............................................................ 39
23.7 Termination/Expiration Assistance.................................................................. 40
23.8 Equitable Remedies................................................................................. 41
24. COMPLIANCE WITH LAWS.................................................................................... 41
24.1 Compliance with Laws and Regulations Generally..................................................... 41
24.2 Equal Employment Opportunity....................................................................... 41
24.3 Occupational Safety and Health Act................................................................. 42
24.4 Gramm-Leach-Bliley Act and Similar Laws............................................................ 42
24.5 Fair Labor Standards Act........................................................................... 42
25. GENERAL................................................................................................. 42
25.1 Binding Nature and Assignment...................................................................... 42
25.2 Public Disclosures................................................................................. 43
25.3 Non-Solicitation................................................................................... 43
25.4 No Third Party Beneficiaries....................................................................... 43
25.5 Entire Agreement................................................................................... 43
25.6 Amendments......................................................................................... 43
25.7 Consents and Approvals............................................................................. 44
25.8 Waiver............................................................................................. 44
25.9 Remedies Cumulative................................................................................ 44
25.10 Priority of Documents.............................................................................. 44
25.11 Headings........................................................................................... 45
25.12 Section References................................................................................. 45
25.13 Schedule References................................................................................ 45
25.14 Use of Certain Words............................................................................... 45
25.15 Statutory References............................................................................... 46
25.16 Severability....................................................................................... 46
25.17 Counterparts....................................................................................... 46
25.18 Covenant of Good Faith............................................................................. 46
25.19 Notices............................................................................................ 46
D&B / IBM Confidential
- iii -
SCHEDULES, EXHIBITS, ATTACHMENTS AND ANNEXES
Schedule A IBM Services and Solutions
Exhibit A-1 Contact Center Services Statement of Work
Exhibit A-2 Data Programming Services Statement of Work
Attachment A-2-1 Postal Data Cleansing
Attachment A-2-2 Data Programming Quality Checklists
Annex A-2-2a SMS Data Normalization Project Quality
Checklist
Annex A-2-2b SMS Spend Analysis Quality Checklist
Annex A-2-2c SMS MWOB Quality Checklist
Annex A-2-2d SMS Supply Optimizer Quality Checklist
Annex A-2-2e SMS Supply Optimizer Refresh Quality
Checklist
Exhibit A-3 Transaction Processing Services Statement of Work
Attachment A-3-1 Transaction Processing Data Sources
Attachment A-3-2 Transaction Processing Workflows
Exhibit A-3 Transaction Processing Services Statement of Work
Attachment A-3-1 Transaction Processing Data Sources
Attachment A-3-2 Transaction Processing Workflows
Exhibit A-4 Finance Processing Services Statement of Work
Exhibit A-5 Cross Functional Services Statement of Work
Attachment A-5-1 IBM Personnel Background Checks and Screening
Exhibit A-6 IBM Solutions
Attachment A-6-1 Contact Center Solution
Annex A-6-1a EU File Update Solution
Attachment A-6-2 Data Programming Solution
Attachment A-6-3 Transaction Processing Solution
Attachment A-6-4 Finance Processing Solution
Attachment A-6-5 Technology Solution
Exhibit A-7 Transition and Transformation
Attachment A-7-1 Transition Solution
Attachment A-7-3 Transition Schedule
Attachment A-7-2 Transformation Solution
Schedule B Service Levels
Exhibit B-1 Contact Center Service Levels
Attachment B-1-1 Record Completeness Score Point Values
Exhibit B-2 Data Programming Service Levels
Attachment B-2-1 Delivery Project Commitment Dates -
Standard Projects
Exhibit B-3 Transaction Processing Service Levels
Exhibit B-4 Finance Processing Service Levels
Exhibit B-5 Critical Service Levels
Exhibit B-6 Mission Critical Service Failures
Exhibit B-7 Revenue Commitment Service Levels
Attachment B-7-1 Revenue Commitment Service Level Computation
Schedule C Charges
Exhibit C-1 Transaction Types and Transaction Volume Measurement
Exhibit C-2 Pricing Tables
D&B / IBM Confidential
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Exhibit C-3 T&M Rate Schedule
Exhibit C-4 Transaction Baselines
Exhibit C-5 Transition Reimbursement
Exhibit C-6 Finance Processing Gain-Share
Exhibit C-7 Minimum Annual Service Charges
Exhibit C-8 Financial Responsibilities
Attachment C-8-1 Financial Responsibilities Matrix
Exhibit C-9 Price Benchmarking
Exhibit C-10 Economic Change Adjustment
Attachment C-10-1 Inflation Sensitivity Factors
Exhibit C-11 Termination Charges
Attachment C-11-1 Termination Charges Schedule
Exhibit C-12 Transition Delay Credits
Exhibit C-13 Invoice Template
Schedule D Key IBM Positions
Schedule E Human Resources
Exhibit E-1 Affected Personnel
Exhibit E-2 Transitioned Personnel
Exhibit E-3 Key Transitioned Personnel
Exhibit E-4 [Reserved]
Exhibit E-5 [Reserved]
Exhibit E-6 [Reserved]
Exhibit E-7 Job Descriptions
Schedule F Governance
Exhibit F-1 IBM and D&B Organization Structures
Exhibit F-2 Draft Procedures Manual Table of Contents
Exhibit F-3 Reports
Schedule G Other Country Locations
Exhibit G-1 Canada Services Agreement
Exhibit G-2 Europe Services Agreement
Attachment G-2-1 United Kingdom Affected Employees
Schedule H Data Privacy and Data Protection Laws
Exhibit H-1 Offshore Processing
Exhibit H-2 Qualifications to the Standard Contractual Clauses
Exhibit H-3 Model Contract
Schedule I [Reserved]
Schedule J Termination/Expiration Assistance
Schedule K Approved Subcontractors
Schedule L Insurance
Schedule M Existing D&B Resources
D&B / IBM Confidential
- v -
Exhibit M-1 Software
Schedule N [Reserved]
Schedule O D&B Competitors
D&B / IBM Confidential
- vi -
GENERAL TERMS AND CONDITIONS
BUSINESS PROCESS SERVICES AGREEMENT (the "Agreement"), made and effective
as of October 15, 2004 (the "Effective Date"), by and between The Dun &
Bradstreet Corporation ("D&B"), a Delaware corporation with its principal place
of business located at 103 JFK Parkway, Short Hills, New Jersey 07078-2708, and
International Business Machines Corporation ("IBM"), a New York corporation with
its principal place of business located at Route 100, Somers, NY 10589.
1. OBJECTIVES
1.1 BACKGROUND, GOALS, AND OBJECTIVES.
D&B and IBM agree upon the following specific background, goals, and
objectives for the Agreement:
(a) D&B desires to enter into an outsourcing arrangement in order to
transform and optimize performance of certain call center, data programming,
transaction processing and financial activities. D&B's guiding principles for
this arrangement are as follows:
(i) recognize substantial and sustained cost savings over what
it would have cost D&B to provide the services for itself, without sacrificing
quality of the services, both initially and on an on-going basis;
(ii) treat fairly and equitably all D&B team members;
(iii) maintain the quality of D&B data, implement effective
controls, and comply with all relevant privacy, financial, and other applicable
controls, laws, rules and regulations; and
(iv) deliver to D&B world class, evolving services, including
through the provision of information technology skills, methods, practices and
standards.
(b) D&B desires for the outsourcing arrangement to align with the
foregoing guiding principles by:
(i) enabling D&B to focus on its core competencies and on
those activities that provide it with a competitive advantage, recognizing that
D&B's core business is dependent on D&B being able to deliver information and
related services to its customers;
(ii) enabling D&B to increase revenues as further described in
the Agreement;
(iii) establishing a flexible framework within which to
quickly respond to evolving technologies, competitive conditions, and changing
D&B business needs;
D&B / IBM Confidential
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(iv) attaining transparency and variability of IBM's charging
structures, permitting D&B to fully understand IBM's charges and to implement a
consumption-based expense structure where actual demand for the Services drives
the charges;
(v) identifying means to improve the Services and reduce costs
to D&B and to enable D&B to improve and expand its information/database
capabilities;
(vi) providing the transitioning of responsibility for
performing the Services from D&B and its contractors to IBM in such a manner so
that any disruptions to D&B are planned, minimal, and controlled; and
(vii) providing the transitioning of responsibility for
performing the Services back to D&B or its designee(s) in connection with
termination or expiration of the Agreement in such a manner so that any
disruptions to D&B are planned, minimal, and controlled.
2. DEFINITIONS
2.1 CERTAIN DEFINED TERMS.
(a) "Affiliate" shall mean, with respect to any entity, any other
entity Controlling, Controlled by, or under common Control with, such entity at
the time in question. At D&B's option, (i) an entity shall be deemed to remain
an Affiliate of D&B for up to twenty-four (24) months after the date it ceases
to be controlled by D&B and (ii) the purchaser of all or substantially all the
assets of any line of business of D&B or its Affiliates shall be deemed an
Affiliate of D&B for up to twenty-four (24) months after the date of purchase,
but only with respect to the business acquired.
(b) "Agreement" shall mean this Agreement, including its schedules,
exhibits, and other attachments, as amended by the Parties from time to time in
accordance with its terms.
(c) "Approved Subcontractors" shall mean IBM's Affiliates, those
subcontractors of IBM approved by D&B prior to the Effective Date and identified
in the Agreement, and any other subcontractor(s) approved by D&B during the Term
in accordance with the provisions in Section 13.4, unless and until approval of
such subcontractor is rescinded by D&B.
(d) "Change" shall have the meaning given in Section 13.3(a).
(e) "Change Management Process" shall have the meaning given in
Section 13.3(a).
(f) "Change Order" shall mean a written document executed by a duly
authorized representative of both Parties and issued under the Agreement
authorizing IBM to carry out a Change.
D&B / IBM Confidential
- 2 -
(g) "Claim" shall mean any demand, or any civil, criminal,
administrative, or investigative claim, action, or proceeding (including
arbitration) asserted, commenced or threatened against an entity or person.
(h) "Commercially Reasonable Efforts" shall mean taking such steps
and performing in such a manner as a well managed business would undertake where
such business was acting in a determined, prudent and reasonable manner to
achieve a particular desired result for its own benefit.
(i) "Confidential Information" shall have the meaning given in
Section 17.3.
(j) "Control" and its derivatives mean with regard to any entity the
legal, beneficial or equitable ownership, directly or indirectly, of: (i) fifty
percent (50%) or more of the capital stock (or other ownership interest, if not
a stock corporation) of such entity ordinarily having voting rights; (ii)(A)
twenty percent (20%) or more of the capital stock (or other ownership interest,
if not a stock corporation) and (B) either (1) a greater percentage than any
other juridical person or (2) actual management control by agreement or
otherwise; or (iii) with respect to an entity not domiciled in the United
States, Control and its derivatives shall have the meaning given in Section 416
of the United Kingdom's Income and Corporation Taxes Act 1988.
(k) "Country Locations" shall mean the countries in which D&B and
its Affiliates that are Eligible Recipients are located.
(l) "D&B Competitor" shall mean the entities listed in Schedule O
(D&B Competitors), and all Affiliates of such entities.
(m) "D&B Data" shall mean all data, whether or not Confidential
Information, collected by or on behalf of IBM (or its Affiliates) in performing
the Services, as well as data provided by D&B (or its Affiliates) or D&B's third
party vendors, and includes D&B customer data as well as business related data,
and all data derived from any of the foregoing, including as stored in or
processed through the Equipment or Software.
(n) "D&B Information" shall mean all information, including D&B
Data, in any form, furnished or made available directly or indirectly to IBM by
D&B or its Affiliates or otherwise obtained by IBM from D&B or its Affiliates
(including data collected on behalf of D&B by IBM Personnel in the course of
performing the Services, but excluding other information first provided directly
or indirectly by IBM Personnel).
(o) "D&B Materials" shall mean Materials owned by D&B or its
Affiliates.
(p) "D&B Retained Functions" shall mean any functions expressly set
forth in the Agreement as functions to be performed by D&B.
(q) "Deliverable" shall mean any tangible work product produced for
D&B or its Affiliates by or on behalf of IBM in the course of performing the
Services that is listed or described as a Deliverable in the Agreement or a
document executed by the Parties under the Agreement.
D&B / IBM Confidential
- 3 -
(r) "Developed IBM Materials" shall have the meaning given in
Section 9.4(b).
(s) "Developed Materials" shall have the meaning given in Section
9.4(a).
(t) "Effective Date" shall mean the date set forth in the
introductory paragraph of the Agreement.
(u) "Eligible Recipients" shall have the meaning given in Section
3.6.
(v) "End Users" shall mean users of the Services.
(w) "Equipment" shall mean the computer and telecommunications
equipment (without regard to which entity owns or leases such equipment) used by
IBM to provide the Services.
(x) "Force Majeure Event" shall have the meaning given in Section
21.5(a).
(y) "IBM Materials" shall mean Materials that are owned or
distributed by IBM, any Approved Subcontractors, or any of their respective
Affiliates.
(z) "IBM Personnel" shall mean the employees, officers, consultants,
contractors and agents of IBM and its Approved Subcontractors assigned to
perform the Services pursuant to the Agreement.
(aa) "IBM Project Executive" shall have the meaning given in Section
6.2.
(bb) "Intellectual Property Rights" shall have the meaning given in
Section 9.4(a).
(cc) "Local Adoption Agreement" shall have the meaning given in
Section 3.8.
(dd) "Losses" shall mean all losses, liabilities, damages and
claims, and all related costs and expenses (including reasonable legal fees and
disbursements and costs of investigation, litigation, settlement, judgment,
interest and penalties) suffered or incurred by a person or entity as a result
of or in connection with a claim or demand by a third party.
(ee) "Major Market" shall mean any the United States, Canada or
Europe.
(ff) "Major Market Agreement" shall have the meaning given in
Section 3.8.
(gg) "Materials" shall mean software and non-software materials used
in performing the Services or otherwise in connection with the Agreement.
(hh) "Notice of Election" shall have the meaning given in Section
20.5.
D&B / IBM Confidential
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(ii) "Out-of-Pocket Expenses" shall mean reasonable, demonstrable
and actual out-of-pocket expenses incurred by IBM for equipment, materials,
supplies or services provided to or for D&B or its Affiliates as identified in
the Agreement and which are reimbursable to IBM under the terms of the
Agreement, but not including IBM's overhead costs (or allocations thereof),
administrative expenses or other mark-ups. In determining IBM's expenses, IBM's
actual, incremental expense shall be used and shall be net of all rebates,
discounts, and allowances received by IBM.
(jj) "Party" shall mean either D&B or IBM and "Parties" shall mean
both D&B and IBM. With respect to a Local Country Agreement, "Party" shall mean
either signatory to it and "Parties" shall mean both signatories to it.
(kk) "Performance Standards" shall mean, individually and
collectively, the quantitative and qualitative performance standards and
commitments for the Services contained in the Agreement, including Service
Levels.
(ll) "Procedures Manual" shall have the meaning given in Section
13.2.
(mm) "Required Consents" shall mean such consents as may be required
or agreed by both Parties to be desirable for the novation or assignment to IBM,
or the grant to IBM of rights of use, of resources otherwise provided for in the
Agreement.
(nn) "Service Commencement Date" shall mean, for each Service type,
the date on which IBM meets the applicable acceptance criteria for completion of
Transition of the applicable Service type, and first assumes contractual
responsibility for performance of such Services. In cases where, pursuant to
Attachment A-7-1, IBM assumes contractual responsibility for a Service type or
category in progressive stages (i.e., a certain percentage on one date, an
additional percentage on a later date, etc.), the Service Commencement Date
shall be deemed to have occurred only for that portion of the Services for which
IBM has assumed contractual responsibility.
(oo) "Service Levels" shall have the meaning given in Section
11.1(b).
(pp) "Software" shall (unless a more specific reference is provided)
mean all software used by IBM to provide the Services, and all related
materials, including methodologies, tools, documentation, materials and media
related thereto (without regard to which entity owns or licenses such software
and related materials).
(qq) "Subscription Agreements" shall have the meaning given in
Section 3.8.
(rr) "Term" shall mean the period during which the Agreement is in
force.
(ss) "Termination/Expiration Assistance" shall have the meaning
given in Section 23.7(a).
(tt) "Third Party Contractor" shall mean a contractor, other than
IBM, IBM's Affiliates and Approved Subcontractors, who provides services similar
to or that replace the Services to D&B and Eligible Recipients.
D&B / IBM Confidential
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(uu) "Third Party Materials" shall mean Materials owned by third
parties.
(vv) "Third Party Service Contracts" shall mean those agreements
pursuant to which a third party was, immediately prior to the Effective Date,
furnishing or providing services to D&B or its Affiliates similar to the
Services, including agreements for the services of non-employee personnel to
provide services similar to the Services prior to the Effective Date.
Notwithstanding the foregoing, Third Party Service Contracts do not include
licenses, leases and other agreements under the Software provisions of this
Agreement.
(ww) "Transition" shall mean the process (and associated time
period) of migrating performance of the in-scope functions from D&B's operating
environment to IBM's initial service delivery environment, making the initial
planned improvements to the service delivery infrastructure and effectuating any
required knowledge transfer from D&B personnel to IBM Personnel.
(xx) "Transformation" shall mean the reengineering/innovation
activities to be planned and undertaken by IBM during the Term to transform the
Services and associated business processes of D&B from their respective
then-current states to a state that will be compliant with D&B's long-term
objectives and IBM's solution as described in the Exhibits to Schedule A (IBM
Services and Solutions) and to otherwise cause the Services to meet D&B's
evolving business requirements.
(yy) "Use" shall mean, in the context of Software, to use, copy,
maintain, modify, enhance, distribute, or create derivative works.
(zz) "Virus" shall have the meaning given in Section 18.9.
2.2 OTHER DEFINED TERMS.
(a) Other terms used in the Agreement are defined in the context in
which they are used and have the meanings indicated.
3. SERVICES
3.1 GENERAL.
Commencing on the Effective Date (or the applicable Service Commencement
Date in the case a specific service), IBM will provide the following services,
functions and responsibilities, as they may evolve during the Term and as they
may, subject to the Change Management Process, be supplemented, enhanced,
modified or replaced ("Services"):
(a) the services, functions and responsibilities described in the
Agreement (including its schedules, exhibits and attachments);
(b) the services, functions and responsibilities reasonably related
to the in-scope Services to the extent performed during the twelve (12) months
preceding the Effective Date by D&B's (and its Affiliates') personnel (including
employees and
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contractors) who are displaced or whose functions were displaced as a result of
the Agreement, even if the service, function or responsibility so performed is
not specifically described in the Agreement; and
(c) any services not described in the Agreement or its schedules but
that are incidental to performance of the Services.
3.2 IMPLIED SERVICES.
If any services, functions, or responsibilities are required for the
proper performance and provision of the Services, regardless of whether they are
specifically described in the Agreement, they shall be deemed to be implied by
and included within the scope of the Services to be provided by IBM to the same
extent and in the same manner as if specifically described in the Agreement.
Except as otherwise expressly provided in the Agreement, IBM shall be
responsible for providing the facilities, personnel, and other resources as
necessary to provide the Services.
3.3 SERVICES EVOLUTION.
IBM shall cause the Services to evolve and to be modified, enhanced,
supplemented and replaced as necessary for the Services to keep pace with
technological advances and advances in the methods of delivering services, where
such advances are at the time pertinent in general use within the industry or,
as identified by D&B, among D&B's competitors. As an example, Services evolution
shall include addition of functionality by IBM as is made possible with new
Equipment and Software utilized by IBM during the Term. Adjustments in Services
in accordance with this Section shall be deemed to be included within the scope
of the Services to the same extent and in the same manner as if expressly
described in the Agreement.
3.4 SERVICES VARIABLE IN SCOPE AND VOLUME.
The Services are variable in scope and volume. Such variations are
provided for in the pricing mechanisms set forth in Schedule C (Charges). IBM
shall not be entitled to receive an adjustment to the charges except as set
forth therein.
3.5 SERVICES PERFORMED BY D&B OR THIRD PARTIES.
(a) Subject to Schedule C (Charges), D&B retains the right to
perform itself, or retain third parties to perform, any of the Services. D&B
will provide IBM with at least sixty (60) days' notice prior to withdrawing any
substantial portion of the Services from the scope of Services under the
Agreement.
(b) In the case of D&B's withdrawal of Services under Section
3.5(a), IBM's charges shall be adjusted as provided in Schedule C (Charges) to
reflect those Services that are no longer required.
(c) If D&B performs any of the Services itself, or retains third
parties to do so, IBM shall cooperate with D&B or such third parties as
reasonably necessary for D&B or the third party to perform such Services. Such
cooperation shall include: (i) providing reasonable access to the D&B or other
facilities being used by IBM to
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provide the Services; (ii) providing reasonable access to the Equipment and
Software (to the extent permitted under any underlying agreements with
unaffiliated third parties); and (iii) providing such information regarding the
operating environment, system constraints and other operating parameters as a
person with reasonable commercial skills and expertise would find reasonably
necessary for D&B or a third party to perform its work. Such cooperation shall
be subject to the third party's compliance with IBM's reasonable security and
confidentiality policies. For the avoidance of doubt, the Parties acknowledge
that this provision is not intended to require IBM to furnish IBM resources for
third parties to use in performing services comparable to the Services.
3.6 PERMITTED USERS OF THE SERVICES.
The Services may be used by D&B and, as directed by D&B, its Affiliates,
and those third parties (such as customers, suppliers, and joint venturers) with
whom D&B or any Affiliate has a bona fide commercial relationship that is
broader than mere resale of the Services (collectively, "Eligible Recipients").
Services provided to Eligible Recipients shall be deemed to be Services provided
to D&B.
3.7 SERVICE LOCATIONS.
The Parties have agreed upon and identified in Schedule A the locations,
as of the Effective Date, at which IBM will perform the Services (subject, in
the case of any Service locations outside the United States, to the execution of
any prerequisite Major Market Service Agreements and/or Local Adoption
Agreements). Any changes in the Service locations or the types of Services
provided at a Service location will be subject to the Change Management Process.
3.8 RELATIONSHIP AND AGREEMENT STRUCTURE.
(a) The Agreement provides for and governs the provision of Services
to D&B and its Affiliates in the United States. By executing the Agreement, D&B
and IBM contract to implement the Agreement in relation to the United States.
(b) It is also the intention of the Parties that the Agreement
provide for the provision of Services to D&B Affiliates in the Major Markets of
Canada and Europe. Simultaneously with the execution of the Agreement by D&B and
IBM in the United States, D&B's and IBM's respective Affiliates in Canada are
subscribing to and joining in the Agreement, thereby activating it in relation
to Canada, by executing a Major Market Services Agreement for Canada in the form
set forth as Exhibit G-1 (Canada Services Agreement). In addition, D&B's and
IBM's respective Affiliates in the United Kingdom are subscribing to and joining
in the Agreement, thereby activating it in relation to the United Kingdom, by
executing a Major Market Services Agreement for Europe in the form set forth as
Exhibit G-2 (Europe Services Agreement).
(c) The Europe Services Agreement provides a framework and
contractual vehicle by which other D&B and IBM Affiliates in Europe may
subscribe to and join in the Agreement if they choose to do so. The Europe
Services Agreement will not be activated or effective in relation to European
countries other than the United Kingdom unless and until the local IBM and D&B
Affiliates in the applicable country
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choose to participate in the Agreement. If they choose to participate in the
Agreement, they may subscribe to and join in the Agreement by negotiating and
executing a local agreement issued under the Europe Services Agreement for the
provision and receipt of the Services in relation to the country in which they
operate (a "Local Adoption Agreement"). If D&B and IBM Affiliates in a European
country choose to enter into a Local Adoption Agreement, they will do so in
compliance with all relevant legal requirements in their home country, including
national legislation implementing the ARD.
(d) Without D&B's consent, no Major Market Services Agreement or
Local Adoption Agreement (collectively "Subscription Agreements") shall alter
the aggregate net amounts to be received by IBM (including IBM Affiliates),
expand the geographic scope of, or otherwise alter the Parties' respective
rights and obligations under the Agreement.
(e) No amendment to an executed Subscription Agreement shall be
effective unless it is approved by the D&B Global Project Executive and the IBM
Project Executive.
(f) The applicable D&B Affiliate may, subject to the terms of
Section 23, terminate any Subscription Agreement without affecting the other
Subscription Agreements or the Agreement.
(g) In relation to a Subscription Agreement, all references in the
Agreement to D&B or IBM shall, be regarded as references to the corresponding
D&B or IBM Affiliate(s) in the relevant jurisdiction unless the context requires
otherwise.
(h) The Parties agree that the UN Convention on the International
Sale of Goods shall not apply to any Subscription Agreement.
4. TERM OF AGREEMENT
4.1 TERM.
Subject to extensions made pursuant to Section 4.2, the Term of the
Agreement will start on the Effective Date and expire at midnight (U.S. Eastern
Time) on March 31, 2012.
4.2 EXTENSION OF TERM.
By giving written notice to IBM no less than six (6) months prior to the
then-existing expiration date of the Agreement, D&B shall have the right to
extend the Term of the Agreement for up to one (1) year on the terms and
conditions then in effect, including those terms, if any, that provide
mechanisms by which the IBM's price is to be adjusted. D&B shall have three (3)
such extension options of up to one (1) year each.
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5. TRANSITION AND TRANSFORMATION
5.1 TRANSITION AND TRANSFORMATION, GENERALLY.
(a) IBM will perform all functions and services necessary to
accomplish the Transition and Transformation on schedule and otherwise in
accordance with Exhibit A-7 (Transition and Transformation).
(b) IBM will plan and perform the Transition and Transformation in a
way that controls and minimizes disruption to D&B and its Affiliates.
(c) IBM's responsibilities with respect to the Transition and
Transformation will include: (i) establishing communications lines and network
connections, and providing Equipment, Software, tapes, records and supplies, as
made necessary by the Transition and Transformation; (ii) maintaining the
Services with minimal disruption to D&B's business operations; (iii) paying all
costs associated with the Transition and Transformation, including
communications lines costs (both installation and ongoing); and (iv) otherwise
performing such tasks as are necessary to enable IBM to carry out the Transition
and Transformation in accordance with Exhibit A-7 (Transition and
Transformation) and provide the Services, including following the Transition and
Transformation.
(d) No functionality of the operations being transitioned to IBM
shall be disabled until IBM demonstrates to D&B's reasonable satisfaction that
it has fully tested and implemented equivalent capabilities for such
functionality at its new location. Communications bandwidth for new locations,
if any, shall support or improve the response times experienced by End Users
prior to the Transition and Transformation.
(e) D&B may monitor, test and otherwise participate in the
Transition and Transformation. IBM shall immediately notify D&B if such
monitoring, testing or participation has caused (or in IBM's reasonable opinion
may cause) a problem or delay in the Transition and/or Transformation, and shall
work with D&B to prevent or circumvent such problem or delay.
6. PERSONNEL
6.1 KEY IBM POSITIONS.
(a) IBM shall cause each of the IBM Personnel filling the Key IBM
Positions set forth in Schedule D (Key IBM Positions) to devote substantially
full time and effort to the provision of the Services to D&B except as otherwise
specified in Schedule D (Key IBM Positions). These individuals will be expected
to remain on the D&B account for at least twenty-four (24) consecutive months
from the time they initially assume their position.
(b) D&B may from time to time change the positions designated as Key
IBM Positions upon at least sixty (60) days prior written notice to IBM,
provided that without IBM's consent, the number of Key IBM Positions shall not
exceed the number initially specified in the Agreement. D&B acknowledges that if
it newly designates a
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position as a Key IBM Position, the person IBM nominates to fill that position
going forward may be different from the person who then occupies the position.
(c) D&B will have the right to interview and/or approve any
personnel proposed by IBM to fill a Key IBM Position.
(d) Except at D&B's request, IBM may not transfer any individual
filling a Key IBM Position until D&B has approved a suitable replacement. No
transfers may occur at a time or in a manner that would have an adverse impact
on delivery of the Services.
(e) So long as an individual is assigned to a Key IBM Position, and
for twelve (12) months thereafter, IBM shall not assign such individual to
perform services for the benefit of any D&B Competitor.
(f) IBM shall establish and maintain an up-to-date succession plan
for the individuals filling Key IBM Positions.
6.2 IBM PROJECT EXECUTIVE.
IBM shall designate an individual to serve as "IBM Project Executive." The
IBM Project Executive shall: (i) be one of the Key IBM Positions; (ii) serve as
the single point of accountability for IBM for the Services; (iii) have
day-to-day authority for undertaking to ensure customer satisfaction; (iv)
receive compensation that includes significant financial incentives based on
D&B's satisfaction with the Services, (i.e., not less than thirty-five percent
(35%) of his or her total targeted compensation); and (v) be located at a
location reasonably designated by D&B from time to time.
