<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
---------------
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO .
COMMISSION FILE NUMBER: 1-10864
------------------------
UNITED HEALTHCARE CORPORATION
State of Incorporation: MINNESOTA
I.R.S. Employer Identification No: 41-1321939
Principal Executive Offices:
300 OPUS CENTER
9900 BREN ROAD EAST
MINNETONKA MN, 55343
Telephone Number: (612) 936-1300
------------------------
Indicate by check mark (x) whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
The number of shares of Common Stock, par value $.01 per share, outstanding on
May 12, 1998 was 192,704,252.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
UNITED HEALTHCARE CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
-------------
<S> <C>
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets at March 31, 1998 and December 31, 1997......................... 3
Condensed Consolidated Statements of Operations for the three month periods ended March 31, 1998 and
1997................................................................................................ 4
Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 1998 and
1997................................................................................................ 5
Notes to Condensed Consolidated Financial Statements.................................................. 6
Report of Independent Public Accountants.............................................................. 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS......... 9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.................................... 14
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS..................................................... 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........................................... 15
ITEM 6. EXHIBITS...................................................................................... 15
Signatures.............................................................................................. 16
</TABLE>
2
<PAGE>
UNITED HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------- ------------
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents......................................................... $ 668 $ 750
Short-Term Investments............................................................ 148 506
Accounts Receivable, net.......................................................... 1,145 768
Assets Under Management........................................................... 1,120 28
Other Current Assets.............................................................. 154 141
------------- ------------
Total Current Assets............................................................ 3,235 2,193
Long-Term Investments............................................................... 3,182 2,785
Property and Equipment, net......................................................... 331 364
Goodwill and Other Intangible Assets, net........................................... 2,356 2,281
------------- ------------
TOTAL ASSETS........................................................................ $ 9,104 $ 7,623
------------- ------------
------------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Medical Costs Payable............................................................. $ 2,675 $ 1,565
Other Policy Liabilities.......................................................... 427 235
Accounts Payable and Accrued Liabilities.......................................... 642 495
Unearned Premiums................................................................. 170 275
------------- ------------
Total Current Liabilities....................................................... 3,914 2,570
Long-Term Obligations............................................................... 20 19
Convertible Preferred Stock......................................................... 500 500
------------- ------------
Shareholders' Equity
Common Stock, $.01 par value--500,000,000 shares authorized; 192,225,000 and
191,111,000 issued and outstanding.............................................. 2 2
Additional Paid-in Capital........................................................ 1,416 1,398
Retained Earnings................................................................. 3,231 3,105
Net Unrealized Holding Gains on Investments Available for Sale, net of income tax
effects......................................................................... 21 29
------------- ------------
Total Shareholders' Equity...................................................... 4,670 4,534
------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.......................................... $ 9,104 $ 7,623
------------- ------------
------------- ------------
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
UNITED HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1998 1997
---------- ----------
<S> <C> <C>
REVENUES
Premiums................................................................................ $ 3,682 $ 2,445
Management Services and Fees............................................................ 371 356
Investment and Other Income............................................................. 62 51
---------- ----------
Total Revenues........................................................................ 4,115 2,852
---------- ----------
OPERATING EXPENSES
Medical Costs........................................................................... 3,152 2,064
Selling, General and Administrative Expenses............................................ 712 575
Depreciation and Amortization........................................................... 42 34
---------- ----------
Total Operating Expenses.............................................................. 3,906 2,673
---------- ----------
EARNINGS BEFORE INCOME TAXES.............................................................. 209 179
Provision for Income Taxes.............................................................. (77) (70)
---------- ----------
NET EARNINGS.............................................................................. 132 109
CONVERTIBLE PREFERRED STOCK DIVIDENDS..................................................... (7) (7)
---------- ----------
NET EARNINGS APPLICABLE TO COMMON SHAREHOLDERS............................................ $ 125 $ 102
---------- ----------
---------- ----------
BASIC NET EARNINGS PER COMMON SHARE....................................................... $ 0.65 $ 0.55
---------- ----------
---------- ----------
NET EARNINGS PER COMMON SHARE, ASSUMING DILUTION.......................................... $ 0.63 $ 0.54
---------- ----------
---------- ----------
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING...................................... 193 185
DILUTIVE EFFECT OF OUTSTANDING STOCK OPTIONS.............................................. 6 4
---------- ----------
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, ASSUMING DILUTION................... 199 189
---------- ----------
---------- ----------
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE>
UNITED HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
--------------------
1998 1997
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net Earnings............................................................................... $ 132 $ 109
Noncash Items:
Depreciation and Amortization............................................................ 42 34
Net Change in Other Operating Items:
Accounts Receivable and Other Current Assets............................................. (92) (106)
Medical Costs Payable.................................................................... 101 104
Accounts Payable and Other Current Liabilities........................................... 12 (4)
Unearned Premiums........................................................................ (133) (117)
--------- ---------
Cash Flows From Operating Activities................................................... 62 20
--------- ---------
INVESTING ACTIVITIES
Cash Paid for Acquisition, net of cash assumed and other effects........................... (84) --
Purchases of Property and Equipment and Capitalized Software............................... (41) (33)
Proceeds from Sales of Property and Equipment.............................................. 29 --
Purchases of Investments................................................................... (1,247) (1,014)
Maturities/Sales of Investments............................................................ 1,201 884
--------- ---------
Cash Flows Used for Investing Activities............................................... (142) (163)
--------- ---------
FINANCING ACTIVITIES
Proceeds from Stock Option Exercises....................................................... 35 17
Stock Repurchases.......................................................................... (30) --
Dividends Paid on Convertible Preferred Stock.............................................. (7) (7)
--------- ---------
Cash Flows From Financing Activities................................................... (2) 10
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............................................. (82) (133)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD.................................................... 750 1,037
--------- ---------
CASH AND EQUIVALENTS, END OF PERIOD.......................................................... $ 668 $ 904
--------- ---------
--------- ---------
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
UNITED HEALTHCARE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements reflect
all adjustments, consisting solely of normal recurring adjustments, needed to
present the financial results for these interim periods fairly. These financial
statements include some amounts that are based on management's best estimates
and judgments. The most significant estimates relate to medical costs payable
and other policy liabilities, intangible asset valuations, and integration
reserves relating to acquisitions. These estimates may be adjusted as more
information becomes available, and any adjustment could be significant.
In accordance with the rules and regulations of the Securities and Exchange
Commission, footnote disclosures that would substantially duplicate the
disclosures contained in the audited financial statements have been omitted.
Read together with the disclosures below, management believes the interim
financial statements are presented fairly. However, these unaudited condensed
consolidated financial statements should be read together with the consolidated
financial statements and the notes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997.
Unless the context otherwise requires, the use of the terms the "Company," "we,"
"us" and "our" in the following refers to United HealthCare Corporation and its
subsidiaries.
2. DIVIDENDS
On February 10, 1998, the Company's Board of Directors approved an annual
dividend for 1998 of $0.03 per share to holders of common stock. Dividends of
approximately $6 million were paid on April 15, 1998 to shareholders of record
at the close of business on April 1, 1998.
3. STOCK REPURCHASE PROGRAM
In November 1997, the Company's Board of Directors authorized a stock repurchase
program under which up to 10% of the Company's outstanding common stock may be
repurchased. Purchases may be made from time to time at prevailing prices in the
open market, subject to certain restrictions on volume, pricing and timing. The
repurchased shares will be available for reissuance for the employee stock
option and purchase plans and for other corporate purposes. During the three
month period ended March 31, 1998, the Company repurchased 706,700 shares at an
average price of $53 per share.
4. CASH AND INVESTMENTS
As of March 31, 1998, the amortized cost, gross unrealized holding gains and
losses and fair value of cash and investments were as follows (in millions):
<TABLE>
<CAPTION>
GROSS UNREALIZED GROSS UNREALIZED
AMORTIZED COST HOLDING GAINS HOLDING LOSSES FAIR VALUE
--------------- ------------------- ------------------- -----------
<S> <C> <C> <C> <C>
Cash and Cash Equivalents......................... $ 668 $ -- $ -- $ 668
Investments Available for Sale.................... 3,219 43 (5) 3,257
Investments Held to Maturity...................... 73 -- -- 73
--
------ --- -----------
Total Cash and Investments...................... $ 3,960 $ 43 $ (5) $ 3,998
--
--
------ --- -----------
------ --- -----------
</TABLE>
6
<PAGE>
UNITED HEALTHCARE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
5. AMERICAN ASSOCIATION OF RETIRED PERSONS
We began providing services to the American Association of Retired Persons
(AARP) on January 1, 1998. The Company's portion of the AARP's insurance program
represents approximately $3.5 billion in annual net premium revenue from more
than 4 million AARP members. The Company is also developing an array of new
products designed to complement the insurance offerings under the AARP program.
Under the terms of the Company's 10-year agreement with AARP, we receive monthly
fees for administrative services and as compensation for assuming the
underwriting risk associated with the program. In addition, AARP has separately
contracted with certain vendors to provide marketing and member services. We
recognize premium revenues associated with the AARP program net of the
administrative fees paid to these vendors.
On January 1, 1998, the following assets and liabilities were transferred from
the program's previous carrier and are included in our consolidated balance
sheet (in millions):
<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
- ------------------------------------------------------------------------------------- ---------
<S> <C>
Assets Under Management.............................................................. $ 959
Premiums Receivable.................................................................. $ 300
Medical Costs Payable and Other Policy Liabilities................................... $ 1,216
Other Liabilities.................................................................... $ 43
</TABLE>
6. COMPREHENSIVE INCOME
The table below presents comprehensive income, defined as changes in the equity
of our business excluding charges resulting from investments by and
distributions to our shareholders, for the three-month periods ended March 31,
1998 and 1997 (in millions):
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Net Earnings.................................................................. $ 132 $ 109
Change in Net Unrealized Holding Gains (Losses) on Investments Available for
Sale, net of income tax effects............................................. (8) (15)
--------- ---------
Comprehensive Income.......................................................... $ 124 $ 94
--------- ---------
</TABLE>
7. RECENTLY ISSUED ACCOUNTING STANDARD
In the fourth quarter of 1998, we will adopt a new accounting standard (SFAS No.
131) that will require us to report financial and descriptive information about
our reportable operating segments. Generally, financial information will be
required to be reported on the basis that is used internally to evaluate segment
performance and to allocate resources to segments. This new standard will not
affect how we determine net earnings or shareholders' equity.
7
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To United HealthCare Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of United
HealthCare Corporation (a Minnesota corporation) and Subsidiaries as of March
31, 1998 and the related condensed consolidated statements of operations and
cash flows for the three month periods ended March 31, 1998 and 1997. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated financial statements of United HealthCare
Corporation and Subsidiaries as of and for the year-ended December 31, 1997 (not
presented herein), and, in our report dated February 12, 1998, we expressed an
unqualified opinion on those statements. In our opinion, the information set
forth in the accompanying condensed consolidated balance sheet as of December
31, 1997, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
/s/ Arthur Andersen LLP
Minneapolis, Minnesota,
May 7, 1998
8
<PAGE>
UNITED HEALTHCARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless the context otherwise requires, the use of the terms the "Company," "we,"
"us" and "our" in the following refers to United HealthCare Corporation and its
subsidiaries.
On January 1, 1998, we began delivering Medicare supplement insurance and other
medical insurance coverage for the American Association of Retired Persons
(AARP) to over 4 million AARP members. The significance of the AARP business
affects the year-to-year comparability of our consolidated financial position
and results of operations. The Summary Operating Information below should be
read together with the narrative portions of Management's Discussion and
Analysis that more fully describe the specific effects of the AARP business.
The following discussion should be read together with the accompanying condensed
consolidated financial statements and notes. In addition, the following
discussion should be considered in light of a number of factors that affect the
Company, the industry in which it operates, and business generally. These
factors are described in Exhibit 99 to this Quarterly Report.
SUMMARY OPERATING INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------------
PERCENT
OPERATING RESULTS 1998 1997 CHANGE
- --------------------------------------------------------------------------------- --------- --------- -------------
(IN MILLIONS EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Total Revenues................................................................... $ 4,115 $ 2,852 44%
Earnings from Operations......................................................... $ 209 $ 179 17%
Net Earnings..................................................................... $ 132 $ 109 21%
Net Earnings Per Common Share, Assuming Dilution................................. $ 0.63 $ 0.54 17%
Medical Costs to Premium Revenues................................................ 85.6% 84.4%
SG&A Expenses to Total Revenues.................................................. 17.3% 20.2%
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, MARCH 31, PERCENT
ENROLLMENT BY PRODUCT 1998 1997 CHANGE
- -------------------------------------------------------------------------------- --------- --------- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Health Plan Products Commercial................................................. 5,576(a) 5,014(a) 11%
Medicare...................................................................... 388 257 51%
Medicaid...................................................................... 510 475 7%
--------- --------- ------
Total Health Plan Products.................................................. 6,474 5,746 13%
Other Network-Based Products.................................................... 4,892(a) 4,595(a) 6%
Indemnity Products.............................................................. 1,689 2,564 (34)%
--------- --------- ------
Total Enrollment............................................................ 13,055 12,905 1%
--------- --------- ------
--------- --------- ------
ENROLLMENT BY FUNDING ARRANGEMENT
- --------------------------------------------------------------------------------
Fully Insured
Health Plan Products........................................................ 5,529 4,887 13%
Other Network-Based Products................................................ 526 508 4%
Indemnity Products.......................................................... 334 529 (37)%
--------- --------- ------
Total Fully Insured....................................................... 6,389 5,924 8%
--------- --------- ------
Self-Funded
Health Plan Products........................................................ 945 859 10%
Other Network-Based Products................................................ 4,366 4,087 7%
Indemnity Products.......................................................... 1,355 2,035 (33)%
--------- --------- ------
Total Self Funded......................................................... 6,666 6,981 (5)%
--------- --------- ------
Total Enrollment........................................................ 13,055 12,905 1%
--------- --------- ------
--------- --------- ------
</TABLE>
- ------------------------------
(a) In conjunction with the realignment of our operations, small group and
middle market point of service membership, previously classified as other
network-based products, are now being presented with our commercial health
plan products (840,000 members at March 31, 1998 and 732,000 members at
March 31, 1997).
9
<PAGE>
RESULTS OF OPERATIONS
PREMIUM REVENUES
Premium revenues in the first quarter of 1998 totaled $3.7 billion. This
represents an increase of $1.2 billion, or 51%, compared to first quarter 1997
premium revenues. On January 1, 1998, under the terms of a contract with the
American Association of Retired Persons (AARP), we began delivering Medicare and
hospital supplement insurance to more than 4 million AARP members. Premium
revenues from our portion of the AARP contract during the first quarter of 1998
were approximately $890 million.
Excluding AARP premium revenues, first quarter 1998 premium revenues totaled
$2.8 billion, an increase of 14% over first quarter 1997. The increase in
premium revenues is primarily the result of growth in year-over-year same-store
health plan premium revenues of $439 million, or 22%. The health plan premium
revenues increase reflect same-store enrollment growth of 13% and an average
year-over-year premium rate increase on renewing commercial groups exceeding 6%.
Growth in our Medicare programs also contributed to the increase in premium
revenues. Included in the total health plan same-store enrollment growth of 13%
is a year-over-year same-store increase of 51% in Medicare enrollment.
Significant growth in Medicare enrollment affects year-over-year comparability
of premium revenues. The Medicare product generally has per member premium rates
three to four times higher than average commercial premium rates because
Medicare members typically use proportionately more medical care services.
The year-over-year increase in premium revenues from health plan operations was
partially offset by an expected decrease in premium revenues from fully insured
non-network-based indemnity products of $53 million. Nearly $30 million of this
decrease is because we discontinued our relationship with a broker who sold and
administered small group indemnity business on our behalf, which led to the loss
of 30,000 indemnity members effective July 1, 1997. The remaining decrease is
from declining enrollment in these products, due to rate increases averaging 10%
to 20% during 1997, as well as other business factors. We expect enrollment in
the non-network-based indemnity products will continue to decline through 1998.
To the extent possible, we will try to convert these enrollees to our
network-based managed care products.
MEDICAL COSTS
We generally set new and renewal commercial health plan premium rates based on
anticipated health care costs. The combination of our pricing strategy and
medical management efforts is reflected in the medical care ratio (the percent
of premium revenues expensed as medical costs). On a comparable basis, the
medical care ratio decreased from 84.4% during the first quarter of 1997 to
83.7% during the first quarter of 1998. This represents decreases of seventy
basis points from the first quarter a year ago and thirty basis points from the
84.0% reported in the fourth quarter of 1997. This sequential decline reflects
the positive impact of higher premiums on new and renewal commercial health plan
business, combined with a relatively stable health care cost trend in the 3% to
4% range. The January renewal period is significant as over 40% of our
commercial health plan enrollment renews in that month. During the January 1998
renewal period, we were able to realize premium rate increases exceeding 6% on
this business.
We continue to see improvement in the medical cost experience in our health
plan. Medicare business, particularly in our start up markets. However, we
realized a weighted-average increase in Medicare premium rates for 1998 of 2%
and expect similar increases for 1999. These modest rate increases may impair
our ability to maintain or improve the medical care ratio associated with our
Medicare business. In response, we are assessing the benefit levels in each
Medicare market and may make adjustments depending on financial performance and
competitive positioning.
When we factor in the AARP business, the aggregate medical care ratio for the
first quarter of 1998 increased to 85.6%. This reflects the dramatically
different mix of business the AARP insurance offerings introduced to our
consolidated operating results.
10
<PAGE>
MANAGEMENT SERVICES AND FEE REVENUES
Management services and fee revenues during the first quarter of 1998 totaled
$371 million. This represents an increase of $15 million, or 4%, over management
services and fee revenues in the first quarter of 1997. These revenues are
primarily generated from self-funded products where we receive a fee for
administrative services and generally assume no financial responsibility for
health care costs associated with these products. In addition, we generate fee
revenues from administrative services we perform on behalf of managed health
plans and for services provided by our specialty businesses.
The overall increase in management services and fee revenues is attributable to
enrollment growth within the managed health plans and an increase in individuals
served by our specialty services operations, most notably in United Behavioral
Health and Optum-Registered Trademark-, our telephone- and Internet-based health
information and personal care management business. Offsetting these increases,
fee revenues from self-funded indemnity products decreased $5 million because of
declining enrollment in these products. In addition, the June 30, 1997 sale of
our subsidiary, United HealthCare Administrators, Inc., resulted in a $12
million decrease in these revenues in 1998 compared to 1997.