6.3 QUALIFICATIONS, RETENTION AND REMOVAL OF IBM PERSONNEL.
(a) Notwithstanding any specific IBM Personnel staffing plans set
out or described in the schedules, exhibits and attachments to the Agreement,
IBM shall be responsible for providing an adequate number of IBM Personnel to
perform the Services in accordance with the requirements of the Agreement,
including as necessary to accommodate spikes in demand for Services, to resolve
backlogs, to achieve the Service Levels, and to meet applicable customer and
month-end deadlines. IBM Personnel shall be properly educated, trained and fully
qualified for the Services they are to perform. D&B shall have the right to
review and approve the job descriptions of IBM Personnel to be recruited to
perform the Services and the right to validate the language skills of IBM
Personnel.
(b) D&B and IBM agree that it is in their best interests to keep the
turnover rate of IBM Personnel to a reasonably low level. As part of its monthly
reporting, IBM shall report on turnover of personnel assigned to D&B's account.
If D&B believes that IBM's turnover rate may be excessive and so notifies IBM,
IBM shall provide data concerning its turnover rate and shall meet with D&B to
discuss the reasons for, and impact of, the turnover rate. If appropriate, IBM
shall submit to D&B its proposals for reducing the turnover rate, and the
Parties shall mutually agree on a program to bring the turnover rate down to an
acceptable level. In any event, IBM shall use Commercially Reasonable Efforts to
keep the turnover rate to a reasonably
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low level, and notwithstanding transfer or turnover of IBM Personnel, IBM
remains obligated to perform the Services without degradation and in accordance
with the Agreement.
(c) While at D&B's premises (or the premises of others receiving the
Services under the Agreement), IBM Personnel shall (i) comply with reasonable
requests, rules, and regulations regarding personal and professional conduct
(including the wearing of an identification badge and adhering to general
safety, dress, behavior, and security practices or procedures) generally
applicable to such premises; and (ii) otherwise conduct themselves in a
businesslike and professional manner.
(d) If D&B determines in good faith that the continued assignment to
D&B's account of one or more IBM Personnel is not in the best interests of D&B,
then IBM shall promptly replace that person with another person of suitable
ability and qualifications.
(e) Prior to being assigned to perform Services, all IBM Personnel
must successfully complete a background screening in accordance with the
provisions of Attachment A-5-1 (IBM Personnel Background Checks and Screening).
If D&B requires, IBM Personnel shall not be assigned to particular Services or
projects until they successfully complete additional background screening, drug
testing, and similar requirements. IBM shall staff the D&B account with a
sufficient number of employees who are willing to agree to and able to pass
background screening, drug tests, and similar requirements as necessary to meet
the requirements of D&B's business.
(f) With respect to Services which are to be performed at locations
other than those exclusively under the control of IBM, IBM shall be responsible
for: (i) being fully informed of the working conditions under which the Services
will be performed; (ii) employing such labor and such means and methods of
carrying out the Services as required by such conditions; (iii) using
Commercially Reasonable Efforts to maintain labor harmony in providing the
Services in order to avoid and prevent strikes, walkouts, work stoppages,
slowdowns, boycotts and other labor difficulties, disharmony, and discord; and
(iv) any costs (including costs of delays) incurred as a result of failing to
meet the obligations under this Section. Without limiting the generality of the
foregoing, IBM shall use Commercially Reasonable Efforts to provide IBM
Personnel for its labor force that will be compatible with other workers at the
applicable location, and shall not permit any disruption in the provision of the
Services on account of IBM Personnel.
6.4 RESTRICTIVE COVENANT.
While IBM Personnel are assigned to perform Services under the Agreement,
they shall not be assigned or permitted to perform services for or on behalf of
any D&B Competitors until after they have ceased to perform any Services under
the Agreement. For the avoidance of doubt, it is acknowledged that IBM Personnel
filling the Key IBM Positions are subject to additional restrictions under
Section 6.1(e).
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7. HUMAN RESOURCES
Schedule E (Human Resources) sets forth the terms and conditions
applicable to the transfer of personnel from D&B (and its Affiliates) to IBM
(and its Affiliates) pursuant to the Agreement.
8. RESPONSIBILITY FOR RESOURCES
8.1 GENERALLY.
Except to the extent specifically provided elsewhere in the Agreement, IBM
shall be responsible for providing all resources (including Equipment and
Software) necessary or desirable to provide the Services and will only recover
the cost of providing such resources through the corresponding charges in
Schedule C (Charges). Any Equipment and Software furnished by IBM that provides
a means of access to D&B systems or D&B Data shall comply with D&B's
then-current IT architecture and security policies.
8.2 ACQUIRED ASSETS.
As of the Effective Date, D&B hereby sells and conveys to IBM for use in
providing the Services, for nominal consideration of one US dollar (US$ 1.00),
the DUNSVoice Assistance Equipment described in Schedule M (Existing D&B
Resources).
8.3 [RESERVED]
8.4 [RESERVED]
8.5 D&B FACILITIES.
(a) As described in Schedule A (IBM Services and Solutions), D&B has
agreed to provide workspace at D&B facilities during agreed timeframes
(generally, during the Transition) for use by in-scope D&B personnel who are
hired by IBM and its Affiliates pursuant to the Agreement. IBM may only use the
D&B facilities for the sole and exclusive purpose of providing the Services. Use
of D&B facilities by IBM and its Affiliates does not constitute a leasehold or
other property interest in favor of IBM and its Affiliates.
(b) IBM and its Affiliates will use the D&B facilities efficiently,
in a manner that is coordinated with D&B and does not interfere with D&B's
business operations, and which does not damage D&B facilities. IBM will cause
IBM Personnel to comply with D&B's policies and procedures made available to IBM
regarding access to and use of the D&B facilities, including procedures for
physical security. IBM will permit D&B and its agents and representatives to
enter into those portions of the D&B facilities occupied by IBM Personnel at any
time to perform inspections, audits or facilities-related services. IBM
acknowledges that when IBM Personnel are present at D&B facilities, they are
subject to the same limitations on privacy that are applicable to D&B personnel
at that facility.
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(c) When D&B facilities are no longer required for performance of
the Services, or in any event upon expiration or termination of the Agreement
(or the applicable lease term, if shorter), IBM will vacate and return them to
D&B's use in substantially the same condition as when IBM began use of them,
subject to reasonable wear and tear.
9. RIGHTS IN MATERIALS
This Section 9 addresses the Parties' respective rights in Materials.
9.1 D&B MATERIALS.
(a) D&B retains all right, title and interest in and to D&B
Materials. If D&B makes any D&B Materials available to IBM for use in providing
the Services, D&B grants to IBM a worldwide, fully paid-up, nonexclusive,
non-transferable license during the Term to Use such D&B Materials solely to the
extent necessary for performing the Services with the right to grant
sub-licenses to Approved Subcontractors thereunder only for such purposes and
subject to all applicable provisions of the Agreement. D&B Materials will be
made available to IBM in such form and on such media as exists on the Effective
Date or as is later obtained by D&B. Except as otherwise specifically set forth
in the Agreement, D&B Materials made available to IBM are made available on an
"AS IS" basis, with no warranties whatsoever.
(b) IBM shall not be permitted to (and shall not permit any Approved
Subcontractors to) Use D&B Materials for the benefit of any entities other than
D&B and its Affiliates without the prior written consent of D&B, which may be
withheld at D&B's discretion. IBM shall (and shall procure that its Approved
Subcontractors shall) install, operate and support (and otherwise treat in the
same manner as D&B Materials existing as of the Effective Date) additional D&B
Materials that D&B may designate from time to time during the Term. Except as
otherwise requested or approved by D&B, IBM shall (and shall procure that its
Approved Subcontractors shall) cease all use of D&B Materials upon expiration or
termination of the Agreement.
9.2 COMMERCIALLY AVAILABLE IBM MATERIALS.
With respect to commercially available IBM Materials (and any
modifications and enhancements that are not developed specially for D&B or
according to D&B's specifications):
(a) IBM hereby grants to D&B and the Eligible Recipients a license
on standard terms and conditions no less favorable than those offered generally
by IBM to other commercial customers to use such IBM Materials during the Term
to permit D&B and the Eligible Recipients to receive, use and enjoy fully the
benefits of the Services;
(b) IBM hereby grants to D&B and the Eligible Recipients a license
on standard terms and conditions no less favorable than those offered generally
by IBM to other commercial customers to use such IBM Materials following the
expiration or termination of the Term or termination of the Service(s) for which
such IBM Materials
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were used; provided that, in all events, such terms and conditions must be at
least broad enough to permit D&B and the Eligible Recipients to use such IBM
Materials to provide for themselves, or have provided for them by third party
contractors, services similar to the Services, and for D&B and the Eligible
Recipients to receive such services;
(c) IBM (A) shall deliver a copy of such IBM Materials to D&B and
the Eligible Recipients, (B) shall deliver source code and/or object code to the
extent such IBM Materials include source code or object code and such code is
customarily provided to commercial customers licensing such IBM Materials, and
(C) if IBM fails to offer or provide upgrades, maintenance, support or other
services for such IBM Materials as provided, shall deliver source code and
object code for such IBM Materials to the extent such IBM Materials include
source code, together with the right to modify, enhance and create derivative
works of such IBM Materials (provided that, in such event, the licensed IBM
Materials shall thereafter be provided on an "as is" basis); and
(d) IBM shall offer to provide to D&B and the Eligible Recipients
upgrades, maintenance, support and other services for such IBM Materials on
IBM's then-current standard terms and conditions for such services.
(e) Unless D&B has otherwise agreed in advance, D&B and the Eligible
Recipients shall not be obligated to pay any license or transfer fees in
connection with its receipt of the licenses and other rights above. IBM shall
not use any such IBM Materials for which it is unable to offer such license or
other rights without D&B's prior written approval (and absent such approval,
IBM's use of any such IBM Materials shall obligate IBM to provide, at no
additional cost to D&B, such license and other rights to D&B, the Eligible
Recipients and D&B's designees).
9.3 NON-COMMERCIALLY AVAILABLE IBM MATERIALS.
With respect to IBM Materials that are not commercially available, unless
otherwise agreed prior to the first use of such IBM Materials:
(a) IBM hereby grants to D&B and the Eligible Recipients a
worldwide, perpetual, irrevocable, non-exclusive, non-transferable fully paid-up
license, to use, execute, reproduce, display, perform, and distribute such IBM
Materials following the expiration or termination of the Term or termination of
the Service(s) for which such IBM Materials were used. Such license shall be
limited to the use of such IBM Materials by D&B and the Eligible Recipients to
provide for themselves and, to have provided for them by Third Party
Contractors, services similar to the Services and for D&B and the Eligible
Recipients to receive, use and fully enjoy the benefits of such services.
Nothing in this Agreement will require D&B or the Eligible Recipients to cease
conducting their respective businesses, or to prohibit Third Party Contractors
from assisting D&B or the Eligible Recipients, in accordance with any business
processes or manners of conducting business that have been implemented by IBM
and nothing in this Agreement will preclude D&B or the Eligible Recipients (or
Third Party Contractors while providing services to D&B or the Eligible
Recipients) from continued use of such processes or manners of conducting
business.
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(b) IBM shall not use any IBM Materials for which it is unwilling to
grant all of the license and other rights described above without D&B's prior
written approval.
(c) IBM hereby grants to Third Party Contractors designated by D&B a
worldwide, irrevocable, non-exclusive, non-transferable, fully paid-up license
to use, execute, reproduce, display, perform, and distribute such IBM Materials
for up to twelve (12) months following the expiration or termination of the Term
or, if later, the cessation of the Service(s) for which such IBM Materials were
used. Such license shall be limited to the use of such IBM Materials by such
Third Party Contractors to provide services similar to the Services to D&B and
the Eligible Recipients. The Third Party Contractors shall not be obligated to
pay any license or transfer fees in connection with their receipt of the
licenses and other rights specified above. However, if the Third Party
Contractors require such licenses and other rights for longer than the stated
period, IBM will provide the licenses solely for the continuation of the
services to D&B and its Affiliates for a price that * . At D&B's request,
IBM shall provide upgrades, maintenance, support and other services for such IBM
Materials on reasonable commercial terms and conditions, which shall include
pricing no less favorable than the pricing customarily charged to other
commercial customers receiving equivalent services. If IBM fails to offer or
provide upgrades, maintenance, support or other services, IBM shall deliver
source code and object code for such IBM Materials to the extent such IBM
Materials are Software and include source code, together with the right to
modify, enhance and create derivative works of such IBM Materials (provided
that, in such event, the licensed IBM Materials shall thereafter be provided on
an "as is" basis).
9.4 DEVELOPED MATERIALS.
(a) "Developed D&B Materials" shall mean the following Materials
developed pursuant to this Agreement by IBM Personnel (alone or jointly with
others): (i) modifications to, or upgrades or enhancements (derivative works)
of, D&B Materials; (ii) newly developed Materials that do not modify or enhance
then existing D&B Materials but are developed specially for D&B or according to
D&B's specifications; and (iii) modifications to, or enhancements (derivative
works) of, IBM Materials or Third Party Materials that are developed specially
for D&B or according to D&B's specifications. As between D&B and IBM, D&B shall
own all patent (including rights to patent applications), copyright, trademark,
trade secret, design, database, transferable moral and other intellectual
property rights (collectively, "Intellectual Property Rights") in and to
Developed D&B Materials. In the case of item (iii) above, D&B's ownership shall
be subject to and limited by the terms of any license agreement entered into by
D&B with respect to the IBM Materials or Third Party Materials from which the
Developed D&B Materials are derived; provided, however, that if IBM Personnel
incorporate any pre-existing Third Party Materials or IBM Materials into any
Developed D&B Materials without first notifying D&B of their nature and entering
into with D&B, or obtaining for D&B, a license to use the pre-existing Third
Party Materials or IBM Materials on terms that are acceptable to D&B, IBM hereby
grants to D&B and Eligible Recipients a perpetual, irrevocable, non-exclusive,
worldwide, paid-up right and license to use such pre-existing Third Party
Materials or IBM Materials as part of the Developed D&B Materials in their
businesses and to authorize others to do the same on their behalf. Any
representations, warranties, and covenants of IBM, and any
D&B / IBM Confidential
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* Text redacted pursuant to application for Confidential Treatment under Rule
24b-2 of the Securities Exchange Act of 1934, as amended, and filed separately
with the Securities and Exchange Commission.
rights of D&B under the Agreement, that are applicable to Developed D&B
Materials shall apply equally to any Third Party Materials or IBM Materials
incorporated into the Developed D&B Materials. To the extent required by
applicable law, IBM shall do all such things and shall execute all such
documents as may be necessary to effect an assignment or transfer (as the case
may be) of all such Intellectual Property Rights. D&B will grant IBM a
non-exclusive license during the Term to Use Developed D&B Materials solely to
perform the Services. The Parties will mutually agree upon, and IBM will include
in the Procedures Manual, a process to ensure written documentation of any
agreement of the Parties pursuant to which IBM will develop any Materials
"specially for D&B or according to D&B's specifications."
(b) "Developed IBM Materials" shall mean modifications to, or
upgrades or enhancements (derivative works) of, IBM Materials developed pursuant
to this Agreement by IBM Personnel (alone or jointly with others) that are not
developed specially for D&B or according to D&B's specifications. As between IBM
and D&B, IBM shall own all Intellectual Property Rights in the Developed IBM
Materials. D&B's license rights in and to Developed IBM Materials shall be the
same as D&B's license rights in and to the underlying IBM Materials from which
they are derived, as provided Sections 9.2 and 9.3, whichever is applicable
under the circumstances.
9.5 CERTAIN D&B RIGHTS FOLLOWING THE TERM.
To the extent D&B and/or its Affiliates use or practice IBM Intellectual
Property Rights in accordance with the terms of the Agreement during the Term,
IBM (on its own behalf and on behalf of its Affiliates) covenants not to assert
against or sue D&B and its Affiliates during or at any time following the Term
any claim for infringement of any patent owned or exclusively licensed by IBM or
its Affiliates where D&B's or its Affiliate's use or practice which constitutes
such infringement began during the Term.
9.6 RESIDUAL KNOWLEDGE.
Nothing contained in the Agreement shall restrict a Party from the use of
any general ideas, concepts, know-how, methodologies, processes, technologies,
algorithms or techniques retained in the unaided mental impressions of such
Party's personnel relating to the Services which either Party, individually or
jointly, develops or discloses under the Agreement, provided that in doing so
such Party does not infringe the Intellectual Property Rights of the other Party
or third parties who have licensed or provided materials to the other Party. For
the avoidance of doubt, the Parties acknowledge and agree that the provisions of
this Section 9.6 do not apply to any of the following: (i) D&B Data; (ii)
information concerning the operations, affairs and businesses of D&B (or its
Affiliates), the financial affairs of D&B (or its Affiliates), and the relations
of D&B (or its Affiliates) with their respective, employees and service
providers (including customer lists, customer information, account information,
consumer markets and other information regarding D&B's (or its Affiliates')
business planning, operations, or marketing activities); or (iii) D&B Materials
and Third Party Materials licensed by D&B (or its Affiliates).
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10. REQUIRED CONSENTS
IBM and its Affiliates shall be responsible, with D&B's and its
Affiliates' reasonable co-operation, for obtaining the Required Consents for
third party contracts and licenses as necessary to perform the Services, and IBM
shall be responsible for those fees (including transfer or upgrade fees,
additional licenses, sublicenses, and maintenance fees) required to obtain such
Required Consents. The Parties shall cooperate with each other so as to minimize
such costs. As and to the extent consent is obtained for IBM and its Affiliates
to manage and utilize the Software or a contract but the relevant license or
such contract remains in D&B's or an Affiliate's name, D&B and its Affiliates
shall exercise termination, extension, and other rights thereunder as IBM, after
consultation with D&B, reasonably directs. If a Required Consent is not
obtained, then, unless and until such Required Consent is obtained, IBM shall
determine and promptly adopt, subject to D&B's prior written approval, such
alternative approaches as are necessary and sufficient to provide the Services
without such Required Consents.
11. PERFORMANCE STANDARDS/SERVICE LEVELS
11.1 GENERAL.
(a) IBM shall perform the Services at least at the same level and
with at least the same degree of accuracy, quality, completeness, timeliness,
responsiveness and efficiency as was provided prior to the Effective Date by or
for D&B.
(b) Quantitative Performance Standards for certain of the Services
("Service Levels"), are set forth in Schedule B (Service Levels).
(c) At all times IBM's level of performance shall be at least equal
to the Service Levels and to standards satisfied by well-managed, world-class
operations performing services similar to the Services.
11.2 PRIORITY OF RECOVERY FOLLOWING INTERRUPTION OF SERVICES.
IBM will give the recovery of its capabilities to perform the Services and
the resumption of its actual performance of the Services the same or greater
priority it gives to recovering its capabilities to perform services and
resuming its performance of those services for any other customer of IBM (and
IBM's own operations).
11.3 USER SATISFACTION.
IBM and D&B will conduct a survey at agreed-to intervals (not less than
annually) of an agreed upon percentage of the D&B user community. The surveys
shall be designed to determine the level of user satisfaction and areas where
user satisfaction can be improved. Such surveys shall include representative
samples of each major category of user within D&B and an agreed upon number of
in-depth face-to-face or telephone interviews. IBM and D&B will mutually agree
on the form and content of the surveys, which shall be no less thorough than
IBM's customary user satisfaction program. The Parties will jointly review the
results of the surveys, and IBM will develop and implement a plan to improve
user satisfaction in areas where
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user satisfaction is low. D&B's satisfaction shall be an element of IBM
employees' personal measurements and a key factor in determining business unit
success. Such factors shall comprise a significant percentage of the variable
incentive compensation pay of each individual holding a Key IBM Position.
11.4 PERIODIC REVIEWS.
Within twelve (12) months after the Effective Date and at least annually
thereafter, D&B and IBM will review the Service Levels and will make adjustments
to them as appropriate to reflect improved performance capabilities associated
with advances in technology, processes and methods. The Parties expect and
understand that the Service Levels will be improved over time without impacting
the agreed pricing. As new technologies and processes are introduced, additional
Service Levels reflecting industry best practices for those technologies and
processes will be established by the Parties. Without limiting the generality of
this Section 11.4, Section 5.3 of Schedule B (Service Levels) sets forth a
mechanism for specific annual improvements in Service Levels.
12. ACCEPTANCE
To the extent development of any software or other Deliverables is
included within the scope of the Agreement, the provisions of this Section 12
shall apply. IBM shall fully test all Software Deliverables prior to delivery to
D&B. Upon receipt of a Software Deliverable, D&B shall review the Deliverable
within ten (10) business days in the case of a written Deliverable and thirty
(30) days in the case of a Software Deliverable, or such other time period as is
otherwise agreed by the Parties in writing (with respect to each Deliverable,
the "Acceptance Period") to verify that it complies with its applicable
specifications. If D&B notifies IBM within five (5) business days after the end
of the Acceptance Period that the Deliverable does not meet its applicable
specifications and describes the deficiencies in sufficient detail for IBM to
reproduce them, IBM shall promptly replace the Deliverable with a conforming
Deliverable. If IBM is unable to provide a conforming Deliverable within ten
(10) days after notification of the nonconformance from D&B, D&B may, at its
option, (i) extend the time for correction of the Deliverable, (ii) accept that
Deliverable in its current condition and receive an equitable adjustment to the
price for such Deliverable to account for the reduction in value of the
Deliverable, or (iii) reject and return to IBM the Deliverable and receive a
refund of amounts paid for the Deliverable and for any other Deliverables
returned by D&B that are rendered unusable for their intended purpose due to the
inoperability of such Deliverable.
13. GOVERNANCE
Schedule F (Governance) sets forth the global relationship structures and
governance processes the Parties will use to govern their relationship under the
Agreement.
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13.1 REPORTS.
Exhibit F-3 (Reports) lists the periodic reports to be issued by IBM to
D&B, which should include, at a minimum, monthly performance reports, monthly
change reports and monthly reports on resource utilization.
13.2 PROCEDURES MANUAL.
(a) IBM shall prepare and deliver to D&B a procedures manual
("Procedures Manual") which describes the activities IBM proposes to undertake
in order to provide the Services, including, where appropriate, those
supervision, monitoring, staffing, reporting, planning and oversight activities
to be undertaken by IBM. IBM will also include in the Procedures Manual a
description of its back up and archiving practices, security procedures, change
control policies and procedures, and overall architecture plan.
(b) Attached as Exhibit F-2 (Draft Procedures Manual Table of
Contents) is a draft table of contents for the Procedures Manual. Working in
consultation with D&B, IBM will deliver a draft Procedures Manual to D&B within
ninety (90) days after the Effective Date for review and comment. The draft
Procedures Manual will be organized generally in accordance with Exhibit F-2
(Draft Procedures Manual Table of Contents), but may include additional sections
or provisions as appropriate. IBM will incorporate or address reasonable
comments or suggestions of D&B and will finalize the Procedures Manual within
one hundred fifty (150) days after the Effective Date. The final Procedures
Manual will be subject to the approval of D&B in accordance with Section 12.
(c) The Procedures Manual will be considered an operational
document, which IBM may revise with the written approval of D&B Global Project
Executive without the need to amend the Agreement. IBM will periodically update
the Procedures Manual to reflect changes in the operations or procedures
described in it. Updates of the Procedures Manual will be provided to D&B for
review, comment and approval.
(d) Notwithstanding anything to the contrary in Section 9, D&B and
its Affiliates may retain and use the Procedures Manual in their businesses and
for their benefit both during the Term and following the expiration or
termination of the Agreement for any reason. Subject to appropriate
non-disclosure agreements for the limited purpose of protecting IBM's
Intellectual Property Rights in any pre-existing IBM Materials incorporated into
the Procedures Manual, D&B and its Affiliates may permit any of their other
service providers to use the Procedures Manual during and after the Term, but
solely in connection with their provision of services to D&B and its Affiliates.
If IBM considers any pre-existing IBM Materials incorporated into the Procedures
Manual to be highly confidential, it may so notify D&B. In that case, D&B will
cooperate with IBM to permit IBM to prepare a special version of the Procedures
Manual masking the sensitive information that D&B will use when disclosing the
Procedures Manual to other service providers provided the masking can be
accomplished without detracting materially from the usefulness of the Procedures
Manual for its intended purpose.
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(e) IBM will perform the Services in accordance with the Procedures
Manual save that in the event of a conflict between the provisions of the
Procedures Manual and the provision of the Agreement, the provisions of the
Agreement shall prevail and the conflict shall be resolved in accordance with
the Change Management Process described in Section 13.3.
13.3 CHANGE CONTROL.
(a) "Change" means any modification to the scope of the Services or
to IBM's charges for providing the Services. "Change Management Process" means a
written procedure for considering, analyzing, approving and carrying out Changes
designed to ensure that only desirable Changes are made and that Changes made by
or on behalf of IBM are carried out in a controlled manner with minimal
disruption to the Services and D&B's and its Affiliates' business operations.
(b) Working in consultation with D&B, IBM will develop and include a
Change Management Process in the Procedures Manual.
(c) Except as otherwise expressly provided in Schedule A (IBM
Services and Solutions), D&B has retained responsibility for establishing the IT
architecture, standards (including security standards) and strategic direction
of D&B (and its Affiliates). IBM will conform to and support such architecture,
standards, and strategic direction in rendering the Services. Any Equipment and
Software provided by or on behalf of IBM that connects to D&B (or its
Affiliates') IT infrastructure will comply with such architecture, standards,
and strategic direction and will only be introduced into the D&B IT
infrastructure in accordance with the Change Management Process.
(d) IBM will not make any Changes, except in accordance with the
Change Management Process and with D&B's approval, that may reasonably be
expected to do or result in any of the following: (i) adversely affect the
specifications, functionality, or performance of any Services; (ii) increase D&B
`s internal costs or IBM's charges to D&B under the Agreement; (iii) disrupt or
adversely affect any of D&B's or its Affiliates' business operations; or (iv)
deploy technology that is not consistent with D&B's (and its Affiliates') IT
architecture, standards and strategic direction, as communicated to IBM.
(e) D&B will not be obliged to approve any Change proposed by IBM if
implementation of the Change would increase D&B's internal costs or IBM's
charges to D&B under the Agreement, or if it would otherwise adversely affect
D&B's or its Affiliate's business. IBM will not be obliged or authorized to
carry out any proposed Change that D&B disapproves.
(f) Should the Parties agree on carrying out a Change, a written
Change Order shall be prepared describing the Change and its effects on the
Services, IBM's charges and any affected components of the Agreement. IBM shall
not begin performing any proposed Change until it has been authorized by a duly
executed Change Order. If IBM does so, IBM shall be deemed to have provided such
performance gratuitously.
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13.4 SUBCONTRACTORS.
IBM may not use subcontractors to perform any material part of the
Services or any of its material responsibilities without D&B's prior written
consent. Where D&B gives its approval of a subcontractor (Approved
Subcontractor), D&B has a right to revoke such approval at any time. If D&B's
revocation of such approval is not for good cause and would cause IBM to incur
significant Out-of-Pocket Expenses, IBM may so notify D&B. In that case, D&B's
revocation will be subject to D&B agreeing to reimburse IBM for such additional
Out-of-Pocket Expenses. IBM will be responsible for all subcontractor services
as if performed by IBM and shall be D&B's sole point of contact for all issues
relating to or arising in connection with the performance of any part of the
Services by Approved Subcontractors. IBM shall remain liable at all times for
all acts or omissions of the Approved Subcontractors arising out of or in
connection with the Agreement. Any act or omission which would be a default
under the Agreement had it been done by IBM shall be deemed to be a default by
IBM under the Agreement notwithstanding the fact that it was done by an Approved
Subcontractor and not IBM. A list of the Approved Subcontractors as of the
Effective Date is set forth in Schedule K (Approved Subcontractors).
13.5 QUALITY ASSURANCE AND IMPROVEMENT PROGRAMS.
As part of its total quality management process, IBM shall provide
continuous quality assurance and quality improvement through: (a) the
identification and application of proven techniques and tools from other
installations within its operations (i.e., "best practices"); and (b) the
implementation of concrete programs, practices and measures designed to improve
performance standards. Such procedures shall include checkpoint reviews,
testing, acceptance, and other procedures for D&B to confirm the quality of
IBM's performance, and shall be included in the Procedures Manual. IBM shall
utilize project management tools, including productivity aids and project
management systems, as appropriate in performing the services.
14. AUDITS; RECORD RETENTION
14.1 AUDIT RIGHTS.
(a) IBM shall maintain a complete audit trail of all financial and
non-financial transactions resulting from the Agreement. IBM shall provide to
D&B and its Affiliates, and its and their auditors (including internal audit
staff and external auditors), inspectors, regulators and other representatives
as D&B may from time to time designate in writing, access at all reasonable
times (and in the case of regulators at any time required by such regulators) to
any facility or part of a facility at which either IBM or any of its
subcontractors is providing the Services, to IBM Personnel, and to data and
records (excluding data pertaining to IBM's other customers and not to D&B, and
excluding cost data except in cases where IBM's charges to D&B are based
directly on IBM's costs: e.g., Out-of-Pocket Expenses) relating to the Services
for the purpose of performing audits and inspections of either IBM or any of its
subcontractors during the Term. For the avoidance of doubt, the purposes for
which D&B audits and inspections may be performed include the following: to
verify the accuracy of IBM's invoices; to verify the integrity of D&B Data and
IBM's compliance
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with the data privacy, data protection, confidentiality and security
requirements of the Agreement; to investigate actual or suspected intrusions
into D&B networks or systems or incidents of unauthorized access to or use of
D&B Data, and to verify IBM's compliance with any other provisions of the
Agreement.
(b) Audits and inspections will be conducted during business hours
and upon reasonable advance notice to IBM except in the case of audits or
inspections by regulators, emergency or security audits or inspections, or
audits or inspections investigating claims of illegal behavior. D&B and its
Auditors will comply with IBM's reasonable security and confidentiality
requirements when accessing facilities or other resources owned or controlled by
IBM; provided, however, that IBM shall not restrict access by personnel
conducting such audits or inspections to any D&B Data or other resources owned
or supplied by D&B. IBM will cooperate fully with D&B and its representatives
conducting audits or inspections and provide such assistance as they reasonably
require to carry out the audit or inspection, including installing and operating
audit software.
14.2 IBM AUDITS.
(a) IBM shall conduct audits of or pertaining to the Services in
such manner and at such times as is consistent with the audit practices of well
managed operations performing services similar to the Services. IBM shall
perform a security audit at least annually and shall cause a Type II Statement
of Auditing Standards ("SAS") 70 audit (or equivalent audit) to be conducted
annually for each shared services facility at or from which Services are
provided to D&B and/or the Eligible Recipients. The SAS 70 audits will be
conducted in accordance with D&B's control requirements as required by D&B. IBM
shall permit D&B to participate in the planning of each SAS 70 audit, shall
confer with D&B as to the scope and timing of each such audit and shall
accommodate D&B requirements and concerns to the extent practicable, in IBM's
reasonable discretion. Unless otherwise agreed by the Parties, each SAS 70 audit
shall be scheduled so as to facilitate annual compliance reporting by D&B and
the Eligible Recipients under the Sarbanes-Oxley Act of 2002 and implementing
regulations promulgated in the thereunder. To the extent the resulting audit
report is relevant to D&B and/or the Eligible Recipients, IBM shall provide a
copy of such report to D&B and its independent auditors for review and comment
as soon as reasonably possible and in all events within thirty (30) days after
completion.
(b) Following an audit or examination, D&B may conduct (in the case
of an internal audit), or request its external auditors or examiners to conduct,
an exit conference with IBM to obtain factual concurrence with issues identified
in the review.
(c) IBM and D&B will meet to review each audit report promptly after
its issuance and to agree mutually upon the appropriate manner, if any, in which
to respond to the changes suggested by the audit report. D&B and IBM agree to
develop operating procedures for the sharing of audit and regulatory findings
and of reports related to IBM's operating practices and procedures produced by
auditors or regulators of either Party.
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14.3 RECORDS RETENTION.
Until the latest of (a) three (3) years after creation of the record; (b)
all pending matters relating to the Agreement are closed; (c) the information is
no longer required to meet D&B's records management policy as disclosed by D&B
to IBM and as such policy may be adjusted from time to time; or (d) the
information is no longer required for either Party to comply with applicable
laws, IBM shall maintain and provide access upon request to the records,
documents, and other information required to meet D&B's audit rights under the
Agreement.
15. D&B RESPONSIBILITIES
15.1 DESIGNATION OF CERTAIN D&B PERSONNEL.
D&B shall designate an individual to serve in each of the D&B roles
identified in Exhibit F-1 (IBM and D&B Organization Structures).
15.2 D&B RETAINED FUNCTIONS
In support of IBM's performance of the Services, D&B will perform the D&B
Retained Functions.
15.3 SAVINGS CLAUSE.
(a) DUE TO THE IMPACT ANY TERMINATION OF THE AGREEMENT OR SUSPENSION
OF PERFORMANCE WOULD HAVE ON D&B'S BUSINESS, D&B'S FAILURE TO PERFORM ITS
RESPONSIBILITIES SET FORTH IN THE AGREEMENT (OTHER THAN D&B'S FAILURE TO PAY
UNDISPUTED AMOUNTS IN EXCESS OF THREE MILLION US DOLLARS (US$ 3 MILLION), OR ITS
FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 7.2 (DISPUTED CHARGES) OF
SCHEDULE C (CHARGES)) SHALL NOT BE GROUNDS FOR TERMINATION OF THE AGREEMENT BY
IBM OR FOR THE SUSPENSION OF PERFORMANCE OF THE SERVICES BY IBM. IBM
ACKNOWLEDGES THAT D&B WOULD NOT BE WILLING TO ENTER INTO THE AGREEMENT WITHOUT
ASSURANCE THAT IT MAY NOT BE TERMINATED BY IBM AND THAT IBM MAY NOT SUSPEND
PERFORMANCE EXCEPT, AND ONLY TO THE EXTENT, AS PROVIDED UNDER THE AGREEMENT.
(b) IBM's nonperformance of its obligations under the Agreement
shall be excused if and to the extent (a) such IBM nonperformance results from
D&B's failure to perform its responsibilities; and (b) IBM provides D&B with
reasonable notice of such nonperformance and (if requested by D&B) uses
Commercially Reasonable Efforts to perform notwithstanding D&B's failure to
perform with D&B being responsible to reimburse IBM for its additional
Out-of-Pocket expenses for such efforts.
16. CHARGES
Schedule C (Charges) sets forth all the charges payable to IBM for
performing the Services and the associated invoicing and payment procedures and
terms. D&B will not be required to pay IBM any amounts for or in connection with
performing the
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Services and fulfilling IBM's obligations under the Agreement other than the
Permitted Charges (as defined in Schedule C).
17. SAFEGUARDING OF DATA; CONFIDENTIALITY
17.1 D&B INFORMATION.
(a) D&B Information shall be and remain, as between the Parties, the
property of D&B, its Affiliates and third party licensors (as the case may be).
IBM shall not possess or assert any lien or other right against or to D&B
Information. Except as expressly permitted by Section 9.6, D&B Information shall
not be: (i) used by IBM other than in connection with providing the Services;
(ii) disclosed, sold, assigned, leased or otherwise provided to third parties by
IBM; or (iii) commercially exploited by or on behalf of IBM.
(b) D&B Information shall not be utilized by IBM for any purpose
other than that of rendering the Services under the Agreement. Upon D&B's
request, or upon termination or expiration of the Agreement for any reason, D&B
Information shall be promptly returned to D&B (or its applicable Affiliate) or
destroyed by IBM.
(c) Without limiting the generality of Sections 24.1 and Schedule H
(Data Privacy and Data Protection Laws), IBM will comply with all data
protection and data privacy laws and regulations applicable to IBM's business.
In addition, IBM will enable D&B to comply with data protection and data privacy
laws and regulations that are not generally applicable to IBM's business but are
applicable to D&B and/or its Affiliates by complying with any associated D&B
standards, policies and requirements that have been communicated to IBM in
writing. For the avoidance of doubt, the Parties acknowledge that IBM is not
providing audit, legal, or compliance advice to D&B under the Agreement.
17.2 SAFEGUARDING D&B DATA.
(a) IBM will establish and maintain safeguards against the
destruction, loss, or alteration of D&B Data in the possession of IBM which are
no less rigorous than those in effect at D&B as of the Effective Date, and which
are no less rigorous than those maintained by IBM for its own information of a
similar nature. D&B will have the right to establish backup security for data
and to keep backup data and data files in its possession if it chooses.
(b) IBM Personnel shall not attempt to access, or allow access to,
any D&B Data that they are not permitted to access under the Agreement. If such
access is attained (or is reasonably suspected), IBM shall promptly report such
incident to D&B, describe in detail the accessed D&B Data, and if applicable
return to D&B any copied or removed D&B Data.
(c) IBM shall utilize Commercially Reasonable Efforts, including
thorough systems security measures, to guard against the unauthorized access,
alteration or destruction of Software and D&B Data. Such measures shall include
the use of Software which: (i) requires all users to enter a user identification
and password prior to gaining access to the information systems; (ii) controls
and tracks
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the addition and deletion of users; and (iii) controls and tracks user access to
areas and features of the information systems. If IBM becomes aware of any
suspected, attempted or actual intrusions into D&B networks or systems, or
incidents of unauthorized access to or use of D&B Data, IBM shall immediately
report the incident to the D&B Global Project Executive.
(d) Schedule H (Data Privacy and Data Protection Laws) sets forth
additional terms and conditions governing data privacy and data protection, and
compliance by the Parties with applicable legislation and regulations as they
relate to the performance of the Services by IBM.
17.3 CONFIDENTIAL INFORMATION.
IBM and D&B each acknowledge that they may be furnished with, receive or
otherwise have access to information of or concerning the other Party that such
Party considers to be confidential, a trade secret or otherwise restricted.
"Confidential Information" shall mean all information, in any form, furnished or
made available directly or indirectly by one Party to the other which is marked
confidential, restricted, or with a similar designation. The terms and
conditions of the Agreement shall be deemed Confidential Information.
17.4 OBLIGATIONS IN CONNECTION WITH CONFIDENTIAL INFORMATION.
(a) Each Party shall use at least the same degree of care as it
employs to avoid unauthorized disclosure of its own information, but in any
event no less than Commercially Reasonable Efforts, to prevent disclosing to
unauthorized parties the Confidential Information of the other Party, provided
that IBM may disclose such information to properly authorized entities as and to
the extent necessary for performance of the Services, and D&B may disclose such
information to third parties as and to the extent necessary for the conduct of
its business, where in each such case: (i) the receiving entity first agrees in
writing to terms and conditions substantially the same as the confidentiality
provisions set forth in the Agreement; (ii) use of such entity is authorized
under the Agreement; (iii) such disclosure is necessary or otherwise naturally
occurs in that entity's scope of responsibility; and (iv) the disclosing Party
assumes full responsibility for the acts and omissions of such third party.
(b) The receiving Party's obligations respecting Confidential
Information of the other Party shall continue for as long as the receiving Party
(or any of its Affiliates, contractors, agents or representatives) retains any
copies of the Confidential Information and shall survive for a period of two (2)
years following the receiving Party's destruction or return of all copies of the
Confidential Information. For the avoidance of doubt, the provisions of this
section shall not in any way limit IBM's obligations to safeguard the D&B Data
pursuant to Section 17.2.
(c) Each Party's Confidential Information shall remain the property
of that Party. Nothing contained in the Parties' obligations with respect to
Confidential Information shall be construed as obligating a Party to disclose
its Confidential Information to the other Party, or as granting to or conferring
on a Party, expressly or impliedly, any rights or license to the Confidential
Information of the other Party, and
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any such obligation or grant shall only be as provided by other provisions of
the Agreement. The obligations set forth in this Section 17.4 shall not apply to
any particular information that the receiving Party can establish: (i) was
already in its possession without any obligation of confidentiality at the time
of disclosure by the furnishing Party; (ii) was developed independently by it
without reference to any Confidential Information of the furnishing Party; (iii)
was obtained without obligation of confidentiality from a source who had the
right to furnish the information to the receiving Party without an obligation of
confidentiality; (iv) was publicly available when disclosed by the furnishing
Party or subsequently becomes publicly available through no fault of the
receiving Party; or (v) was disclosed by the furnishing Party to other parties
without an obligation of confidentiality.
18. REPRESENTATIONS, WARRANTIES AND COVENANTS
18.1 WORK STANDARDS.
IBM represents and warrants that the Services shall be rendered with
promptness and diligence and shall be executed in a workmanlike manner, in
accordance with the practices and high professional standards used in
well-managed operations performing services similar to the Services. IBM
represents and warrants that it shall use adequate numbers of qualified
individuals with suitable training, education, experience and skill to perform
the Services.
18.2 EFFICIENCY AND COST EFFECTIVENESS.
IBM represents and warrants that it shall use Commercially Reasonable
Efforts to use efficiently the resources or services necessary to provide the
Services. IBM represents and warrants that with respect to chargeable resources
it shall use Commercially Reasonable Efforts to perform the Services in the most
cost-effective manner consistent with the required level of quality and
performance.
18.3 DELIVERABLES.
IBM represents and warrants that all deliverables will comply with their
applicable specifications.
18.4 TECHNOLOGY.
IBM agrees that it shall provide the Services using, subject to the Change
Management Process, proven, current technology that will enable D&B to take
advantage of technological advancements in its industry and support D&B's
efforts to maintain competitiveness in the markets in which it competes.
18.5 NON-INFRINGEMENT.
Each Party represents and warrants that it shall perform its
responsibilities under the Agreement in a manner that does not infringe, or
constitute an infringement or misappropriation of, any Intellectual Property
Rights of any third party. IBM represents that there are no current claims that
any portion of the Services infringes any third party Intellectual Property
Rights (regardless of IBM's view of the merits of
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such claim) and IBM shall promptly inform D&B of any claims which are
hereinafter brought.
18.6 OWNERSHIP AND USE OF SOFTWARE AND RELATED MATERIAL.
IBM represents and warrants that it is either the owner of, or authorized
to use, all of the software and related material, including IBM Software, used
and to be used in connection with the Services, which is not otherwise owned by
D&B or its Affiliates.
18.7 AUTHORIZATION AND OTHER CONSENTS.
Each Party represents and warrants to the other that: (a) it has the
requisite corporate power and authority to enter into the Agreement and to carry
out the transactions contemplated by the Agreement; (b) the execution, delivery
and performance of the Agreement and the consummation of the transactions
contemplated by the Agreement have been duly authorized by the requisite
corporate action on the part of such Party and will not constitute a violation
of any judgment, order or decree; (c) the execution, delivery and performance of
the Agreement and the consummation of the transactions contemplated by the
Agreement will not constitute a material default under any material contract by
which it or any of its material assets are bound, or an event that would, with
notice or lapse of time or both, constitute such a default; and (d) there is no
proceeding pending or, to the knowledge of the Party, threatened which
challenges or may have a material adverse affect on the Agreement or the
transactions contemplated by the Agreement.
18.8 INDUCEMENTS.
IBM represents and warrants to D&B that it has not violated any applicable
laws or regulations or any D&B policies of which IBM has been given notice
regarding the offering of unlawful inducements in connection with the Agreement.
If at any time during the Term, D&B determines that the foregoing representation
and warranty is inaccurate, and provided the inaccuracy is of such a material
nature that it might have reasonably led D&B not to enter into the Agreement had
D&B known this before entering into the Agreement, then, in addition to any
other rights D&B may have at law or in equity, D&B shall have the right to
terminate the Agreement for cause without first affording IBM an opportunity to
cure.
18.9 VIRUSES.
IBM shall use Commercially Reasonable Efforts so that no Viruses are coded
or introduced into the systems used to provide the Services. If a Virus is found
to have been introduced into the systems used to provide the Services, IBM shall
use Commercially Reasonable Efforts upon D&B's request to assist D&B in reducing
the effects of the Virus and, if the Virus causes a loss of operational
efficiency or loss of data, to assist D&B to the same extent to mitigate and
restore such losses. Such assistance shall be provided at no charge if the Virus
was introduced either by IBM personnel or via software, systems or other
resources controlled by IBM; otherwise, such assistance shall be provided in
accordance with the applicable pricing provisions of the Agreement. "Virus"
shall mean: (a) program code or programming instruction or set of instructions
intentionally designed to disrupt, disable, harm, interfere with or
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otherwise adversely affect computer programs, data files or operations; or (b)
other code typically described as a virus or by similar terms, including Trojan
horse, worm or backdoor, that was not authorized in writing by D&B.
18.10 DISABLING CODE.
IBM represents and warrants that, without the prior written consent of D&B
(which it may withhold in its sole discretion), IBM shall not insert into the
Software any code that would have the effect of disabling or otherwise shutting
down all or any portion of the Services, other than code which is inserted into
commercially available products by the product licensor in the normal course of
its business to ensure a purchaser or licensee uses the product in accordance
with the license agreement. IBM further represents and warrants that, with
respect to any disabling code that may be part of the Software, IBM shall not
invoke such disabling code at any time, including upon expiration or termination
of the Agreement for any reason, without D&B's prior written consent.
18.11 DISCLAIMERS.
(a) During the proposal and contract negotiation process preceding
the Effective Date, IBM has been afforded the opportunity to conduct to its
satisfaction a full examination of D&B's operations related to the Services. D&B
MAKES NO WARRANTIES THAT ARE NOT SET FORTH IN THE AGREEMENT. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN SCHEDULE C (CHARGES), IN NO EVENT WILL INFORMATION
DISCOVERED AFTER THE EFFECTIVE DATE OR CHANGES IN CIRCUMSTANCES OF ANY KIND
SERVE AS THE BASIS FOR IBM TO ADJUST THE PRICING OR TERMS OF THE AGREEMENT.
(b) THE WARRANTIES SET FORTH IN THE AGREEMENT ARE EXCLUSIVE. OTHER
THAN AS PROVIDED IN THE AGREEMENT, THERE ARE NO EXPRESS WARRANTIES AND THERE ARE
NO IMPLIED WARRANTIES, INCLUDING IMPLIED WARRANTIES OR MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
19. INSURANCE
IBM will maintain during the Term insurance coverage in accordance with
Schedule L (Insurance).
20. INDEMNITIES
20.1 IBM INDEMNITIES.
IBM will indemnify and hold D&B and D&B's Affiliates and their respective
officers, directors, employees, agents, successors and assigns harmless against
any and all Losses arising from, related to, or in any way connected with,
Claims of or for any of the following:
(a) IBM's failure to observe or perform any duties or obligations to
be observed or performed on or after the Effective Date by IBM under the Third
Party
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Service Contracts, if any, assigned to IBM or for which IBM has assumed
financial, administrative or operational responsibility under the Agreement.
(b) Infringement or misappropriation of any Intellectual Property
Rights, alleged to have occurred because of systems, deliverables, or other
resources provided by IBM to D&B, or based upon the performance of the Services
by IBM. IBM's foregoing indemnity obligation shall not apply to the extent (but
only to the extent) any claimed infringement or misappropriation is directly
attributable to any of the following: (i) the combination, operation or use of
an item provided on behalf of IBM with other specific items not furnished by,
through, or at the specification of IBM or its subcontractors; provided,
however, that this exception will not be deemed to apply to the combination,
operation or use of an item with other commercially available products that
could reasonably have been anticipated to be used in combination with the item
provided by IBM in connection with the Services: e.g., the use of application
software provided by IBM with a commercially available computer and operating
system not provided by IBM), (ii) modifications of hardware, Software, or
materials that were not made, directed, or approved by IBM, (iii) specifications
provided by the Indemnified Party if such specifications did not permit use of a
non-infringing alternative and provided IBM did not knowingly commit an
infringement or misappropriation without advising D&B in writing in advance,
(iv) business process(es) that the Indemnified Party requires IBM to use or
follow if such business process(es) did not permit use of a non-infringing
alternative and provided IBM did not knowingly commit an infringement or
misappropriation without advising D&B in writing in advance, or (v) use by the
Indemnified Party of an item in other than its specified operating environment;
(c) By, on behalf of, or related to, any employee of IBM, its
Affiliates, or any Approved Subcontractor, including Claims arising on or after
the Effective Date under occupational health and safety, worker's compensation,
ERISA or other applicable federal, state, or local laws or regulations, or at
common law, except to the extent of D&B's responsibility, if any, under Section
20.3;
(d) Any amounts including taxes, interest, and penalties assessed
against D&B or its Affiliates which are obligations of IBM;
(e) The inaccuracy or untruthfulness of any representation or
warranty made by or on behalf of IBM in any of the following Sections: 18.5,
18.6, 18.7 and/or 18.10;
(f) By subcontractors arising out of IBM's breach or violation of
IBM's subcontracting arrangements;
(g) Arising out of (i) a violation of Federal, state, or other laws
or regulations for the protection of persons or members of a protected class or
category of persons by IBM or its employees, subcontractors or agents; (ii)
sexual discrimination or harassment by IBM, its employees, subcontractors or
agents; and (iii) work-related injury or death caused by IBM, its employees,
subcontractors, or agents (except to the extent covered by D&B's worker's
compensation coverage);
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(h) By any IBM Personnel that D&B (or its Affiliate) is liable to
such person as the employer or joint employer of such person, including any
claim for employee benefits as a result thereof;
(i) Arising out of or relating to inadequacies in the physical and
data security control systems at the locations from which IBM provides the
Services, to the extent such systems are controlled or provided by IBM after the
Effective Date; and/or
(j) Arising out of IBM's breach of Section 24.
20.2 D&B INDEMNITIES.
D&B will indemnify, defend and hold harmless IBM and its Affiliates and
their respective officers, directors, employees, agents, successors and assigns
against any and all Losses arising from, related to, or in any way connected
with, Claims of or for any of the following:
(a) D&B's failure to observe or perform any duties or obligations to
be observed or performed prior to the Effective Date by D&B under any of the
third party contracts assigned to IBM or for which IBM has assumed financial,
administrative or operational responsibility; and
(b) Infringement or misappropriation of any Intellectual Property
Rights, alleged to have occurred because of systems or other resources provided
to IBM by D&B unless attributable to IBM's failure to obtain any Required
Consent IBM is responsible for obtaining.
20.3 ADDITIONAL INDEMNITIES.
Each Party (indemnitor) agrees to indemnify, defend and hold harmless the
other (indemnitee) and its Affiliates and their respective officers, directors,
employees, agents, successors and assigns, against any and all Losses arising
from, related to or in any way connected with, Claims of or for any of the
following:
(a) the death or bodily injury of any agent, employee (other than an
employee of the indemnitor), customer, business invitee, or business visitor or
other person caused by the tortious conduct of the indemnitor (except to the
extent that that the indemnitor is considered a 'special employer' under
applicable workers compensation laws and that under such law the indemnitee is
deemed to be fully protected by workers compensation insurance);
(b) the damage, loss or destruction of any real or tangible personal
property caused by the tortious conduct of the indemnitor; or
(c) resulting from an act or omission of the indemnitor in its
capacity as an employer of a person.
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20.4 INFRINGEMENT.
(a) If any item used by IBM to provide the Services (other than an
item provided by D&B) becomes, or in IBM's reasonable opinion is likely to
become, the subject of a third party infringement or misappropriation Claim, in
addition to indemnifying D&B and its Affiliates and in addition to D&B's other
rights, IBM shall promptly take the following actions, at no additional charge
to D&B, in the listed order of priority: (i) promptly secure the right to
continue using the item; (ii) replace or modify the item to make it
non-infringing or without misappropriation, provided that any such replacement
or modification must not degrade the performance or quality of the affected
component of the Services and IBM shall be responsible for the cost of any new
interfaces or integration work required as a result of the replacement or
modification; or (iii) remove the item from the Services, in which case IBM's
charges shall be equitably adjusted to reflect such removal and if, in D&B's
reasonable opinion, such removal is material to all or any portion of the
remaining Services D&B may terminate such portion of the affected Services or
the entire Agreement, as the case may be, without penalty.
(b) If any item provided to IBM by D&B for use in providing the
Services becomes, or in D&B's reasonable opinion is likely to become, the
subject of a third party infringement or misappropriation Claim, in addition to
indemnifying IBM and its Affiliates pursuant to Section 20.2(b), D&B may take
any of the following actions, at no charge to IBM: (i) promptly secure the right
for IBM and its Affiliates to continue using the item; (ii) replace or modify
the item with a functionally equivalent or similar item that is non-infringing
and bear the cost of any new interfaces or integration work required as a result
of the replacement or modification; or (iii) cease making the item available to
IBM for use in providing the Services. If D&B exercises option (iii), the
Parties will negotiate an equitable adjustment of IBM's performance obligations
and charges to reflect the withdrawal of the item from IBM's use. The foregoing
shall not apply to the extent the claimed infringement or misappropriation is
attributable to IBM's failure to obtain any Required Consent(s) for which IBM is
responsible under the Agreement.
20.5 INDEMNIFICATION PROCEDURES.
The following procedures will apply to Claims for which a party seeks to
be indemnified pursuant the Agreement:
(a) Promptly after an indemnitee receives notice of any Claim for
which it will seek indemnification pursuant to the Agreement, the indemnitee
will promptly notify the indemnitor of the Claim in writing. No failure to so
notify the indemnitor will abrogate or diminish the indemnitor's obligations
under this Section 20 if the indemnitor has or receives knowledge of the Claim
by other means or if the failure to notify does not materially prejudice its
ability to defend the Claim. Within fifteen (15) days after receiving an
indemnitee's notice of a Claim, but no later than ten (10) days before the date
on which any formal response to the Claim is due, the indemnitor will notify the
indemnitee in writing as to whether the indemnitor acknowledges its
indemnification obligation and elects to assume control of the defense and
settlement of the Claim (a "Notice of Election"). In issuing a Notice of
Election, the indemnitor waives any right of contribution against the indemnitee
unless the Notice of Election
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expressly states that indemnitor believes in good faith that the indemnitee may
be liable for portions of the Claim that are not subject to indemnification by
the indemnitor, in which case the indemnitee will have the right to participate
jointly in the defense and settlement of the Claim at its own expense using
counsel selected by it.
(b) If the indemnitor timely delivers a Notice of Election, it will
be entitled to have sole control over the defense and settlement of the Claim
except as provided in Section 20.5(a). After delivering a timely Notice of
Election, the indemnitor will not be liable to the indemnitee for any legal
expenses subsequently incurred by the indemnitee in defending or settling the
Claim. In addition, the indemnitor will not be required to reimburse the
indemnitee for any amount paid or payable by the indemnitee in settlement of the
Claim if the settlement was agreed to without the written consent of the
indemnitor.
(c) If the indemnitor does not deliver a timely Notice of Election
for a Claim, the indemnitee may defend and/or settle the Claim in such manner as
it may deem appropriate, at the cost and expense of the indemnitor, including
payment of any settlement, judgment or award and the costs of defending or
settling the Claim. The indemnitor will promptly reimburse the indemnitee upon
demand for all Losses suffered or incurred by the indemnitee as a result of or
in connection the Claim.
20.6 SUBROGATION.
If an indemnitor shall be obligated to indemnify an indemnitee under the
Agreement, the indemnitor shall, upon fulfillment of its obligations with
respect to indemnification, including payment in full of all amounts due
pursuant to its indemnification obligations, be subrogated to the rights of the
indemnitee with respect to the Claims to which such indemnification relates.
21. LIABILITY
21.1 GENERAL INTENT.
Subject to the liability restrictions below, it is the intent of the
Parties that each Party shall be liable to the other Party for any actual
damages incurred by the non-breaching Party as a result of the breaching Party's
failure to perform its obligations in the manner required by the Agreement.
21.2 LIABILITY RESTRICTIONS.
(a) Subject to Section 21.2(c) below, in no event, whether in
contract or in tort (including breach of warranty, negligence and strict
liability in tort), shall a Party be liable for indirect or consequential,
exemplary, punitive or special damages, or any loss of profits, revenue,
business, savings, or goodwill, even if such Party has been advised of the
possibility of such damages in advance.
(b) Subject to Section 21.2(c) below, each Party's total liability
to the other, whether in contract or in tort (including breach of warranty,
negligence and strict liability in tort) shall be limited in the aggregate to an
amount equal to the total
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charges payable to IBM pursuant to the Agreement for proper performance of the
Services for the twelve (12) months prior to the month in which the most recent
event giving rise to liability occurred; provided that if such event giving rise
to liability occurs during the first twelve (12) months after the Effective
Date, liability shall be limited to an amount equal to the total charges that
would be payable to IBM pursuant to the Agreement for proper performance for the
Services during such twelve (12) month period. Service Credits do not count
against and do not reduce the amounts available under the foregoing limitations.