OTHER OPERATING EXPENSES
Selling, general and administrative expenses as a percent of total revenues (the
SG&A ratio) decreased from 20.2 % during the first quarter of 1997 to 17.3%
during the first quarter of 1998. The improvement in the SG&A ratio reflects the
operating leverage we gain with the addition of the AARP business as well as our
diligence in managing these expenses. On an absolute dollar basis, selling,
general and administrative costs through the first quarter of 1998 increased
$137 million, or 24%, over the comparable period of 1997. This increase reflects
the additional infrastructure needed to support the corresponding $1.3 billion
increase in revenues, as well as the additional investment in future growth
platforms.
GOVERNMENT REGULATION
Our primary business, offering health care coverage and health care management
services, is heavily regulated at the federal and state levels. We strive to
comply in all respects with applicable regulations and may need to make changes
from time to time in our services, products, marketing methods or organizational
or capital structure.
Regulatory agencies generally have broad discretion to issue regulations and
interpret and enforce laws and rules. Changes in applicable laws and regulations
are continually being considered, and the interpretation of existing laws and
rules also may change from time to time. These changes could affect our
operations and financial results.
Certain proposed changes in Medicare and Medicaid programs may improve
opportunities to enroll people under products developed for these populations.
Other proposed changes could limit available reimbursement and increase
competition in those programs, with adverse effects on our financial results.
Also, it could be more difficult for us to control medical costs if federal and
state bodies continue to consider and enact significant and onerous managed care
laws and regulations.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) may
represent the most significant federal reform of employee benefit law since the
enactment of the Employee Retirement Income Security Act (ERISA) in 1974. Some
of HIPAA's significant provisions include guaranteeing the availability of
health insurance for certain employees and individuals, limits on the use of
preexisting condition exclusions, prohibitions against discriminating on the
basis of health status, and requirements which make it easier to continue
coverage in cases where a person is terminated or changes employers. Under HIPAA
and other similar state laws, medical cost control through amended provider
contracts and improved preventive and chronic care management may become more
important. We believe our experience in these areas will allow us to compete
effectively.
11
<PAGE>
Health care fraud and abuse has become a top priority for the nation's law
enforcement entities and has focused on participants in federal government
health care programs such as Medicare, Medicaid and the Federal Employees Health
Benefits Program (FEHBP). We participate extensively in these programs.
We also are subject to governmental investigations and enforcement actions.
Included are actions relating to ERISA, which regulates insured and self-insured
health coverage plans offered by employers; the FEHBP; federal and state fraud
and abuse laws; and laws relating to care management and health care delivery.
Government actions could result in assessment of damages, civil or criminal
fines or penalties, or other sanctions, including exclusion from participation
in government programs. We currently are involved in various government
investigations and audits, but we do not believe the results will have a
material adverse effect on our financial position or results of operations.
INFLATION
Although the general rate of inflation has remained relatively stable and health
care cost inflation has stabilized in recent years, the national health care
cost inflation rate still exceeds the general inflation rate. We use various
strategies to mitigate the negative effects of health care cost inflation,
including setting commercial premiums based on anticipated health care costs,
risk-sharing arrangements with various health care providers, and other health
care cost containment measures. Specifically, health plans try to control
medical and hospital costs through contracts with independent providers of
health care services. Through these contracted care providers, our health plans
emphasize preventive health care and appropriate use of specialty and hospital
services.
While we currently believe our strategies to mitigate health care cost inflation
will continue to be successful, competitive pressures, new health care product
introductions, demands from health care providers and customers, applicable
regulations or other factors may affect our ability to control the impact of
health care cost increases. In addition, certain non-network-based products do
not have health care cost containment measures similar to those in place for
network-based products. As a result, there is added health care cost inflation
risk with these products.
FINANCIAL CONDITION AND LIQUIDITY
Cash and investments at March 31, 1998, were $4.0 billion, a $43 million
decrease from December 31, 1997. In the first quarter of 1998, we generated cash
from operations of $62 million and realized proceeds from stock option exercises
and the sale of property and equipment of $64 million. We also used over $155
million in cash related to acquisitions, capital expenditures, and common stock
repurchases.
Under applicable government regulations, several subsidiaries are required to
maintain specific capital levels to support their operations. After taking these
regulations and certain business considerations into account, we had $872
million in cash and investments available for general corporate use at March 31,
1998. From these cash reserves, we recently established a $100 million capital
fund designated for strategic investments in new and promising businesses.
The National Association of Insurance Commissioners has an effort underway that
would require new minimum capitalization limits for health care coverage
provided by insurance companies, HMOs and other risk-bearing health care
entities. The requirements would take the form of risk-based capital rules.
Depending on the nature and extent of the new minimum capitalization
requirements ultimately adopted, there could be an increase in the capital
required for certain of our subsidiaries. Any increase would be funded from our
corporate usable cash reserves. The new requirements are expected to be
effective December 31, 1998.
We continue to focus on expanding health care programs to the Medicare
population. In the past 12 months, the number of sites offering a Medicare
health plan product increased from 18 to 27. Over the same period, health plan
Medicare enrollment grew 51%. We continue to invest in new markets and expect
12
<PAGE>
to have 39 sites offering Medicare programs by year-end 1998. Significant
expenses are associated with introducing a Medicare health plan product.
Start-up expenses include a lengthy and detailed regulatory approval process,
product-specific provider contracting and network configuration, high up-front
sales and marketing costs, and staffing of service areas in advance of product
sales. We expect to incur operating losses from Medicare products in start-up
markets, usually for the first 12 to 18 months. Once Medicare enrollment targets
are met, we expect corresponding administrative costs to be covered.
In January 1998, we initiated a significant realignment of our operations,
designed to take full advantage of opportunities to grow and succeed as we
expand into the broad health and well-being marketplace. We are aligning our
operations into six independent but strategically linked businesses, each
focused on performance, growth and shareholder value.
The realignment is dramatically changing the way we manage our business. We are
realigning our resources and activities to more directly support the operations
of our businesses. We are assessing the effectiveness of our core management
processes and transaction processing systems. We are also evaluating each of our
businesses for strategic fit, growth potential and operating performance and
will be taking actions on business units that do not fit our new direction.
Our realignment efforts will take several months to complete. Despite the vast
undertaking, we do not expect our realignment efforts to negatively affect our
product offerings, provider relations, billing and collection disciplines, and
claims processing and payment activities. These efforts, however, may make it
appropriate for us to absorb certain restructuring charges. While we anticipate
such efforts could be significant, we cannot yet estimate the size of any
restructuring charges.
We are in the process of modifying our computer systems to accommodate the year
2000. We currently expect these modifications to be completed well in advance of
the year 2000 with no adverse effect on our operations. We expect to incur
associated expenses of approximately $20 million in 1998 and $15 million in 1999
to complete this effort. Our inability to complete year 2000 modifications on a
timely basis or the inability of other companies with which we do business to
complete their year 2000 modifications on a timely basis could adversely affect
our operations.
In November 1997, the Company's Board of Directors authorized a stock repurchase
program. Up to 10% of our outstanding common stock may be repurchased under the
program. Purchases may be made from time to time at prevailing prices in the
open market, subject to certain restrictions relating to volume, pricing and
timing. The repurchased shares will be available for reissuance through employee
stock option and purchase plans and for other corporate purposes. During the
first quarter of 1998, we repurchased 706,700 shares at an average price of $53
per share.
In January 1998, we filed a shelf registration statement with the Securities and
Exchange Commission to sell up to $200 million of debt securities and preferred
or common stock. The shelf filing registers the securities and allows us to sell
them from time to time in the event we need financing. Proceeds from sales of
these securities may be used for a variety of general corporate purposes,
including working capital, securities repurchases and acquisitions.
We expect our available cash resources will be sufficient to meet our current
operating requirements and internal development and realignment initiatives. In
addition, based on our current financial condition and results of operations, we
should be able to finance additional cash requirements in the public or private
markets, if necessary.
Currently, we do not have any other material definitive commitments that require
cash resources; however, we continually evaluate opportunities to expand our
operations. This includes internal development of new products and programs and
may include acquisitions.
13
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Since the date of the Company's Annual Report filed on Form 10-K for the fiscal
year ended December 31, 1997, no material changes have occurred in the Company's
exposure to market risk associated with the Company's investments in market risk
sensitive financial instruments. The Company does not believe that its risk of a
loss in future earnings, fair values or cash flow attributable to such
investments is material.
14
<PAGE>
UNITED HEALTHCARE CORPORATION
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company exchanged 223,904 shares of its common stock for all of the
outstanding capital stock of Reden & Anders, Ltd. in a transaction that closed
on February 20, 1998. The Company issued these shares in reliance on Section
4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder.
The Company made inquiries of the recipients of securities in this transaction
and obtained representations from such persons to establish that this issuance
qualified for an exemption from the registration requirements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Shareholders held on May 13, 1998 (the
"Annual Meeting"), the Company's shareholders elected three directors, approved
a proposal to amend the United HealthCare Corporation 1993 Employee Stock
Purchase Plan and ratified the appointment of Arthur Andersen LLP as independent
public accountants.
The three directors elected at the Annual Meeting are: William C. Ballard, Jr.
with 159,681,441 votes cast for his election and 1,725,041 votes withheld;
Richard T. Burke with 159,678,842 votes cast for his election and 1,727,640
votes withheld; and William W. McGuire, M.D. with 159,681,691 votes cast for his
election and 1,724,791 votes withheld. The directors whose term of office as a
director continued after the Annual Meeting are: James A. Johnson, Thomas H.
Kean, Douglas W. Leatherdale, Walter F. Mondale, Mary O. Mundinger, Robert L.
Ryan, William G. Spears and Gail R. Wilensky.
The proposal to amend the United HealthCare Corporation 1993 Employee Stock
Purchase Plan was approved with 160,442,172 votes cast for the proposal, 526,525
votes cast against the proposal and 257,525 votes abstaining. There were 180,019
broker non-votes cast on this matter. The amendment allows new regular employees
to participate in the plan immediately, and makes employees whose employment by
the Company is for less than 5 months in any calendar year ineligible to
participate in the Plan.
The appointment of Arthur Andersen LLP as independent public accountants for the
year ending December 31, 1998 was ratified with 160,979,065 votes cast for
ratification, 74,276 votes cast against ratification and 173,122 votes
abstaining. There were 180,019 broker non-votes on this matter.
ITEM 6. EXHIBITS
(a) The following exhibits are filed in response to Item 601 of Regulation S-K.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- ---------------------------------------------------------------------------------------------------
<C> <C> <S>
10 -- Information Technology Services Agreement between United HealthCare Services, Inc., a wholly owned
subsidiary of the Company, and Unisys Corporation dated June 1, 1996.*
15 -- Letter Re Unaudited Interim Financial Information
99 -- Cautionary Statements.
</TABLE>
- ------------------------
* Pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended,
confidential portions of this contract have been omitted and filed
separately with the Securities and Exchange Commission in connection with a
confidential treatment request.
(b) The Company did not file any reports on Form 8-K during the three-month
period ended March 31, 1998.
15
<PAGE>
UNITED HEALTHCARE CORPORATION
SIGNATURES
Pursuant to the requirements 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.
<TABLE>
<S> <C> <C>
UNITED HEALTHCARE CORPORATION
</TABLE>
<TABLE>
<C> <S> <C>
/s/ WILLIAM W. MCGUIRE, M.D.
- ------------------------------ President and Chief Dated: May 7, 1998
William W. McGuire, M.D. Executive Officer
/s/ DAVID P. KOPPE
- ------------------------------ Chief Financial Officer Dated: May 7, 1998
David P. Koppe
</TABLE>
16
<PAGE>
UNITED HEALTHCARE CORPORATION
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------------- ------------------------------------------------------------------------------------------------
<C> <C> <S>
10 -- Information Technology Services Agreement between United HealthCare Services, Inc., a wholly
owned subsidiary of the Company, and Unisys Corporation dated June 1, 1996.*
15 -- Letter Re Unaudited Interim Financial Information
99 -- Cautionary Statements.
</TABLE>
- ------------------------
* Pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended,
confidential portions of this contract have been omitted and filed
separately with the Securities and Exchange Commission in connection with a
confidential treatment request.
17
<PAGE>
INFORMATION TECHNOLOGY SERVICES AGREEMENT
between
UNITED HEALTHCARE SERVICES, INC.
and
UNISYS CORPORATION
dated as of
June 1, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 3. BASE SERVICES . . . . . . . . . . . . . . . . . . . . . . . . 9
3.01 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.02 Changes to the Services . . . . . . . . . . . . . . . . . . . 9
3.03 Systems Software. . . . . . . . . . . . . . . . . . . . . . . 9
3.04 Systems Software Maintenance. . . . . . . . . . . . . . . . . 9
3.05 Additional Third Party Software . . . . . . . . . . . . . . . 9
3.06 New Releases, Modifications and Versions of Systems Software. 10
3.07 Licenses and Permits. . . . . . . . . . . . . . . . . . . . . 11
3.08 Changes in Law and Regulations. . . . . . . . . . . . . . . . 11
3.09 Strategic Plan and Product Standards. . . . . . . . . . . . . 11
3.10 Manufacturers' Warranties . . . . . . . . . . . . . . . . . . 12
3.11 Supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.12 Hardware Currency . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Changes in Scope of Services. . . . . . . . . . . . . . . . . 12
3.14 Changes to Base Charges . . . . . . . . . . . . . . . . . . . 12
3.15 Software Manuals. . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Dedicated Logical Environments. . . . . . . . . . . . . . . . 12
3.17 Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Variable Pricing Mechanism. . . . . . . . . . . . . . . . . . 13
ARTICLE 4. TRANSITION. . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.01 Transition Services . . . . . . . . . . . . . . . . . . . . . 13
4.02 Testing Environments. . . . . . . . . . . . . . . . . . . . . 13
4.03 Transition Acceptance Criteria. . . . . . . . . . . . . . . . 14
4.04 Transition Plan Changes . . . . . . . . . . . . . . . . . . . 14
ARTICLE 5. APPLICATION RESOURCES . . . . . . . . . . . . . . . . . . . . 14
5.01 Application Resources . . . . . . . . . . . . . . . . . . . . 14
5.02 Application Resource Proposals. . . . . . . . . . . . . . . . 14
ARTICLE 6. ADDITIONAL SERVICES . . . . . . . . . . . . . . . . . . . . . 15
6.01 Additional Services . . . . . . . . . . . . . . . . . . . . . 15
6.02 Third Party Services. . . . . . . . . . . . . . . . . . . . . 15
6.03 Acquisition and Divestiture . . . . . . . . . . . . . . . . . 15
ARTICLE 7. CUSTOMER SATISFACTION . . . . . . . . . . . . . . . . . . . . 16
7.01 Baseline Customer Satisfaction Survey . . . . . . . . . . . . 16
7.02 Customer Satisfaction Survey. . . . . . . . . . . . . . . . . 16
ARTICLE 8. PERFORMANCE STANDARDS . . . . . . . . . . . . . . . . . . . . 16
8.01 Base Services . . . . . . . . . . . . . . . . . . . . . . . . 16
8.02 New Performance Standards . . . . . . . . . . . . . . . . . . 16
8.03 Adjustment of Performance Standards . . . . . . . . . . . . . 17
8.04 Performance Reports . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
<CAPTION>
<S> <C> <C>
8.05 Root-Cause Analysis . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 9. BENCHMARKING. . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 10. SERVICE LOCATIONS . . . . . . . . . . . . . . . . . . . . . . 18
10.01 Service Locations . . . . . . . . . . . . . . . . . . . . . . 18
10.02 Security Procedures . . . . . . . . . . . . . . . . . . . . . 18
10.03 Security Relating to Competitors. . . . . . . . . . . . . . . 18
10.04 Access to Personnel and Resources . . . . . . . . . . . . . . 18
ARTICLE 11. PROJECT TEAM. . . . . . . . . . . . . . . . . . . . . . . . . 18
11.01 Executive Committee . . . . . . . . . . . . . . . . . . . . . 18
11.02 Unisys Account Executive. . . . . . . . . . . . . . . . . . . 19
11.03 Key Employees . . . . . . . . . . . . . . . . . . . . . . . . 19
11.04 Project Staff . . . . . . . . . . . . . . . . . . . . . . . . 19
11.05 Facilities and Equipment. . . . . . . . . . . . . . . . . . . 19
11.06 Review Meetings . . . . . . . . . . . . . . . . . . . . . . . 20
11.07 Subcontractors. . . . . . . . . . . . . . . . . . . . . . . . 20
11.08 Conduct of Unisys Personnel . . . . . . . . . . . . . . . . . 20
11.09 Conduct of UHS Personnel. . . . . . . . . . . . . . . . . . . 21
11.10 Non-Competition . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 12. MANAGEMENT AND CONTROL. . . . . . . . . . . . . . . . . . . . 21
12.01 Procedures Manual . . . . . . . . . . . . . . . . . . . . . . 21
12.02 Change Control Procedure. . . . . . . . . . . . . . . . . . . 22
12.03 Deliverables. . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 13. PROPRIETARY RIGHTS. . . . . . . . . . . . . . . . . . . . . . 22
13.01 UHS Software. . . . . . . . . . . . . . . . . . . . . . . . . 22
13.02 Unisys Proprietary Software . . . . . . . . . . . . . . . . . 23
13.03 Unisys Third Party Software . . . . . . . . . . . . . . . . . 23
13.04 UHS Third Party Software. . . . . . . . . . . . . . . . . . . 24
13.05 Developed Software. . . . . . . . . . . . . . . . . . . . . . 24
13.06 Infringement. . . . . . . . . . . . . . . . . . . . . . . . . 24
13.07 Changes and Upgrades to the Systems . . . . . . . . . . . . . 24
13.08 Documentation . . . . . . . . . . . . . . . . . . . . . . . . 25
13.09 Cooperation Upon Divestiture. . . . . . . . . . . . . . . . . 25
ARTICLE 14. REQUIRED CONSENTS . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 15. UHS RESPONSIBILITIES. . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 16. REPORTS AND DATA. . . . . . . . . . . . . . . . . . . . . . . 26
16.01 Ownership of UHS Data . . . . . . . . . . . . . . . . . . . . 26
16.02 Correction of Errors. . . . . . . . . . . . . . . . . . . . . 26
16.03 Return of Data. . . . . . . . . . . . . . . . . . . . . . . . 27
16.04 Reports and Raw Data. . . . . . . . . . . . . . . . . . . . . 27
16.05 Re-Runs . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16.06 Unisys Data Security. . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 17. CONTINUED PROVISION OF SERVICES . . . . . . . . . . . . . . . 27
17.01 Disaster Recovery . . . . . . . . . . . . . . . . . . . . . . 27
17.02 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . 28
17.03 Allocation of Resources . . . . . . . . . . . . . . . . . . . 29
<PAGE>
<CAPTION>
<S> <C> <C>
ARTICLE 18. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.01 Base Charges. . . . . . . . . . . . . . . . . . . . . . . . . 29
18.02 Additional Charges. . . . . . . . . . . . . . . . . . . . . . 29
18.03 Rights of Set off . . . . . . . . . . . . . . . . . . . . . . 29
18.04 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.05 Unused Credits. . . . . . . . . . . . . . . . . . . . . . . . 30
18.06 Adjustment to Charges . . . . . . . . . . . . . . . . . . . . 30
18.07 Proration . . . . . . . . . . . . . . . . . . . . . . . . . . 30
18.08 Technology Improvements . . . . . . . . . . . . . . . . . . . 30
18.09 Technology Developments . . . . . . . . . . . . . . . . . . . 30
ARTICLE 19. PAYMENT SCHEDULE. . . . . . . . . . . . . . . . . . . . . . . 30
19.01 Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
19.02 Detailed Invoices . . . . . . . . . . . . . . . . . . . . . . 31
19.03 Time of Payment . . . . . . . . . . . . . . . . . . . . . . . 31
19.04 Disputed Charges or Credits . . . . . . . . . . . . . . . . . 31
ARTICLE 20. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 21. AUDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
21.01 Processing. . . . . . . . . . . . . . . . . . . . . . . . . . 33
21.02 Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
21.03 Unauthorized Access . . . . . . . . . . . . . . . . . . . . . 34
21.04 Record Retention. . . . . . . . . . . . . . . . . . . . . . . 34
21.05 Access and Reports. . . . . . . . . . . . . . . . . . . . . . 34
21.06 Audit Software. . . . . . . . . . . . . . . . . . . . . . . . 35
21.07 Facilities. . . . . . . . . . . . . . . . . . . . . . . . . . 35
21.08 Third Party Audit . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 22. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . 35
22.01 Confidential Information. . . . . . . . . . . . . . . . . . . 35
22.02 Attorney-Client Privilege . . . . . . . . . . . . . . . . . . 36
22.03 Equitable Relief. . . . . . . . . . . . . . . . . . . . . . . 37
22.04 Unauthorized Acts . . . . . . . . . . . . . . . . . . . . . . 37
22.05 Legal Action. . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 23. REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . 37
23.01 By UHS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
23.02 By Unisys . . . . . . . . . . . . . . . . . . . . . . . . . . 38
23.03 Government Contracts. . . . . . . . . . . . . . . . . . . . . 38
23.04 Service Level Agreements. . . . . . . . . . . . . . . . . . . 38
ARTICLE 24. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 38
24.01 Termination for Convenience . . . . . . . . . . . . . . . . . 38
24.02 Termination for Sale of Unisys. . . . . . . . . . . . . . . . 39
24.03 Termination for Material Breach . . . . . . . . . . . . . . . 39
24.04 Termination for Non-Payment . . . . . . . . . . . . . . . . . 39
24.05 Termination for Unisys Bankruptcy . . . . . . . . . . . . . . 39
24.06 Other Terminations. . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 25. TERMINATION CHARGE. . . . . . . . . . . . . . . . . . . . . . 40
25.01 Termination for Convenience . . . . . . . . . . . . . . . . . 40
25.02 No Additional Charges . . . . . . . . . . . . . . . . . . . . 40
<PAGE>
<CAPTION>
<S> <C> <C>
ARTICLE 26. TERMINATION ASSISTANCE. . . . . . . . . . . . . . . . . . . . 40
ARTICLE 27. EXIT PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 28. DISPUTE RESOLUTION. . . . . . . . . . . . . . . . . . . . . . 42
28.01 Account Executives. . . . . . . . . . . . . . . . . . . . . . 42
28.02 Executive Committee . . . . . . . . . . . . . . . . . . . . . 42
28.03 Binding Arbitration . . . . . . . . . . . . . . . . . . . . . 42
28.04 Continuity of Services. . . . . . . . . . . . . . . . . . . . 42
ARTICLE 29. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . 42
29.01 By UHS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
29.02 By Unisys . . . . . . . . . . . . . . . . . . . . . . . . . . 43
29.03 Indemnification Procedures. . . . . . . . . . . . . . . . . . 43
ARTICLE 30. DAMAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
30.01 Direct Damages. . . . . . . . . . . . . . . . . . . . . . . . 44
30.02 Consequential Damages . . . . . . . . . . . . . . . . . . . . 45
30.03 Performance Credits . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 32. TRANSITIONED EMPLOYEES. . . . . . . . . . . . . . . . . . . . 47
32.01 Letter Agreement. . . . . . . . . . . . . . . . . . . . . . . 47
32.02 Unisys Employee Leasing . . . . . . . . . . . . . . . . . . . 47
32.03 Credit Mechanism. . . . . . . . . . . . . . . . . . . . . . . 47
32.04 Replacement of Leased Employees . . . . . . . . . . . . . . . 48
ARTICLE 33. MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . 48
33.01 Assignment and Change of Control. . . . . . . . . . . . . . . 48
33.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
33.03 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 49
33.04 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
33.05 Relationship. . . . . . . . . . . . . . . . . . . . . . . . . 49
33.06 Consents, Approvals and Requests. . . . . . . . . . . . . . . 49
33.07 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 50
33.08 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
33.09 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . 50
33.10 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 50
33.11 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . 50
33.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 50
33.13 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
33.14 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . 51
33.15 Covenant of Further Assurances. . . . . . . . . . . . . . . . 51
33.16 Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . 51
33.17 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
<PAGE>
LIST OF EXHIBITS
Exhibit 1 Base Services
Exhibit 2 Applications Software
Exhibit 3 Systems Software
Exhibit 4 Transition Plan
Exhibit 5 Performance Credits
Exhibit 6 Hardware Inventory
Exhibit 7 Customer Satisfaction Survey
Exhibit 8 Service Locations
Exhibit 9 Key Employees
Exhibit 10 UHS Competitors
Exhibit 11 Charges
Exhibit 12 Disaster Recovery Services and Critical Applications
Exhibit 13 Audit Procedures
Exhibit 14 UHS Travel Expense Policy
Exhibit 15 Subcontractors
Exhibit 16 Termination Assistance Services
Exhibit 17 Termination Charges
Exhibit 18 Application Resource Request and Rates
Exhibit 19 Resource Usage Reports and Data
Exhibit 20 Form of Performance Report
Exhibit 21 Strategic Plan
Exhibit 22 Procedures Manual Outline
Exhibit 23 Change Control Procedures Outline
Exhibit 24 UHS Affiliates
Exhibit 25 Deliverables
Exhibit 26 Service Level Agreements and Performance Standards
Exhibit 27 U.S. Government Contract Requirements
Exhibit 28 Transitioned Employee Letter Agreement
Exhibit 29 UHS Employee List
Exhibit 30 COLA
Exhibit 31 Variable Pricing Mechanism
Exhibit 32 UHS Confidential Information standard of care
<PAGE>
INFORMATION TECHNOLOGY SERVICES AGREEMENT, dated as of June 1,
1996, by and between UNITED HEALTHCARE SERVICES, INC. and UNISYS CORPORATION.
Capitalized terms not otherwise defined herein have the meanings set forth in
ARTICLE 1.
W I T N E S S E T H:
WHEREAS, UHS and Unisys have engaged in extensive negotiations and
discussions that have culminated in the formation of the relationship to provide
information technology services according to Performance Standards and according
to the terms and conditions as described in this Agreement.
NOW, THEREFORE, for and in consideration of the agreements of the
parties set forth below, UHS and Unisys agree as follows:
ARTICLE 1. DEFINITIONS.
The following defined terms shall have the meanings specified
below:
(1) "ACCOUNT EXECUTIVES" shall mean the Unisys Account Executive
and the UHS Account Executive, collectively.
(2) "ADDITIONAL CHARGES" shall mean the fees described in an
Additional Services Schedule.
(3) "ADDITIONAL SERVICES" shall mean those services requested by
UHS and provided by Unisys that are outside the scope of the Base
Services.
(4) "ADDITIONAL SERVICES PROPOSAL" shall mean the proposal,
submitted by Unisys in response to UHS' request for the
performance of an Additional Service, containing a description of
the scope and functionality of such Additional Service and an
estimate, as may be applicable, of the computing, communications,
human resources, capacity requirements and costs necessary to
develop and implement such Additional Service.
(5) "ADDITIONAL SERVICES SCHEDULE" shall mean, in the event that
UHS elects to have Unisys perform an Additional Service, a written
agreement executed by UHS and Unisys.
(6) "AFFILIATE" shall mean, with respect to a Party, any entity
controlled, controlling or under common control with that Party,
and, additionally, with respect to UHS, those entities shown on
EXHIBIT 24.
(7) "AGENTS" shall mean with respect to a party, such party's
directors, officers, employees, agents, subcontractors and other
representatives.
(8) "AGREEMENT" shall mean this Information Technology Services
Agreement, dated June 1, 1996, by and between UHS and Unisys, its
Exhibits and Attachments, as may be amended by the Parties from
time to time.
(9) "AGREEMENT DATE" shall mean June 1, 1996.
(10) "APPLICATION GIGABYTES" shall mean the allocated disk space,
measured in gigabytes, that represents UHS' billable portion of
the installed DASD.
<PAGE>
(11) "APPLICATION HOURS" shall mean the CPU time that represents
UHS' billable portion of CPU consumption.
(13) "APPLICATIONS SOFTWARE" shall mean the software set forth in
Exhibit 2.
(14) "APPLICATION TAPE MOUNTS" shall mean the tape mounts that
represent UHS' billable portion of tape mounts.
(15) "BACKUP FACILITY" shall have the meaning set forth in
SECTION 17.01.
(16) "BASE CHARGES" shall mean the fees for the Base Services set
forth in EXHIBIT 11.
(17) "BASELINE" shall mean the specified quantity of resources
included in the Base Charges set forth in EXHIBIT 11.
(18) "BASE PERFORMANCE STANDARDS" shall mean the performance
standards described in EXHIBIT 1 for the Base Services, as may be
adjusted pursuant to SECTION 8.03.
(19) "BASE SERVICES" shall mean the services and obligations (a)
set forth in EXHIBIT 1 and (b) otherwise identified in this
Agreement as being Base Services.
(20) "CHANGE(S)" shall mean all changes to the Systems and the
Services that would materially alter the functionality or
technical environment of the Systems.
(21) "CHANGE CONTROL PROCEDURES" shall mean the written
procedures for handling and implementing Changes as approved by
UHS.
(22) "CHARGES" shall mean the Base Charges and the Additional
Charges, collectively.
(23) "CONFIDENTIAL INFORMATION" of a Party shall mean (a) all
confidential or proprietary information of either Party that is
marked as such, (b) other information of UHS, its Affiliates or
their customers that is not permitted to be disclosed to third
parties under applicable local law or regulation and (c) the terms
of this Agreement, including all related documentation used or
created by the Parties.
(24) "CONTRACT YEAR" shall mean each 12-month period commencing
on the Effective Date or any anniversary of the Effective Date
during the Term.
(25) "CRITICAL DUPLICATIONS" shall mean those applications set
forth in EXHIBIT 12 as may be updated by UHS from time to time
during the Term.
(26) "DEFAULT CURE PERIOD" shall have the meaning set forth in
SECTION 24.04.
(27) "DEFAULT NOTICE" shall have the meaning set forth in
SECTION 24.04.
(28) "DEVELOPED SOFTWARE" shall have the meaning set forth in
SECTION 13.05.
(29) "DEVELOPED SOFTWARE AGREEMENT" shall have the meaning set
forth in SECTION 13.05.
-2-
<PAGE>
(30) "DIRECT DAMAGES CAP" shall have the meaning set forth in
SECTION 30.01.
(31) "DISASTER" shall mean any event including, without
limitation, a Force Majeure Event, which (a) causes one or more of
the Critical Applications to be unavailable at any UHS Service
Location or (b) is generally referred to as a disaster in the
health insurance or managed health care industries.
(32) "DOCUMENTATION" shall mean all documentation, written
materials, work papers, configurations, manuals (including the
Procedures Manual and the Change Control Procedures) and other
work product prepared by or on behalf of Unisys or otherwise used
by Unisys or its Agents in connection with providing the Services.
(33) "EFFECTIVE DATE" shall mean June 1, 1996.
(34) "EXECUTIVE COMMITTEE" shall mean the committee comprised of
(a) two members of UHS' executive management staff, appointed by
UHS, and (b) two members of Unisys executive management staff,
appointed by Unisys.
(35) "FORCE MAJEURE EVENT" shall mean any failure or delay
caused, directly or indirectly, by fire, flood, earthquake,
elements of nature or acts of God, acts of war, terrorism, riots,
sabotage, civil disorders, rebellions or revolutions in the United
States or any other similar cause beyond the reasonable control of
a Party and without the fault or negligence of such Party.
(36) "INDEMNIFYING PARTY" shall mean the Party to whom the
Indemnitee shall give notice of a claim that is covered by SECTION
29.01 or SECTION 29.02.
(37) "INDEMNITEE" shall mean the party against whom a third party
makes a claim covered by SECTION 29.01 or SECTION 29.02 with
respect to which such Party seeks indemnification.
(38) "KEY EMPLOYEE(S)" shall mean the employees who are set forth
on EXHIBIT 9 as may be updated pursuant to SECTION 11.03(1).
(39) "MACHINES" shall mean the UHS Machines and the Unisys
Machines, collectively.
(40) "MODIFICATION" shall mean small extensions or enhancements
that do not add significant economic value.
(41) "MODULE" shall mean the scope of services related to certain
technology sets; as of the Effective Date, the three Modules are
the UNIX, Unisys and IBM mainframes.
(42) "NEW PERFORMANCE STANDARDS" shall have the meaning set forth
in SECTION 8.02.
(43) "PARTY" shall mean either UHS or Unisys, as the case may be.
(44) "PERFORMANCE CREDIT(S)" shall mean, in the event of a
failure to provide the Services in accordance with the Performance
Standards, the performance credits
-3-
<PAGE>
incurred by Unisys to be applied against the Charges identified in
and according to the schedule set forth in EXHIBIT 5.
(45) "PERFORMANCE STANDARDS" shall mean the Base Performance
Standards and the New Performance Standards, collectively.
(46) "PRIVILEGED WORK PRODUCT" shall mean certain documents, data
and databases created by Unisys and its Agents for UHS and its
Affiliates and all associated communications thereto subject to
the attorney-client privilege.
(47) "PROCEDURES MANUAL" shall mean the operating procedures
manual prepared by Unisys in the form and scope agreed upon by UHS
and Unisys which establishes the procedures pursuant to which
policies of UHS and Unisys will be adhered to during the Term.
(48) "PROJECT STAFF" shall have the meaning set forth in
SECTION 11.04.
(49) "RELEASE" shall mean adding a significant new function to
the product, consolidating major maintenance or extensions to the
prior Release or providing synchronization with new structure in a
required corequisite product.
(50) "REASONABLE CURRENCY" shall have the meaning set forth in
SECTION 3.06.
(51) "REPORT(S)" shall mean those reports (a) prepared by UHS as
of the Effective Date and (b) as UHS may reasonably require from
time to time during the Term to meet UHS' and its Affiliates'
operational requirements.
(52) "SERVICE LOCATIONS" shall mean those UHS Service Locations
and Unisys Service Locations that are set forth in EXHIBIT 8.
(53) "SERVICES" shall mean the Base Services and the Additional
Services, collectively.
(54) "SOFTWARE" shall mean the Unisys Software, the UHS Software
and the Developed Software, collectively.
(55) "STRATEGIC PLAN" shall have the meaning set forth in
SECTION 3.09.
(56) "SYSTEMS SOFTWARE" shall mean the software set forth in
EXHIBIT 3.
(57) "SYSTEMS" shall mean the Software and the Machines,
collectively.
(58) "TERM" shall have the meaning set forth in ARTICLE 2.
(59) "TERMINATION ASSISTANCE SERVICES" shall mean (1) the
cooperation of Unisys and its Agents with UHS and its Affiliates
in effecting the orderly transfer of the Services to a third party
or the resumption of the Services by UHS or its Affiliates upon
request by UHS and (2) the performance by Unisys of such services
as may be requested by UHS in accordance with EXHIBIT 16, in
connection with the transfer of the Services to a third party or
the resumption of the Services by UHS or its Affiliates.
-4-
<PAGE>
(60) "TERMINATION CHARGE" shall mean those fees described in
EXHIBIT 17.
(61) "THIRD PARTY SERVICES" shall have the meaning set forth in
SECTION 6.02.
(62) "TRANSITION ACCEPTANCE CRITERIA" shall mean the acceptance
tests in respect of the Transition Services described in EXHIBIT
4.
(63) "TRANSITION COMPLETION DATE" shall mean, with respect to any
Module, the date UHS and Unisys agree that such Module has been
migrated to Unisys, has met all of the Transition Acceptance
Criteria for such Module, and is processing on the platform and
serial number that relates to the list of Machines on EXHIBIT 6 in
accordance with a mutually acceptable transition migration plan.
(64) "TRANSITION SERVICES" shall mean the migration of the Base
Services to Unisys, including the project management, data center
migration, network deployment, testing, documentation and related
services described in EXHIBIT 4.
(65) "TRANSITION SCHEDULE" shall have the meaning set forth in
SECTION 4.01.
(66) "TRANSITIONED EMPLOYEES" shall mean any former employees of
UHS or its Affiliates hired by Unisys in connection with this
Agreement.
(67) "UHS" shall mean United HealthCare Services, Inc., a
Minnesota corporation.
(68) "UHS ACCOUNT EXECUTIVE" shall mean the individual who is
appointed by UHS who shall be solely authorized to act as the
primary point of contact for Unisys in dealing with UHS and its
Affiliates with respect to each party's obligations under this
Agreement and all consents or approvals under this Agreement and
to make all requests on behalf of UHS and its Affiliates.
(69) "UHS COMPETITORS" shall mean those entities set forth in
EXHIBIT 10.
(70) "UHS DATA" shall mean all data and information submitted to
Unisys by UHS or its Affiliates in connection with the Services,
including data and information derived from that which is
submitted to Unisys by UHS or its Affiliates.
(71) "UHS DATA CENTER" shall mean those UHS data centers that are
set forth in EXHIBIT 4.
(72) "UHS MACHINES" shall mean those machines and equipment which
Unisys uses in the provision of the Services and which are owned
or leased by UHS and set forth in EXHIBIT 6.
(73) "UHS PROPRIETARY SOFTWARE" shall mean the software owned by
UHS or its Affiliates identified as such and set forth in EXHIBIT
2.