For the avoidance of doubt, the cap on aggregate liability set forth in this
paragraph is intended to be an aggregate cap applicable to any and all claims
under the Agreement, including any and all claims arising under Local Services
Agreements executed hereunder, or under any Adoption Agreements executed
thereunder.
(c) The limitations set forth in Sections 21.2(a) and 21.2(b) above
shall not apply with respect to: (i) Claims that are the subject of
indemnification; (ii) damages occasioned by a Party's breach of its obligations
with respect to Confidential Information; or (iii) any amounts payable by D&B to
IBM under the Agreement for Services properly performed.
21.3 DIRECT DAMAGES.
The following shall be considered direct damages and shall not be
considered consequential damages to the extent they result from a Party's
failure to fulfill its obligations in accordance with the Agreement: (a) costs
of recreating or reloading any D&B Information that is lost or damaged; (b)
costs of implementing a workaround in respect of a failure to provide the
Services; (c) costs of replacing lost or damaged equipment and software and
materials; (d) costs and expenses incurred to correct errors in software
maintenance and enhancements provided as part of the Services; (e) costs and
expenses incurred to procure the Services from an alternate source; and (f)
straight time, overtime, or related expenses incurred by D&B or its Affiliates,
including overhead allocations for employees, wages and salaries of additional
personnel, travel expenses, telecommunication and similar charges incurred due
to the failure of IBM to provide the Services or incurred in connection with (a)
through (e) above.
21.4 DUTY TO MITIGATE.
Each Party shall have a duty to mitigate damages for which the other Party
is responsible.
21.5 FORCE MAJEURE.
(a) Neither Party shall be liable for any default or delay in the
performance of its obligations under the Agreement (other than the obligations
to pay amounts due under the Agreement) (i) if and to the extent such default or
delay is caused, directly or indirectly, by fire, flood, earthquake, elements of
nature or acts of God, riots, civil disorders, war, government action, an order
under the Defense Production Act, or any other cause beyond the reasonable
control of such Party; (ii) provided the non-performing Party is without fault
in causing such default or delay, and such default or delay could not have been
prevented by reasonable precautions
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and could not reasonably be circumvented by the non-performing Party through the
use of alternate sources, workaround plans or other means (including, with
respect to IBM, by IBM meeting its obligations for performing disaster recovery
services as provided in the Agreement) (each such event, a "Force Majeure
Event").
(b) In such event the non-performing Party shall be excused from
further performance or observance of the obligations so affected for as long as
such circumstances prevail and such Party continues to use Commercially
Reasonable Efforts to recommence performance or observance without delay,
including the performance and fulfillment of any express disaster
recovery/business continuity obligations of IBM under the Agreement. Any Party
so delayed in its performance shall immediately notify the Party to whom
performance is due by telephone (to be confirmed in writing within twenty-four
(24) hours of the inception of such delay) and describe at a reasonable level of
detail the circumstances causing such delay. A Force Majeure Event does not
excuse IBM from providing disaster recovery services.
(c) If any Force Majeure Event substantially prevents, hinders or
delays performance of the Services necessary for the performance of functions
reasonably identified by D&B as critical for more than five (5) consecutive
calendar days or any material portion of the Services for more than ten (10)
business days, then at D&B's option: (i) D&B may procure such Services from an
alternate source, and IBM shall be liable for payment for such Services from the
alternate source for so long as the delay in performance shall continue, not to
exceed 180 days; (ii) D&B may terminate any portion of the Agreement so affected
and the charges payable hereunder shall be equitably adjusted to reflect those
terminated Services; or (iii) D&B may terminate the Agreement as of a date
specified by D&B in a written notice of termination to IBM. If D&B terminates
the Agreement under clause (b) or (c) above, D&B shall pay IBM's charges for all
Services performed under the Agreement, but shall not be liable for payment of
any termination charges. IBM shall not have the right to any additional payments
from D&B for costs or expenses incurred by IBM as a result of any Force Majeure
Event.
22. DISPUTE RESOLUTION
Any dispute between the Parties arising out of or relating to the
Agreement, including with respect to the interpretation of any provision of the
Agreement and with respect to the performance by IBM to D&B, shall be resolved
by the process set forth in this Section 22.
22.1 DISPUTE RESOLUTION PROCESS.
(a) The Parties initially shall attempt to resolve their disputes
informally, or as described in Section 22.1(b), by appointing designated
representatives who do not devote substantially all of their time to performance
under the Agreement to meet for the purpose of endeavoring to resolve such
disputes.
(b) In the event of any dispute arising out of or in connection with
the Agreement that is not resolved informally, the Parties agree to discuss and
consider submitting the matter to settlement proceedings under the International
Chamber of Commerce (ICC) ADR Rules. In the event that the Parties agree to
submit the matter to settlement proceedings under the ICC ADR Rules and the
dispute has not been settled pursuant to such rules within forty five (45) days
following the filing of a request for ADR or within such period as the Parties
may agree in writing, the parties shall have no further obligations under this
Section 22.1(b).
(c) If the Parties are unable to resolve a dispute informally,
either party may pursue its remedies under the Agreement through litigation.
(d) Nothing in this Section 22.1 shall prevent any party seeking,
obtaining or implementing interim or conservatory measures or other immediate
relief in respect of any dispute or referring any matter relating to the
Agreement to any competent government agency, commission, court or other
authority having jurisdiction over either Party with a request that it make a
determination or take other appropriate steps for its resolution.
(e) Notwithstanding the provisions of Section 22.1, commencement of
litigation shall be deemed appropriate if commenced by a Party to avoid the
expiration of an applicable limitations period or to preserve a superior
position with respect to other creditors, or a Party makes a good faith
determination that a breach of the Agreement by the other Party is such that a
temporary restraining order or other injunctive relief is necessary.
22.2 CONSOLIDATION OF DISPUTES.
(a) Notwithstanding anything in the Agreement or any Major Market
Services Agreement or Local Adoption Agreement to the contrary, in order that
disputes between the Parties to the Agreement, or between the parties to the
Major Market Services Agreements or Local Adoption Agreements that are similar
in nature are resolved in a consistent manner, if either Party determines that a
dispute under a Major Market Services Agreement or Local Adoption Agreement is
sufficiently similar to a dispute that is pending, or which it believes is
likely to occur, under the Agreement, such Party may elect to cause the dispute
under the Major Market Services Agreement or local Adoption Agreement to be
resolved under Section 22.1.
(b) Such right to elect to consolidate any dispute resolution must
be exercised no later than fifteen (15) days (time being of the essence) after
(i) the Parties agree to submit the matter
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to settlement proceedings under the ICC ADR Rules in accordance with Section
22.1(b), or (ii) the service by one Party of process for litigation under
Section 0 to the other Party and to the tribunal where the action is pending,
whose proceedings shall be stayed.
(c) If the Parties are unable to resolve a dispute informally,
either party may pursue its remedies under the Agreement through litigation.
(d) Nothing in this Section 22.1 shall prevent any party seeking,
obtaining or implementing interim or conservatory measures or other immediate
relief in respect of any dispute or referring any matter relating to the
Agreement to any competent government agency, commission, court or other
authority having jurisdiction over either Party with a request that it make a
determination or take other appropriate steps for its resolution.
(e) Notwithstanding the provisions of Section 22.1, commencement of
litigation shall be deemed appropriate if commenced by a Party to avoid the
expiration of an applicable limitations period or to preserve a superior
position with respect to other creditors, or a Party makes a good faith
determination that a breach of the Agreement by the other Party is such that a
temporary restraining order or other injunctive relief is necessary.
22.2 CONSOLIDATION OF DISPUTES.
(a) Notwithstanding anything in the Agreement or any Major Market
Services Agreement or Local Adoption Agreement to the contrary, in order that
disputes between the Parties to the Agreement, or between the parties to the
Major Market Services Agreements or Local Adoption Agreements that are similar
in nature are resolved in a consistent manner, if either Party determines that a
dispute under a Major Market Services Agreement or Local Adoption Agreement is
sufficiently similar to a dispute that is pending, or which it believes is
likely to occur, under the Agreement, such Party may elect to cause the dispute
under the Major Market Services Agreement or local Adoption Agreement to be
resolved under Section 22.1.
(b) Such right to elect to consolidate any dispute resolution must
be exercised no later than fifteen (15) days (time being of the essence) after
(i) the Parties agree to submit the matter to settlement proceedings under the
ICC ADR Rules in accordance with Section 22.1(b), or (ii) the service by one
Party of process for litigation under Section 0 to the other Party and to the
tribunal where the action is pending, whose proceedings shall be stayed.
(c) If any such election is made, all disputes pending under the
applicable Major Market Services Agreement and/or Local Adoption Agreement shall
be consolidated with all disputes pending or raised under the Agreement. The
party who initiated the proceeding under the Major Market Services Agreement
and/or Local Adoption Agreement shall in no way be procedurally prejudiced by
such consolidation and the adverse party shall not assert any procedural defense
to the consolidated disputes pending under the Major Market Services Agreement
and/or Local Adoption Agreement (such as expiration of any statute of
limitations) which would not have been available to it under the proceeding
initiated under the Agreement.
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22.3 CONTINUED PERFORMANCE.
Except as otherwise directed by the other Party, each Party shall continue
performing its obligations under the Agreement while a dispute is being resolved
except (and then only) to the extent the issue in dispute precludes performance
and without limiting either Party's right to terminate the Agreement. For the
avoidance of doubt, D&B's withholding payment of disputed charges as permitted
under the Agreement will not be considered to prevent IBM from performing the
Services. In the event of a breach of this obligation (in addition to all other
remedies and rights and without the same constituting an election of remedies),
D&B shall be entitled to seek and obtain injunctive relief, without posting bond
or proving damages, in addition to all other remedies.
22.4 GOVERNING LAW.
The Agreement and performance under it shall be governed by and construed
in accordance with the law of the State of New Jersey, United States, without
regard to any portion of its choice of law principles which might provide for
application of a different jurisdiction's law, except in the case of (i) any
dispute or claim arising under a Local Services Agreement executed hereunder, or
an Adoption Agreement issued thereunder which, according to the local laws of
the applicable country, must mandatorily be governed and resolved according to
such local laws; or (ii) any dispute or claim relating specifically to the terms
and conditions set forth specifically in a Local Services Agreement executed
hereunder, or an Adoption Agreement issued thereunder. In the case of an
exception under the preceding sentence, the local law of the applicable country
outside the United States shall apply.
23. TERMINATION
23.1 TERMINATION FOR CAUSE BY D&B.
D&B may terminate the Agreement for cause, in whole or in part, if IBM:
(a) commits a material breach of the Agreement which is capable of
being cured within thirty (30) days after notice of breach from D&B to IBM, and
is not cured in such thirty (30) day period;
(b) commits a material breach of the Agreement which is not capable
of being cured within thirty (30) days after notice of breach from D&B to IBM
but is capable of being cured within sixty (60) days after such notice and fails
to (i) proceed promptly and diligently to correct the breach; (ii) develop
within thirty (30) days following such notice a complete plan (acceptable to
D&B) for curing the breach; and (iii) cure the breach within sixty (60) days of
such notice;
(c) commits a material breach of the Agreement that is not subject
to cure with due diligence within sixty (60) days after notice of breach from
D&B to IBM; or
(d) commits numerous breaches of its duties or obligations which
collectively constitute a material breach of the Agreement.
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If D&B chooses to terminate the Agreement in part, the charges payable
under the Agreement will be equitably reduced to reflect those services that are
terminated.
23.2 TERMINATION BY IBM.
IBM may terminate the Agreement before the end of the Term by separate
written notice of termination setting forth the termination date if, and only
if, D&B fails to pay IBM undisputed charges due under the Agreement totaling at
least three million US dollars (US$ 3 million) and does not cure the failure by
the end of the third and final notice period set forth below. For the avoidance
of doubt, the foregoing three million US dollars (US$ 3 million) limit is
intended to be an aggregate limit applicable to any and all charges under the
Agreement, including any and all charges under the Major Market Services
Agreements and Local Adoption Agreements executed pursuant to this Agreement.
(a) IBM's first notice of overdue payment shall be sent to the
attention of D&B's Global Project Executive, with a copy to D&B's General
Counsel, shall expressly reference this Section 23.2, be identified as the first
notice, shall set forth the overdue amount and shall expressly state that IBM
may terminate the Agreement if such failure to make payment is not cured within
thirty (30) days after D&B's receipt of such notice.
(b) If D&B does not make the overdue payment within ten (10) days
after receipt of IBM's first notice, IBM shall send a second notice to the
attention of D&B's Vice President, Corporate Controller, with a copy to D&B's
General Counsel, which notice shall expressly reference this Section 23.2, be
identified as the second notice, shall set forth the overdue amount and shall
expressly state that IBM may terminate the Agreement if such failure to make
payment is not cured within twenty (20) days after D&B's receipt of such notice.
(c) If D&B does not make the overdue payment within ten (10) days
after receipt of IBM's second notice, IBM shall send a third notice to the
attention of D&B's Chief Financial Officer, with a copy to D&B's General
Counsel, which notice shall expressly reference this Section 23.2, be identified
as the third and final notice, shall set forth the overdue amount and shall
expressly state that IBM may terminate the Agreement if such failure to make
payment is not cured within ten (10) days after D&B's receipt of such notice
23.3 TERMINATION FOR CONVENIENCE BY D&B.
D&B may terminate the Agreement (or any Major Market Services Agreement or
Local Adoption Agreement) for convenience and without cause at any time by
giving IBM at least six (6) months' prior written notice designating the
termination date. In such event, D&B shall pay IBM on the effective date of
termination, in accordance with Section 9.2 of Schedule C (Charges), the
applicable termination charges specified in Exhibit C-11 (Termination Charges),
such payment not being a condition precedent to the termination. If a purported
termination for cause by D&B is determined by a competent court or other
tribunal with appropriate jurisdiction not to have been properly a termination
for cause, then such termination by D&B will be deemed to have been a
termination for convenience.
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23.4 TERMINATION FOR CHANGE OF CONTROL.
If (a) another entity, directly or indirectly, in a single transaction or
series of related transactions, acquires either Control of D&B (or the D&B
Affiliate that is a party to a Subscription Agreement) or all or substantially
all of the assets of D&B (or such D&B Affiliate); or (b) D&B (or such D&B
Affiliate) is merged with or into another entity, then, at any time within nine
(9) months after the last to occur of such events, D&B may terminate the
Agreement (or such D&B Affiliate may terminate its Subscription Agreement) by
giving IBM at least one hundred twenty (120) days' prior written notice
designating the termination date. In such event, D&B shall pay IBM on the
effective date of termination, in accordance with Section 9.2 of Schedule C
(Charges), the applicable termination charges specified in Exhibit C-11
(Termination Charges), such payment not being a condition precedent to the
termination.
23.5 SPECIAL TERMINATION CONDITIONS.
D&B may terminate the Agreement, in whole or in part, in the following
circumstances, without being liable for any termination charges or wind-down
expenses. For the avoidance of doubt, such termination shall not be considered a
termination for cause or a termination for convenience, but shall otherwise be
with full reservation of rights by D&B.
(a) A Mission Critical Service Failure identified in Exhibit B-6
(Mission Critical Service Failures) occurs other than as a result of a Force
Majeure Event; or
(b) Subject to the limitations, if any, imposed by applicable
then-current bankruptcy statutes, if IBM (a) files any petition in bankruptcy;
(b) has an involuntary petition in bankruptcy filed against it which is not
challenged in twenty (20) days and dismissed within sixty (60) days; (c) becomes
insolvent; (d) makes a general assignment for the benefit of creditors; (e)
admits in writing its inability to pay its debts as they mature; (f) has a
receiver appointed for its assets; or (g) is subject to an event analogous to
any of the foregoing in any jurisdiction in which IBM is incorporated, resident
or is otherwise subject including any jurisdiction in which IBM is located for
the performance of the Services or any part of them.
23.6 EXTENSION OF TERMINATION EFFECTIVE DATE.
D&B may extend the effective date of termination/expiration one or more
times as it elects in its discretion, provided that the total of all such
extensions shall not exceed one hundred eighty (180) days following the
effective date of termination/expiration in place immediately prior to the
initial extension under this Section, at the charges then in effect. If IBM
terminates the Agreement for D&B's failure to pay undisputed charges, if so
requested by IBM, D&B will either (a) pre-pay the estimated monthly charges at
least thirty (30) days prior to each month; or (b) post an irrevocable letter of
credit or performance bond in sufficient amount to meet ninety (90) days of the
on-going charges to be incurred and D&B shall pay such on-going charges in a
timely manner. For any notice or notices of such extensions provided to IBM
within thirty (30) days of the then-scheduled date of termination/expiration,
D&B
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shall also reimburse IBM for incremental Out-of-Pocket Expenses caused by such
extension.
23.7 TERMINATION/EXPIRATION ASSISTANCE.
(a) Commencing six (6) months prior to expiration of the Agreement
or on such earlier date as D&B may request, or commencing upon a notice of
non-renewal or termination (including notice based upon default by D&B) of the
Agreement or of one or more of the Services and continuing through the effective
date of expiration or, if applicable, of termination of the Agreement, IBM
shall, while continuing to provide the Services, provide to D&B, or at D&B's
request to D&B's designee, the reasonable termination/expiration assistance
requested by D&B to allow the Services to continue without material interruption
or material adverse effect and to facilitate the orderly transfer of the
Services to D&B or its designee (including a competitor of IBM)
("Termination/Expiration Assistance"). Schedule J (Termination/Expiration
Assistance) contains a non-exhaustive description of the kinds of
Termination/Expiration Assistance activities IBM may be requested by D&B to
provide.
(b) During Termination/Expiration Assistance, D&B or its designee
shall be permitted to undertake, without interference from IBM, to hire any IBM
Personnel primarily performing the Services as of the date of notice of
termination, or, in the case of expiration, within the six (6) month period
prior to expiration. IBM and its Affiliates shall waive its rights, if any,
under agreements with such personnel restricting the ability of such personnel
to be recruited or hired by D&B or D&B's designee. D&B or its designee shall
have reasonable access to such personnel for interviews and recruitment. In the
case of IBM Personnel who are employees (or contractors) of IBM's non-Affiliate
subcontractors, the following shall apply: (i) if the applicable subcontract
between IBM and the subcontractor was entered into on or after the Effective
Date of the Agreement, the foregoing shall apply without modification; and
alternatively, (ii) if the applicable subcontract between IBM and the
subcontractor was entered into prior to the Effective Date of the Agreement, IBM
shall use Commercially Reasonable Efforts to cause the subcontractor to waive
its rights, if any, under agreements with such personnel restricting the ability
of such personnel to be recruited or hired by D&B or D&B's designee and the
foregoing shall apply subject to any such restrictions that are not waived by
the subcontractor.
(c) For twelve (12) months following the effective date of
termination or expiration of the Agreement or of any Services, at D&B's request
IBM shall continue to provide Termination/Expiration Assistance. Actions by IBM
under this Section shall be subject to the other provisions of the Agreement.
Charges for such activities by IBM shall be as indicated in Section 9.3 of
Schedule C (Charges).
(d) As reasonably requested by D&B, IBM shall provide
Termination/Expiration Assistance for any Services that D&B reduces or
terminates, or otherwise withdrawals from IBM's scope, under the Agreement.
(e) In the process of evaluating whether to undertake or allow
termination/expiration or renewal of the Agreement, D&B may consider obtaining,
or determine to obtain, offers for performance of services similar to the
Services following
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termination/ expiration of the Agreement. As and when reasonably requested by
D&B for use in such a process, IBM shall provide to D&B such information and
other cooperation regarding performance of the Services as would be reasonably
necessary for a third party to prepare an informed, non-qualified offer for such
services, and for a third party not to be disadvantaged compared to IBM if IBM
were to be invited by D&B to submit a proposal. The types of information and
level of cooperation to be provided by IBM shall be no less than those initially
provided by D&B to IBM prior to commencement of the Agreement. IBM's support in
this respect shall include providing information regarding Equipment, Software,
staffing and other matters that IBM would otherwise provide as part of
Termination/Expiration Assistance.
23.8 EQUITABLE REMEDIES.
IBM acknowledges that, if it breaches (or attempts or threatens to breach)
its obligation to provide Termination/Expiration Assistance, D&B will be
irreparably harmed. In such a circumstance, D&B may proceed directly to court.
If a court of competent jurisdiction should find that IBM has breached (or
attempted or threatened to breach) any such obligations, IBM agrees that,
without any additional findings of irreparable injury or similar procedural
requirements to obtaining injunctive relief (including the posting of bond), it
shall not oppose the entry of an appropriate order compelling performance by IBM
and restraining it from any further breaches (or attempted or threatened
breaches).
24. COMPLIANCE WITH LAWS
24.1 COMPLIANCE WITH LAWS AND REGULATIONS GENERALLY.
(a) Each Party agrees at its cost and expense to obtain all
necessary regulatory approvals applicable to its business, to obtain any
necessary licenses or permits for its business and to comply with all national,
federal, state and local laws, regulations, ordinances and codes applicable to
such Party or its business (or its Affiliates).
(b) In addition, in the case of any laws, regulations, ordinances
and codes that are specifically applicable to the Services rendered by IBM or to
IBM as a provider of Services to D&B and its Affiliates, IBM shall perform its
obligations under the Agreement in compliance with any associated D&B standards,
policies and requirements that have been communicated to IBM in writing.
(c) If a charge occurs of non-compliance of a Party with any such
laws, regulations, ordinances, or codes affecting the Services or the other
Party, the Party so charged shall promptly notify the other Party of such
charges in writing.
24.2 EQUAL EMPLOYMENT OPPORTUNITY.
IBM represents that it is, and during the Term shall remain, an equal
opportunity/affirmative action employer. IBM certifies that IBM does not, and
shall not, discriminate against its employees or applicants for employment on
any legally impermissible basis and is and shall remain in compliance with all
national, federal, state, and local laws, regulations or executive orders
against discrimination, including
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Executive Orders 11141, 11246, 11375, 11458, 11625, 11701, and 11758. IBM
certifies in accordance with 41 CFR Chapter 60-1.8 that its facilities are not
segregated and that IBM complies with the Equal Opportunity Clause (41 CFR
Section 60-1.4), the Affirmative Action Clause for Handicapped Workers (41 CFR
Section 60-250.4), and the Affirmative Action Clause for Disabled Veterans and
Veterans of the Vietnam Era (41 CFR Section 60-741.4), which are incorporated in
the Agreement by reference.
24.3 OCCUPATIONAL SAFETY AND HEALTH ACT.
IBM covenants that all work performed under the Agreement will fully
comply with the provisions of the Federal Occupational Safety and Health Act of
1970 and with any rules and regulations promulgated pursuant to the Act and any
similar state or local laws.
24.4 GRAMM-LEACH-BLILEY ACT AND SIMILAR LAWS.
IBM shall comply with all applicable national, federal, state or local
laws, and rules and regulations of regulatory agencies, protecting the
confidential material and privacy rights of D&B, its Affiliates, and/or their
customers and consumers, including Title V of the Gramm-Leach-Bliley Act, 15 USC
Section 6801 et. seq. and the Economic Espionage Act, 18 USC Section 1831 et.
seq. to the extent applicable to IBM in its capacity as a provider of processing
services to D&B and as directed by D&B
24.5 FAIR LABOR STANDARDS ACT.
IBM certifies to D&B that in the performance of the Agreement it shall comply
with all applicable provisions of Section 6, 7, and 12 of the Fair Labor
Standards Act, 29 USC Sections 201 - 219, as amended, and that there will be no
violations by IBM of the `hot goods' or `hot cargo' provisions of such Act
involving restrictions on the use of underage employees by IBM.
25. GENERAL
25.1 BINDING NATURE AND ASSIGNMENT.
The Agreement shall be binding on the Parties and their respective
successors and assigns. Neither Party may, or shall have the power to, assign
the Agreement without the prior written consent of the other, except that D&B
may assign its rights and obligations under the Agreement without the approval
of IBM to: (a) an entity which acquires all or substantially all of the assets
of D&B's line of business to which the Services relate; (b) to any Affiliate; or
(c) to the successor in a merger or acquisition of D&B; provided that in no
event shall such assignment relieve D&B of its obligations under the Agreement.
Subject to the foregoing, any assignment by operation of law, order of any
court, or pursuant to any plan of merger, consolidation or liquidation, shall be
deemed an assignment for which prior consent is required and any assignment made
without any such consent shall be void and of no effect as between the Parties.
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25.2 PUBLIC DISCLOSURES.
All media releases, public announcements and public disclosures by either
Party relating to the Agreement or the subject matter of the Agreement,
including promotional or marketing material, but not including announcements
intended solely for internal distribution or disclosures to the extent required
to meet legal or regulatory requirements beyond the reasonable control of the
disclosing Party, shall be coordinated with and approved by the other Party
prior to release.
25.3 NON-SOLICITATION.
Subject to D&B's right to recruit IBM Personnel when transitioning
Services from IBM to a third party or back in-house, from the Effective Date
until six (6) months after completion of its obligations under the Agreement a
Party shall not directly or indirectly solicit or seek to procure (other than by
general advertising), without the prior written consent of the other Party, (i)
in the case of D&B, the employment of IBM's employees engaged in the provision
of the Services during the period they are so engaged and for six (6) months
thereafter; and (ii) in the case of IBM, D&B's employees engaged in the
provision of its call center systems during the period they are so engaged and
for six (6) months thereafter. A breach of this obligation shall not be the
basis for termination of the Agreement.
25.4 NO THIRD PARTY BENEFICIARIES.
The IBM Party, in providing the Services, shall be acting as an
independent contractor. Nothing in the Agreement shall create any relationship
of joint venturers, partnership, or employer and employee between the Parties or
between one of the Parties and the other Party's personnel, agents, employees or
subcontractors. Except as expressly provided in the Agreement, neither Party
(nor any of its Affiliates) shall have any authority to act or make
representations or commitments on behalf of the other Party (or its Affiliates)
or to create any contractual liability to a third party on behalf of the other
Party (or its Affiliates).
25.5 ENTIRE AGREEMENT.
This Agreement - consisting of these General Terms and Conditions and the
attached Schedules A through O (including their respective exhibits and other
attachments) - constitutes the entire agreement between the Parties with respect
to its subject matter and merges, integrates and supersedes all prior and
contemporaneous agreements and understandings between the Parties, whether
written or oral, concerning its subject matter.
25.6 AMENDMENTS.
Any terms and conditions varying from the Agreement on any order or
written notification from either Party will not be effective or binding on the
other Party. The Agreement may be amended or modified solely in a writing signed
by an authorized representative of each Party.
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25.7 CONSENTS AND APPROVALS.
Where approval, acceptance, consent or similar action by either Party is
required under the Agreement, such action will not be unreasonably delayed,
conditioned or withheld unless the Agreement expressly provides that it is in
the discretion of the Party. No approval or consent given by a Party under the
Agreement will relieve the other Party from responsibility for complying with
the requirements of the Agreement, nor will it be construed as a waiver of any
rights under the Agreement (except to the extent, if any, expressly provided in
such approval or consent). Each Party will, at the request of the other Party,
perform those actions, including executing additional documents and instruments,
reasonably necessary to give full effect to the Agreement.
25.8 WAIVER.
No failure or delay by a Party in exercising any right, power or remedy
will operate as a waiver of that right, power or remedy, and no waiver will be
effective unless it is in writing and signed by an authorized representative of
the waiving Party. If a Party waives any right, power or remedy, the waiver will
not waive any successive or other right, power or remedy that Party may have.
25.9 REMEDIES CUMULATIVE.
Except as otherwise expressly provided in the Agreement, all remedies
provided in the Agreement are cumulative and in addition to and not in lieu of
any other remedies available to a Party under the Agreement, at law, or in
equity.
25.10 PRIORITY OF DOCUMENTS.
(a) Subject to Section 25.10(b), the Schedules, Exhibits and any
other attachments expressly identified in the same or in the body of the
Agreement form part of the Agreement and shall have the same force and effect as
if expressly set out in the body of the Agreement, and any reference to the
Agreement shall include the Schedules, Exhibits and any such other attachments.
(b) In the event of a conflict between or among the documents
comprising the Agreement, the following order of precedence will apply
(documents listed in descending order of priority):
(i) these General Terms and Conditions, together with Schedule
H (Data Privacy and Data Protection Laws), Schedule J (Termination/Expiration
Assistance), and Schedule L (Insurance);
(ii) Schedule C (Charges), including its Exhibits and
Attachments;
(iii) other Schedules;
(iv) other Exhibits;
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(v) other Attachments; and
(vi) other Annexes.