(74) "UHS SERVICE LOCATIONS" shall mean the service locations
owned, leased or under the control of UHS that are set forth in
EXHIBIT 8.
-5-
<PAGE>
(75) "UHS SOFTWARE" shall mean the UHS Proprietary Software, the
UHS Third Party Software and any related documentation in UHS'
possession on or after the Agreement Date.
(76) "UHS THIRD PARTY SOFTWARE" shall mean the software licensed
or leased by UHS or its Affiliates from a third party which is
identified as such and set forth in EXHIBIT 2 and EXHIBIT 3.
(77) "UNISYS" shall mean Unisys Corporation, a Delaware
corporation.
(78) "UNISYS ACCOUNT EXECUTIVE" shall have the meaning set forth
in SECTION 11.02.
(79) "UNISYS MACHINES" shall mean those machines and equipment
owned or leased by Unisys for use in connection with the Services
set forth in EXHIBIT 6.
(80) "UNISYS PROPRIETARY SOFTWARE" shall mean the software
identified as such and listed on EXHIBIT 3, as appropriate, and
related documentation (a) owned by Unisys prior to the Agreement
Date which is used in connection with the Services, (b) of which
Unisys acquires ownership after the Agreement Date which is used
in connection with the Services, or (c) is developed by or on
behalf of Unisys after the Agreement Date for use in connection
with the Services that is not UHS Software or Developed Software.
(81) "UNISYS SERVICE LOCATIONS'' shall mean the service locations
owned, leased or under the control of Unisys that are set forth in
EXHIBIT 8.
(82) "UNISYS SOFTWARE" shall mean the Unisys Proprietary Software
and the Unisys Third Party Software, collectively.
(83) "UNISYS SYSTEMS" shall mean the Unisys Software and the
Unisys Machines, collectively.
(84) "UNISYS THIRD PARTY SOFTWARE" shall mean all software
identified as such and listed in EXHIBIT 3, as appropriate, and
related documentation licensed or leased from a third party by
Unisys (a) prior to the Agreement Date which will be used in
connection with the Services or (b) after the Agreement Date for
use in connection with the Services.
(85) "VERSION" shall mean a major rewrite of the product, one
that usually adds substantial new function to the product or
represents a major restructuring and overhaul of the underlying
software structure.
ARTICLE 2. TERM.
The term of this Agreement shall commence on June 1, 1996 and
shall continue until 12:00 midnight (Eastern Standard Time) on November 1, 2005,
unless terminated earlier pursuant to this Agreement (the "TERM").
ARTICLE 3. BASE SERVICES.
3.01 GENERALLY. As of the Effective Date and continuing
throughout the Term, Unisys shall provide to UHS and certain Affiliates of UHS
the Base Services with respect to the
-6-
<PAGE>
appropriate UHS Data Center. In accordance with the terms of this Agreement,
Unisys shall increase or decrease the amount of the Base Services according to
UHS' and such Affiliates' demand for the Base Services and at the Charges
described in EXHIBIT 11. In performing the Services, Unisys and its Agents
shall during the Term use the Unisys Software, UHS Software and such other
software as the Parties may agree.
3.02 CHANGES TO THE SERVICES. Except as may be necessary on an
emergency basis to maintain the continuity of the Services, as required pursuant
to the Change Control Procedures or as otherwise set forth in this Agreement,
Unisys shall not, without UHS' prior consent (which consent shall not be
unreasonably withheld), modify the then current (1) composition or nature of the
Services or (2) manner in which the Services are provided or delivered.
3.03 SYSTEMS SOFTWARE. Except as otherwise provided herein, as
part of the Base Services, Unisys shall have administrative, operational,
maintenance and financial responsibility for the Systems Software.
3.04 SYSTEMS SOFTWARE MAINTENANCE. As part of the Base Services,
Unisys shall provide UHS and its Affiliates with Systems Software maintenance
and Systems Software production support services as described in EXHIBIT 1,
including but not limited to (1) preventive and corrective maintenance to
correct defects and failures in the Systems Software, (2) installing, testing
and maintaining upgrades to the Systems Software and any third party systems
software and (3) changes, enhancements and replacements of the Systems Software
or additional Systems Software, as Unisys deems necessary, in order to perform
the Services in accordance with the Performance Standards.
3.05 ADDITIONAL THIRD PARTY SOFTWARE. UHS may request Unisys to
provide additional third party applications or systems software to perform the
Services. With respect to such software, Unisys shall use reasonable commercial
efforts to secure a license that is either (1) in Unisys name and transferable
to UHS or its Affiliates, as agreed to by the Parties, upon the expiration or
termination of any Service under this Agreement or (2) in UHS' or its
Affiliates' name, as agreed to by the Parties, with Unisys having the right to
have access to and use such software to the extent contemplated by this
Agreement. Additionally, Unisys shall use reasonable commercial efforts to have
included in each such license the right for UHS or its Affiliates, as agreed to
by the Parties, and Unisys to attend all user group meetings offered by the
software vendor. As part of the Base Services, Unisys shall have
administrative, operational, maintenance responsibility for any additional
third-party systems software requested by UHS during the Term if such software
is identified as System Software. The financial responsibility for the
acquisition of such additional third party systems software shall be determined
by the Account Executives on a case by case basis.
3.06 NEW RELEASES, MODIFICATIONS AND VERSIONS OF SYSTEMS
SOFTWARE.
(1) As part of the Base Services, Unisys shall maintain
Reasonable Currency for Modifications and Versions of the Systems
Software, unless otherwise agreed to by UHS and Unisys. "Reasonable
Currency" shall mean that new Modifications and Versions of the Systems
Software shall be installed by Unisys and be operational no later than
12 months following the date the licensor of such software made such
Modification or Version generally available to Unisys. Unisys shall
perform the installation of new Modifications and Versions, program
temporary fixes, perform preventive maintenance and perform other
software changes in accordance with the Change Control Procedures. UHS
and Unisys shall jointly determine the appropriate level of testing
required for such System Software Changes. UHS shall provide
maintenance and testing support for Applications Software to allow
Unisys to meet upgrade schedules for System Software changes.
-7-
<PAGE>
(2) If UHS determines that certain Systems Software requires a
migration period during which multiple product levels are supported,
Unisys shall advise UHS of the additional charges, if any, associated
with the provision of such support and the Parties shall agree on the
terms and conditions associated with providing such support. If UHS
requests that Unisys delay upgrading any Systems Software, and Unisys is
not meeting an affected Performance Standard, UHS shall relieve Unisys
from such Performance Standard (as agreed to by the Parties) until such
time as such Systems Software is deemed current. In the event that any
such Systems Software is no longer supported by the vendor, Unisys may
pass through to UHS the incremental maintenance costs in respect of such
Systems Software.
(3) If a Release of Systems Software that is being used by
Unisys to support the Services becomes unsupported by the maker of such
Systems Software after the Effective Date, and a new Release of such
Systems Software exists, Unisys shall, at its cost, maintain Reasonable
Currency (as defined in subsection 1) for such Systems Software. If a
new Release of Systems Software is available but the old Release is
still being supported by the maker of such Systems Software, Unisys
shall not have the obligation to maintain Reasonable Currency with
respect to such Systems Software, but UHS may request that Unisys
maintain Reasonable Currency. If UHS so requests, Unisys shall prepare
a cost estimate and UHS shall be responsible for such costs. Unisys
shall perform the installation of new Releases, program temporary fixes,
perform preventive maintenance and perform other software changes in
accordance with the Change Control Procedures. UHS and Unisys shall
jointly determine the appropriate level of testing required for System
Software Changes.
3.07 LICENSES AND PERMITS. As part of the Base Services, Unisys
shall be responsible for obtaining all governmental licenses, authorizations and
permits required by applicable laws and regulations, which Unisys is required to
have to perform the Services. Unisys shall have financial responsibility for,
and shall pay, all fees and taxes associated with obtaining such governmental
licenses, authorizations and permits.
3.08 CHANGES IN LAW AND REGULATIONS. Each Party shall identify
and notify the other Party of changes in applicable laws and regulations and, as
part of the Base Services, Unisys shall identify the impact of such changes on
its ability to perform and deliver the Services. Unisys shall promptly make any
modifications to the Services as are reasonably necessary to perform and deliver
the Services in accordance with the Performance Standards as a result of such
changes. Unisys shall be responsible for, and shall pay for, the cost of any
such modification relating to Unisys business. UHS shall pay for the cost of
any such modification relating to UHS' or its Affiliates' businesses. All such
modifications shall be effected through the Change Control Procedures.
3.09 STRATEGIC PLAN AND PRODUCT STANDARDS. Unisys shall comply
with UHS' strategic plan with respect to information systems, platforms and
product standards (the "STRATEGIC PLAN") existing as of the Effective Date, as
set forth in EXHIBIT 21, and as may be modified during the Term. Upon UHS'
request, and as part of the Base Services, Unisys shall assist UHS in modifying
the Strategic Plan to incorporate alternative technologies, such as hardware and
applications software that support comprehensive centralized and decentralized
processing correlating to UHS' strategic business direction. Upon UHS' request,
Unisys shall assist in the modification of such strategic systems plan in
cooperation with a third party consultant designated and paid for by UHS.
Notwithstanding any such assistance from Unisys, the adoption of such
modifications, in whole or in part, (1) shall be within UHS' sole discretion,
(2) may be considered a Change or an Additional Service and (3) if a Change, may
be subject to Additional Charges.
-8-
<PAGE>
3.10 MANUFACTURERS' WARRANTIES. As part of the Base Services,
Unisys shall without limitation of any of UHS' other rights or remedies, pass
through to UHS or its Affiliates, as agreed to by the Parties, whenever such
pass through is permitted, the manufacturer's or vendor's warranty on all
Machines, Software, or any installation or maintenance services provided in
connection with such Machines or Software, and, in the event of any warranty
claim, cooperate fully with UHS in asserting such claim against the warrantor.
3.11 SUPPLIES. As part of the Base Services, Unisys shall
provide to UHS such data processing related forms and supplies required for
Systems operations. Unisys shall provide magnetic tapes and disc packs,
provided that if there is a material change in the Services that affects the
volume of data processing related forms and supplies required for Systems
operations, the Parties shall negotiate an appropriate adjustment to the
Charges.
3.12 HARDWARE CURRENCY. As part of the Base Services, Unisys
shall maintain the Machines under the original manufacturer's specifications for
such Machines. In the event such specifications have been or will be
discontinued, Unisys shall develop a plan for UHS' approval to replace such
Machines within a reasonable time with Machines and equipment providing equal
functionality for which maintenance is available.
3.13 CHANGES IN SCOPE OF SERVICES. Notwithstanding anything to
the contrary contained in this Agreement, UHS shall have the right to insource
or to contract with a third party to perform any Services subject to SECTION
3.18 and SECTION 24.01.
3.14 CHANGES TO BASE CHARGES. Any disagreement between the
Parties with respect to any adjustments to the Base Charges contemplated by
SECTION 3.13 or SECTION 6.03 shall be resolved in accordance with the dispute
resolution procedures set forth in ARTICLE 28.
3.15 SOFTWARE MANUALS. As part of the Base Services, Unisys will
provide, as requested by UHS or its Affiliates, documentation for the Unisys
Software set forth in EXHIBIT 3, to the extent that a licensor would normally
provide such documentation to a licensee. Any additional documentation required
beyond the normal distribution shall be at UHS' expense.
3.16 DEDICATED LOGICAL ENVIRONMENTS. As part of the Base
Services, Unisys shall provide the Services using logical environments (LPARS)
dedicated solely to UHS and its Affiliates. Unisys may propose from time to
time during the Term that UHS share the same logical environment that is
dedicated solely to supporting UHS and its Affiliates with other customers of
Unisys. Unisys shall provide to UHS, for UHS' approval, a detailed proposal for
such shared environment, including benefits, savings or risks to UHS and its
Affiliates during the Term.
3.17 ASSETS. As soon as possible after the Effective Date, the
Parties shall execute an asset purchase agreement in accordance with the
following three principles: 1) UHS will continue to make all lease payments
under the Comdisco leases until the expiration of those leases; 2) Unisys will
purchase, at net book value, those UHS assets set forth in EXHIBIT 6 (including
the personal computers and related equipment of the Transitioned Employees set
forth on EXHIBIT 29), and apply a monthly credit for the first four years of
this Agreement on a pro-rata basis as set forth in EXHIBIT 11; and 3) as part of
the Base Services, Unisys shall be financially responsible for all other
expenses related to the assets referred to in (1) and (2), including, but not
limited to, support and maintenance obligations.
3.18 VARIABLE PRICING MECHANISM. By the end of 1996, the Parties
will jointly develop and implement a revised charge process in accordance with
EXHIBIT 31, which will result in charges based on the usage of computing
resources (the "Variable Pricing Mechanism"). The Variable
-9-
<PAGE>
Pricing Mechanism will (1) include, but is not limited to, Application CPU
Minutes, Application Gigabytes and Application Tape Mounts and (2) be broken out
by Module. By the end of 1997, the Parties will have completed a joint project
to (1) determine the feasibility of implementing a "per member per month" based
pricing structure, (2) develop an implementation plan for such per member per
month charging, if appropriate, and (3) submit the final results to the
Executive Committee for its review. The Executive Committee shall complete its
review of the results as soon as reasonably practicable following its receipt of
such results. As the Executive Committee deems appropriate, the terms of this
Agreement shall be adjusted to give effect to such results.
ARTICLE 4. TRANSITION.
4.01 TRANSITION SERVICES. Commencing on the Effective Date, as
part of the Base Services, Unisys shall provide the Transition Services in
accordance with the schedule (the ''TRANSITION SCHEDULE") mutually determined by
the Parties within thirty days of the Agreement Date. Upon completion, the
Transition Schedule shall be set forth in EXHIBIT 4.
4.02 TESTING ENVIRONMENTS. As part of the Base Services, Unisys
shall provide mutually acceptable transition services with respect to
operation/testing environments. Subject to UHS' approval and where testing with
data representative of the production environment is necessary, Unisys may use a
copy of such UHS production data as provided by UHS.
4.03 TRANSITION ACCEPTANCE CRITERIA. As part of the Base
Services, UHS and Unisys shall perform the Transition Acceptance Criteria for
each Module set forth in EXHIBIT 4.
4.04 TRANSITION PLAN CHANGES. In the event that the Transition
Services are not completed in accordance with the time frames set forth in the
Transition Schedule, then the Account Executives shall mutually determine
changes to the Transition Schedule, as well as any increased costs or charges
related to such changes.
ARTICLE 5. APPLICATION RESOURCES.
5.01 APPLICATION RESOURCES. As part of the Services, Unisys
shall, upon UHS' request, provide to UHS and its Affiliates access to Unisys
specialized technical personnel and resources services (the "APPLICATION
RESOURCE POOL") consistent with Unisys other commercial customers receiving
substantially similar goods and services (such as Unisys consulting services and
technology architects) at the rates set forth in EXHIBIT 18 for the first two
years following the Effective Date, for use in connection with new projects or
such other services designated by UHS, including enhancement and consulting
services.
5.02 APPLICATION RESOURCE PROPOSALS. UHS may from time to time
request that Unisys perform services using the Application Resource Pool. As
soon as reasonably practicable after receipt of such a request from UHS and as
part of the Base Services, Unisys shall provide to UHS (1) a written description
of the work Unisys anticipates performing in connection with such Application
Resource Pool, (2) a schedule for commencing and completing such work, (3) the
number of person hours included in the Application Resource Pool anticipated to
be expended and (4) when appropriate, the software, hardware and human resources
and run-time requirements necessary to develop and operate any new applications
and the Parties' respective obligations and Unisys charges, if any. In the
event UHS elects to have Unisys perform services using the Application Resource
Pool, UHS and Unisys shall execute an Application Resource Request. Unisys
shall not use any Application Resource Pool until an Application Resource
Request in respect of such Application Resource Pool has been executed on behalf
of UHS. If Unisys becomes aware that the actual resources (including software,
hardware, human and
-10-
<PAGE>
run-time resources) expended by Unisys or its Agents in performing the services
pursuant to an Application Resource Request exceed or are likely to exceed the
resources set forth in such Application Resource Request, Unisys shall notify
UHS immediately of the extent, or likely extent, that the actual resources
exceed or are expected to exceed the anticipated resources. Unless the charges
for the project are fixed, Unisys shall, as soon as practicable, perform a
root-cause analysis, at its own expense, to identify the cause of the need for
such excess resources and provide a report detailing the circumstances resulting
in the need for such excess resources.
ARTICLE 6. ADDITIONAL SERVICES.
6.01 ADDITIONAL SERVICES. During the Term, UHS may, from time to
time, request that Unisys perform an Additional Service. Unisys shall, as part
of the Base Services, provide to UHS, as soon as reasonably practicable
following receipt of UHS' request, an Additional Services Proposal. In the
event UHS elects to have Unisys perform the Additional Service, UHS and Unisys
shall execute an Additional Services Schedule, and UHS shall be responsible for
the Additional Charges with respect to such Additional Services Schedule.
Unisys shall not begin performing any Additional Service until an Additional
Services Schedule has been duly executed by UHS and Unisys.
6.02 THIRD PARTY SERVICES. Notwithstanding any request made to
Unisys or the submission of an Additional Services Proposal by Unisys pursuant
to SECTION 6.01, UHS shall have the right to contract with a third party to
perform any services which are in addition to, or outside the scope of, the
Services under this Agreement (the "THIRD PARTY SERVICES"). If UHS contracts
with a third party to perform any Third Party Service, Unisys shall cooperate
with UHS and such third party to the extent reasonably required by UHS,
including provision of (1) written requirements, standards and procedures for
UHS systems operations maintained by Unisys so that the enhancements or
developments of such third party may be operated by Unisys, (2) assistance and
support services to such third party at commercially reasonable rates, and (3)
access to the Software and the Machines, subject to any third party restrictions
on Unisys Third Party Software and Unisys Machines, as may be reasonably
required by such third party and approved by UHS in connection with such Third
Party Service. UHS shall require such third parties to comply with Unisys
reasonable requirements regarding operations, data center standards and
security. Unisys shall, at its own expense, provide reasonable cooperation with
such Third Party Service provider at UHS' request, provided the Third Party
Service provider complies with any written requirements, standards and policies
for system operations provided to UHS by Unisys. UHS agrees to consider
recommendations from Unisys regarding the technical architecture or environment
for any such Third Party Service.
6.03 ACQUISITION AND DIVESTITURE. In the event of an acquisition
of any business or business unit by UHS or its Affiliates, any increased
function or service requirements that may result in connection with such
acquisition may be treated as Additional Services or Third Party Services, at
UHS' option. In the event of a divestiture of any business or business unit of
UHS or its Affiliates, Unisys and UHS shall negotiate and implement a decrease
in the Base Charges.
ARTICLE 7. CUSTOMER SATISFACTION.
7.01 BASELINE CUSTOMER SATISFACTION SURVEY. During the 90-day
period after the Effective Date and as part of the Base Services, Unisys shall
conduct a baseline customer satisfaction survey with respect to Base Services
for each Module, for a representative sample of affected end-users at UHS
Service Locations. These surveys shall be of the content and scope described in
EXHIBIT 7, administered in accordance with the procedures agreed upon by UHS and
Unisys and shall be the
-11-
<PAGE>
baseline for measurement of performance improvements described in SECTION 7.02.
The content, scope, method and timing of these surveys shall be acceptable to
UHS and Unisys.
7.02 CUSTOMER SATISFACTION SURVEY. As part of the Base Services,
Unisys shall conduct a customer satisfaction survey for each Module, at a
frequency to be determined by the Account Executives. The surveys shall, at a
minimum, cover at least the following classes of personnel: (1) end-users of the
Services and (2) senior management of end-users. The content, scope and method
of the survey shall be consistent with the baseline customer survey conducted
pursuant to SECTION 7.01. Unisys shall provide UHS and the Executive Committee
with a summary (in form and substance satisfactory to UHS) of the results of any
customer satisfaction survey conducted by Unisys pursuant to this SECTION 7.02.
The Account Executives shall determine the appropriate customer satisfaction
measurements for each class of end-users. These measurements shall show
reasonable improvement from the prior survey. If Unisys fails to achieve any of
these measurements, then 30 days after the survey is complete, Unisys shall
submit a detailed plan to UHS detailing how it will meet the measurements in the
future.
ARTICLE 8. PERFORMANCE STANDARDS.
8.01 BASE SERVICES. Unisys shall provide the Base Services at a
level of performance equal to or better than that provided immediately prior to
the Agreement Date. In addition, commencing ten business days after each
Transition Completion Date, Unisys shall provide the appropriate Base Services
at the Base Performance Standards applicable to such Base Services. For the
lesser of: 1) the transition period prior to each Transition Completion Date, or
2) 60 days, Unisys shall benchmark its level of performance. After such time
period, the Parties shall establish the Base Performance Standards. In the
event that Unisys is unable to achieve applicable Base Performance Standards
within the 30 day period following each Transition Completion Date, Unisys, as
part of the Base Services, and UHS shall consider mechanisms for tuning the
operation of the Systems or adjusting the Base Performance Standards.
8.02 NEW PERFORMANCE STANDARDS. Unisys shall provide Additional
Services at the levels of service (1) specified in an Additional Services
Schedule or (2) otherwise established in writing by UHS and Unisys (the "NEW
PERFORMANCE STANDARDS").
8.03 ADJUSTMENT OF PERFORMANCE STANDARDS. The Executive
Committee shall review during the last quarter of every calendar year and shall
adjust and implement, as appropriate, the Performance Standards. In addition,
either UHS or Unisys may, at any time upon notice to the other Party, request
review and, upon agreement by the Executive Committee, adjust any Performance
Standard which such Party in good faith believes is inappropriate at that time.
8.04 PERFORMANCE REPORTS. As part of the Base Services, on or
before the tenth business day of each month during the Term, Unisys shall
provide to UHS monthly performance reports assessing Unisys performance with
respect to the Performance Standards as agreed upon by UHS and Unisys and
substantially similar to that set forth in EXHIBIT 20.
8.05 ROOT-CAUSE ANALYSIS. In the event that the Services have
not been provided in accordance with the Performance Standards, Unisys shall, as
part of the Base Services, (1) perform a root-cause analysis to identify the
cause of such failure, (2) correct such failure, (3) provide UHS with a written
report detailing the cause of, and procedure for correcting, such failure and
(4) provide UHS with reasonable evidence that such failure will not reoccur.
Unisys shall provide the foregoing to UHS at the next monthly management meeting
following Unisys failure to provide the Services in accordance with the
Performance Standards.
-12-
<PAGE>
ARTICLE 9. BENCHMARKING.
Within 180 days after the Effective Date, UHS and Unisys shall
jointly establish a continuous benchmark program against selected third parties
for quality, cost and delivery of the Services to determine those factors which
are "best of breed". Unisys, at no cost to UHS, shall (1) develop an analysis
of such benchmarking results, (2) develop a plan for reaching any higher level
of service or better price performance ratio identified by the benchmark, and
(3) submit the final results to the Executive Committee for its review (the
"Benchmark Results"). The Executive Committee shall complete its review of the
Benchmark Results as soon as reasonably practicable following its receipt of the
Benchmarking Results. As the Executive Committee deems appropriate, the terms
of this Agreement shall be adjusted to give effect to the Benchmark Results.
The benchmarker, the benchmarking and the information required to conduct or
support the benchmarking shall be jointly determined by UHS and Unisys. The
Executive Committee shall mutually determine expense allocation with respect to
the cost of the benchmarker. The benchmark shall be conducted upon written
request of UHS, but no more frequently than once during any 12 month period.
ARTICLE 10. SERVICE LOCATIONS.
10.01 SERVICE LOCATIONS. The Services shall be provided from the
Unisys Service Locations, or such other locations as may be mutually acceptable.
10.02 SECURITY PROCEDURES. As part of the Base Services, Unisys
shall maintain and enforce at the Unisys Service Locations safety and security
procedures that are at least (1) equal to industry standards for such Service
Locations and (2) as rigorous as those procedures in effect at the UHS Service
Locations as of the Effective Date. As part of the Base Services, Unisys shall
provide at the Unisys Service Locations commercially reasonable (in the context
of the health care industry) safety and security procedures to prevent
unauthorized access to all software and equipment which process UHS Data,
provided that Unisys shall not be responsible for any unauthorized access caused
by the negligent or wrongful acts of UHS or its Agents. Unisys shall
periodically review and update safety and security procedures at the Service
Locations. With respect to each UHS Service Location, as part of the Base
Services, Unisys shall comply with the safety and security procedures that are
in effect at the UHS Service Locations as may be reasonably required by UHS and
its Affiliates.
10.03 SECURITY RELATING TO COMPETITORS. If (1) Unisys provides
the Services from an Unisys Service Location that is shared with a third party
or third parties and (2) any part of the business of Unisys or any such third
party is now or in the future identified by UHS as competitive with UHS' or its
Affiliates' businesses, then Unisys, at UHS' request, shall develop a process,
subject to approval of UHS, to restrict access in any such shared environment to
UHS' Confidential Information so that Unisys Agents engaged in such competitive
business shall have no access to UHS' Confidential Information.
10.04 ACCESS TO PERSONNEL AND RESOURCES. As part of the Base
Services, Unisys shall, upon UHS' request, provide UHS and its Affiliates
reasonably equal access to Unisys specialized technical personnel and resources
consistent with Unisys other commercia' customers receiving substantially
similar goods and services.
ARTICLE 11. PROJECT TEAM.
11.01 EXECUTIVE COMMITTEE. Within 30 days of the Effective Date,
UHS and Unisys shall appoint the Executive Committee. A member of the Executive
Committee may be replaced at any
-13-
<PAGE>
time by the Party that originally appointed such member to the Executive
Committee with the prior consent of the other Party. UHS shall designate one of
its members on the Executive Committee to act as the chairperson of the
Executive Committee. No Executive Committee member shall have voting power
greater than any other Executive Committee member. The Executive Committee
shall be authorized and responsible for generally overseeing the performance of
the Services.
11.02 UNISYS ACCOUNT EXECUTIVE. Unisys shall appoint an
individual who from the Agreement Date shall be in charge of implementing the
Services on a full-time basis and shall act as the primary Unisys contact under
this Agreement (the "UNISYS ACCOUNT EXECUTIVE"). Unisys appointment of any
Unisys Account Executive shall be subject to UHS' prior consent. Unisys shall
not reassign or replace any Unisys Account Executive during the first two years
of his or her assignment as the Unisys Account Executive unless UHS consents to
such reassignment or replacement or the individual (1) voluntarily resigns from
Unisys, (2) is dismissed by Unisys for misconduct or unsatisfactory performance
in respect of his or her duties and responsibilities to UHS or Unisys or (3) is
unable to work due to his or her death or disability. The Unisys Account
Executive shall be located in the Twin Cities metropolitan area, Minnesota,
unless otherwise agreed upon by the Parties.
11.03 KEY EMPLOYEES.
(1) UHS shall, subject to Unisys consent, periodically update the list
of Key Employees. The Key Employees as of the Effective Date shall be
dedicated to the UHS account on a full-time basis for at least two years
unless otherwise identified in EXHIBIT 9. Subsequent Key Employees
shall be dedicated to the UHS account on a full-time basis for at least
one year. Without UHS' approval, which approval shall not be
unreasonably withheld, Unisys shall not replace or reassign off the UHS
account any Key Employee (1) if such replacement or reassignment would
materially disrupt the business of UHS or any of its Affiliates, and (2)
without at least two months' prior notice.
(2) As of the Effective Date, Unisys shall provide UHS with a list of
Key Employees for the transition period. Without Unisys approval, which
approval shall not be unreasonably withheld, UHS shall not reassign any
Key Employee until the transition period has been completed.
11.04 PROJECT STAFF. Unisys shall use adequate numbers of
individuals with suitable training, education, experience and skill to perform
the Services in the most cost effective manner consistent with the applicable
Performance Standards. Unisys shall notify UHS prior to implementing any
material change in staffing requirements at (1) UHS' Service Locations and (2)
Unisys Service Locations.
11.05 FACILITIES AND EQUIPMENT. Unisys shall supply the personal
computers, workstations, terminals, printers, software and other related
equipment and supplies to the Key Employees and Unisys Account Executive
required at any UHS service location. Unisys shall also maintain and upgrade
all such equipment and supplies. In addition, Unisys shall provide on Unisys
premises, to UHS personnel reasonably required to be located on Unisys premises,
reasonable space, office furnishings, janitorial service, office supplies,
available copier, telephone, local phone service and utilities as the Parties
may agree.
11.06 REVIEW MEETINGS. Promptly after the Effective Date, UHS and
Unisys shall determine an appropriate set of periodic meetings to be held
between UHS and Unisys. At a minimum, the parties shall schedule (1) meetings
among operational personnel to discuss ongoing issues relating generally to
daily performance and planned or anticipated activities and changes, (2)
management
-14-
<PAGE>
meetings to review the performance report, the project schedule report, the
changes report and such other matters as appropriate, and (3) senior management
meetings to review relevant contract and performance issues, each to be held as
often as the parties shall agree from time to time during the Term.
Notwithstanding the foregoing, Unisys is willing to participate in such meetings
as often as UHS shall reasonably request.
11.07 SUBCONTRACTORS. EXHIBIT 15 sets forth all subcontractors
that Unisys proposes to use in connection with the Services. On and after the
Effective Date, Unisys may not subcontract any of the Services with any
subcontractor not on EXHIBIT 15 without UHS' prior consent, which such consent
shall not be unreasonably withheld. Notwithstanding the foregoing, Unisys shall
not be relieved of any obligation or responsibility under this Agreement by
virtue of any subcontract and shall remain liable for each of its obligations
and responsibilities under this Agreement. Unisys shall be responsible for the
work and activities of each of its subcontractors, including compliance with the
terms of this Agreement. Unisys shall be responsible for all payments to
subcontractors of Unisys providing Services under this Agreement.
11.08 CONDUCT OF UNISYS PERSONNEL. While at the UHS service
locations, Unisys and its Agents shall (1) comply with UHS' standard rules and
regulations regarding personal and professional conduct (including, but not
limited to, the wearing of an identification badge or personal protective
equipment and adhering to regulations and general safety practices or
procedures) generally applicable to such UHS service locations; (2) comply with
UHS' then current policies on Drug and Alcohol Testing, Equal Employment
Opportunity, Sexual and Other Harassment, Violence Free Workplace, Drug-Free
Workplace, Solicitation and Smoking; and (3) otherwise conduct themselves in a
businesslike and professional manner. In the event that UHS determines in good
faith that a particular Unisys employee or Agent is not conducting himself or
herself in accordance with this SECTION 11.08, UHS may, but shall not be
required to, provide Unisys with notice and documentation in respect of such
conduct. Upon receipt of such notice, Unisys shall promptly investigate the
matter and take appropriate action. Further, upon notice to Unisys, UHS
reserves the right to investigate the matter and take appropriate action
including, but not limited to, requiring the removal of or otherwise restricting
the access of the Unisys employee or Agent from or within UHS' facility.
11.09 CONDUCT OF UHS PERSONNEL. While at the Unisys service
locations, UHS and its Agents shall (1) comply with Unisys standard rules and
regulations regarding personal and professional conduct (including, but not
limited to, the wearing of an identification badge or personal protective
equipment and adhering to regulations and general safety practices or
procedures) generally applicable to such Unisys service locations; (2) comply
with Unisys then current policies on Equal Employment Opportunity, Prevention
and Investigation of Harassment in the Workplace, Disruptive Personnel,
Drug-Free Workplace, Solicitation and Smoking; and (3) otherwise conduct
themselves in a businesslike and professional manner. In the event that Unisys
determines in good faith that a particular UHS employee or Agent is not
conducting himself or herself in accordance with this SECTION 11.09, Unisys may,
but shall not be required to, provide UHS with notice and documentation in
respect of such conduct. Upon receipt of such notice, UHS shall promptly
investigate the matter and take appropriate action. Further, upon notice to
UHS, Unisys reserves the right to investigate the matter and take appropriate
action including, but not limited to, requiring the removal of or otherwise
restricting the access of the UHS employee or Agent from or within the Unisys
facility.
11.10 NON-COMPETITION. Unisys shall not assign an Unisys Account
Executive or Key Employee to the account of the companies and organizations set
forth in EXHIBIT 10 or any successor company or organization without UHS' prior
consent, which consent shall not be unreasonably withheld, during his or her
assignment on the UHS account or for two years from the date of removal.
-15-
<PAGE>
ARTICLE 12. MANAGEMENT AND CONTROL.
12.01 PROCEDURES MANUAL. As part of the Base Services, Unisys
shall deliver to UHS, for UHS' approval as to scope, prior to each Transition
Completion Date, in the form and scope agreed upon by UHS and Unisys and
substantially similar to that set forth in EXHIBIT 22, the Procedures Manual
with respect to the Module covered by such Transition Completion Date,
describing (1) the computer hardware and software environments in which the
Services will be performed, (2) the documentation (such as operations manuals,
user guides and disaster recovery plans) which provides further details
regarding the Services, (3) the procedures Unisys intends to use and the
activities Unisys proposes to undertake in order to manage the Services,
including, when appropriate, those direction, supervision, monitoring, staffing,
reporting, planning and oversight activities normally undertaken at the UHS
service locations where critical business, commercial and financial data of UHS
are processed and (4) crisis management and war room procedures. Until such
time as the Procedures Manual has been approved as to scope by UHS and except as
otherwise required or permitted by this Agreement, Unisys shall follow and
comply with the policies and procedures provided or made known to Unisys, and
followed by and complied with by UHS as of the Effective Date in respect of the
Base Services. Unisys shall, prior to the Transition Completion Date of each
Module and otherwise periodically throughout the Term, update the Procedures
Manual and provide UHS with updated copies thereof to reflect any changes in the
operations or procedures described therein within a reasonable time after such
changes were made. The Procedures Manual shall not contradict the terms of this
Agreement.
12.02 CHANGE CONTROL PROCEDURES. As part of the Base Services,
Unisys shall deliver to UHS, for UHS' approval, prior to the first Transition
Completion Date, in a form and scope substantially similar to that set forth in
EXHIBIT 23, the Change Control Procedures. All Changes shall be made pursuant
to the Change Control Procedures. No Change shall be implemented without UHS'
prior approval except as may be necessary on a temporary basis to maintain the
continuity of the Services. Unisys shall (1) schedule all projects and Changes
so as not to disrupt UHS' or its Affiliates' businesses, (2) prepare and deliver
to UHS a monthly rolling schedule for ongoing and planned Changes for the next
90-day period, (3) monitor the status of Changes against the applicable
schedule, (4) document and provide to UHS notification (which may be given
orally provided that such oral notice is confirmed in writing to UHS within five
business days) of all Changes performed on a temporary basis to maintain the
continuity of the Services no later than the next business day after the Change
was made and (5) once every 180 days during the Term review and modify as
appropriate the Change Control Procedures. The Change Control Procedures shall
be included in the Procedures Manual.
12.03 DELIVERABLES. As part of the Base Services, Unisys shall
provide the Deliverables in accordance with EXHIBIT 25.
ARTICLE 13. PROPRIETARY RIGHTS.
13.01 UHS SOFTWARE. Subject to any third party restrictions, UHS
and its Affiliates hereby grant to Unisys, at no cost to Unisys, solely to
provide the Services, a nonexclusive, non-transferable right to use the UHS
Software; provided, however, that Unisys may not decompile, disassemble or
otherwise reverse engineer the UHS Software in any manner, without UHS' prior
consent. As of the Effective Date, UHS shall, subject to any third party
restrictions, at no cost to Unisys, provide Unisys with access to the UHS
Software in the form in use by UHS and its Affiliates as of the Effective Date.
Subject to SECTION 11.07 and any third party restrictions, Unisys may sublicense
to Unisys subcontractors, at no cost to UHS or its Affiliates, the right to have
access to and operate the UHS Software as may be necessary in connection with
the provision of the Services. Except as otherwise provided in this Agreement,
at such time as Unisys or its Agents cease to perform an
-16-
<PAGE>
applicable Service, this license to Unisys shall immediately revert to UHS or
its Affiliates and Unisys shall (1) deliver to UHS or its Affiliates, at no cost
to UHS or its Affiliates, a current copy of all the UHS Software in the form in
use as of the date of such cessation and (2) destroy or erase all other copies
of the UHS Software that were made available to Unisys or its Agents. Any
enhancements or modifications to the UHS Software and related documentation
shall be and shall remain the exclusive property of UHS or its Affiliates or any
of their third party licensors.
13.02 UNISYS PROPRIETARY SOFTWARE. The Unisys Proprietary
Software shall be and shall remain the exclusive property of Unisys. UHS shall
have no rights or interests in the Unisys Proprietary Software except as
described in this SECTION 13.02. Prior to using any Unisys Proprietary Software
to provide any of the Services, Unisys shall notify UHS that it intends to use
such Unisys Proprietary Software and obtain UHS' consent. If UHS does not
consent, Unisys shall recommend a functionally equivalent alternative which
Unisys shall use upon UHS' consent. The Account Executives will mutually
determine the financial responsibility for any additional incremental costs of
such functionally equivalent alternatives. As part of the Base Services, Unisys
shall make available to UHS and its Affiliates Unisys Proprietary Software for
use by UHS and its Affiliates solely in connection with the Services. Unisys
shall offer to UHS a copy of, and grant to UHS and its Affiliates non-exclusive,
non-transferable license to use the Unisys Proprietary Software at commercially
reasonable price, terms and conditions at such time as Unisys and its Agents
cease to perform an applicable Service under this Agreement.