(c) In the event of a conflict between or among the documents
comprising Schedule A (IBM Services and Solutions), the following order of
precedence will apply (documents listed in descending order of priority):
(i) the Statements of Work (Exhibits A-1 through A-5);
(ii) Exhibit A-7 (Transition and Transformation), including
its Attachments; and
(iii) Exhibit A-6 (IBM Solutions), including its Attachments.
25.11 HEADINGS.
The section headings and the table of contents used in the Agreement are
for convenience of reference only and will not enter into the interpretation of
the Agreement.
25.12 SECTION REFERENCES.
(a) Unless otherwise indicated, section references are to sections
of the document in which the reference is contained. For example, section
references in these General Terms and Conditions are to sections of the General
Terms and Conditions and, likewise, section references in a schedule to the
Agreement are to sections of that schedule.
(b) References to numbered (or lettered) sections of the Agreement
also refer to and include all subsections of the referenced section.
25.13 SCHEDULE REFERENCES.
Unless otherwise indicated, references to schedules to the Agreement also
refer to and include all exhibits, attachments and annexes to the referenced
schedule.
25.14 USE OF CERTAIN WORDS.
Unless the context requires otherwise, (i) "including" (and any of its
derivative forms) means including but not limited to, (ii) "may" means has the
right, but not the obligation to do something and "may not" means does not have
the right to do something, (iii) "will" and "shall" are expressions of command,
not merely expressions of future intent or expectation, (iv) "written" or "in
writing" is used for emphasis in certain circumstances, but that will not
derogate from the general application of the notice requirements set forth in
the Agreement in those and other circumstances, (v) use of the singular imports
the plural and vice versa, and (vi) use of a specific gender imports the other
gender(s).
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25.15 STATUTORY REFERENCES.
All references to any statute or statutory provision (including any
subordinate legislation) shall be deemed to include a reference to any statute
or statutory provision that amends, extends, consolidates or replaces the same
or that has been amended, extended, consolidated or replaced by the same, and
shall include any orders, regulations, codes of practice, instruments or other
subordinate legislation made under the relevant statute.
25.16 SEVERABILITY.
If any provision of the Agreement conflicts with the law under which the
Agreement is to be construed or if any provision of the Agreement is held
invalid by a competent authority, [such provision will, if possible, be deemed
to be restated to reflect as nearly as possible the original intentions of the
Parties in accordance with applicable law.
25.17 COUNTERPARTS.
The Agreement may be executed in two (2) or more counterparts, all of
which taken together constitute a single agreement between the Parties. Each
signed counterpart, including a signed counterpart reproduced by facsimile or
other reliable means, will be considered an original.
25.18 COVENANT OF GOOD FAITH.
Each Party, in its respective dealings with the other Party under or in
connection with the Agreement, will act reasonably and in good faith.
[Remainder of page intentionally blank]
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25.19 NOTICES
(a) All formal notices, requests, demands, approvals and
communications under the Agreement (other than routine operational
communications) will be in writing and may be served either (i) in person or
(ii) by registered or certified mail or air freight services that provide proof
of delivery, with postage or shipping fees prepaid, and addressed to the Party
to be served as follows:
In the case of D&B: With a copy to:
D&B D&B
3 Sylvan Way 103 JFK Parkway
Parsippany, New Jersey 07054 Short Hills, New Jersey 07078
Attn: Mark Samuels Attn: General Counsel
Fax: 866.758.0641 Fax: 866.561.5154
In the case of IBM: With a copy to:
IBM Corporation IBM Corporation
Florham Park Legal Dept.
400 Campus Drive Route 100
Florham Park, New Jersey 07932 Somers, NY 10589
Attn: IBM Global Services Project Attn: IBM Global Services
Executive for D&B General Counsel
Fax: 973.514.4159 Fax: 914.766.8445
[Remainder of page intentionally blank]
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(b) Notices given as described above will be considered received on
the day of actual delivery.
(c) A Party may from time to time change its address or designee for
notification purposes by giving the other Party prior written notice of the new
address or designee in the manner provided above and the date on which it will
become effective.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
signed and delivered by its duly authorized officer, all as of the Effective
Date.
INTERNATIONAL BUSINESS MACHINES DUN & BRADSTREET, Inc.
CORPORATION
By: _________________________________ By: __________________________
Maureen Power Gary Michel
Vice President, Business Vice President, Re-Engineering
Transformation Outsourcing
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SCHEDULE A
IBM SERVICES AND SOLUTIONS
1. INTRODUCTION
As part of the Services, IBM shall provide the services, functions, and
responsibilities described in this Schedule A. IBM shall provide the Services as
required to meet the Service Levels provided in Schedule B (Service Levels) and
in accordance with the Procedures Manual. All Charges for the Services are
provided in Schedule C (Charges).
D&B operates in a business environment characterized by constant change
that directly affects the delivery of finance-related processing services. IBM
shall evolve, supplement, and enhance the Services over time as necessary to
meet D&B's changing business needs and to gain the benefit of changes in
technology and best practice processes.
Excepted as otherwise specified in this Schedule A, IBM shall: (a) have
end-to-end responsibility for the performance of the Services beginning on the
Services Commencement Date; and (b) be held responsible for the performance of
the Services without regard to the use by IBM of third-party products or
vendors.
All communications sent by IBM on behalf of D&B as part of the Services
shall appear to be from D&B (e.g., e-mails shall be sent from a D&B e-mail
address).
References to time in this Schedule A shall be in Local Market Time for
each in-scope D&B location.
2. FORMAT AND CONTENTS
This Schedule A consists of this document and the Exhibits listed below.
2.1. EXHIBIT A-1 - CONTACT CENTER SERVICES
This Exhibit describes the Inbound, Outbound and other Contact Center
Services (e.g., Contract Administration) that IBM shall provide.
2.2. EXHIBIT A-2 - DATA PROGRAMMING SERVICES
This Exhibit describes the Data Programming Services, including Delivery
and Global Trade, that IBM shall provide.
This Exhibit contains the following Attachments:
(a) Attachment A-2-1: Postal Data Cleansing
(b) Attachment A-2-2: Data Programming Quality Checklists
(i) Annex A-2-2a: SMS Data Normalization Project Quality Checklist
(ii) Annex A-2-2b: SMS Spend Analysis Quality Checklist
(iii) Annex A-2-2c: SMS MWOB Quality Checklist
(iv) Annex A-2-2d: SMS Supply Optimizer Quality Checklist
D&B / IBM Confidential
A-1
(v) Annex A-2-2e: SMS Supply Optimizer Refresh Quality Checklist
2.3. EXHIBIT A-3 - TRANSACTION PROCESSING SERVICES
This Exhibit describes the Transaction Processing Services that IBM shall
provide. This Exhibit contains the following Attachments:
(a) Attachment A-3-1: Transaction Processing Data Sources
(b) Attachment A-3-2: Transaction Processing Workflows
2.4. FINANCE PROCESSING SERVICES
This Exhibit describes the Accounts Payable and Travel and Expense
processing, Order-to-Cash and collections and cash applications processing
Services that IBM shall provide.
2.5. EXHIBIT A-5 - CROSS FUNCTIONAL SERVICES
This Exhibit describes additional "cross-functional" Services that apply
generally to the Contact Center, Data Programming, Transaction Processing, and
Finance Processing Services, (e.g., security and business continuity).
Attachment A-5-1 (IBM Personnel Background Checks and Screening) describes the
Personnel background checks and screening that IBM will perform.
2.6. EXHIBIT A-6 - IBM SOLUTIONS
This Exhibit describes how IBM will perform the Services described in each
Exhibit listed above, including the overall implementation of the technology IBM
will use in the solution.
This Exhibit contains the following Attachments:
(a) Attachment A-6-1: Contact Center Solution
(i) Annex A-6-1-a: EU File Update Solution
(b) Attachment A-6-2: Data Programming Solution
(c) Attachment A-6-3: Transaction Processing Solution
(d) Attachment A-6-4: Finance Processing Solution
(e) Attachment A-6-5: Technology Solution
2.7. EXHIBIT A-7 - TRANSITION AND TRANSFORMATION
This Exhibit describes the activities, deliverables, and schedule by which
IBM will transition responsibility for the Services from D&B and the automation,
re-engineering and improvements IBM will make to the processes, environment, and
technology used to provide the Services as part of the Transformation.
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This Exhibit contains the following Attachments:
(a) Attachment A-7-1: Transition Solution
(b) Attachment A-7-2: Transition Schedule
(c) Attachment A-7-3: Transformation
3. DEFINITIONS
3.1. CERTAIN DEFINITIONS
(a) "Contact Center Services" means those Inbound Contact Services,
Outbound Contact Services, Contract Administration that IBM will perform as part
of the Services as are further described in Exhibit A-1 (Contact Center
Services).
(b) "Data Programming Services" means those Services IBM will perform,
including Delivery and Global Trade as are further described in Exhibit A-2
(Data Programming Services).
(c) "D&B Products" means products related to Risk Management Solution
(RMS), Sales and Marketing Solution (S&MS), and IBM Management Solution Services
(SMS) that IBM sells and delivers as part of the Services. The specific D&B
Products that IBM will use in its performance of the Services may change from
time-to-time during the Term.
(d) "Gold Service Customer" means those high priority customers as
designated by D&B that receive a higher level of service, which includes
dedicated Personnel to perform the Services
(e) "Gold Services" means the provision of Services to Gold Service
Customers, which includes dedicated IBM Personnel to perform the Services.
(f) "Local Market Time" means the local time of the country or region
receiving the Services.
(g) "Transaction Processing Services" means the collection, entering,
processing, and error correction that IBM performs as part of the Services as
are further described in Exhibit A-3 (Transaction Processing Services).
(h) "Finance Processing Services" means the Accounts Payable, Travel and
Expense, and Order to Cash Services provided by IBM as further described in
Exhibit A-4 (Finance Processing Services).
3.2. OTHER DEFINITIONS
Capitalized terms not defined herein shall have the meaning given to them
in the Exhibits of this Schedule A or elsewhere in the Agreement.
D&B / IBM Confidential
A-3
EXHIBIT A-1
CONTACT CENTER SERVICES
1. DEFINITIONS ........................................................................ 2
1.1. Certain Definitions ....................................................... 2
1.2. Other Definitions ......................................................... 4
2. INBOUND CONTACT SERVICES ........................................................... 4
2.1. Order Requests ............................................................ 4
2.2. Customer Requests ......................................................... 6
2.3. Entity Query Requests ..................................................... 8
2.4. Technical Support Requests ................................................ 9
2.5. Usage Requests ............................................................ 11
2.6. Gold Service .............................................................. 13
2.7. Marketing Campaigns ....................................................... 16
3. OUTBOUND CONTACT SERVICES .......................................................... 16
3.1. Acquisition Services ...................................................... 17
3.2. Investigation Services .................................................... 18
3.3. Fulfillment Services ...................................................... 20
3.4. Family Tree Services ...................................................... 21
3.5. Advanced Customer Update Group ............................................ 22
3.6. Inquiry Screening Services ................................................ 23
3.7. Ad Hoc Outbound Services .................................................. 24
4. Training services .................................................................. 25
5. Revenue Generation Services ........................................................ 25
5.1. D&B Products .............................................................. 26
5.2. Lead Generation ........................................................... 26
6. Contact documentation services ..................................................... 27
6.1. General ................................................................... 27
6.2. Contact Disposition Documentation ......................................... 27
6.3. Translations .............................................................. 27
6.4. Language Requirements ..................................................... 28
7. continuous improvement and quality control ......................................... 28
7.1. Continuous Improvement .................................................... 28
7.2. Quality Assurance ......................................................... 28
7.3. Call Monitoring ........................................................... 29
8. OTHER SERVICES ..................................................................... 30
8.1. Contract Administration ................................................... 30
8.2. Fraud Identification ...................................................... 31
8.3. Access to D&B Systems ..................................................... 31
8.4. Preparation Of Procedures Manual .......................................... 31
8.5. Operations Management Services ............................................ 32
8.6. Contact Center Telecommunications Management Services ..................... 32
8.7. IVR ....................................................................... 34
D&B / IBM Confidential
A-1-1
EXHIBIT A-1
CONTACT CENTER SERVICES
1. DEFINITIONS
1.1. CERTAIN DEFINITIONS
(a) "Acquisition Services" has the meaning given in Section 3.1(a).
(b) "ACUG Services" has the meaning given in Section 3.5(a).
(c) "Complaints" has the meaning given in Schedule C to the Agreement.
(d) "Contact" means a voice, callback, chat, fax, email or other form of
communication relating to the Contact Center Services between IBM Personnel and
an End User. "Inbound Contact" means an inbound Contact received by IBM.
"Outbound Contact" means an outgoing Contact initiated by IBM to resolve an
Outbound Services Request.
(e) "Contact Center" means the physical premises where the Contact Center
Services are performed.
(f) "Contract Administration Services" has the meaning given in Section
8.1(a).
(g) "CRC Renewals" has the meaning given in Schedule C to the Agreement.
(h) "Cross-sell" has the meaning given in Section 5.1(b)(iii).
(i) "Customer" means an Entity having an existing business relationship
with D&B, potential for a future relationship with D&B, or D&B Personnel acting
on behalf of D&B.
(j) "Customer Request Services" has the meaning given in Section 2.2(a).
(k) "D&B Products" has the meaning given in Section 5.1(a).
(l) "DUNS Number" has the meaning given in Section 2.3(b)(iv).
(m) "DUNSVoice Assistance" means those Contacts where operator assistance
is provided for unresolved Order Requests and resolved via an automated order
delivery system.
(n) "End User" shall mean an End User of the Contact Center Services,
including internal and external D&B customers.
(o) "Entity" means any business (i.e., sole proprietorship, partnership,
or corporation), religious, educational or other not for profit organization, or
governmental agency whose organizational and financial data is collected by IBM
on behalf of D&B, including D&B Customers.
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(p) "Entity Query Request Services" has the meaning given in Section 2.3.
(q) "eUpdates" has the meaning given in Schedule C to the Agreement.
(r) "Family Tree Services" has the meaning given in Section 3.4.
(s) "File Updates" has the meaning given in Schedule C to the Agreement.
(t) "Fulfillment Services" has the meaning given in Section 3.3(a).
(u) "Gold Services" has the meaning given in Section 2.6.
(v) "Inbound Contact Services" has the meaning given in Section 2.
(w) "Interactive Voice Response" or "IVR" means a system that provides
pre-recorded information to End Users making Inbound Contacts via telephone
either with or without selection by the caller and include other functions such
as call routing, database interaction to acquire information from or append
information to a database, and voice input recognition and voice read back.
(x) "Inquiry Screening Services" has the meaning given in Section 3.6(a).
(y) "Investigation Services" has the meaning given in Section 3.2(a).
(z) "Linkage Validation and Error Resolution" has the meaning given in
Schedule C to the Agreement.
(aa) "Local Market Business Hours" means Monday through Friday from 08:00
to 18:00 in the local market receiving Services, excluding public holidays
recognized by D&B in such market.
(bb) "Order Request Services" has the meaning given in Section 2.1(a).
(cc) "Outbound Contact Services" has the meaning given in Section 3.
(dd) "Outbound Services Request" means a job, project, or other work
request provided to IBM by D&B that requires IBM to initiate Outbound Contacts
and investigate, acquire, and update information on business Entities, to
generate Qualified Leads, or to perform other Services described in this Exhibit
A-1.
(ee) "Personal Investigations" has the meaning given in Schedule C to the
Agreement.
(ff) "Qualified Lead" has the meaning given in Section 5.2(b).
(gg) "Service Failures" has the meaning given in Schedule C to the
Agreement.
(hh) "Severe Risk Tip" has the meaning given in Section 1.1(j) of Exhibit
B-1.
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(ii) "Technical Support Request Services" has the meaning given in Section
2.4(a).
(jj) "Up-sell" has the meaning given in Section 5.1(b)(ii).
(kk) "Usage Request Services" has the meaning given in Section 2.5(a).
1.2. OTHER DEFINITIONS
Capitalized terms not defined in this Exhibit A-1 (Contact Center
Services) shall have the meaning given to them in Schedule A or elsewhere in the
Agreement.
2. INBOUND CONTACT SERVICES
IBM shall be responsible for receiving and responding to Order Requests,
Customer Requests, Entity Query Requests, Technical Support Requests, and Usage
Requests received via voice, callback, chat, fax, and email, and any other
inbound communications, as well as providing Gold Services and where applicable,
supporting marketing campaigns, all as further described in this Section 2
(collectively, "Inbound Contact Services"). IBM shall provide Inbound Contact
Services during Local Market Business Hours for each of the local markets
receiving such Services.
2.1. ORDER REQUESTS
(a) General. As part of the Inbound Contact Services, IBM shall be
responsible for handling order Requests for D&B Products received from End Users
("Order Request Services").
(b) Order Request Services Description. IBM's responsibilities with
respect to Order Request Services include:
(i) Receiving an End User Order Request;
(ii) Accessing and validating the End User's account with D&B and
authenticating that the End User is authorized to access account information and
purchase D&B Products and services on behalf of their company;
(iii) Locating the D&B reports or other products or services
requested by the End User;
(iv) Providing general preview information about the located D&B
reports or other products or services;
(v) For DUNSVoice Assistance Contacts, providing a report number and
transferring the End User back to the automated order entry system for
processing;
(vi) Identifying and presenting Up-sell and Cross-sell opportunities
in each Inbound Contact;
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(vii) Determining the delivery method preferred by the End User for
D&B Products;
(viii) Placing domestic and international D&B Product orders, as
applicable;
(ix) Providing manual processing and delivery via email, fax and
mail for orders in Europe that require special instructions and after
Transition, for those orders handled offshore, routing such orders via email as
requested by D&B (i.e., routing such orders through US) for delivery;
(x) Reviewing the interaction with the End User at the end of the
Contact and setting forth proper expectations about the contents, price, and
delivery time of D&B products; and
(xi) Documenting the sale and delivery of each D&B Product and
disposition of each Order Request.
(c) IBM Personnel Minimum Requirements. All IBM Personnel providing Order
Request Services shall have the following minimum skills and qualifications:
(i) Good oral and written communication skills, including accent
neutralization training and ability;
(ii) Basic telephone skills;
(iii) Good spelling skills;
(iv) Computer skills ranging from basic to good as required,
including typing ability and the ability to navigate text and interfaces;
(v) Intermediate to extensive knowledge of D&B Products as required
to process the Order Request;
(vi) Basic business and financial knowledge, including an in-depth
understanding and awareness of the culture and business practices in the local
markets being serviced;
(vii) Basic knowledge of D&B policies and organization; and
(viii) Sales skills ranging from basic to intermediate as required
to perform the Services set forth in Section 5 below.
(d) Language Requirements. IBM Personnel shall have the language skills
required to complete the Order Requests from each local market from which the
Inbound Contacts originate. In addition, at a minimum for each local market,
there shall be at least one (1) person available during Local Market Business
Hours who is able to perform the Order Request Services in English. IBM
Personnel shall be able to read, write, and speak the following languages with
native fluency:
(i) English;
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(ii) Spanish;
(iii) Dutch;
(iv) Flemish;
(v) French; and
(vi) Italian.
2.2. CUSTOMER REQUESTS
(a) General. IBM shall be responsible for receiving and responding to
Customer requests, which include billing and payment inquiries, requests for
duplicate bills, D&B Product information (e.g., price information), contract
inquiries (e.g., types of contracts or usage requirements), questions concerning
the delivery of a report, inquiries about using a D&B tool or application,
inquiries regarding understanding credit ratings, and requests for removal from
marketing files ("Customer Request Services").
(b) Customer Request Services Description. IBM's responsibilities with
respect to Customer Request Services include:
(i) Receiving incoming Customer Requests;
(ii) Accessing and validating the End User's account with D&B and
authenticating that the End User is authorized to provide and receive
information about the Customer account and make commitments on behalf of their
company;
(iii) Identifying the type of Customer Request and action required
to resolve it;
(iv) Resolving the Customer Request to the Customer's satisfaction,
or where IBM cannot resolve the Customer Request, escalating it in accordance
with D&B policies and procedures (e.g., issuing Customer Request to other D&B
service points as required for resolution);
(v) If escalated, tracking the Customer Request through resolution
and following up regularly with the escalation points to ensure timely
resolution;
(vi) Identifying and presenting Up-sell and Cross-sell sales
opportunities in each Contact;
(vii) Reviewing the interaction with the Customer at the end of the
Contact and setting forth proper expectations about any future action to be
taken with respect to the Customer Request; and
(viii) Documenting resolution of the Customer Request.
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(c) IBM Personnel Minimum Requirements. All IBM Personnel providing
Customer Request Services shall have the following minimum skills and
qualifications:
(i) Good oral and written communication skills, including accent
neutralization training and ability;
(ii) Good telephone skills as required to handle each particular
type of Customer Request;
(iii) Intermediate computer skills (e.g., file transfer and
maintenance ability);
(iv) Extensive D&B Product knowledge;
(v) Basic business and financial knowledge, including an in-depth
understanding and awareness of the culture and business practices in the local
markets being serviced;
(vi) Basic problem analysis skills;
(vii) Basic to intermediate complaint resolution skills;
(viii) Extensive knowledge of D&B policies and organization; and
(ix) Basic sales skills.
(d) Language Requirements. IBM Personnel shall have the language skills
required to complete the Customer Requests from each local market from which the
Inbound Contacts originate in accordance with the proficiency requirements set
forth in Attachment A-6-1 (Contact Center Solution). In addition, at a minimum
for all local markets, there shall be at least one (1) person available during
Local Market Business Hours who is able to perform the Customer Request Services
in English. For the purposes of clarity, where language skills of each local
market are not specifically designated in Attachment A-6-1 (Contact Center
Solution), IBM Personnel shall be able to read, write, and speak the following
languages with native fluency:
(i) English;
(ii) Spanish;
(iii) Italian;
(iv) Flemish;
(v) Dutch; and
(vi) French.
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2.3. ENTITY QUERY REQUESTS
(a) General. IBM shall be responsible for receiving and responding to
Entity Query Requests from End Users, which includes delivery of entity reports,
providing explanation of entity reports (e.g., ratings and analytics),
confirmation of specific information within the report (e.g., confirmation of
CEO), updating data elements, updating financial statements, identification of
family tree and linkage information, creation of new entity records, and
assignment of DUNS Number ("Entity Query Request Services").
(b) Entity Query Request Services Description. IBM's responsibilities with
respect to Entity Query Request Services include:
(i) Receiving incoming Entity Query Requests;
(ii) Accessing and validating the End User's account with D&B and
authenticating that the End User is authorized to provide data and make
commitments on behalf of their company;
(iii) Identifying the type of Entity Query and the action required
to resolve it;
(iv) Establishing business Entity number ("DUNS Number") if the
Entity is not listed in the D&B databases;
(v) Soliciting additional business Entity information missing from
the D&B database for existing business Entities and entering such information
into the D&B database based on D&B policy and procedures;
(vi) Providing D&B reports to End Users about Entities upon request;
(vii) Resolving each Entity Query to the End User's satisfaction, or
where IBM cannot resolve the Entity Query, escalating it in accordance with D&B
policies and procedures;
(viii) If escalated, tracking the Entity Query through resolution
and following up regularly with the escalation points to ensure timely
resolution;
(ix) Identifying and presenting Up-sell and Cross-sell sales
opportunities in each Contact;
(x) Performing direct sales of Self-Awareness D&B Products;
(xi) Reviewing the End User interaction at the end of the Contact
and setting forth proper expectations about any future action to be taken with
respect to the Entity Query Request; and
(xii) Documenting resolution of Entity Query Request.
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(c) IBM Personnel Minimum Requirements. All IBM Personnel handling Entity
Query Requests shall have the following minimum skills and qualifications:
(i) Good oral and written communication skills, including accent
neutralization training and ability;
(ii) Telephone skills ranging from basic to good as required to
handle the particular customer service request;
(iii) Intermediate computer skills (e.g., navigate text and GUI
interfaces);
(iv) Extensive D&B Product knowledge;
(v) Advanced business and financial knowledge, including an in-depth
understanding and awareness of the culture and business practices in the local
markets being serviced;
(vi) Advanced problem analysis skills;
(vii) Advanced complaint resolution skills;
(viii) Extensive knowledge of D&B policies and organization; and
(ix) Proven advanced sales skills.
(d) Language Requirements. IBM Personnel shall have the language skills
required to complete the Entity Query Requests from each local market from which
the Inbound Contacts originate. In addition, at a minimum for each local market,
there shall be at least one (1) person available during Local Market Business
Hours who is able to perform the Entity Query Request Services in English. IBM
Personnel shall be able to read, write, and speak the following languages with
native fluency:
(i) English;
(ii) Spanish;
(iii) Dutch;
(iv) Flemish;
(v) French; and
(vi) Italian.
2.4. TECHNICAL SUPPORT REQUESTS
(a) General. IBM shall be responsible for receiving and resolving
technical support requests, which includes performing ID and password
maintenance, assisting End Users with the configurations of browsers, modems,
and other interfaces necessary to connect to D&B, consulting on firewall issues,
assisting in the recovery of
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data, and consulting D&B proprietary applications so as to maximize the
Contact's use of such applications ("Technical Support Request Services").
(b) Technical Support Request Services Description. IBM's responsibilities
with respect to Technical Support Request Services include:
(i) Receiving incoming Technical Support Requests;
(ii) Accessing and validating the End User's account with D&B and
authenticating that the End User is authorized to provide and receive
information about the End User and make commitments on behalf of their company;
(iii) Identifying the type of Technical Support Request and action
required to resolve the request, including repairing End User files as
appropriate;
(iv) Resolving the Technical Support Request to the End User's
satisfaction, or where IBM cannot resolve the request, escalating it in
accordance with D&B policies and procedures;
(v) If escalated, tracking the Technical Support Request through
resolution and following up regularly with the escalation points to ensure
timely resolution;
(vi) Providing step-by-step user instruction to the End User;
(vii) Testing the solution provided to the End User or maintaining
the Contact until the End User has tested the solution and confirmed that its
problem has been resolved;
(viii) Reviewing the interaction with the End User at the end of the
Contact and setting forth proper expectations about any future action to be
taken with respect to the Technical Support Request; and
(ix) Documenting resolution of the Technical Support Request.
(c) Testing
As part of the Technical Support Requests Services, IBM shall perform
intermediate testing of applications used by End Users to purchase to D&B
Products, including:
(i) Receiving test code in advance of release;
(ii) Performing test routines to identify application and data
exceptions;
(iii) Prioritizing application and data exceptions and reporting
back such exceptions to application development; and
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(iv) Signing off on acceptance of applications.
(d) IBM Personnel Minimum Requirements. All IBM Personnel handling
Technical Support Requests shall have the following minimum skills and
qualifications:
(i) Good oral and written communication skills, including accent
neutralization training and ability;
(ii) Telephone skills ranging from basic to good as required to
handle the particular Technical Service Request;
(iii) Advanced Internet skills;
(iv) Good troubleshooting and problem resolution skills;
(v) Extensive D&B system knowledge;
(vi) Intermediate database knowledge (e.g., Search Query Language);
and
(vii) Intermediate network knowledge.
(e) IBM Personnel shall have the language skills required to complete the
Technical Support Requests from each local market from which the Inbound
Contacts originate. In addition, at a minimum for each local market, there shall
be at least one person available during Local Market Business Hours who is able
to perform the Technical Support Request in English. IBM Personnel shall be able
to read, write, and speak the following languages with native fluency:
(i) English;
(ii) Spanish;
(iii) Dutch;
(iv) Flemish;
(v) French; and
(vi) Italian.
2.5. USAGE REQUESTS
(a) General. IBM shall be responsible for receiving and resolving requests
regarding contract usage from End Users ("Usage Request Services").
(b) Usage Request Services Description. IBM's responsibilities with
respect to Usage Request Services include:
(i) Receiving Usage Requests;
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(ii) Accessing and validating the End User's account with D&B and
authenticating that the End User is authorized to provide data and make
commitments on behalf of their company;
(iii) Identifying the type of Usage Request and the action required
to fulfill the Usage Request;
(iv) Reviewing each Usage Request to determine whether it complies
with applicable D&B policy;
(v) Aggregating applicable documentation required to fulfill each
Usage Request;
(vi) If a Usage Request is permitted by D&B policy, calculating the
corresponding usage adjustment and preparing the appropriate accounting
transaction;
(vii) If a Usage Request is not permitted by D&B policy, referring
the Usage Request to D&B's sales organization with all relevant documentation
and an explanation of the reason the Usage Request is non-compliant;
(viii) Processing approved Usage Requests as permitted by D&B
policy;
(ix) Entering updated Usage information into the appropriate D&B
systems; and
(x) Documenting resolution of the Usage Request.
(c) IBM Personnel Minimum Requirements. All IBM Personnel handling Usage
Requests shall have the following minimum skills and qualifications:
(i) Basic to good oral and written communication skills, including
accent neutralization training and ability;
(ii) Telephone skills ranging from basic to good as required to
handle the particular Usage Request;
(iii) Good telephone skills;
(iv) Computer skills ranging from basic to intermediate (e.g.,
ability to navigate text and GUI interfaces) as required to handle the Usage
Request;
(v) Proficiency in Microsoft Word and Excel;
(vi) Work organization skills;
(vii) Extensive knowledge of D&B policies and organizations;
(viii) Attention to detail;
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(ix) Advanced analytical skills; and
(x) Good math skills.
(d) Language Requirements. IBM Personnel shall have the language skills
required to complete the Usage Requests from each local market from which such
requests originate. In addition, at a minimum for all local markets, there shall
be at least one (1) person available during Local Market Business Hours who is
able to perform the Usage Request Services in English. IBM Personnel shall be
able to read, write, and speak the following languages with native fluency:
(i) English;
(ii) Spanish;
(iii) Italian;
(iv) Flemish;
(v) Dutch; and
(vi) French.
2.6. GOLD SERVICE
(a) In performing order Request Services, Customer Request Services, and
Usage Request Services, IBM shall designate certain IBM Personnel to provide
Gold Services to Gold Service Customers, which includes:
(i) Working with D&B on account planning;
(ii) Working with D&B on identifying incremental sales opportunities
for such accounts and implementing strategies to take advantage of such
opportunities;
(iii) Performing special requests relating to Gold Service Customers
at no additional charge in an effort to stimulate sales as requested by D&B,
which include:
(A) Performing usage projects, which includes customizing
data outputs as required to meet Gold Service Customer
requests and allow D&B sales team to leverage such usage
requests in order to analyze usage trends, identify
sales opportunities and to assist with contract
renewals;
(B) Updating the schedule of location document ("SOL"),
which contains all of the various user locations and
contact information and is required in the contract
renewal process;
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(C) Maintaining the SOL, which includes subscriber set-up,
cancellation and any changes to contacts or addresses);
(D) Researching and documenting variances for pricing,
contract terms and conditions and payment terms, which
require D&B approval. Any deviation from standard
published pricing or payment terms is considered a
variance that will require prior approval from the
appropriate authorization level. Any deviation from
standard contract terms and conditions (whether such
deviation is located within the terms and conditions,
the order form or any other document) is considered a
variance that will require D&B approval;
(E) Assisting with contract renewal process by working
closely with IBM Personnel performing Contract
Administration Services to ensure all information is
collected and entered correctly, including handling the
purchase orders, invoices, tracking usage for carryover
purposes, and working closely with D&B in monitoring the
process;
(F) Maintaining and assigning customer IDs and passwords for
the full spectrum of D&B access systems;
(G) Assisting with the collection, logging and resolving of
data quality issues for gold customers, which includes
working with D&B in resolving issues concerning data
quality and delivering information regarding resolution
of such issues back to Customers on a daily, weekly and
monthly depending on the customer requirements. In
addition, IBM shall order investigations or
reinvestigations where required and deliver the results
of such investigation back to the customer;
(H) Supporting IBM on-Ramp ("SOR"), which includes
functioning as the front line support for all suppliers
that need support when completing the online application
process (e.g., placing an investigation to create a
report for suppliers to have a scoreable record on
file);
(I) Supporting the Safeco Credit Scoring Project, which
includes functioning as the front line support for
Safeco agents and customers that have questions
regarding their D&B file as it pertains to their ability
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to meet Safeco's requirements. IBM shall log calls from
Safeco agents and customers and issue a monthly report
to Safeco that defines activity and results;
(J) Handling and processing investigations from Ford
locations in an expedited fashion, including callbacks
so Ford is able to enter results of such investigations
into their application processing system for approval;
(K) Tracking the history of a D&B rating between specific
dates and providing this information to the customer;
(L) Checking and filtering D&B data to fit into a specific
customer's algorithm;
(M) Checking different data providers for later filings of
balance sheet information and, if necessary printing a
copy of the balance sheet and matching to the D&B data,
and delivering to the customer;
(N) End to end fulfillment of the portfolio check product,
which includes checking the database for a DUNS number,
creating a database in MS Access, and picking up the
request from Lotus Notes and exporting into Excel for
analysis;
(O) Providing customized data/services as required (e.g.,
creating spreadsheets from customers containing multiple
businesses, providing reasons for D&B rating changes);
and
(P) Calling GMC customers (in collaboration with local
Marketing and GMC sales) to stimulate revenue usage.
(vi) Proactively implementing processes that improve service to Gold
Service Customers and/or reduce complaints by Gold Service Customers (provided
that if such a process will have a material impact on the cost to IBM, the
parties may mutually agree on any incremental charges through a Change Order);
(v) Compiling special reports (e.g., summary of contract details,
usage or billing information) as requested by D&B;
(vi) Meeting with D&B clients in person as requested by D&B.
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(b) IBM Personnel Minimum Requirements. In addition to the minimum skills
required for IBM Personnel handling Order Requests, Customer Requests, and Usage
Requests, IBM Personnel performing Gold Services shall have the following
minimum skills and qualifications:
(i) Excellent oral and communication skills, including accent
neutralization training and ability;
(ii) Telephone skills ranging from good to basic as required to
perform the Gold Services;
(iii) Intermediate computer skills;
(iv) Extensive D&B Product knowledge;
(v) Good to advanced business and financial knowledge as required to
perform the Services;
(vi) Advanced analytical skills;
(vii) Expert complaint resolution skills;
(viii) Extensive knowledge company policies and organization; and
(ix) Proven advanced selling skills (e.g., ability to recognize
value propositions).
(c) Language Requirements. IBM Personnel shall have the language skills
required to perform Gold Services in each local market serviced. In addition, at
a minimum for each local market, there shall be at least one (1) person
available during Local Market Business Hours who is able to perform the Gold
Services in English. IBM Personnel shall be able to read, write, and speak the
following languages with native fluency:
(i) English; and
(ii) Italian.
2.7. MARKETING CAMPAIGNS
From time to time during the Term, and in accordance with the Change
Control Procedures, D&B will set-up toll-free numbers to conduct specialized
marketing campaigns to market certain D&B Products and services. IBM shall
handle the Inbound Contacts from such campaigns as designated by D&B ("Marketing
Campaign Services").
3. OUTBOUND CONTACT SERVICES
IBM shall be responsible for providing outbound voice and back office
support for the following: Acquisition Services (comprising CRC Renewal,
eUpdate, and File
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Update (including File Build) Outbound Services Requests); Investigation
Services (comprising Complaint, Service Failure, Fulfillment, Personal
Investigation, and VIP Reporting Outbound Services Requests), Family Tree
Services (comprising Family Tree and Linkage Validation and Error Resolution
Outbound Services Requests); ACUG Services; and Inquiry Screening Services, all
as further described in this Section 3 (collectively, the "Outbound Contact
Services"). IBM shall provide Outbound Contact Services during Local Market
Business Hours for each of the local markets receiving such Services, and during
extended hours outside of Local Market Business Hours to the extent necessary
for IBM to meet the Service Levels and other performance standards provided in
the Agreement.
3.1. ACQUISITIoN SERVICES
(a) General.
IBM shall be responsible for the CRC Renewals, eUpdates, File Updates
(including File Build), which includes gathering data and acquiring new
financial Entity reports ("Acquisition Services").
(b) Acquisition Services Description. IBM's responsibilities with respect
to Acquisition Services include:
(i) Pulling outbound Services Requests from a request queue;
(ii) Gathering data elements and inquiring as to availability of
financial statements for the Entity that is the subject of the outbound Services
Request;
(iii) Mitigating issues or concerns with service or perceived value
of service, if applicable, during all Contacts with the Entity;
(iv) Obtaining and entering financial statements from the Entity;
(v) Closing and documenting the resolution of each Outbound Services
Request and all Contacts made relating to the Outbound Services Request;
(vi) Creating or Updating as required, the credit record of each
Entity involved in the Outbound Services Request to reflect most current
information that has been gathered from IBM research and interviews.
(c) IBM Personnel Minimum Requirements. All IBM Personnel performing the
Acquisition Services shall have the following minimum skills and qualifications:
(i) Good oral and written communication skills, including accent
neutralization training and ability;
(ii) Telephone skills ranging from basic to good as required to
handle the particular Outbound Services Request;
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(iii) Basic computer skills (e.g., ability to navigate text and GUI
interfaces);
(iv) D&B Product knowledge;
(v) Basic to intermediate business and financial knowledge;
(vi) Good sense of customer service;
(vii) Good internet skills; and
(viii) Attention to detail.
(d) Language Requirements. IBM Personnel shall have the language skills
required to perform the Acquisition Services in each local market serviced. In
addition, at a minimum for each local market, there shall be at least one (1)
person available during Local Market Business Hours who is able to perform the
Acquisition Services in English. IBM Personnel shall be able to read, write, and
speak English with native fluency.
3.2. INVESTIGATION SERVICES
(a) General. IBM shall be responsible for Complaint, Personal
Investigations, VIP Reporting, Service Failure Outbound Services Requests, which
includes investigating requests regarding Entities and updating or confirming
data that is currently on file as a result of such Entity investigations, or if
applicable, writing an original report about such Entity as requested by
Customers ("Investigation Services").
(b) Investigation Services Description. In performing the Investigation
Services, IBM's responsibilities include the following:
(i) Pulling Outbound Services Requests from a request queue;
(ii) Accessing and validating the End User's account with D&B and
authenticating that the End User is authorized to provide data and make
commitments on behalf of their company;
(iii) Investigating the issues involved in each Outbound Services
Request utilizing D&B data resources and external resources as required (e.g.,
legal documents on the Entity filed at central registries);
(iv) Contacting the Entity that is the subject of the Outbound
Services Request for more information where required to complete the
investigation;
(v) Utilizing additional data sources where required, to gather
'value added' data (e.g., local Registries & Government agencies or surfing the
internet);
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(vi) Updating the Entity record to reflect the most current
information gathered during the research and Entity interview;
(vii) For priority orders, contacting the Entity to communicate
status and resolution on high priority requests;
(viii) Where requested or required by applicable procedures,
contacting the Entity to communicate the steps taken in the investigation;
(ix) Generating and sending appropriate reports required to resolve
the Outbound Services Request or requested during Contacts; and
(x) Documenting the resolution of the Outbound Services Request and
all Contacts made relating to the Outbound Services Request.
(c) IBM Personnel Minimum Requirements. IBM Personnel performing
Investigation Services shall have the following minimum skills and
qualifications:
(i) Good oral and written communication skills, including accent
neutralization training and ability;
(ii) Basic telephone skills;
(iii) Computer skills ranging from basic to intermediate as required
to handle the particular investigation;
(iv) Ability to work through uneven incoming workloads and
inventories;
(v) Basic business and financial knowledge including an in-depth
understanding and awareness of the culture and business practices in the local
markets serviced in performing each the Investigation Services;
(vi) Good knowledge of D&B data and processes;
(vii) D&B Product knowledge;
(viii) Sales skills;
(ix) Good sense of customer service; and
(x) Attention to detail.
(d) Language Requirements. IBM Personnel shall have the language skills
required to perform the Investigation Services in each local market serviced in
accordance with the proficiency requirements set forth in Attachment A-6-1
(Contact Center Solution). In addition, at a minimum for each market, there
shall be at least one (1) person available during Local Market Business Hours
who is able to perform the Investigation Services in English. For the purposes
of clarity, where language skills of each local market are not specifically
designated in Attachment A-6-1 (Contact
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Center Solution), IBM Personnel shall be able to read, write, and speak the
following languages with native fluency:
(i) English;
(ii) Spanish;
(iii) Italian;
(iv) Flemish;
(v) Dutch;
(vi) German; and
(vii) French.
3.3. FULFILLMENT SERVICES
(a) General. IBM shall be responsible for performing Fulfillment Services,
which include expediting U.S. Entity report creation and investigating
additional data sources that might have a material affect on the entities report
(i.e., trade references) ("Fulfillment Services").
(b) Fulfillment Services Description. In performing the Fulfillment
Services, IBM shall investigate additional references provided by the Entity for
up to six (6) months from the date the Outbound Services Request is pulled from
the request queue. In performing the Fulfillment Services, IBM responsibilities
include the following:
(i) Pulling Outbound Services Requests from a request queue;
(ii) Accessing and validating the End User's account with D&B and
authenticating that the End User is authorized to provide data and make
commitments on behalf of their company;
(iii) Calling credit references;
(iv) Adding credit information to Entity files;
(v) Creating a credit information file for each Entity if not in
existence;
(vi) Offering D&B Products as part of the Fulfillment Services; and
(vii) Documenting resolution of the Outbound Services Request and
all Contacts relating to the Outbound Services Request.
(c) IBM Personnel Minimum Requirements. IBM Personnel performing
Fulfillment Services shall have the following minimum skills and qualifications:
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(i) Basic oral and written communication skills, including accent
neutralization training and ability;
(ii) Basic telephone skills;
(iii) Ability to work through uneven incoming work loads and
inventories;
(iv) Intermediate to superior customer service skills; and
(v) Basic computer skills (ability to navigate text and GUI
interfaces).
(d) Language Requirements. IBM Personnel shall be able to read, write, and
speak English with native fluency.
3.4. FAMILY TREE SERVICES
(a) General. IBM shall be responsible for handling Family Tree and Linkage
Validation and Error Outbound Services Requests, which includes creating
complete and accurate views of corporate family trees and maintaining such views
("Family Tree Services").
(b) Family Tree Services Description. In performing the Family Tree
Services, IBM's responsibilities include the following:
(i) Pulling Outbound Services Requests from a request queue;
(ii) Authenticating that the Entities End User is authorized to
provide data and make commitments on behalf of their company;
(iii) Reviewing D&B's current list of corporate linkages to
eliminate duplication and ensure consistency of data elements (e.g., Standard
Industrial Codes ("SICs"), business names, and tradestyles);
(iv) Obtaining lists of locations from the subject company either
via direct request, or other verifiable means (e.g., website, annual report). If
directly requesting the information, the company may agree to review D&B's
corporate linkage and make changes. If a company's website is used, confirmation
of permission to use the website shall be requested by the IBM by sending an
e-mail notice to the company and obtaining such permission via a return e-mail
or other means. IBM will utilize the form e-mail provided by D&B to provide such
notice;
(v) Matching list of company locations to D&B's files and reviewing
results to validate that the results are accurate;
(vi) Updating the company's corporate family and inputting such
updates into D&B systems;
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(vii) Responding to requests to add new locations to corporate
families by creation of a new Entity record;
(viii) Contacting, and updating if applicable, lists of locations
that may be part the corporate families based on similarity of names;
(ix) For linkage validation errors, contacting those locations where
an ownership or linkage update is required because the current owner has been
deleted as a duplicate or is out of business; and
(x) Responding to customer inquiries on corporate linkages using a
web based tools system (e.g., DBDATA1).
(c) IBM Personnel Minimum Requirements. IBM Personnel performing Family
Tree Services shall have the following minimum skills and qualifications:
(i) Good oral and written communication skills, including accent
neutralization training and ability;
(ii) Basic telephone skills;
(iii) Basic business and financial knowledge, including an in-depth
understanding and awareness of the culture and business practices in the local
markets being serviced
(iv) Ability to work through uneven incoming work loads/inventories;
(v) Intermediate/superior customer service skills; and
(vii) Basic computer skills (e.g., ability to navigate text and GUI
interfaces).
(d) Language Requirements. IBM Personnel shall have the language skills
required to perform the Family Tree Services in each local market from where
data is collected in accordance with the specific proficiency requirements set
forth in Attachment A-6-1 (Contact Center Solution).
3.5. ADVANCED CUSTOMER UPDATE GROUP
(a) General. IBM shall be responsible for handling Advanced Customer
Update Group ("ACUG") Outbound Services Requests, which includes updating U.S.
and Canadian company credit records of public and large private companies,
responding to specific End User requests regarding public companies, confirming
information submitted by a company, and performing expedited reevaluation of
credit investigations ("ACUG Services").
(b) ACUG Service Descriptions. In performing the ACUG Services, IBM's
responsibilities include the following:
(i) Pulling Outbound Services Requests from a request queue;
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(ii) Retrieving the filing from the SEC website and updating the
financial statement and D&B record with all data retrieved;
(iii) Validating that data gathered from the company's information
listed with the SEC;
(iv) Checking for errors;
(v) Contacting the company to review any inconsistent data and
updating the data accordingly;
(vi) Obtaining and entering the most current financial statements of
the company;
(vii) Offering D&B Products during all Contacts; and
(viii) Documenting resolution of the Outbound Services Request and
all Contacts relating to the Outbound Services Request.
(c) IBM Personnel Minimum Requirements. IBM Personnel performing ACUG
Services shall have the following minimum skills and qualifications:
(i) High level of oral and written communication skills for those
IBM Personnel responsible for advanced activities (e.g., speaking to senior
officers of large companies), including accent neutralization training and
ability;
(ii) Basic telephone skills;
(iii) Basic computer skills (ability to navigate text and GUI
interfaces);
(iv) High level of business and financial knowledge;
(v) Basic sales skills; and
(vi) Knowledge of D&B policies & procedures.
(d) Language Requirements. IBM Personnel shall be able to read, write, and
speak English with native fluency.
3.6. INQUIRY SCREENING SERVICES
(a) General. IBM shall be responsible for researching End User inquiries
for missing reports or reports identified as deficient, and responding to the
End User with the correct information ("Inquiry Screening Services").
(b) Inquiry Screening Service Descriptions. In performing the Inquiry
Screening Services, IBM's responsibilities include the following:
(i) Pulling Outbound Services Requests from a request queue;
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(ii) Determining if the Entity that is the subject of the inquiry
exists within D&B files;
(iii) If the Entity that is the subject of the inquiry exists within
D&B files, investigating and resolving the inquiry and responding to the End
User submitting the inquiry;
(iv) If the Entity that is the subject of the inquiry is not found
within D&B files, accessing web tools to determine if subject of the inquiry
exists and responding to the End User submitting the inquiry with any
information (or lack of information) obtained;
(v) Screening and resolving those requests identifiable by data
element (e.g., calling the number provided) and when not possible, forwarding
those inquiries, at no additional charge, to the IBM Outbound Contact Center to
create a revised report (through performance of a Service Failure) or gather
requested information as part of the Investigation Services; and
(vi) Documenting resolution of the Outbound Services Request and all
Contacts made relating to the Outbound Services Request.
(c) IBM Personnel Minimum Requirements. IBM Personnel performing Inquiry
Screening Services shall have the following minimum skills and qualifications:
(i) Basic oral and written communication skills, including accent
neutralization training and ability;
(ii) Basic telephone skills;
(iii) Basic computer skills (e.g., ability to navigate text and GUI
interfaces);
(iv) Basic to intermediate business and financial knowledge;
(v) High degree of organizational skills;
(vi) Attention to detail;
(vii) Comprehensive language and spelling ability; and
(viii) Intermediate typing skills
(d) Language Requirements. IBM Personnel shall be able to read, write, and
speak English with native fluency.
3.7. AD HOC OUTBOUND SERVICES
From time to time during the Term, D&B may request IBM to collect
information in order to update the database in a manner that deviates from the
Services described in this Exhibit A-1. To the extent that such request
materially deviates from the Service provided (i.e. substantial increase or
decrease in Contact
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handle times) the scope, service levels, and charges for such work shall be
mutually agreed to by the parties in accordance with the Change Control
Procedures.
4. TRAINING SERVICES
(a) IBM shall be responsible for developing, improving, and maintaining
the requisite skills and technical knowledge of personnel assigned by IBM to
perform the Services, which includes:
(i) Initial training on the Services as required during Transition;
(ii) Ongoing training of IBM Personnel performing the Services
during the Term, including training on changes developed and delivered by D&B,
provided that such training will not exceed one (1) week for IBM Personnel that
are performing the Services adequately;
(iii) Ongoing training on changes developed and delivered by IBM;
(iv) Initial and on-going language training;
(v) Initial and on-going sales training;
(vi) Training on changes to D&B Products and policies and processes,
and technology used to perform the Services, provided that D&B will give
reasonable advance notice to IBM of the changes; and
(vii) Remediation training to those IBM Personnel not performing
adequately as designated by IBM or D&B.
(b) IBM shall provide D&B with competent personnel across all areas of the
Services.
(c) For the Software, tools, and applications provided or developed by
IBM, IBM shall provide feature overview training for IBM Personnel and D&B
trainers and product documentation for End Users.
(d) The training process and resources set forth in Attachment A-7-2
(Transition Schedule).
5. REVENUE GENERATION SERVICES
IBM shall generate revenue for D&B by selling D&B Products directly to End
Users in the manner described in Section 5.1 and by obtaining and providing
Qualified Leads for D&B sales personnel to sell D&B Products in the manner
described in Section 5.2.
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5.1. D&B PRODUCTS
(a) As part of the Services and in accordance with the Service Levels, IBM
shall sell certain D&B Products and services.
(b) IBM shall sell D&B Products using all of the following methods:
(i) Directly selling D&B Products as part of the Inbound Contact
Services;
(ii) Selling higher value D&B Products that contain additional
features as part of the Inbound Contact Services ("Up-sell"); and
(iii) Selling additional D&B Products that relate to the original
Order Request as part of the Inbound Contact Services ("Cross-sell").
(c) IBM shall be take advantage of all opportunities to sell D&B Products
and to Up-sell and Cross-sell during Contacts.
5.2. LEAD GENERATION
As part of the Services, IBM shall generate Qualified Leads for D&B sales
representatives during the Inbound Contacts and Outbound Services Requests
Contacts as designated by D&B. D&B shall prioritize the types of D&B Products on
which IBM should focus its sales efforts.
(a) During each Contact, IBM shall identify instances where an End User
would benefit from the sale of a D&B Product and shall market such Products to
the End User.
(b) If during a Contact, reference to D&B Products is made with the
reasonable expectation of such reference resulting in the sale of a D&B Product,
then IBM shall refer the End User to a D&B sales representative to make a sales
call (a "Qualified Lead").
(c) As further described in Section 6.2 below, IBM shall assign a
disposition code to every Qualified Lead, and where desirable, perform a warm
transfer of such Qualified Lead to a sales representative.
(d) As further detailed in Attachment A-7-3 (Transformation Solution), IBM
shall institute and follow procedures to analyze data regarding Qualified Leads
on a continuing basis. IBM shall implement analytics to facilitate the
identification of targets for immediate sales and for lead generation. In this
regard, IBM shall implement streamlined procedures to (1) ensure each End User
receives information regarding D&B Products that are appropriate, and (2) comply
with Do Not Call Legislation and applicable D&B policies as further described in
Schedule H (Data Privacy and Data Protection Laws).
(e) IBM shall identify and provide leads about End Users that may be
interested in having accounts receivable and bad debt collected by a third party
and refer such leads to D&B.
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6. CONTACT DOCUMENTATION SERVICES
6.1. GENERAL
(a) IBM shall be responsible for documenting the following information
from each Contact:
(i) Date and time of Contact;
(ii) Duration of Contact;
(iii) Information identifying the End User (e.g., name, address,
phone number, street code and product code) with which the Contact is made, as
specified by D&B;
(iv) Summary of correspondence during the Contact;
(v) Disposition of the Contact in accordance with the procedures set
forth in Section 6.2;
(vi) Identification of IBM Personnel that handled the Contact;
(vii) D&B account number and DUNS Number of the End User with which
the Contact is made, if applicable;
(viii) Description of follow-up actions and appropriate timeframes
to such actions; and
(ix) Other relevant information that may be requested by D&B during
the Term.
(b) IBM shall distribute documentation described in Section 6.1 to D&B in
a manner that allows D&B to easily update information contained in D&B's CRM
systems or databases.
(c) IBM shall maintain the Contact documentation set forth in 6.1 for
thirteen (13) months or such longer period necessary to satisfy D&B records
retention policy and post Transformation make such information available
real-time to D&B via the Internet with the appropriate security or any other
form as designated by D&B.
6.2. CONTACT DISPOSITION DOCUMENTATION
IBM shall assign a disposition code to each Contact correspondence and
provide such disposition information to D&B in a manner that allows D&B to sort
through Contact information by disposition code.
6.3. TRANSLATIONS
If requested by a Customer, IBM shall provide translations from in-scope
native languages to English of the "free-text" report sections of the
information provided to Customers, at no additional charge.
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6.4. LANGUAGE REQUIREMENTS
IBM Personnel shall have the language skills required to perform the
Contact Documentation Services in each local market serviced. In addition, at a
minimum for each market, there shall be at least one (1) person available during
Local Market Business Hourst who is able to perform the Contact Documentation
Services in English. IBM Personnel shall be able to read, write, and speak the
following languages with native fluency:
(a) English;
(b) Spanish;
(c) Italian;
(d) Flemish;
(e) Dutch;
(f) German; and
(g) French.
7. CONTINUOUS IMPROVEMENT AND QUALITY CONTROL
7.1. CONTINUOUS IMPROVEMENT
IBM shall adopt and apply continuous process improvement principles to
processes carried out on behalf of D&B designed to achieve the following:
(a) Improve the quality of data and improve the efficiencies of each
Contact such that number of Contacts can be reduced.
(b) Improve customer satisfaction;
(c) Where possible, reduce redundant Contacts to customers;
(d) Improve first time resolution of Inbound Contacts and Outbound
Services Requests such that interface points and hand-offs are reduced;
(e) Improve overall quality assurance scores; and
(f) Reduce the overall cost per Contact and the corresponding charges for
such records to D&B.
7.2. QUALITY ASSURANCE
IBM, as part of its total quality management process, shall provide
continuous quality assurance and quality improvement through:
(a) The identification and application of proven techniques and tools from
other installations within its operations (i.e., "Best Practices") that would
benefit D&B either operationally or financially;
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(b) The implementation of concrete programs, practices, and measures
designed to ensure that the Services are performed in accordance with the
Service Levels and the level of service will improve during the Term; and
(c) Tools to schedule, score, and record Inbound Contact and Outbound
Contact Services.
7.3. CALL MONITORING
(a) Upon reasonable advanced notice, IBM shall provide D&B with unassisted
real time voice monitoring capabilities of all Contacts and ensure voice records
of all monitored Contacts are captured in the quality assurance system to
facilitate further review and follow-up by IBM and D&B. In accordance with
Attachment A-6-5 (Technology Solution), recorded screen and voice Contacts shall
be made available to D&B by the next Business Day upon request.
(b) IBM shall monitor a statistically significant, random selection of
Inbound Contacts and Outbound Contacts to ensure each IBM agent is complying
with the obligations described in this Exhibit A-1. The statistically
significant sample shall be determined by agreed upon confidence levels and
margins of error when using the following formula or other means agreed by the
Parties:
n = [(Za/2(Sigma)/E)(2)]
Where:
n = sample size
p = estimated population proportion correct
Za/2 = critical value for level of confidence (i.e., 95% will be the
standard level of confidence with a 4% confidence interval) Za/2= 1.96)
(c) E = error interval desired (i.e. E has a calculation that accounts for
population size, which is Sqrt[(N - n)x/n(N-1)] IBM and D&B shall (1) mutually
agree to a calibration methodology, (2) score the agreed upon Contacts in
accordance with the calibration methodology, and (3) meet on a weekly basis to
review the results.
(d) IBM shall use the results for the ongoing training of IBM Personnel.
(e) In accordance with Section 25 of the Agreement and Schedule H (Data
Privacy and Protection Laws), if any IBM Personnel perform unsatisfactorily
twice during a four (4) week period in accordance with methodology and scoring
set for in 7.3(c) above, then IBM shall perform remediation training with such
IBM Personnel. If during any other four (4) week period during the Term, such
IBM Personnel perform unsatisfactorily twice, unless otherwise approved by D&B,
such IBM Personnel will no longer be used by IBM to provide the particular
Services for which IBM Personnel performed unsatisfactorily.
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(f) IBM shall provide reports with information regarding the call
monitoring Services described in this Section to D&B as requested by D&B on a
monthly basis.
8. OTHER SERVICES
8.1. CONTRACT ADMINISTRATION
(a) General. IBM shall be responsible for processing contract requests and
any other account updating request, validating contract policy compliance,
entering contract data into appropriate billing system, and following up with a
D&B sales associate via phone, fax, and email ("Contract Administration
Services").