13.03 UNISYS THIRD PARTY SOFTWARE. The Unisys Third Party
Software shall be and shall remain the property of Unisys third party licensors.
As part of the Base Services, Unisys shall, to the extent permitted by third
party restrictions, make available to UHS and its Affiliates Unisys Third Party
Software for use by UHS and its Affiliates in connection with the Services. As
part of the Base Services, Unisys shall, to the extent permitted by the licenses
or leases in respect of the Unisys Third Party Software, deliver to UHS a copy
of, and transfer to UHS or its Affiliates as agreed to by the Parties, a
perpetual, non-exclusive, non-transferable license to use the Unisys Third Party
Software at such time as Unisys and its Agents cease to provide an applicable
Service. UHS shall pay any ongoing fees after expiration or termination of an
applicable Service (such as monthly license or monthly maintenance fees) for
such Unisys Third Party Software. Unisys shall pay any required consents for
such initial license charges for the use of such functionally equivalent
software. To the extent that third party restrictions prevent Unisys from
transferring UHS and its Affiliates such a license, Unisys shall recommend, and
upon UHS' approval, assist UHS in obtaining a functionally equivalent
alternative. UHS shall pay any ongoing fees after expiration or termination of
an applicable Service (such as monthly license fees or monthly maintenance fees)
for such functionally equivalent software.
13.04 UHS THIRD PARTY SOFTWARE. The UHS Third Party Software has
been licensed to UHS or its Affiliates. UHS is responsible for paying any
consent or access fees to enable Unisys to use the UHS Third Party Software
during the Term. Unisys shall pay the ongoing charges (such as monthly license
fees and monthly maintenance fees) for such UHS Third Party Software. At such
time as Unisys or its Agents cease to provide the applicable Service for which
such UHS Third Party Software is required, Unisys and its Agents shall cease to
have access to such UHS Third Party Software.
13.05 DEVELOPED SOFTWARE. Prior to Unisys or any Unisys Agent (1)
enhancing or modifying the UHS Software or (2) developing any software and
related documentation under this Agreement ((1) and (2), collectively, the
"DEVELOPED SOFTWARE"), Unisys shall inform UHS of such enhancements,
modifications or developments, and the Parties shall agree on the appropriate
allocation of the proprietary rights in and interests to the Developed Software
pursuant to a separate,
-17-
<PAGE>
written agreement (including an appropriate escrow arrangement) between the
Parties (a "DEVELOPED SOFTWARE AGREEMENT") which shall preempt the application
of any applicable state or Federal law or any other provision of this Agreement.
Unless otherwise set forth in a Developed Software Agreement, at such time as
Unisys and its Agents cease to provide an applicable Service, Unisys shall
deliver to UHS or its Affiliates, at no cost to UHS or its Affiliates, a current
copy of, and grant to UHS and its Affiliates a perpetual, non-exclusive
non-transferable license to use the Developed Software and any related
documentation in the form in use by Unisys in connection with the Services as of
the date of such cessation.
13.06 INFRINGEMENT. In the event that the Services, the Unisys
Software, or any code or materials created or used under this Agreement by
Unisys or its Agents that is contained in the Developed Software is found to be
infringing upon the proprietary rights of a third party, Unisys shall, at its
own expense (1) obtain the right to use the infringing material, (2) modify the
software or material so that it is no longer infringing, or (3) obtain and
install functionally similar software or materials that are not infringing.
13.07 CHANGES AND UPGRADES TO THE SYSTEMS. Except as may be
approved by UHS, the Unisys Account Team shall not make any changes or
modifications to the Software that would adversely alter the functionality of
the Software, degrade the performance of the Software, or materially adversely
affect UHS' or its Affiliates' businesses. For purposes of this Section, the
"Unisys Account Team" shall mean those Unisys employees who are directly
involved (with respect to all or a portion of their job responsibilities) in
providing any of the Services to UHS. Unisys shall be responsible, at no cost
to UHS or its Affiliates, for any modification or enhancement to, or
substitution for, the Software used in connection with the Services necessitated
by (1) unauthorized changes by Unisys to the UHS Software or Developed Software
or (2) changes to the Systems Software or related operating environments.
13.08 DOCUMENTATION. All Documentation with respect to Unisys
Software shall be made available to UHS and its Affiliates on a non-exclusive
basis and shall be returned to Unisys upon request, and will remain the property
of Unisys, unless UHS has a license for such Documentation. All Documentation
with respect to UHS Software and Applications Software shall be made available
to Unisys on an non-exclusive basis and shall be and will remain the property of
UHS and its Affiliates.
13.09 COOPERATION UPON DIVESTITURE. In the event of a divestiture
of any business or business unit of UHS or its Affiliates, Unisys shall
cooperate with UHS with respect to, and shall not unreasonably withhold or delay
the grant by Unisys of any license or right to use any Unisys Software or Unisys
proprietary tools to such divested business or business unit at commercially
reasonable charges, terms and conditions. Unisys shall also assist such
divested business or business unit in obtaining any third party licenses from a
third party vendor.
ARTICLE 14. REQUIRED CONSENTS.
All consents, upgrade fees or approvals necessary to allow Unisys
or its Agents to use UHS Software or leased hardware, other than that which is
acquired by Unisys on behalf of, or for the benefit of, UHS shall be obtained by
UHS with Unisys cooperation. All consents or approvals necessary to allow
Unisys or its Agents to (1) use the Unisys Software, (2) use any assets leased
or owned by Unisys or its Agents and (3) use third party services retained by
Unisys to provide the Services during the Term shall be obtained by Unisys.
After Unisys or its Agents cease to provide an applicable Service, and subject
to applicable third party consents, all consents or approvals necessary to allow
UHS and its Affiliates to continue to use: (a) any assets leased or owned by
Unisys or its Agents or (b) the third party services retained by Unisys to
provide Services during the Term, shall be obtained by
-18-
<PAGE>
Unisys. UHS shall be responsible for paying the costs of obtaining any consents
associated with UHS Software, other than that which is acquired by Unisys on
behalf of, or for the benefit of, UHS and its Affiliates during the Term. The
Parties shall negotiate in good faith the financial responsibility for the costs
of obtaining any other consents not otherwise provided for in this Agreement.
ARTICLE 15. UHS RESPONSIBILITIES.
In addition to UHS' other responsibilities provided for in this
Agreement, including, but not limited to payment obligations set forth in
ARTICLE 18, during the Term, UHS shall be responsible for:
(1) the appointment of the UHS Account Executive with the
authority to bind UHS;
(2) providing, on UHS' premises, to Unisys employees dedicated
full time to the UHS account and reasonably required to be
located on UHS' premises, reasonable space, office
furnishings, janitorial service, office supplies, available
copier, telephone, local phone service and utilities in
connection with Unisys provision of the Services, at no cost
to Unisys;
(3) cooperating with Unisys and its Agents by, among other
things, making available, as reasonably requested by Unisys,
personnel, information, approvals and acceptances so that
Unisys may perform its obligations hereunder in a timely and
acceptable manner;
(4) the administrative, operational, maintenance and financial
responsibility for the Applications Software;
(5) furnishing all available documentation for data center
operations, run streams and period-end activities, and any
data available to validate the function of batch flows;
(6) providing the necessary transportation for data and reports
between different UHS Sites; and
(7) providing all existing data processing-related forms and
supplies (magnetic tapes, disk packs, labels, etc.) required
by Unisys to provide Services.
ARTICLE 16. REPORTS AND DATA.
16.01 OWNERSHIP OF UHS DATA. The UHS Data is and shall remain the
property of UHS and its Affiliates. The UHS Data shall not be (1) used by
Unisys or its Agents other than in connection with providing the Services, (2)
disclosed, sold, assigned, leased or otherwise provided to third parties by
Unisys or its Agents (except as provided for in this Agreement and subject to
ARTICLE 22) or (3) commercially exploited by or on behalf of Unisys or its
Agents.
16.02 CORRECTION OF ERRORS. As part of the Base Services, Unisys
shall promptly correct at UHS' request and sole discretion any errors or
inaccuracies in the UHS Data and the Reports caused by Unisys or its Agents and
such correction shall not limit any other remedies that UHS or its Affiliates
may be entitled to under this Agreement or at law. Notwithstanding the
foregoing, Unisys shall not make any changes to the UHS Data without UHS' prior
approval.
-19-
<PAGE>
16.03 RETURN OF DATA. Unisys shall, upon (1) request by UHS at
any time, or, (2) the cessation of all Termination Assistance Services, (a)
promptly return to UHS and its Affiliates, in the format and on the media that
is requested by UHS and is mutually acceptable, at UHS' option, all or a portion
of the UHS Data and (b) erase or destroy that portion of the UHS Data not
returned to UHS in Unisys or its Agents' possession upon cessation of all
Termination Assistance Services. UHS shall pay Unisys reasonable out-of-pocket
costs associated with the return of such data. Archival tapes containing any
UHS Data may be used by Unisys or its Agents solely for back-up and recovery
purposes.
16.04 REPORTS AND RAW DATA. As part of the Base Services, Unisys
shall provide to UHS the Reports. The Reports shall be prepared and provided by
Unisys to UHS according to the schedules and in the manner set forth in the
Procedures Manual and substantially similar to that set forth in EXHIBIT 19.
The Reports will detail UHS' use of system resources, as they relate to the
Charges. Unisys will also provide or allow UHS and its Affiliates electronic
access to the data that was used to generate the Reports for the purposes of ad
hoc reporting and for input to appropriate UHS charge-back systems.
16.05 RE-RUNS. Neither UHS nor its Affiliates shall be charged
for any re-runs of Reports or UHS Data due to the fault of Unisys or any of its
Agents. UHS shall pay for the Application Hours, the Application Gigabytes and
the Application Tape Mount Charges as specified in EXHIBIT 11 for that
percentage of re-runs necessitated by incorrect or incomplete data, failure of
Applications Software or erroneous instructions supplied to Unisys by UHS and
for correction of programming, operator, or other processing errors caused by
UHS. Unisys and UHS shall agree on a process for detection, analysis and
crediting with respect to re-runs as part of the Procedures Manual.
16.06 UNISYS DATA SECURITY. In addition to Unisys obligations set
forth in SECTION 10.02, Unisys security procedures shall ensure that UHS Data
under control by Unisys shall not be available to UHS competitors. Unisys
shall, at UHS' request, provide information with respect to its security
procedures with respect to UHS Data.
ARTICLE 17. CONTINUED PROVISION OF SERVICES.
17.01 DISASTER RECOVERY. As part of the Base Services, Unisys
shall provide disaster recovery services as set forth in this section.
Beginning on the Effective Date, Unisys shall (1) monitor and administer the
disaster recovery and storage agreements between UHS and certain vendors that
are set forth in Exhibit 12, (2) implement the portions of UHS' disaster
recovery plan that are applicable to the Services, (3) cooperate with UHS and
its vendors to (a) initially update the UHS disaster recovery plan to reflect
the relocation of the Machines and Services to the Unisys Service Location and
(b) update the plan on an annual basis thereafter and (c) update the plan prior
to the installation of new Machines or the provision of new Services, (4)
provide a designated representative who has disaster recovery experience and who
can act as a liaison between UHS and Unisys on disaster recovery-related
communications, activities and issues, (5) cooperate with UHS and its vendors in
testing the disaster recovery plan annually, or at such other frequency as may
be set forth in EXHIBIT 12, and (6) comply with the tests that are required by
the disaster recovery plan. UHS has the sole discretion to declare a Disaster.
UHS is responsible for all disaster recovery fees, and Unisys will not charge
UHS for fees related to affected Services during the Disaster period, provided
that Unisys may charge UHS for the reasonable personnel costs incurred by Unisys
with respect to the Services during such Disaster period. Unisys may propose
alternative disaster recovery services to UHS at a level of service equal to or
better than the disaster recovery services currently provided to UHS. If Unisys
makes such a proposal, the parties shall mutually determine its scope and
whether such proposal should be adopted.
-20-
<PAGE>
Any Unisys disaster recovery plan proposal shall identify a backup facility or
facilities that can provide the Services in the event of a Disaster (the "BACKUP
FACILITY"). The Backup Facility shall be sufficiently distant from Unisys
primary processing facility such that a single event would not compromise the
primary processing facility and the Backup Facility simultaneously. In the
event that Unisys cannot perform the Services in accordance with the applicable
performance standards within four weeks of the declaration of a Disaster, UHS
may terminate this Agreement without regard to ARTICLE 25 or SECTION 17.02.
17.02 FORCE MAJEURE. Any failure or delay by UHS or Unisys in the
performance of its obligations pursuant to this Agreement shall not be deemed a
default of this Agreement or a ground for termination hereunder, provided that
such failure or delay could not have been prevented by reasonable precautions
and cannot reasonably be circumvented by the non-performing Party through the
use of alternate sources, work-around plans or other means to the extent such
failure or delay is due to the occurrence of a Force Majeure Event. Except as
provided under this SECTION 17.02, upon the occurrence of a Force Majeure Event,
the non-performing Party shall be excused from any further performance of its
obligations pursuant to this Agreement affected by the Force Majeure Event for
as long as (1) such Force Majeure Event continues and (2) such Party continues
to use reasonable commercial efforts to recommence performance whenever and to
whatever extent possible without delay. The Party delayed by a Force Majeure
Event shall immediately notify the other Party by telephone (to be confirmed in
a notice within five days of the inception of such delay) of the occurrence of a
Force Majeure Event and describe in reasonable detail the nature of the Force
Majeure Event. If any Force Majeure Event prevents, hinders or delays
performance of the Services necessary for the performance of Critical
Applications for more than four weeks, UHS may terminate this Agreement (without
regard to any cure rights that Unisys might otherwise have under this Agreement)
without limitation as to any other remedies that UHS or its Affiliates may be
entitled to under this Agreement or at law. The occurrence of a Force Majeure
Event does not limit or otherwise affect Unisys obligation to provide either
normal business continuation procedures or any other disaster recovery services
as described in SECTION 17.01.
17.03 ALLOCATION OF RESOURCES. Whenever a Force Majeure Event or
a Disaster causes Unisys to allocate limited resources between or among Unisys
Affiliates and customers, UHS and its Affiliates shall receive at least the same
priority in respect of such allocation as that received by Unisys other
commercial customers receiving substantially similar goods and services.
ARTICLE 18. PAYMENTS.
18.01 BASE CHARGES. In consideration of Unisys providing the Base
Services, UHS shall pay to Unisys (or its designated collection/paying agent)
the Base Charges. Each party shall be responsible for all fees and expenses
incurred by such party in connection with this Agreement prior to the Agreement
Date. For the purposes of this Agreement, "as part of the Base Services" means
that such Services or deliverables are included in the Base Charges. Unless
explicitly set forth in this Agreement, no other charges apply to the provision
of the Services.
18.02 ADDITIONAL CHARGES. In consideration of Unisys providing
the Additional Services, UHS shall pay to Unisys (or its designated
collection/paying agent) the Additional Charges.
18.03 RIGHTS OF SET OFF. UHS may set-off any amounts due and owed
to UHS as a credit against the Charges payable to Unisys.
18.04 EXPENSES. All expenses (including travel and travel-related
expenses) incurred by Unisys in connection with its provision of the Base
Services are included in the Base Charges and shall not be reimbursed by UHS or
its Affiliates unless agreed upon in advance by UHS. If agreed upon
-21-
<PAGE>
pursuant to an Additional Services Schedule, UHS shall pay or reimburse Unisys
for the reasonable and actual documented expenses, including travel and
travel-related expenses, incurred by Unisys in connection with its performance
of the Additional Services provided that such expenses are incurred in
accordance with UHS' policy for such expenses as set forth in EXHIBIT 14 or
otherwise approved in writing by the UHS Account Executive. UHS shall have no
obligation to reimburse Unisys for any such expenses which are either not
properly approved in advance or which are not invoiced within 120 days of the
later of the date incurred or invoiced by the third party to Unisys.
18.05 UNUSED CREDITS. Any unused credits against future payments
issued to UHS by Unisys pursuant to this Agreement shall be paid to UHS by
Unisys within 30 days of the expiration or termination of this Agreement for any
reason.
18.06 ADJUSTMENT TO CHARGES. Except as set forth in Exhibit 30,
or as otherwise agreed upon by the Parties and subject to this SECTION 18.06,
Unisys may not increase the Charges during the Term.
18.07 PRORATION. Unless otherwise specified, all periodic fees or
Charges under this Agreement are to be calculated on a calendar month basis and
will be prorated for any partial month.
18.08 TECHNOLOGY IMPROVEMENTS. UHS and Unisys acknowledge that
significant hardware and software price and performance improvements which occur
during the Term may result in greater savings in respect of the total costs of
providing the Services than Unisys assumed in establishing the Charges. Within
60 days after the end of the third and sixth years of this Agreement, the
Parties shall review actual information technology trends during the previous
calendar year based on objective third-party information. In the event that UHS
believes that significant hardware and software price and performance
improvements have occurred which are applicable to the Services and which have
not been adopted by Unisys and if the Parties determine that they will realize
significant cost savings as a result of the implementation of such new hardware
and software improvements, Unisys and UHS shall determine an appropriate
allocation of implementation expenses, determine an appropriate reduction to the
Charges which reflects anticipated cost savings, and implement such new hardware
and software improvements. In the event that the Parties cannot agree on
specific reductions, the matter shall be submitted to the Executive Committee
for dispute resolution pursuant to ARTICLE 28.
18.09 TECHNOLOGY DEVELOPMENTS. As part of the Base Services,
Unisys shall provide to UHS, for UHS' evaluation and testing in connection with
the Services, at the same time as access is provided to other Unisys customers,
any new, commercially available information processing technology developments,
including new software and hardware developments, that could reasonably be
expected to have an impact on UHS' business. If, after such evaluation and
testing, UHS requests that Unisys provide any technology developments to UHS for
UHS' or its Affiliates' use, Unisys shall provide such developments to UHS at
reasonable commercial rates as may be agreed to by UHS and Unisys for any
incremental costs.
ARTICLE 19. PAYMENT SCHEDULE.
19.01 CHARGES. Unisys shall provide UHS during the Term with an
invoice during the first week of each calendar month for that month's Base
Charges and Additional Charges for any Additional Services performed by Unisys
during the prior month. UHS shall pay the Base Charges and the Additional
Charges set forth on the invoice within 30 days after receipt by UHS. UHS shall
pay invoices by wire funds transfer or other electronic means acceptable to
Unisys to an account specified by Unisys.
-22-
<PAGE>
19.02 DETAILED INVOICES. Upon UHS' request, Unisys shall provide
invoices with varying degrees of detail as reasonably requested by UHS or in
accordance with ARTICLE 20.
19.03 TIME OF PAYMENT. Any sum due Unisys pursuant to this
Agreement for which payment is not otherwise specified in this Agreement shall
be due and payable 30 days after receipt by UHS of an invoice from Unisys. In
the event that UHS has made any overpayment or paid any charges not in fact due,
UHS shall be entitled to an immediate refund upon notice to Unisys of such
overpayment. Any payment due to a Party under this Agreement, other than
amounts set-off pursuant to SECTION 18.03 and disputed charges or credits under
SECTION 19.04, shall accrue interest at the rate of one and one quarter percent
per month calculated from the date such payment is owed until the date of
payment.
19.04 DISPUTED CHARGES OR CREDITS. In the event either Party in
good faith disputes the accuracy or applicability of any Charge or credit, the
Party shall notify the other Party of the nature and support for such dispute
within a reasonable period after becoming aware of, and performing an
investigation of, the disputed matter. Except as permitted by SECTION 18.03,
the Party contesting its obligations to pay a Charge or to grant a credit shall
deposit any disputed amount up to but not exceeding 10 percent of the prior
month's Charges (not to exceed in 50 percent of the latest month's Charges in
the aggregate), that cannot be resolved by the Executive Committee which exceeds
$100,000 in an interest-bearing escrow account in the United States bank or
depository specified by the other Party. In the event of a dispute pursuant to
which a Party in good faith believes it is entitled to withhold payment, (1)
such Party shall continue to pay the undisputed amounts and pay the disputed
amounts into escrow or to Unisys in accordance with this SECTION 19.04 and (2)
the other Party shall continue to provide the Services or otherwise perform its
obligations. Upon resolution of the dispute, the Parties shall allocate the
money in the escrow account and any fees relating to opening and maintaining the
escrow account, plus any interest earned on such money, according to the
resolution of the dispute. No failure by either Party to identify a contested
Charge or credit prior to payment of the invoiced amount shall limit or waive
any of such Party's rights or remedies with respect to such Charges or credits,
including such Party's right to withhold such disputed amounts from subsequent
Charges or credits due to the other Party and pay such sums into an escrow
account as described in this SECTION 19.04. Unpaid fees and credits that are in
dispute in accordance with this SECTION 19.04 shall not be considered a basis
for monetary or other default or other grounds for non-performance or
termination under this Agreement.
ARTICLE 20. TAXES.
(1) The Base Charges paid by UHS are inclusive of any applicable
sales, use, personal property or other taxes attributable to
periods on or after the Effective Date based upon or measured by
Unisys cost in acquiring or providing equipment, materials,
supplies or services furnished or used by Unisys in performing or
furnishing the Base Services, including without limitation, all
personal property and use taxes, if any, due on Unisys Machines
and Unisys Software and sales tax, if any, due on Unisys purchase
of assets from UHS or its Affiliates.
(2) In the event that a sales, use, excise or services tax is assessed
on the provision of the Services by Unisys or on Unisys charges to
UHS under this Agreement, however levied or assessed, UHS shall be
responsible for and pay the amount of any such tax. Unisys shall
inform UHS immediately upon its receipt of notice of any kind that
any such sales, use, excise or service tax is due or has been
assessed on the provision of the Services, or upon its receipt of
notice of any kind that any audit is being performed in connection
with the possible assessment of any such sales, use, excise or
service tax. In
-23-
<PAGE>
either such event, Unisys and UHS shall jointly determine whether
any such tax or assessment shall be paid, compromised, litigated
or appealed and shall jointly determine appropriate matters with
respect to procedure, compromise, defense or appeal or any other
aspects of any such tax, audit or assessment concerning its
liability. UHS shall also be responsible for paying all personal
property or use taxes due on or with respect to UHS Machines and
Applications Software and for the payment of any excise taxes for
any UHS data network lines and circuits.
(3) Each Party shall bear sole responsibility for all taxes,
assessments and other real property-related levies on its owned or
leased real property.
(4) The Parties agree to cooperate with each other to more accurately
determine each Party's tax liability and to minimize such
liability to the extent legally possible.
(5) Each Party shall provide and make available to the other any
resale certificates, information regarding out-of-state sales or
use of equipment, materials or services, and other exemption
certificates or information reasonably requested by either party.
Unisys shall collect and remit sales tax where required.
(6) UHS and Unisys shall cooperate to segregate the fees payable under
this Agreement into the following separate payment streams: (1)
those for taxable Services, (2) those for nontaxable Services, (3)
those for which a sales, use or similar tax has already been paid
by Unisys and (4) those for which Unisys functions merely as a
paying agent for UHS in receiving goods, supplies or services
(including leasing and licensing arrangements) that otherwise are
nontaxable or have previously been subject to tax. Unisys shall
minimize taxes to be incurred as a result of the performance of
Unisys obligations under this Agreement.
ARTICLE 21. AUDITS.
21.01 PROCESSING. Upon notice from UHS, Unisys shall provide, and
shall cause its Agents to provide, such auditors and inspectors as UHS or any
audit or regulatory authority may designate with reasonable access to the
Service Locations and the Software and Machines for the purpose of performing
audits or inspections of the Services and the businesses of UHS in accordance
with the procedures set forth in EXHIBIT 13 (including Unisys provision of any
Service being provided in support of business being audited). Unisys shall
provide, and shall cause its Agents to provide, such access (1) during normal
business days and hours (except as may be necessary to perform security audits)
at Unisys Service Locations and (2) at any time at UHS' service locations. As
part of the Base Services, Unisys shall provide, and shall cause its Agents to
provide, such auditors and inspectors any assistance that they may reasonably
require. If any audit by an auditor designated by UHS or a regulatory authority
results in Unisys being notified that it or its Agents are not in compliance
with any generally accepted or statutory accounting principle, statutory
requirement, or other audit requirement (as agreed to by the Parties) relating
to the Services (other than an audit requirement (a) relating specifically to
the insurance industry or (b) that UHS did not comply with as of the Agreement
Date), Unisys shall, and shall cause its Agents to, at its own expense and
within the period of time specified by such auditor or regulatory authority
comply with such audit. If UHS was not in compliance with any such audit
requirement as of the Agreement Date, such audit requirement may be considered
outside the scope of this Agreement and any additional cost incurred by Unisys
in complying with such audit requirement will be paid as mutually determined by
the Account Executives. UHS and its Agents shall comply with Unisys reasonable
security policies and procedures in conducting any such audits.
-24-
<PAGE>
21.02 CHARGES. Upon notice from UHS, Unisys shall provide, and
shall cause its Agents to provide, to UHS and its designees access to such
financial records and supporting documentation as may be necessary for UHS to
determine the accuracy of the Charges. Upon reasonable notice from UHS, UHS may
audit the Charges charged to UHS to determine that such Charges are accurate and
in accordance with this Agreement. If, as a result of such audit, UHS
determines that Unisys has overcharged UHS, UHS shall notify Unisys of the
amount of such overcharges and Unisys shall promptly pay to UHS the amount of
the overcharge, plus interest at the current prime rate, as announced by The
Chase Manhattan Bank, N.A., calculated from the date of receipt by Unisys of the
overcharged amount until the date of payment to UHS.
21.03 UNAUTHORIZED ACCESS.
(1) In the event Unisys or its Agents discover or are notified of a
material breach or potential material breach of security on a
system, or telecommunications network which contains, processes or
transmits UHS' Confidential Information, Unisys shall immediately
(a) notify UHS, (b) investigate the breach or potential breach and
(c) provide UHS and its designees with reasonable access to all
resources and information in Unisys possession as may be necessary
to investigate the breach or potential breach. UHS shall have the
right to conduct any investigation relating to such breach or
potential breach that it determines is appropriate.
(2) In the event Unisys or its Agents may have been, or becomes aware
that an individual or individuals may be, involved in unauthorized
or illegal activities to obtain money or information from or
through UHS or any of its Affiliates, its clients or suppliers or
in any way damage (or expose to damage) UHS its Affiliates or any
of their clients or suppliers, Unisys shall immediately (a) notify
UHS, (b) investigate such activities and (c) provide UHS and its
designees with reasonable access to all resources and information
in Unisys possession as may be necessary to investigate such
activities. UHS shall have the right to conduct and control any
investigation relating to such activities that it determines is
appropriate.
21.04 RECORD RETENTION. Each of UHS and Unisys, as part of the
Base Services, shall (1) retain records and supporting documentation sufficient
to document the Services and the Charges paid or payable by UHS under this
Agreement in accordance with such Party's record and document retention policies
and procedures and in accordance with all laws and regulations applicable to UHS
and its Affiliates' businesses and (2) upon notice from the other Party, provide
such Party and its auditors or inspectors with reasonable access to such records
and documentation.
21.05 ACCESS AND REPORTS. As part of the Base Services, Unisys
shall provide to UHS and its designees access to (1) Unisys and its Agents'
staff, (2) records and supporting documentation relating to the Services and the
portion of the Charges which are volume-related, (3) the Software and (4) the
Service Locations or other facilities, as may be reasonably necessary for UHS or
its auditors or inspectors to perform the audits described in SECTION 21.01 and
SECTION 21.02. As part of the Base Services, Unisys shall provide to UHS
periodic status reports in accordance with the audit procedures described in
EXHIBIT 13 regarding Unisys resolution of any audit-related compliance activity
for which Unisys is responsible.
21.06 AUDIT SOFTWARE. As part of the Base Services, and subject
to the Change Control Procedures, Unisys shall, at UHS' request and to the
extent permitted under the applicable third party agreements, operate such audit
software as UHS or its designee may provide to Unisys from time to time during
the Term.
-25-
<PAGE>
21.07 FACILITIES. To the extent reasonably available, Unisys
shall provide to UHS and its designees on Unisys premises (or if the audit is
being performed of a subcontractor, the subcontractor's premises if necessary)
space, office furnishings (including lockable cabinets), telephone and facsimile
service, utilities and office-related equipment (including a copier) as UHS or
such auditors and inspectors may reasonably require to perform the audits
described in this ARTICLE 21. Such facilities and related assistance shall be
provided as part of the Base Services.
21.08 THIRD PARTY AUDIT. As part of the Base Services, Unisys
shall cooperate and participate, at the reasonable request of UHS, in an audit
of Unisys by an external auditor acceptable to, and paid for by UHS, provided
that UHS acknowledges that such audit shall only include any information related
to UHS or to the Services. The results of such third party audit shall be the
exclusive property of UHS.
ARTICLE 22. CONFIDENTIALITY.
22.01 CONFIDENTIAL INFORMATION. Each Party shall use at least the
same standard of care in the protection of Confidential Information of the other
Party as UHS uses to protect its own confidential or proprietary information and
as generally set forth on EXHIBIT 32. Each Party shall use the Confidential
Information of the other Party only in the performance of obligations under this
Agreement and shall make such Confidential Information available only to its
employees or Agents having a "need to know" with respect to such purpose. Each
Party shall advise each such employee and Agent of its obligations under this
Agreement and require such employees, subcontractors and agents to abide by such
obligations. In the event of the expiration or termination of this Agreement
for any reason, all Confidential Information of a Party disclosed to and all
copies thereof made by the other Party shall be returned to the disclosing Party
or, at the disclosing Party's option, erased or destroyed. The recipient of the
Confidential Information shall provide to the disclosing Party certificates
evidencing such destruction. The obligations in this SECTION 22.01 shall not
restrict any disclosure by a Party pursuant to any applicable law, or by order
of any court or government agency (provided that the disclosing Party shall give
prompt notice to the non-disclosing Party of such order). Confidential
Information of a Party shall not be afforded the protection of this Agreement if
such data was (a) developed by the other Party from non-Confidential
Information, (b) rightfully obtained by the other Party without restriction from
a third party, (c) publicly available other than through the fault or negligence
of the other Party or (d) released without restriction to anyone by the owner of
the Confidential Information. Except for such longer period as may be required
by law or contract, the obligations set forth in this ARTICLE 22 shall continue
for five years after the expiration or termination of this Agreement. In
addition, each Party understands and agrees that the receiving Party's employees
will further develop their skills and experience through use of the disclosing
Party's Confidential Information. It is not a violation of this Agreement for
the recipient to use such general knowledge, skills, ideas, and techniques
learned from Confidential Information in the ordinary course of its business;
provided, however, that such knowledge, skills, ideas, and techniques are
limited to information mentally retained by the receiving Party's employees
without a subsequent reference to tangible documentation, and will not include
(i) the source of the information, (ii) any financial, statistical, or personnel
information, or (iii) the business plans of the disclosing Party.
22.02 ATTORNEY-CLIENT PRIVILEGE. Unisys acknowledges that UHS
asserts that Privileged Work Product has been or will be prepared in
anticipation of litigation and that Unisys is performing the services in respect
of Privileged Work Product as an agent of UHS, and that all matter related
thereto is protected from disclosure by Rule 26 of the Federal Rules of Civil
Procedure. UHS will notify Unisys of any Privileged Work Product to which
Unisys has or may have access. After the Unisys Account Executive is notified
or otherwise becomes aware that such documents, data, database
-26-
<PAGE>
or communications are Privileged Work Product, only Unisys personnel for whom
such access is necessary for the purposes of providing Services to UHS as
provided in this Agreement may have access to Privileged Work Product. Should
Unisys ever be notified of any judicial or other proceeding seeking to obtain
access to Privileged Work Product, Unisys shall (a) immediately notify UHS
(attention: Assistant General Counsel for Litigation) at the second address
specified in SECTION 33.02 and (b) at the direction of UHS, resist providing
such access to the extent it may lawfully do so. UHS shall have the right and
duty to represent Unisys in such resistance or to select and compensate counsel
to so represent Unisys or to reimburse Unisys for reasonable attorneys' fees and
expenses incurred in resisting such access. If Unisys is ultimately required,
pursuant to an order of a court of competent jurisdiction, to produce documents,
disclose data or otherwise act in contravention of the confidentiality
obligations imposed in this Agreement, or otherwise with respect to maintaining
the confidentiality, proprietary nature and secrecy of Privileged Work Product,
Unisys shall not be liable for breach of such obligation.
22.03 EQUITABLE RELIEF. Each Party acknowledges and agrees that,
in the event of a breach or threatened breach of any of the foregoing
provisions, such Party may have no adequate remedy in damages and, accordingly,
shall be entitled to seek an injunction or specific performance to prevent such
breach or threatened breach; provided, however, that no specification of a
particular legal or equitable remedy shall be construed as a waiver, prohibition
or limitation of any legal or equitable remedies in the event of a breach
hereof.
22.04 UNAUTHORIZED ACTS. Each Party shall: (1) notify the other
Party promptly of any unauthorized possession, use or knowledge, or attempt
thereof, of any Confidential Information by any person or entity which may
become known to it, (2) promptly furnish to the other Party full details of the
unauthorized possession, use or knowledge, or attempt thereof, and use
reasonable efforts to assist the other Party in investigating or preventing the
reoccurrence of any unauthorized possession, use or knowledge, or attempt
thereof, of Confidential Information, (3) cooperate with the other Party in any
litigation and investigation against third parties deemed necessary by such
Party to protect its proprietary rights and (4) promptly prevent a reoccurrence
of any such unauthorized possession, use or knowledge of Confidential
Information.
22.05 LEGAL ACTION. Neither Party shall commence any legal action
or proceeding in respect of any unauthorized possession, use or knowledge, or
attempt thereof, of Confidential Information by any person or entity which
action or proceeding identifies the other Party or its Confidential Information
without such Party's consent.
ARTICLE 23. REPRESENTATIONS, WARRANTIES AND COVENANTS.
23.01 BY UHS. UHS represents, warrants and covenants that: (1) it
is a corporation validly existing and in good standing under the laws of
Delaware, (2) it has all the requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement, (3) the execution,
delivery and performance of this Agreement has been duly authorized by UHS, (4)
no approval, authorization or consent of any governmental or regulatory
authority is required to be obtained or made by it in order for it to enter into
and perform its obligations under this Agreement, (5) in connection with its
obligations under this Agreement, it shall comply with all applicable Federal,
state and local laws and regulations and shall obtain all applicable permits and
licenses, (6) the UHS Proprietary Software does not and will not, and any code
or materials provided or created by UHS or its Agents that is contained on
Developed Software will not, infringe upon the proprietary rights of any third
party, (7) it has not disclosed as of the Effective Date any Confidential
Information relating to Unisys and (8) it is either the owner or authorized by
the owner of the UHS Machines and UHS Software to use such UHS Machines and UHS
Software in accordance with the terms of this Agreement.
-27-
<PAGE>
23.02 BY UNISYS. Unisys represents, warrants and covenants that:
(1) it is a corporation validly existing and in good standing under the laws of
Delaware (2) it has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement, (3) the execution,
delivery and performance of this Agreement has been duly authorized by Unisys,
(4) no approval, authorization or consent of any governmental or regulatory
authority is required to be obtained or made by it in order for it to enter into
and perform its obligations under this Agreement, (5) in connection with
providing the Services, it shall comply with all applicable Federal, state and
local laws and regulations and has obtained all applicable permits, rights and
licenses (including, without limitation, all rights and licenses which are
necessary to use the Systems), (6) the Unisys Proprietary Software does not, and
the provision of the Services and the Developed Software (except for any code or
materials provided or created by UPS or its Agents) does not, infringe upon the
proprietary rights of any third party, (7) it has not disclosed as of the
Effective Date any Confidential Information relating to UHS and (8) it is either
the owner or authorized by the owner of the Unisys Machines to use such Unisys
Machines in accordance with the terms of this Agreement.
23.03 GOVERNMENT CONTRACTS. Unisys will comply and will cause its
Agents to comply with all provisions applicable to subcontractors under United
States Government Contracts, which provisions are set forth in EXHIBIT 27.
23.04 SERVICE LEVEL AGREEMENTS. Unisys and its Agents, in
connection with certain service level agreements between UHS or its Affiliates
as set forth in EXHIBIT 26, agree to comply with all service level provisions
(including liquidated damages, credits or other similar payments) applicable to
the Services being performed by Unisys; provided, however, that Unisys payment
of such liquidated damages, credits or other similar payments will be UHS' sole
financial remedy for Unisys failure to meet any such service levels and will be
in lieu of Performance Credits under Section 30.03, but will still count towards
the threshold set forth in Section 30.03. In addition, Unisys shall be eligible
for a portion of any credit related to Unisys performance of the Services with
respect to the service level agreements. EXHIBIT 26 may only be revised upon
mutual agreement of the Account Executives.