(b) Contract Administration Services Description. In performing the
Contract Administration Services, IBM's responsibilities include the following:
(i) Receiving and responding to contract requests;
(ii) Accessing and validating the relevant End User with D&B;
(iii) Identifying the type of contract request and the actions
required to fulfill the request;
(iv) Reviewing the request for completeness, accuracy, and adherence
to D&B policy;
(v) Returning all incomplete or out of policy transactions back to
originating organization (e.g., D&B sales organization);
(vi) Locating existing customer accounts in D&B's order entry
system, or where there is no existing account setting up new accounts;
(vii) Inputting data into the appropriate order entry system;
(viii) Verifying the entered data for completeness, accuracy, and
adherence to D&B policy;
(ix) Documenting the Contract request processed and notifying D&B's
sales organization of completion.
(c) IBM Personnel Minimum Requirements. IBM Personnel performing Contract
Administration Services shall have the following minimum skills and
qualifications:
(i) Basic oral and written communication skills;
(ii) Basic telephone skills;
(iii) Basic computer skills (e.g., ability to navigate text and GUI
interfaces);
(iv) Basic to intermediate business and financial knowledge;
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(v) High degree of organizational skills;
(vi) Attention to detail;
(vii) Comprehensive language and spelling ability; and
(viii) High level typing skills.
(d) Language Requirements. IBM Personnel shall be able to read, write, and
speak English, Spanish, and French as required to perform the Contract
Administration Services.
8.2. FRAUD IDENTIFICATION
IBM will mitigate risk from fraudulent information by ensuring that IBM
Personnel are cognizant of fraud possibilities and trained to identify
fraudulent and potentially fraudulent information. IBM's responsibilities in
this regard include:
(a) Following risk guidelines provide in the Procedures Manual and
periodic fraud updates provided by D&B;
(b) Training all IBM Personnel providing Contact Center Services on
techniques for identifying fraud and risks of fraud (D&B will train the IBM
trainers);
(c) Asking probing questions to obtain additional information required to
assess the existence or potential for fraud; and
(d) Providing D&B with Severe Risk Tips as described in Schedule B to the
Agreement.
8.3. ACCESS TO D&B SYSTEMS
IBM shall access the D&B system via real time updates or batch processing
as set forth in Attachment A-6-5 (Technology Solution) and Exhibit A-7-3
(Transformation Solution).
8.4. PREPARATION OF PROCEDURES MANUAL
In accordance with Section 19.5 of the Agreement, IBM will provide the
Procedures Manual that will address, among other things, as appropriate:
(a) The major activities IBM will undertake to perform the Services;
(b) Contact Center workflow and operational procedures;
(c) Contact Center logical and physical data security procedures;
(d) Contact handling procedures including procedures for IBM Personnel to:
(i) Establish and authenticate the customer's identity using the
data from the database where available;
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(ii) Update customer data in the database;
(iii) Handle on an expedited basis problems which IBM is or should
be aware are of high business priority; and
(iv) Inform D&B sales desk of possible opportunities for sales of
D&B Products as designated by D&B arising from customer calls to the Contact
Center; and
(e) Descriptions of IBM Personnel authority levels and profiles.
8.5. OPERATIONS MANAGEMENT SERVICES
IBM shall be responsible for providing, managing and maintaining all
resources necessary for the administration, operation, management, maintenance
and support of the Contact Centers, as described in Attachment A-6-5 (Technology
Solution) and Attachment A-7-3 (Transformation Solution). IBM's responsibilities
in this regard shall include:
(a) Measuring IBM performance of the Services with respect to the
applicable Service Levels. IBM shall evaluate, procure and implement the
necessary (and where appropriate state of the art) tools to monitor and measure
IBM performance and shall design and implement appropriate measurement and
monitoring procedures;
(b) Providing and implementing a central database and an automated tool
for tracking and managing problems, queries and requests. IBM will provide
extracts of such database on a monthly basis or as otherwise mutually agreed to
by the Parties; and
(c) Monitoring problems, queries, and requests and analyzing them to
detect trends and emerging patterns to identify for D&B in the monthly
performance reports or to immediately notify D&B in the case of an increase in a
particular type of problem.
8.6. CONTACT CENTER TELECOMMUNICATIONS MANAGEMENT SERVICES
In accordance with Attachment A-6-5 (Technology Solution) and Exhibit
A-7-3 (Transformation Solution), IBM's responsibilities regarding Contact Center
telecommunications management Services shall include:
(a) Operating telephony equipment, including IVR, PBX equipment, voice
recognition technology, automated contact distribution applications (e.g.,
ACD's), IVR's, dialers, cabling, headsets, fax machines and telephones;
(b) Managing the infrastructure necessary to support the Contact Centers'
telephony infrastructure;
(c) Maintaining telephony infrastructure including PBX equipment,
automated contact distribution applications, dialers, cabling, headsets,
telephones, and fax machines, which includes performing telephony maintenance
including
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preventive, corrective and emergency maintenance so as to minimize disruption to
the Services, including load balancing all traffic;
(d) Monitoring the usage, performance and maintenance of telephony
Software and Equipment. IBM also shall track on an on-going basis the principal
performance indicators of the telephony infrastructure, and identify actual and
potential bottlenecks so as to enable IBM to proactively handle maintenance and
capacity issues and to support the Parties' technology planning activities;
(e) Performing network design activities on the IBM network used to
provide the Services;
(f) Performing telephony engineering functions including, capacity and
configuration management, telephony optimization, efficiency tuning, and
conducting site surveys as appropriate;
(g) Maintaining a comprehensive telephony network management cross
reference database and comprehensive custom telephony network and Applications
diagrams. IBM will provide such information to D&B within a reasonable period of
time following D&B's request;
(h) Replacing, upgrading, supplementing and enhancing telephony Equipment
and infrastructure, including PBX equipment, automated contact distribution
applications, dialers, cabling, headsets, telephones, fax machines, and
lightning protection systems as appropriate. In this regard IBM shall be
responsible for evaluating, procuring, staging, configuring, and installing any
telephony Equipment and infrastructure, including PBX equipment, automated
contact distribution applications, dialers, cabling, headsets, telephones, fax
machines, and lightning protection systems;
(i) Performing telephony modifications as required to maintain regulatory
compliance. IBM will be responsible for performing such telephony modifications
within acceptable timeframes for compliance and will provide progress reports to
D&B at regular intervals;
(j) Performing telephony administration functions, including:
(i) Verifying Usage based communications costs, if any;
(ii) Projecting Usage based communication costs in the event D&B
requests implementation of a toll free number service for customers; and
(iii) Developing, establishing and maintaining directories of
telephone extensions.
(k) Management and Maintenance of Systems and Communications.
(i) Implementing, installing, and maintaining Equipment and Software
for systems (including switch, call accounting, voice mail, and teleconferencing
bridge). IBM shall provide proper system design to include
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protection against lightning strikes, electric noise and power surges, including
during new installations;
(ii) Performing dialer programming, including feature and function
software upgrades/changes to support business requirements;
(iii) Performing problem resolution functions related to systems,
including resolving customer questions and problems with the features and
functions of the system;
(iv) Managing and maintaining the system configuration; and
(v) Updating, managing and maintaining dialer feature functionality
in accordance with D&B's business requirements.
(l) System Documentation/Management.
(i) Establishing and maintaining calling group arrangements;
(ii) Maintaining information lists containing phone data for D&B,
including telephone, speed dial, and fax numbers;
(iii) Updating, maintaining, documenting and monitoring, as
appropriate, serviceability of call distribution systems, messaging, paging,
cabling, training, warranty and maintenance issues;
(iv) Performing cable management and installation and coordinating
cable runs for communications. IBM shall create, maintain and update
documentation for cabling; for new installations, IBM shall document and map
cable runs and supervise labeling and mapping performed;
(v) Updating, maintaining (including administering warranty
services), monitoring, providing training for and documenting, as appropriate,
the systems ancillary to the operations of communications, including call
management systems, voice messaging and pagers; and
(vi) Managing and maintaining telecommunications-related Software
packages.
(m) Providing technical advice in support of Contact Center operations.
8.7. IVR
As further described in the Transformation Plan, IBM shall design,
develop, configure, and implement the IVR used to perform the Inbound Contact
Center Services, including so as to maximize the automated functionality and the
number of problems, queries, and requests that are resolved by means of
automated response. In developing the IVR system, IBM shall incorporate in the
IVR the functionality required to perform the Services, which at a minimum will
be no less comprehensive then the IVR used by D&B as of the Effective Date. IBM
shall make changes to the IVR as requested by D&B. Charges for the IVR changes
designated by D&B shall be
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as set forth in Exhibit C-2 (Pricing Tables). D&B shall designate whether the
required change to the IVR is a "normal" or "emergency" change. One hundred
percent (100%) of "emergency" changes to the IVR provided by D&B shall be made
within 24 hours unless otherwise agreed to by D&B. One hundred percent of
non-emergency changes to the IVR provide by D&B shall be made within five (5)
Business Days unless otherwise agreed to by D&B. The formula for calculating the
percent of IVR changes made during the required timeframe shall be as follows:
(Number of changes to the IVR made within the required timeframe / Number of
change requests submitted by D&B) * 100.
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EXHIBIT A-2
DATA PROGRAMMING SERVICES
1. Definitions................................................................................... 2
1.1. Certain Definitions.................................................................. 2
1.2. Other Definitions.................................................................... 2
2. Global Trade.................................................................................. 2
2.1. In-Scope Locations................................................................... 2
2.2. Hours of Operation................................................................... 2
2.3. Service Descriptions and Process Workflow Diagrams................................... 3
2.4. IBM Personnel Minimum Qualifications................................................. 8
2.5. Language Requirements................................................................ 9
3. Delivery...................................................................................... 9
3.1. In-Scope Locations................................................................... 9
3.2. Hours of Operation................................................................... 9
3.3. Service Descriptions................................................................. 9
3.4. U.S. RMS Products, Processes, and Additional Services................................ 13
3.5. U.S. SMS Products, Processes, and Additional Services................................ 14
3.6. U.S. S&MS Products, Processes, and Additional Services............................... 14
3.7. Europe Products, Processes, and Additional Services.................................. 14
3.8. Canada Products, Processes, and Additional Services.................................. 14
3.9. IBM Personnel Minimum Qualifications................................................. 15
3.10. Language Requirements................................................................ 15
TABLE OF ATTACHMENTS
A-2-1 - Postal Cleansing Services
A-2-2 - Delivery Project Quality Checklists
D&B / IBM Confidential
A2-1
EXHIBIT A-2
DATA PROGRAMMING SERVICES
This Exhibit describes the Data Programming Services IBM shall provide.
1. DEFINITIONS
1.1. CERTAIN DEFINITIONS
(a) "ABEND" has the meaning given in Section 2.3(c).
(b) "Benefits" and "Incentives" has the meaning given in 2.3(e).
(c) "Delinquent Files" has the meaning given in Section 2.3(a).
(d) "Delivery Services" has the meaning given in Section 3.
(e) "Global Trade Services" has the meaning given in Section 2.
(f) "I-Cases" has the meaning given in Section 2.3(d)(i).
(g) "Trade Participant Numbers" has the meaning given in Section 2.3(a).
1.2. OTHER DEFINITIONS
Capitalized terms not defined in this Exhibit A-2 (Data Programming
Services) shall have the meaning given to them in Schedule A (IBM Services and
Solutions) or elsewhere in the Agreement.
2. GLOBAL TRADE
IBM shall be responsible for gathering and processing data from D&B
customers relating to the credit and payment experiences they have with
businesses in D&B databases and for performing the related services described in
this Section 2. ("Global Trade Services").
2.1. IN-SCOPE LOCATIONS
IBM shall gather and process data and provide Global Trade Services for
businesses entities and D&B customers in the United States, Europe, and Canada.
Each of these regions has unique processes, technologies, and languages that IBM
shall utilize and integrate into its overall solution and service delivery
approach.
2.2. HOURS OF OPERATION
(a) IBM shall work and maintain real-time interaction via telephone and
e-mail with the D&B trade teams during all normal business hours in the United
States, Europe, and Canada to ensure issues and requests are resolved on the
same day they arise.
(i) D&B's trade teams in the United States and Canada work from
07:00 to 18:00, Monday through Friday, Eastern Time.
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(ii) D&B's trade team in Europe works from 08:00 to 18:00, Monday
through Friday, Central European Time.
(b) In addition to working during normal business hours, IBM Personnel
shall work outside of normal business hours and on weekends when necessary to
accommodate spikes in demand for Services, to achieve the Service Levels, and to
meet applicable customer and month-end deadlines.
2.3. SERVICE DESCRIPTIONS AND PROCESS WORKFLOW DIAGRAMS
Each customer participating in D&B's global trade program is assigned to a
D&B associate who has overall responsibility for the relationship between D&B
and the customer. IBM shall provide the Services described in this Section 2.3
and work closely with such D&B associates to ensure global trade information is
collected and processed accurately and in a timely manner. IBM's
responsibilities with respect to Global Trade Services include:
(a) Prompting Customers for Delinquent Files.
(i) D&B will provide IBM with lists of Delinquent Files, along with
the four digit trade participant numbers associated with those customers ("Trade
Participant Numbers").
(ii) IBM shall send e-mails and letters (where e-mail addresses are
not available or as directed by D&B) to customers from whom D&B is requesting
Delinquent Files, and continue following-up by e-mail on a regular basis until
the customers either: (i) provide the Delinquent Files; or (ii) indicate that
they cannot or will not provide the Delinquent File.
(iii) IBM will check the information received from customers to
ensure completeness and send follow-up communications requesting any missing
files (e.g., requesting a file omitted from a customer submission).
(iv) IBM shall log and track the status of each Delinquent File on
the D&B Intranet (or manually for countries such as Canada where delinquency is
not tracked on the Intranet) from the moment it is identified by D&B until it is
received from the relevant customer or referred to D&B for further action. For
customers in Canada and other countries in which delinquency is tracked
manually, IBM shall provide D&B with hard-copy reports of the status each
Delinquent File on a weekly basis.
(v) IBM will access messages from customers on a daily basis from a
D&B provided e-mail mailbox.
(vi) IBM shall refer all customer questions received by IBM to
designated D&B trade team personnel.
(vii) For the Canada market, IBM shall:
(A) Lift and transition D&B's current operation "as-is" to
India;
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(B) Perform a "deep-dive" review of the DunTrade Control
System Database, located on a stand-alone PC and
recommend an alternative solution to allow for more
functionality and data capture of e-mail addresses and
related data. The solution will be sized by IBM and
approved by D&B management before implementation; and
(C) Collect customer e-mail addresses from existing D&B
coordinators and aggregate them into a central file.
(b) Manual File Pre-processing. IBM shall perform all manual processing
functions required to enable customer files to run through D&B's automated
global trade programs.
(i) On a daily basis, IBM will access lists of files requiring
manual file pre-processing via the D&B global trade Internet site- and
country-specific e-mail in-boxes for Europe and Canada customers.
(ii) IBM shall check and verify the format of files and the content
of data contained in the files, and if necessary, contact the customer
submitting the file via e-mail to request files that were not attached.
(iii) IBM shall download and log files requiring manual
pre-processing into the appropriate D&B administrative systems.
(iv) IBM shall perform all file consolidation, file manipulation,
and other manual file pre-processing required to prepare files to run through
D&B automated programs, including:
(A) Converting files by PC based pre-processors and saving
the original files and the converted files on the D&B
trade server;
(B) Uploading e-mail attachments and other files to D&B
mainframe systems for processing;
(C) Creating pre-processors for files of new trade partner
files after uploading them to D&B mainframe systems;
(D) Rewriting pre-processors to accommodate lay-out changes;
(E) Reformatting data via TSO access to prepare it for the
applicable data transformation tool (currently AIH);
(F) Using and applying password and resource access control
facility ("RACF") security;
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(G) Editing and submitting Cobol job control language
("JCL") members;
(H) Performing custom SAS work to reformat files where
required; and
(I) Validating file output prior to submission to the
applicable data transformation tool to minimize quality
errors and ABENDS.
(v) IBM shall check "CJS libraries" in TSO and "Wip Notes" on the
D&B Intranet for special pre-processing instructions and comply with such
instructions when processing files.
(vi) In unusual cases where it is not feasible for IBM to manipulate
the files for automated processing without customer action, IBM shall refer
files to a designated D&B team member for take further action with the customer.
(vii) IBM shall perform the Services described above manually in
markets such as Canada where hardcopy control functions have not yet been
automated.
(c) ABEND Resolution.
(i) IBM will receive a screen snapshot each day from TSO showing the
global trade jobs that ABENDed during the prior day. An "ABEND" is an abnormal
end to a processing job that occurs when D&B systems are presented with
instructions or data they cannot recognize or are asked to reach beyond their
protective boundaries.
(ii) With respect to each ABEND job, IBM will be responsible for:
(A) Analyzing the ABEND and the related JCLs; checking
related files, layout, pre-processors, and
specifications; determining the cause of the ABEND; and
identifying appropriate corrective action;
(B) Taking action to resolve the problem causing the ABEND
(e.g., conducting file cleansing, sorting files,
eliminating bad records, updating pre-processor or data
transformation tool specifications); and
(C) Resubmitting the job without customer contact for
processing.
(iii) If, after using Commercially Reasonable Efforts, IBM cannot
resolve an ABEND without customer contact (e.g., if customer needs to make input
file layout changes), IBM shall refer the issue to a D&B team member who
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will contact the customer. IBM shall then take follow up action identified by
D&B and the customer to resolve the ABEND.
(d) Resolving Automatic Quality Check Rejects ((a)e., I Cases).
(i) In the United States and European markets, D&B systems perform
automated quality checks on every customer file submission. Each day, IBM will
access country-specific e-mail in-boxes to identify I Cases that require further
processing. In Canada, where as of the Effective Date D&B does not have systems
that perform automated quality checks, IBM shall manually check each customer
file submission to identify I Cases that require further processing.
(ii) IBM shall analyze and take appropriate corrective action to
resolve each I Case. IBM's responsibilities in this regard include:
(A) Reviewing processing results and other file records from
previous months to determine the cause of the I Case;
(B) Analyzing files and checking file layout, pre-processors
and specifications;
(C) Identifying solutions for resolving I Cases (both by
reviewing solutions from previous months and developing
new solutions);
(D) Taking action necessary to correct the I Case and
resubmitting the I Case job for another quality check
(e.g., rerunning jobs, changing processing instructions,
updating pre-processor and data transformation tools
specifications); and
(E) Performing the steps above until each I Case passes the
automated (or manual) quality check process.
(iii) IBM shall not contact customers directly during I Case
reviews. If IBM cannot resolve an I Case without customer contact, IBM shall
refer the issue to a designated D&B team member for further action with the
customer.
(iv) Where authorized by D&B policies or directed by a D&B team
member, IBM shall override quality check validations, correct errors and
inconsistencies in customer files, and take any other action required to resolve
I Cases.
(e) Benefit/Incentive Creation and Distribution to Customer. D&B offers
participants in its global trade program benefits and incentive products and
services ("Benefits" and "Incentives"). IBM shall create and distribute Benefits
and Incentives
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to customers identified by D&B. IBM's responsibilities in this regard include
the following:
(i) Creating Benefits and Incentives from information contained in
D&B databases as further described in this Section 2.3(e).
(ii) Checking "CJS libraries" for instructions and files in D&B's
bulk source tracking ("BST") application for Incentives.
(iii) Responding to and fulfilling ad hoc requests from customers
via e-mail about Benefits and Incentives.
(iv) For customers in the United States market, providing the
following Benefits and Incentives: PPS samples, providing documents requested by
customers on an ad hoc basis, and creating files for D&B's delivery and
fulfillment teams.
(v) For customers in the European market, performing and managing
the following Benefit and Incentive programs:
(A) Trade Web Incentive - Providing monthly reports, graphs
and data for D&B customers about: (1) the payment
behavior of their customers compared to the payment
behavior of their customers to other creditors, (2)
payments in each company branch, and (3) company size,
foundation, structure, and similar information.
(B) Centro Marco Project - Providing monthly updates in
Italy to members of a branch organization about the
payment behavior of their customers.
(C) Failure Service - Providing weekly information via
e-mail to customers in the Netherlands about companies
that declared bankruptcy in the prior week.
(D) Key Alert - Providing weekly information via e-mail to
D&B customers in Italy about changes in the D&B rating
or Paydex of their respective customers.
(E) Free D&B DUNS Numbers - Providing information for
customers throughout Europe about their respective
matched accounts (e.g., name, address, and DUNS Number)
via e-mail.
(vi) For customers in the Canadian market, IBM shall:
(A) Create monthly files from the DunTrade Control System
and upload them to the D&B mainframe.
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(B) Fulfill ad hoc job requests for Duns Returns and copies
of customer files.
(C) Fulfill special handling requirements for Benefits and
Incentives requested by customers.
(vii) Maintaining Incentive systems and applications and
trouble-shooting and resolving problems for such systems and applications (e.g.,
Centromarca and TWI in Europe).
(viii) Receiving e-mails with questions and input about data and
administrative problems with Benefit and Incentive production from D&B and D&B
customers, and taking the action required to answer and respond to such
questions and resolve such problems.
(ix) Creating and providing D&B with reports about the Benefits and
Incentives distributed to customers.
(f) File Management. IBM shall implement and follow a process for formally
tracking and routing all paper, electronic, and verbal information received in
connection with the Global Trade Services.
2.4. IBM PERSONNEL MINIMUM QUALIFICATIONS
All IBM Personnel providing Global Trade Services shall have the following
minimum skills and qualifications:
(a) Some knowledge of Assembler.
(b) Ability to work independently.
(c) Two (2) or more years experience working in a PC environment using the
Microsoft Office suite of products.
(d) EasyTrieve, SAS, JCL, COBOL, TSO, Visual Basic skills to the extent
required to provide the Services.
(e) College degree or equivalent experience in a data processing or
computer science field.
(f) Ability to write and maintain mainframe programs used by D&B and
procedures using JCL and SAS and any other D&B systems required to provide the
Services.
(g) Ability to understand complex oral and written data processing
instructions.
(h) Strong problem solving, analytical, and time management skills.
(i) Language capabilities to the extent required by Section 2.5 below.
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(j) In addition to the qualifications described above, IBM team leaders
shall have the following skills: (A) ability to perform complex Data Programming
Services; (B) leadership, mentoring and daily planning capabilities; and (C)
clear, concise communication skills.
2.5. LANGUAGE REQUIREMENTS
IBM Personnel shall have the following language skills to enable them to
perform the Services and interact with D&B trade teams in each region. IBM
personnel shall be able to read, write, and speak the following languages
proficiently:
(a) For customers in the United States market - English
(b) For customers in the Canadian market - English and Canadian French.
(c) For customers in the European market - English, Dutch, Flemish,
French, Spanish, German, Italian, and Portuguese.
3. DELIVERY
IBM shall provide the Services described in this Section 3 related to the
fabrication and fulfillment of D&B Products ("Delivery Services"). IBM shall
fabricate and distribute to D&B customers the D&B Products described below in
this Section 3.
3.1. IN-SCOPE LOCATIONS
IBM shall provide Delivery Services for customers in the United States,
Europe, and Canada. Each of these regions has unique processes, technologies,
and language requirements that IBM shall accommodate and integrate into its
overall solution and service delivery approach.
3.2. HOURS OF OPERATION
(a) At a minimum, IBM Personnel providing Delivery Services shall be
available to interact with D&B delivery personnel and customers on a daily basis
from 09:00 to 17:00, Monday through Friday, Local Market Time.
(b) In addition, IBM Personnel with expertise on the content of S&MS
products shall be available to discuss specific S&MS products and projects from
08:00 to 20:00, Monday through Friday, Local Market Time.
(c) IBM Personnel shall work outside normal business hours and weekends
when necessary to accommodate spikes in demand for Services, to achieve the
Service Levels, and to meet all applicable customer and month-end deadlines.
3.3. SERVICE DESCRIPTIONS
This Section 3.3 provides a high level description of the functions IBM
shall perform for each D&B Product requested by D&B and certain additional IBM
responsibilities. Sections 3.4 through 3.8 provide process flow diagrams and
more detailed requirements that apply specifically to RMS, SMS, and S&MS
products in the United States, Canada, and Europe.
(a) Fabrication and Fulfillment Process.
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(i) IBM shall assist D&B during the D&B Product proposal and
specification development phase. IBM's responsibilities in this regard include:
(A) Providing technical expertise required to develop
solution or product proposals for customers.
(B) Attending meetings and participating in discussions with
D&B and D&B customers about D&B capabilities to
customize and deliver D&B Products and to verify that
D&B solutions and products can meet customer needs and
expectations.
(C) Providing sizing information for products requested by
D&B customers.
(D) Reviewing product specifications with D&B to ensure
completeness, accuracy, and feasibility.
(ii) D&B will provide IBM with electronic and hard-copies of
customer orders and D&B Product specifications via fax and e-mail.
(iii) IBM shall perform postal cleansing of all customer data prior
to fabricating the requested products in accordance with the process described
in Attachment A-2-1 (Postal Cleaning). IBM shall use the third party software
and services provided by Axciom, Group One, Data Services Incorporated, and
Uniserv prior to the Effective Date or replacement third party software and
service providers selected by IBM and approved by D&B to perform postal
cleansing.
(iv) IBM shall fabricate the requested D&B Products in accordance
with order specifications and deadlines provided by D&B. This may require IBM
to:
(A) Submit jobs and execute processes using JCL and
plug-and-play procedures that extract or manipulate data
to append to D&B Products.
(B) Modify existing programs and procedures and developing
new programs and procedures to fabricate ad hoc and
custom Delivery Projects, including through the use and
application of COBOL, SAS, Easy Trieve, and Visual
Basic.
(C) Prepare customer records for matching, initiate matches
in the appropriate D&B matching systems, and monitor the
match process through completion. As requested, IBM
shall perform matching as a stand-alone process to
produce products with only DUNS Numbers appended or as
part of a multi-step process to produce a product with a
DUNS Number
D&B / IBM Confidential
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and additional D&B data requested by a customer
appended.
(D) Utilize databases, processes, tools, and software unique
to each in-scope customer market to fabricate D&B
Products.
(v) During product fabrication, IBM shall perform and produce
standard and customized audits of the datasets incorporated into the requested
D&B Products, including match and CFP audits.
(vi) IBM shall perform quality checks on all D&B Products to verify
compliance with each item on the quality checklists attached as Attachment
A-2-2 IBM shall ensure each D&B Product complies with the applicable quality
checklist before distributing it to D&B or a D&B customer.
(vii) IBM shall deliver D&B Products to D&B or D&B's customer, as
specified in the applicable product order.
(viii) After distribution of a D&B Product to D&B or a D&B customer,
upon request, IBM shall investigate issues, provide documentation, and answer
questions for D&B as necessary for D&B to respond to customer inquires regarding
the data in the D&B Products or the process used to fabricate the D&B Products.
(b) General Delivery Services. In connection with fabrication and
fulfillment of D&B Products, IBM shall be responsible for additional general
functions performed by Fulfillment Systems Analysts ("FSAs") within the D&B
Delivery Services organization prior to the Effective Date, including following:
(i) Maintaining a broad level of knowledge about D&B Products, D&B
data, and production capabilities and providing the D&B sales force with such
information upon request.
(ii) Implementing, maintaining, and continuously improving quality
controls designed to ensure D&B Products are accurate and complete when provided
to D&B customers.
(iii) Proactively working to identify strategies to increase sales
potential for D&B Products and to improve D&B customer satisfaction, including
participating in D&B delivery team meetings upon request.
(iv) Assisting in identifying production problems and
troubleshooting technical design and coding problems in systems used to provide
Delivery Services.
(v) Providing consultative support to business partners regarding
customized D&B Product solutions.
(vi) Establishing and achieving productivity levels stated in annual
goals and objectives for each IBM employee providing Delivery Services.
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(vii) Actively participating in Delivery Service teaming, proposal
development, and negotiation activities as requested by D&B, including meeting
with customers in a sales or technical meeting to provide technical expertise
and to reconcile D&B technical capabilities with customer needs and
expectations.
(viii) Participating in ad hoc calls with D&B customers when
requested, often on short notice.
(ix) Recording all time worked on each D&B Product fulfillment
request or project request in D&B's time tracking system.
(x) Prioritizing project and other work as necessary to meet
schedules and other commitments to D&B customers.
(xi) Creating data sources and feeds for new products.
(xii) Developing solutions to ensure compliance with applicable
laws, regulations, and D&B contract obligations (e.g., certain D&B customers
with sensitive data have provisions in their agreements with D&B prohibiting the
transport of any of their data outside the United States). IBM's solution must
be adjusted as necessary to accommodate these limitations.
(xiii) Working with D&B to build prototypes of new delivery
products.
(xiv) Testing new products requested by D&B or D&B customers.
(xv) Utilizing the most current D&B data files, as defined by D&B,
to fulfill customer orders.
(xvi) Setting up automated libraries to create fresh deliverables
and process new files.
(xvii) Creating historical databases on a monthly, quarterly, and
yearly basis.
(xviii) Creating current databases on a weekly and monthly basis.
(xix) Working with D&B and D&B's infrastructure vendor to prioritize
mainframe resources allocated to the delivery group to enable it to achieve the
Service Levels. This will require IBM to monitor Delivery Projects during peak
times to ensure the most critical jobs are receiving the necessary resources.
(c) D&B Retained Responsibilities. D&B will retain responsibility for the
functions performed by delivery project managers and customer support
representatives. These functions include:
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(i) Negotiating product orders and developing D&B Product
specifications with customers (with the IBM assistance described in Section
3.3(a)(i).
(ii) Maintaining relationships with D&B customers.
(iii) Establishing product and project delivery schedules with
customers.
(iv) Creating universal D&B data tables used in the Market Spectrum
Web and Private Data Portal products. IBM shall be responsible for the actual
creation of the flat files used for specific customers.
(v) Performing initial programming of specific profiles and then
monitoring the flows within D&B's Data Integration Batch Product system.
(d) Required Interactions and Interfaces between IBM and Other Entities.
IBM shall coordinate its efforts and interface with D&B and third party entities
as required to perform the Delivery Services, including the following:
(i) D&B's infrastructure organization to resolve application
problems, network problems, systems integration, and other technology issues.
(ii) D&B groups that support D&B Product systems (e.g., RAM and
eRAM).
(iii) D&B and third party sales teams during the negotiation and
development of orders and product specifications.
(iv) Other D&B Delivery Service personnel. IBM will be required to
interact regularly (at least on a daily basis) with D&B project managers and
quality control analysts.
3.5. U.S. RMS PRODUCTS, PROCESSES, AND ADDITIONAL SERVICES
RMS products are generated by D&B's Risk Asset Manager ("RAM") and
("eRAM") software. IBM shall fabricate and deliver products that enable D&B
customers to evaluate the credit of their respective customers using
custom-decision making rules.
(a) RMS Products. There are two categories of RMS products requested by
D&B's United States sales teams as of the Effective Date: (i) RMS RAM/eRAM
Products and (ii) RMS Data Append Products. Each are defined in Schedule C.
(b) RMS Process Workflow Diagram. Attachment A-2-3 contains a process
workflow diagram for fabrication of RMS products. The specific process steps for
which IBM shall be responsible are highlighted in yellow. The process diagrams
are not intended to limit the scope of IBM's responsibilities under this
Section 3.
that directly affects
A2-13
3.5. U.S. SMS PRODUCTS, PROCESSES, AND ADDITIONAL SERVICES
IBM shall use D&B analytical tools and customer data to fabricate SMS
products. There are two categories of SMS products requested by D&B's United
States sales teams as of the Effective Date: (i) SMS Data Service Products and
(ii) SMS Analytical Service Products. Each are defined in Schedule C.
3.6. U.S. S&MS PRODUCTS, PROCESSES, AND ADDITIONAL SERVICES
(a) S&MS Products. S&MS products provide data to support marketing efforts
of D&B customers. There are five categories of S&MS products requested by D&B's
United States sales teams as of the Effective Date: (i) S&MS Custom Count, (ii)
S&MS MAP, (iii) S&MS Prospect File (Match without Prospect Append), (iv) S&MS
Prospect File (Match with Prospect Append), and (v) S&MS Prospect File (Prospect
with Append). Each are defined in Schedule C.
(b) Gold Service. Each Gold Service Customer has a dedicated S&MS team
consisting of a project manager, customer service representative, and FSA. IBM
shall assign FSAs to each Gold Service Customer as directed by D&B. Gold Service
FSAs shall maintain knowledge and skills required to provide Services to their
respective customers and be available to participate in pre- and post-delivery
support activities.
3.7. EUROPE PRODUCTS, PROCESSES, AND ADDITIONAL SERVICES
(a) Europe D&B Products. IBM shall be responsible for the fabrication and
fulfillment of standard and custom S&MS, SMS, and RMS products to customers in
Europe (including the UK, Ireland, Italy, Belgium, and the Netherlands). Europe
D&B Products can be divided into the following two categories: (i) Standard
Europe S&MS Product, and (ii) Europe Append Product. Each are defined in
Schedule C.
(b) Europe Process Workflow Diagrams. The process workflow diagrams for
RMS, S&MS, and SMS products are the same in Europe as they are in the United
States, however, IBM will be required to use different systems and databases
unique to each country market in order to fabricate such products.
3.8. CANADA PRODUCTS, PROCESSES, AND ADDITIONAL SERVICES
(a) Canada D&B Products. IBM shall be responsible for the fabrication and
fulfillment of S&MS, SMS, and RMS products to customers in Canada. There are two
[three?]categories of Canada D&B Products: (i) Standard Canada S&MS Product, and
(ii) Canada Append Product. Each are defined in Schedule C.
(b) Canada Process Workflow Diagrams. The process workflow diagrams for
Canada S&MS Products is the same as the process for S&MS products in the United
States and Europe. The specific process steps for which IBM shall be responsible
are highlighted in yellow. The process diagram is not intended to limit the
scope of IBM's responsibilities under this Section (iii) Although many processes
are the same in Canada and other markets, IBM will be required to use different
systems and databases unique to each country market in order to fabricate such
products.
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3.9. IBM PERSONNEL MINIMUM QUALIFICATIONS
IBM shall be responsible for all Services provided by FSAs previously
working within D&B's Delivery Services organization and the related functions
and services described in this Section 3.9. FSAs are also referred to as
technicians, production analysts, and fulfillment systems specialists within
D&B's environment.
At a minimum, all IBM FSAs shall have the following qualifications:
(a) Knowledge of commonly used data processing concepts, practices and
procedures, including JCL, EZTrieve, Syncsort, TSO, ROSCOE, and SAS and an
ability to write, maintain, and modify such programs and procedures.
(b) Good oral and written communication skills in the languages required
to provide the Services.
(c) Ability to prioritize and organize workload, and to manage and
complete multiple jobs and priorities concurrently.
(d) Strong problem solving, analytical, and time management skills.
(e) Ability to work well under pressure of customer demands.
(f) Ability process detailed information without error.
(g) Knowledge about the categories and substance of data in the D&B
databases.
(h) 2+ years experience working in a PC environment using the Microsoft
Office suite of products.
(i) College degree or equivalent experience in a data processing or
computer science field.
(j) Language skills to the extent required by Section 3.10 below.
3.10. LANGUAGE REQUIREMENTS
(a) D&B Product orders will be submitted in different languages. IBM shall
provide an appropriate number of personnel with reading, writing, and speaking
fluency in the following languages:
(i) English to process orders and fabricate products in the United
States, Canada, and Europe.
(ii) French to process orders and fabricate products in the Canada
and Europe.
(iii) Italian, German, Spanish, and Portuguese to process orders and
fabricate D&B Products in Europe.
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(b) IBM will provide staff in the countries where D&B receives the
Services to the extent necessary to facilitate complex local work or to
interface with local D&B teams.
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ATTACHMENT A-2-1
POSTAL DATA CLEANSING
At a minimum, IBM shall perform the following postal data cleansing
services:
1. FIELD-BY-FIELD AUDIT:
- - Parse and reformat customer file at D&B
- - Verify that at least 65% of records have enough address elements to be
helped by postal pre-processing
- - Verify that there is one address per record - variations of an address on
a single record, i.e., a bill-to and a ship-to, or a street address and a
P.O. Box, must be segregated into separate records to be helped by postal
processing
- - Audit and grade contents of every field in every record for two
characteristics: completeness: presence/absence of data; relevance: does
it appear that what's in the field belongs there, based on proprietary
definitions
2. CONVERT/PARSE/REFORMAT/CORRECT:
- - Unless otherwise requested, translate all special characters and character
ornamentation to anglicized equivalents
- - Unless otherwise requested, convert to correct country location,
isolation, and anglicized USPS standard
- - Convert to correct postal code location, isolation, and format, including
State/Province/Prefecture/County location
3. UTILIZING POSTAL DATA FROM ALL COUNTRIES IN WHICH D&B HAS CUSTOMERS OR DATA
SOURCES:
- - Validate, correct, add City names, Postal Codes,
State/Country/Prefecture/County
- - Validate/correct Street Address/P.O. Box information
- - Append "best" corrections to original data, return to D&B for matching to
WorldBase, add score categorizing each address for accuracy/deliverability
- - Prior to match to D&B global data, apply global cleansing software to
already cleansed records, to gain even more corrections, and, potentially,
more matches
- - Use "double-cleansed" address to match to D&B. This shall enable IBM to
"correct" additional addresses, addresses postal processing said were
uncorrectable, when successfully matching such a record to D&B data -
giving D&B access to the D&B version of the customer's address.
D&B / IBM Confidential
A-2-1-1
ATTACHMENT A-2-2
DATA PROGRAMMING QUALITY CHECKLISTS
The following are the minimum quality assurance requirements that Suppie
shall use to perform quality checks for Delivery Projects.
1. RMS
1.1. RAM/ERAM CHECKLIST
The following checklist applies to New Sale Domestic, New Sale Global,
Demos, Refresh (automated), Refresh (new data/revenue), Refresh (new data/non
revenue), and other RAM/eRAM products:
(a) Check for presence of all three database files (CST, DNB & FIN).
(b) Check counts of all three files vs. PDI to ensure counts match.
(c) Check to ensure customer data is populated on CST file.
(d) Check to ensure that FSS, CS & linkage (Branch/HQ/Dom. UltDuns) data
is present on DNB file.
(e) If eRAM packet, confirm that Global Ultimate linkage is present on DNB
file.
(f) Check to ensure that financial summary data is present on FIN file.
(g) If Full Financials ordered, check counts vs. support call and presence
of detailed financial data in file.
(h) Checks for "Y" indicator at the end of the file.
1.2. DATA APPENDS CHECKLIST
The following checklist applies to Data Appends, including standard,
custom, and competitive showdown products.
(a) Check to ensure that output file counts match specs.
(b) Check to make sure that data is populated per the specs.
(c) Check that file meets output requiremetns per spec (Excel, delimited,
fixed fielded, etc...).
1.3. SBRPS CHECKLIST
The following checklist applies to SBRPS products:
(a) Check to make sure that SAIF & SBBF files are present.
(b) Check to make sure that SAIF file meets FI requirements and header
record is populated.
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A-2-2-1
(c) Check to make sure that SBBF file is populated correctly and that
header record is present.
1.4. SBRI CHECKLIST
[To be provided by D&B during Transition]
2. S&MS
The following checklists apply to all S&MS products fabricated by
Supplier:
2.1. FILE PREPROCESSING
(a) Supplier will be expected to complete the appropriate work, e.g.
download an emailed or FTPed file, merge multiple files or manipulate data
according to the "pre-processing steps" outlined in the project requirements
submitted by D&B. The output from Supplier will be a file that can be passed to
the next appropriate step for any additional matching and/or data append
required to complete the customer order.
(b) The quality of Supplier's work will be assessed through a periodic
monitoring process along with feedback from S&MS Delivery's contact with
customers.
(c) An error is realized when the file delivered by the Supplier to S&MS
Delivery or to a D&B Customer that does not match the specifications defined in
the Project Requirements Document (PRD)/DOE Order and/or when there is an issue
on the file the Supplier should have resolved.
2.2. QUALITY ASSURANCE
It is the responsibility of Supplier to insure that the deliverable
returned to S&MS Delivery is correct and meets the requirements detailed in the
project specifications. S&MS Delivery will except 99% defect free on Gold
customer's requests and 98% defect free on non-Gold customer requests.
2.3. COUNTS/MAPS
(a) Verify the correct selectors were used to create the count(s).
(b) Verify the counts were created from the most current data available.
(c) Verify the counts fall within the count range as defined within the
specifications.
(d) Confirm that the correct fields and ranges are employed in the X & Y
axis of the Market Analysis Profile (MAP).
(e) Verify that the proper control breaks are taking place in a MAP.
2.4. MATCH PROCESSING
(a) Verify input file count(s) against the PRD/DOE order prior to
processing.
(b) Verify that all records are accounted for after the Match has run.
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A-2-2-2
(c) Check the Match Samples to make sure the customer data was mapped
correctly.
(d) Check the Match Confidence Codes to make sure the codes are
distributed reasonably.
(e) Verify that the Bemfab information is included on the file if asked
for on Domestic records.
(f) Verify the correct Match Grade (7 or 11) was appended.
(g) Verify the record length (LRECL) matches layout provided.
(h) Verify the correct Match processes was employed (AOS vs DMI), (one
pass vs multiple passes) (U.S. vs. Global or a combination of both) & (tight
rules vs loose rules).
(i) Verify CC (city/country) repairs completed according to standards on
Global records.
(j) Verify the entire Phone Number was mapped (up to 20 positions).
(k) Verify Match audit program ran to completion.
2.5. FLAT FILE/APPEND OUTPUT.
(a) Verify the file contains the correct number of records.
(b) Verify each record is the correct record length as defined in the
record layout.
(c) Check to make sure all customer fields are mapped correctly to the
layout.
(d) Make sure the match data (DUNS number, Match Grade; Confidence Codes
etc) start and end as defined in the specifications.
(e) Spot check to verify all fields are correctly populated.
(f) Make sure all additional QA processes that are defined in the
requirement document (MRD/TRD/PRD/DOE/GOE) are performed.
(g) Run an audit on the final file and verify that the presence/absence
numbers and data frequency are reasonable as predefined by S&MS Delivery.
(h) If this is a scheduled job for an existing customer, compare the new
audit to the audit from the previous update for consistency and investigate any
differences that are not reasonable (10% difference).
(i) If the Prospect Universe was created through DOE or GOE, insure the
data was pulled properly.
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A-2-2-3
(j) Ensure the processing performed and the output created match what was
requested in the PRD/DOE/GOE.
(k) Provide the Project Managers and/or Customer Service Reps with the
information necessary for a final Quality Assurance check.
3. SMS
The quality checklists applicable to SMS Projects fabricated by Supplier
are attached as Annexes A-2-2-a through A-2-2-e to this Attachment.
4. EUROPE
The quality checklists above for RMS, S&MS, and SMS in Sections 1, 2, and
3 shall be used for Delivery Projects in Europe.
5. CANADA
The following checklist applies to RMS, S&MS, and SMS Delivery Projects
for Canada.
QUALITY-CANADA: S&MS RMS SMS
Output not in specified format X X X
Data not in specified format X X X
- (e.g. leading zeros, currency fields). Default
values/format to be used unless instructions
given in specifications
- Fields not truncated
Data coverage of output is similar to (within 10%) of the X X X
overall coverage of the D&B database. If not ensure file is
re-checked as customer expectation is to receive similar
coverage as the overall database.
Check 5% of the file to ensure that the matching has been X X X
correctly performed. (Example: Customer input name matches
the Legal output name or 1 of the Tradestyle names)
Confirm that the overall match rate meets the proposal X X X
requirements when a match rate guarantee has been applied
(Example: all data rationalization projects have a 75% match
rate guarantee)
Check order form to validate # of records on output does not X X X
exceed purchased amount. In addition validate the country
distribution to order form
D&B / Supplier Confidential
A-2-2-4
All records with a DUNS number must have D&B Legal Name X X X
Ensure Inactive records only has Company Name, address and X X X
SIC data. All other data should be blanked out.
Special instructions not followed (these would be included X X X
on the specification form)
Number of records not met marketing order expectations X
- Customer has ordered x number of records based
on predetermined criteria output needs to be
within 10% of ordered records
RMS RAM & eRAM X
- Test import the files to ensure format meets
software specifications
- For new orders ensure all 3 files (dbfile,
finfile & custfile) are sent to the customer.
- Validate any custom appends meet import
specifications
All fields with coded data are either a) decoded to X X X
"English" term if on specification form or b) Ensure that
all codes in output are present on the D&B layout so that
the customer can de-code.
File layout & File Summary are always delivered with output. X X X
All records with a primary SIC must have a Line of Business X X X
All records with linkage information need to be filled, when X X X
specified, so that all active records have hierarchy data
populated at each level.
Validate that all companies with the same site name roll to X X X
the same Ultimate DUNS number (Example: All Bank of Montreal
companies roll to the same Global Ultimate company)
All records returned to customer X X X
D&B / Supplier Confidential
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- Number of records on input customer file matches
the number of output records on final
deliverable
D&B / Supplier Confidential
A-2-2-6
ANNEX A-2-2A
SMS DATA NORMALIZATION PROJECT QUALITY CHECKLIST
OVERVIEW
D&B SMS Data Normalization
PRE-MATCH AND STANDARD LAYOUT PHASE
This encompasses initial review of the file, validation, match and Standard
Layout Preparation.
Verify number of records in file(s) against the TRD or the File Submission form.
Sum the dollars in the Mainframe Dataset and verify against the TRD or File
Submission Form.
- If it doesn't match, notify the PM via email before continuing
further. After the PM checks with customer and confirms the
difference, continue on.
- If it does match, continue.
If using the "Standard Layout First" method,
- Sequence the original Customer File by making a copy and appending
the sequence number to the end. Verify that the number of records in
the resulting new file and the last sequence number in the Stndlay
is the same.
- Use this Sequenced file to create a Standard Layout and then verify
that each field in the Stndlay has been correctly placed.
- Check that no fields are truncated.
- Check that the dollars are now formatted as whole dollars.
- Sum again the dollars in the Stndlay and verify against the
original sum. (A small difference is acceptable due to
rounding into a whole number.)
- Do a frequency count on the Country field in the Stndlay (pos
554-573). Make the fields consistent, ex., USA, US, United
States.
D&B / IBM Confidential
A-2-2a-1
If using the "Standard Layout After" method,
- Determine which country code, if any, the file contains and use the
Country Code conversion feature of CFP.
- Create the template to be used in FROMCFP job, either instream or a
dataset. Verify the layout positions.
- After Match and running of the FROMCFP job which creates the
Stndlay, verify that each field in the Stndlay has been correctly
placed.
- Sum dollars and verify against original total.
POST MATCH
This encompasses the steps taken directly after match.
After running Merger/Dats, verify that the counts equal the total.
Verify the purchase dollars and record count.
DELIVERABLE
This encompasses the steps taken to create Data Normalization
1. Run merger dats - IF NOT ALREADY RUN
(SMSC100)- for large jobs or
(SMSC101) -for small jobs (under 5000 recs)
2. run sidbs (SMSD001H)-
3. run finance (if needed) (SMSD300)
4. run erp credit (if needed) (SMSD400)
5. run pfm.seams.prodjcl(stapd01) - creates append either check off elements
needed or use the datarat pre 'x' packages -
Use only if you have a standard package
These different packages can be found in
pfm.seams.datarat(*)
6. OR if you are running a new data packet after step 3 run new data
pack(SMSD275)
7. run pfm.seams.prodjcl(newdat2)
8. IF YOU DON NOT RUN PLUG & PLAY (SMSD275) - RUN PFM.SEAMS.PRODJCL(NEWDATA) OR
(NEWNEW ) >>>as of 022004 NEW ORDER OF ELEMENTS
D&B / IBM Confidential
A-2-2a-2
Run pfm.seams.prodjcl(returns) - will create full, dupes, nodun and document
with counts
Create output per TRD. Example- txt, xls, mdb,etc.
After running the SIDBs in CFP, verify that the number of records in the
Supplier file is approximately equal to the number of unique DUNs in the file.
After running the Append, check the output messages in the log for errors.
Check the Nodetail Dataset-check a couple DUNs to see why they didn't get data
appended. Divide the number of no details by the total number of the DUNs'd
records in the file; it should be a very small percentage, ex., .05%
Check the D&B business name against the customer's business name for a
representative (first, middle, last sequence number) and make sure they match,
or are realistic.
Check in OSP-randomly check a couple of records to see if the correct elements
are appended. Ex., CEO name, SIC1, etc.
Full, Dupes, Nomatch files-Browse the mainframe datasets and confirm the layout
of each element that we are appending.
Confirm the record counts and record length
After creating output, confirm data against layout, lrecl and record counts.
D&B / IBM Confidential
A-2-2a-3
ANNEX A-2-2B
SMS SPEND ANALYSIS QUALITY CHECKLIST
OVERVIEW
D&B SMS Spend Analysis provides an in-depth evaluation of a company's supply
base. The presentation segments a customer's supplier-base by corporate family,
industry, socioeconomic status, risk, and geography. A customer will learn who
its largest suppliers are, which ones are most dependent on its business, which
industries they operate in, and what risk is associated with those suppliers.
The outcome is a detailed analysis of the strengths and weaknesses of a
customer's supply base. \ The deliverable is in Powerpoint and Excel.
PRE-MATCH AND STANDARD LAYOUT PHASE
This encompasses initial review of the file, validation, match and Standard
Layout Preparation.
Verify number of records in file(s) against the TRD or the File Submission form.
Sum the dollars in the Mainframe Dataset and verify against the TRD or File
Submission Form.
- If it doesn't match, notify the PM via email before continuing
further. After the PM checks with customer and confirms the
difference, continue on.
- If it does match, continue.
If using the "Standard Layout First" method,
- Sequence the original Customer File. Verify that the number of
records in the resulting file and the last sequence number in the
Stndlay is the same.
- Use this Sequenced file to create a Standard Layout and then verify
that each field in the Stndlay has been correctly placed.
- Check that no fields are truncated.
- Check that the dollars are now formatted as whole dollars.
- Sum again the dollars in the Stndlay and verify against the
original sum. (A small difference is acceptable due to
rounding into a whole number.)
- Do a frequency count on the Country field in the Stndlay (pos
554-573). Make the fields consistent, ex., USA, US, United
States.
D&B / IBM Confidential
A-2-2b-1
If using the "Standard Layout After" method,
- Determine which country code, if any, the file contains and use the
Country Code conversion feature of CFP.
- Create the template to be used in FROMCFP job, either instream or a
dataset. Verify the layout positions.
- After Match and running of the FROMCFP job which creates the
Stndlay, verify that each field in the Stndlay has been correctly
placed.
- Sum dollars and verify against original total.
POST MATCH
This encompasses the steps taken directly after match.
After running Merger/Dats, verify that the counts equal the total.
Verify the purchase dollars and record count.
DELIVERABLE PREP
This encompasses the steps taken to create Spend Analysis.
After creating the template, verify the DUNs that the PM gave you on the TRD in
OSP by cutting and pasting into OSP. Type the customer's name into template and
verify spelling against TRD.
After running the SIDBs in CFP, verify that the number of records in the
Supplier file is approximately equal to the number of unique DUNs in the file.
After running the Spend in CFP, wait a bit to make sure that it FTP'd properly
before looking at the Dataset. The job may finish in CFP, but the datasets may
not have made it to the mainframe yet.
As a quality check after the report Macros (Top.XLS) have been completed a
review of each report in the Print Preview Mode should be completed. The review
should include looking at the beginning (top) of the report and at the end
(bottom) of the report. If there are less than 100 change the title to "TOP"
without a number after it. In addition if any fields have been formatted
incorrectly (i.e. column is unusually wide) correct at this time.
D&B / IBM Confidential
A-2-2b-2
DELIVERABLE PREP
This encompasses the steps taken to create Spend Analysis.
When reviewing the presentation if the title does not fit into the area provided
for the customer. The font should be made just a little smaller (i.e. from 44 to
40 or 36).
Slide 4 should be checked against the Final Proc Tabulate
Slide 11, 12, and 13 should be the same industries which appear in the first 3
positions on slide 10. Another quick check to make sure everything is okay is to
add up the dollar percents on the graph in slides 11, 12, and 13 and they should
come very close to the dollar percent on slide 10 for that industry. This does
not have to be going into the spreadsheet and getting the exact figures, I think
by just eyeballing the graphs you should have a good idea if the information is
correct or not
Slide 14 can be checked against the SICDLR01.XLS report. Reviewing these SIC
groups by dollars and number of suppliers should ensure that the correct files
were run
Slide 15 should have the same Top 10 SIC codes as are in the Top 10 on Slide 14
Slides 16, 17, and 18 should be reviewed against the SIC8DLR.XLS file. A
comparison of dollars and numbers should be completed
Slide 19 should be reviewed against the SICSUP01.XLS report. Reviewing these SIC
groups by dollars and number of suppliers and order to be identical.
Slide 20 should have the same Top 10 SIC codes as are in the Top 10 on Slide 19
Slides 21 through 28 can be checked by linking back to the Excel Spreadsheet,
however if all the links are in place and were updated when the presentation was
originally open there should not be any problems here
Slide 29 should be reviewed against the ULTSUP01.XLS report. Reviewing the
companies by dollars, number of suppliers and order of supplier should be
identical
Slide 30 should be reviewed against the ULTDLR01.XLS report. Reviewing the
companies by dollars, number of suppliers and order of supplier should be
identical
D&B / IBM Confidential
A-2-2b-3
Slides 31 through 37 can be checked by linking back to the Excel Spreadsheet,
however if all the links are in place and were updated when the presentation was
originally open there should not be any problems here.
Slide 38 can be determined if the link is present by seeing your project
customer name in the graph. Remember to put this name in the 2 places in the
Header. If after changing the name the Header does not fit in the header section
lower the font size on the Very Large font items to a point where everything
will fit in the section
Slides 39 through 46 can be checked by linking back to the Excel Spreadsheet,
however if all the links are in place and were updated when the presentation was
originally open there should not be any problems here
Slide 47 can be determined if the link is present by seeing your project
customer name in the graph. Remember to put this name in the 2 places in the
Header. If after changing the name the Header does not fit in the header section
lower the font size on the Very Large font items to a point where everything
will fit in the section.
Slides 47 through 55 can be checked by linking back to the Excel Spreadsheet,
however if all the links are in place and were updated when the presentation was
originally open there should not be any problems here
D&B / IBM Confidential
A-2-2b-4
ANNEX A-2-2C
SMS MWOB QUALITY CHECKLIST
OVERVIEW
D&B SMS Enhanced MWOB
The MWOB (Minority and Woman Owned Business) package is a lower end product
designed to help customers meet federal reporting and compliance standards.
Revenue is based on the number of records submitted by the customer.
Deliverable records are all Duns Numbered records with MWOB data appended.
Records without a Duns or without appended information are not returned.
Deliverable layout is the Seams Standard layout with MWOB data appended. The
standard deliverable does not return the customer record, duplicate or no match
files.
PRE-MATCH AND STANDARD LAYOUT PHASE
This encompasses initial review of the file, validation, match and Standard
Layout Preparation.
Verify number of records in file(s) against the TRD or the File Submission
form.
Sum the dollars in the Mainframe Dataset and verify against the TRD or
File Submission Form.
- If it doesn't match, notify the PM via email before continuing
further. After the PM checks with customer and confirms the
difference, continue on.
- If it does match, continue.
D&B / IBM Confidential
A-2-2c - 1
If using the "Standard Layout First" method,
- Sequence the original Customer File. Verify that the number of
records in the resulting file and the last sequence number in
the Stndlay is the same.
- Use this Sequenced file to create a Standard Layout and then
verify that each field in the Stndlay has been correctly
placed.
- Check that no fields are truncated.
- Check that the dollars are now formatted as whole
dollars.
- Sum again the dollars in the Stndlay and verify against
the original sum. (A small difference is acceptable due
to rounding into a whole number.)
- Do a frequency count on the Country field in the Stndlay
(pos 554-573). Make the fields consistent, ex., USA, US,
United States.
If using the "Standard Layout After" method,
- Determine which country code, if any, the file contains and
use the Country Code conversion feature of CFP.
- Create the template to be used in FROMCFP job, either instream
or a dataset. Verify the layout positions.
- After Match and running of the FROMCFP job which creates the
Stndlay, verify that each field in the Stndlay has been
correctly placed.
- Sum dollars and verify against original total.
POST MATCH
This encompasses the steps taken directly after match.
After running Merger/Dats, verify that the counts equal the total.
Verify the purchase dollars and record count.
DELIVERABLE PREP
This encompasses the steps taken to create the Enhanced MWOB.
STEP 1 Match / filter file using standard SCS processes
STEP 2 Create Standard Layout
STEP 3
1. Run SIDBs: SMSD001H
After running the SIDBs in CFP, verify that the number of
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A-2-2c - 2