ARTICLE 24. TERMINATION.
24.01 TERMINATION FOR CONVENIENCE. UHS may terminate this
Agreement, in whole or with respect to one or more Modules, without regard to
SECTION 24.02 or SECTION 24.03, at any time after the fourth anniversary of the
Effective Date upon 90 days' prior notice to Unisys.
24.02 TERMINATION FOR SALE OF UNISYS. In the event that
substantially all of the assets or more than 50 percent of the voting securities
of Unisys are sold or transferred to any person or entity or events occur that
would constitute a change in control of Unisys, Unisys shall provide UHS notice
within 10 days thereof. UHS may terminate this Agreement upon 120 days' prior
notice to Unisys, if such notice is given within 60 days of UHS' receipt of
notice by Unisys of such a sale, transfer or change in control. In the event
that Unisys fails to provide the notice pursuant to this SECTION 24.02, and
fails to cure such breach within two days after receipt of notice from UHS, UHS
may terminate this Agreement immediately. The termination rights described in
this SECTION 24.02 shall not apply to a merger or corporate reorganization in
which Unisys is the surviving entity (provided, however, that such merger or
corporate reorganization does not result in a material adverse change in the
performance of the Services).
24.03 TERMINATION FOR MATERIAL BREACH. If either party defaults
in the performance of any of its material obligations under this Agreement and
such default is not cured within 30 days (the "DEFAULT CURE PERIOD") after
notice (the "DEFAULT NOTICE") is received by the defaulting Party
-28-
<PAGE>
specifying, in reasonable detail, the nature of the default, the non-defaulting
Party may, upon further notice to the defaulting Party, terminate this Agreement
as of the date specified in such notice of termination. Any non-payment of a
disputed amount under this Agreement pursuant to SECTION 19.04 shall not be
considered a default under this Agreement. Any termination under this SECTION
24.04 shall be without limitation as to any other remedies that a Party may be
entitled to under this Agreement. A Party shall be in default under this
Agreement if upon the occurrence of events reasonably creating doubts as to such
Party's ability or willingness to perform future obligations under this
Agreement and such Party fails to provide within lO days after written notice by
the other Party such assurances of performance as are reasonably requested in
writing by the other Party. Notwithstanding anything to the contrary contained
in this Agreement, in the event of a dispute relating to or arising out of a
Default Notice, the dispute resolution process set forth in SECTION 28.02 and
SECTION 28.03 must be commenced and completed within the Default Cure Period.
24.04 TERMINATION FOR NON-PAYMENT. Without prejudice to other
remedies, Unisys may terminate this Agreement for default by UHS if UHS fails to
make payments of (a) Base Charges provided for in Section 19.01, identified as
delinquent in a written notice from Unisys to UHS, within 20 days after receipt
by UHS of such notice or (b) any other charges, identified as delinquent in a
written notice from Unisys to UHS, within 30 days after receipt by UHS of such
notice.
24.05 TERMINATION FOR UNISYS BANKRUPTCY. UHS may, by giving
Unisys notice, immediately terminate this Agreement:
(1) upon the institution by Unisys of proceedings to be adjudicated as
a bankrupt or insolvent entity, or the consent by Unisys to the
institution of bankruptcy or insolvency proceedings against Unisys or
the filing by Unisys of a petition or answer or consent seeking
reorganization or release under the Federal Bankruptcy Act, or any
similar federal or state law, or the consent by Unisys to the filing of
any such petition or the appointment of a receiver, liquidator,
assignee, trustee or other similar official of Unisys or of all or any
substantial part of its property, or the making by Unisys of an
assignment for the benefit of creditors, or the admission in writing by
Unisys of its inability to pay its debts generally as they become due or
the taking of corporate action by Unisys in furtherance of any such
action; or
(2) if within 60 days after the commencement of an action against
Unisys seeking any bankruptcy, insolvency, liquidation, dissolution or
similar relief under any present or future law or regulation, such
action shall not have been dismissed or all orders or proceedings
thereunder affecting the operations or the business of Unisys stayed, or
if the stay of any such order or proceeding shall thereafter be set
aside; or if within 60 days after the appointment without the consent or
acquiescence of Unisys of any trustee, receiver or liquidator or similar
official of Unisys or of all or any substantial part of the property of
Unisys, such appointment shall not have been vacated.
24.06 OTHER TERMINATIONS. This Agreement may also terminate, in
whole or in part, pursuant to SECTION 17.01, SECTION 17.02 and SECTION 30.03.
Any such termination shall not be subject to SECTION 24.01, SECTION 24.02 or
SECTION 24.03.
ARTICLE 25. TERMINATION CHARGE.
25.01 TERMINATION FOR CONVENIENCE. In the event of a termination
pursuant to SECTION 24.01, UHS shall pay to Unisys on the effective date of such
termination an amount equal to the Termination Charge specified in EXHIBIT 17
for termination pursuant to SECTION 24.01 for the Contract Year that such
termination is effected.
-29-
<PAGE>
25.02 NO ADDITIONAL CHARGES. In the event of a termination of
this Agreement, UHS shall not pay to Unisys any fees or charges other than those
fees due and payable under this Agreement at the time of such termination and
the applicable Termination Charges set forth in SECTION 25.01.
ARTICLE 26. TERMINATION ASSISTANCE.
Provided that UHS is not in default of its financial obligations
to Unisys under this Agreement, Unisys shall perform, upon UHS' request, the
Termination Assistance Services for up to 360 days following the expiration or
termination of this Agreement, in whole or in part, for the Charges in effect
immediately prior to such expiration or termination. The quality and standards
of performance following expiration or termination shall not be degraded. Upon
expiration or termination of this Agreement, in whole or in part, each Party
shall, in accordance with the other's written instructions, return to the other
Party all relevant Confidential Information or other materials supplied to it in
the same condition as received, normal wear and tear excepted. If UHS requests
that all UHS Data stored on any data media be returned to it, UHS shall pay
Unisys the then current replacement cost of all data media delivered by Unisys
to UHS. Unisys shall provide the data in a machine readable form to the
specifications set by UHS and to the satisfaction of UHS.
ARTICLE 27. EXIT PLAN.
Provided that UHS is not in default of its financial obligations
under this Agreement, then upon the expiration or the termination of this
Agreement, in whole or in party, for any reason:
(1) Unisys shall provide the Termination Assistance Services with UHS'
reasonable cooperation in accordance with ARTICLE 26;
(2) each Party shall have the rights specified in ARTICLE 13 in
respect of the Software and tools;
(3) upon UHS' request, with respect to any contracts applicable to
services being provided to UHS or its Affiliates for maintenance,
disaster recovery services and other necessary third party
services being used by Unisys or its Agents to perform Services as
of the expiration or termination, Unisys shall, if possible,
transfer or assign such agreements to UHS or its designee, on
terms and conditions acceptable to both parties;
(4) upon UHS' request, Unisys shall sell to UHS or its designee the
Unisys Machines being solely used to provide the Services, free
and clear of all liens, security interests or other encumbrances,
at market rates; and
(5) upon UHS' request, for up to one year after the end of the Term,
Unisys shall make any Unisys employees performing Services as of
the termination date available to UHS for the purpose of: 1)
continuing to perform any of the Services on UHS' behalf (and UHS
shall pay reasonable straight time, overtime or related expenses
incurred by Unisys, including overhead allocations of Unisys for
such employees, travel expenses, overtime expenses,
telecommunication charges and similar charges); and 2) making
employment offers and hiring such employees as UHS deems
necessary.
ARTICLE 28. DISPUTE RESOLUTION.
-30-
<PAGE>
28.01 ACCOUNT EXECUTIVES. All disputes shall initially be
referred to the Unisys Account Executive and the UHS Account Executive. If the
Account Executives are unable to resolve the dispute within 10 business days
after referral of the matter to them, the Parties shall submit the dispute to
the Executive Committee.
28.02 EXECUTIVE COMMITTEE. The Executive Committee shall meet at
least once every 90-day period during the Term (or such other time as the
Executive Committee may agree from time to time) for the purpose of overseeing
the performance of this Agreement and resolving the disputes that may arise
under this Agreement. The Executive Committee shall consider the disputes in
the order such disputes are brought before it. In the event the Executive
Committee is unable to resolve a dispute within 10 business days from the date
that the Executive Committee first considered the matter, the Executive
Committee shall notify the senior management of each Party.
28.03 BINDING ARBITRATION. If a dispute is not resolved pursuant
to SECTION 28.02, then either Party may institute binding arbitration in
accordance with the rules of the American Arbitration Association. The
arbitrators will have no authority to award any punitive or exemplary damages,
or to vary or ignore the terms of this Agreement, and will be bound by
controlling law. With respect to an action to seek injunctive relief or
specific performance to prevent or stay a breach of any provision of ARTICLE 13
or ARTICLE 22, the procedures of this ARTICLE 28 are not binding.
28.04 CONTINUITY OF SERVICES. During the Term, Unisys assumes an
independent obligation to continue to perform the Services during any dispute
between the Parties, including any litigation or arbitration proceedings.
ARTICLE 29. INDEMNIFICATION.
29.01 BY UHS. Subject to the limits and other provisions of
ARTICLE 30, UHS shall indemnify and hold Unisys harmless from any liability,
damages or expenses, including reasonable attorneys' fees, arising out of or
relating to (1) any claim by a third party that (a) the UHS Proprietary Software
or (b) any code or materials provided or created by UHS that is contained in the
Developed Software infringe upon the proprietary rights of any third party
(except as may have been caused by a (i) modification by Unisys or its Agents
(which was not directed by UHS) or (ii) Unisys combination, operation or use
with devices, data or programs furnished by Unisys or its Agents, to the extent
that the infringement arises from such modifications, combination, operation or
use), (2) any amounts, including taxes, interest and penalties assessed against
Unisys which are obligations of UHS pursuant to ARTICLE 20, (3) the inaccuracy
or untruthfulness of any representation, warranty or covenant made by UHS
pursuant to SECTION 23.01, (4) tangible personal or real property damage, net of
insurance recovery, resulting from UHS' acts or omissions, to the extent such
damage exceeds $50,000 in the aggregate, (5) any payment or other obligation of
UHS which accrues prior to the Effective Date, (6) a breach of the safety or
physical security procedures in effect (i) at the UHS Service Locations or (ii)
at the Unisys Service Locations to the extent the breach results from UHS' acts
or omissions, (7) any claim by a Unisys employee for wrongful acts committed by
UHS or its Agents, including, but not limited to, employment claims for
discrimination or harassment on the basis of a protected class under Title VII
of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, or the Minnesota Human Rights Act, and (8)
breaches of UHS' obligations under this Agreement.
29.02 BY UNISYS. Subject to the limits and other provisions of
ARTICLE 30, Unisys shall indemnify and hold UHS harmless from, any liability,
damages or expenses, including reasonable attorneys' fees, arising out of or
relating to (1) any claim by a third party that (a) the Services, (b) the Unisys
Proprietary Software or (c) any code or materials provided or created by Unisys
or its Agents that is contained in the Developed Software infringe upon the
proprietary rights of any third party
-31-
<PAGE>
(except as may have been caused by (i) a modification by UHS' employees (which
was not directed by Unisys) or (ii) UHS' combination, operation or use with
devices, data or programs furnished by UHS or its Agents to the extent that the
infringement would not have occurred but for such modification, combination,
operation or use), (2) any amounts including taxes, interest and penalties
assessed against UHS or its Affiliates which are obligations of Unisys pursuant
to ARTICLE 20, (3) the inaccuracy or untruthfulness of any representation,
warranty or covenant made by Unisys pursuant to Section 23.02, (4) claims
arising out of Unisys breach or violation of Unisys subcontracting arrangements,
(5) tangible personal or real property damage, net of insurance recovery,
resulting from Unisys acts or omissions, to the extent such damage exceeds
$50,000 in the aggregate, (6) a breach of the safety or physical security
procedures in effect (i) at the Unisys Service Locations or (ii) at the UHS
service locations to the extent the breach results from Unisys acts or
omissions, (7) any claim by a UHS employee for wrongful acts committed by Unisys
or its Agents, including, but not limited to, employment claims for
discrimination or harassment on the basis of a protected class under Title VII
of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, or the Minnesota Human Rights Act, and (8)
breaches of Unisys obligations under this Agreement.
29.03 INDEMNIFICATION PROCEDURES. If any third party makes a
claim covered by SECTION 29.01 or SECTION 29.02 against an Indemnitee with
respect to which such Indemnitee intends to seek indemnification under SECTION
29.01 or SECTION 29.02, such Indemnitee shall give prompt notice of such claim
to the Indemnifying Party (under SECTION 29.01 or SECTION 29.02), including a
brief description of the amount and basis therefor, if known. Neither the
Indemnifying Party nor any Indemnitee shall be liable for any settlement of any
third party claim subject to indemnification effected without its consent.
ARTICLE 30. DAMAGES.
30.01 DIRECT DAMAGES. Each of UHS and Unisys shall be liable to
the other Party for any direct damages arising out of or relating to a breach of
its obligations under this Agreement. The following shall be considered direct
damages and Unisys shall not assert that they are indirect, incidental, special,
or consequential damages or lost profits to the extent they result from Unisys
failure to provide the Services in accordance with this Agreement:
(1) reasonable costs of recreating (if possible) or reloading any of
UHS' or its Affiliates' information that is lost or damaged;
(2) reasonable costs of implementing a work around in respect of a
failure to provide all or a portion of the Services or any part thereof;
(3) reasonable costs of replacing lost or damaged equipment software
and materials;
(4) reasonable costs and expenses incurred by UHS or its Affiliates to
return Systems Software to manufacturer specifications;
(5) reasonable costs and expenses incurred by UHS or its Affiliates to
procure the Services from an alternate source, to the extent in excess
of Unisys charges under this Agreement, and provided that such costs and
expenses shall not continue beyond the Term;
(6) reasonable straight time, overtime or related expenses incurred by
UHS or its Affiliates, including overhead allocations of UHS or its
Affiliates for their employees, wages and salaries of additional
employees, travel expenses, overtime expenses, telecommunication
-32-
<PAGE>
charges and similar charges, due to the failure of Unisys or its Agents
to provide all or a portion of the Services incurred in connection with
(1) through (5) above;
(7) specific damages incurred pursuant to contractual provisions
including, without limitation, liquidated damages, performance
guarantees and fee reductions incurred by UHS or its Affiliates pursuant
to customer or provider contracts; and
(8) the amount of any payment or penalty imposed on a Party by a
regulatory agency arising out of the other Party's breach of this
Agreement.
The liability of either Party for actual, direct damages resulting from
performance or nonperformance under this Agreement, regardless of the form of
action, and whether in contract, tort (including, without limitation,
negligence), warranty or other legal or equitable grounds, will be limited in
the aggregate for the Term to the greater of (i) $6,000,000 or (ii) the charges
paid to Unisys by UHS during the twelve month period immediately prior the date
the amount of damages was established (the "DIRECT DAMAGES CAP"). In addition,
the liability of either Party for actual, direct damages specified in
subsections (7) and (8) resulting from performance or nonperformance under this
Agreement, regardless of the form of action, and whether in contract, tort
(including, without limitation, negligence), warranty or other legal or
equitable grounds, will be limited in the aggregate for the Term to the greater
of (i) $1,000,000 or (ii) ten percent of the charges paid to Unisys by UHS
during the twelve month period immediately prior the date the amount of damages
was established; provided, however that on and after the first anniversary of
the Effective Date, such direct damages shall be limited to an amount equal to
subsection (ii). These limitations will not apply to (a) losses by either Party
for bodily injury or damage to real property or tangible personal property, (b)
either Party's obligations to indemnify the other pursuant to SECTION 29.01(1),
SECTION 29.01(7), SECTION 29.02(1) and SECTION 29.02(7), (c) any breach of
confidentiality obligations contained in this Agreement or the improper
disclosure of UHS Data, or (d) liability resulting from the willful misconduct
of a Party.
30.02 CONSEQUENTIAL DAMAGES. In no event will either Party have
any liability whether based on contract, tort (including, without limitation,
negligence), warranty or any other legal or equitable grounds, for any loss of
interest, profit or revenue by the other Party or for any consequential,
indirect, incidental, special, punitive or exemplary damages suffered by the
other Party, arising from or related to this Agreement, even if such Party has
been advised of the possibility of such losses or damages; provided, however,
that this clause will not prevent either Party from recovering amounts owed
under this Agreement. This limitation will not apply to (1) losses by either
Party for bodily injury or damage to real property or tangible personal
property, (2) either Party's obligations to indemnify the other pursuant to
SECTION 29.01(1), SECTION 29.01(7), SECTION 29.02(1) and SECTION 29.02(7), (3)
any breach of confidentiality obligations contained in this Agreement or the
improper disclosure of UHS Data, or (4) liability resulting from the willful
misconduct of a Party.
30.03 PERFORMANCE CREDITS. In the event Unisys fails to meet any
of the Performance Standards, Unisys shall pay to UHS the applicable Performance
Credits. Although the sum of the Performance Credits may be greater than 10
percent of Base Charges for a calendar month, the Performance Credits payable to
UHS in any calendar month shall not exceed, in the aggregate, 10 percent of that
calendar month's Base Charges. The Performance Credits represent negotiated
amounts on the basis of reduced service levels and shall not be deemed or
construed as a penalty. If the Performance Credits incurred actually exceed 10
percent of the calendar month's Base Charges during five months in any
consecutive six month period during the Term, UHS may, upon notice to Unisys,
terminate this Agreement immediately in whole or in part without regard to
SECTION 24.04. Notwithstanding the foregoing, Unisys and its Agents shall
cooperate with UHS and its Affiliates to respond to customer and provider
complaints or concerns in connection with Unisys performance or non-
-33-
<PAGE>
performance of Services under this Agreement and shall effectuate a prompt
work-around or other solution to the extent necessary to address satisfactorily
such complaints or concerns. If, during the Term, the Performance Credits
incurred exceed, in the aggregate, $3,000,000, UHS may, upon notice to Unisys
within 90 days of exceeding such amount, terminate this Agreement in whole or in
part without regard to SECTION 24.04. In the event UHS terminates this
Agreement in part, (1) the Baseline shall be adjusted to reflect such Services
removed from the scope of this Agreement as a consequence of such termination
and (2) Unisys shall reduce the Base Charges on a dollar for dollar basis. UHS'
receipt of Performance Credits shall be without limitation as to any other
remedies available to UHS or its Affiliates under this Agreement or at law,
provided that UHS shall not receive duplicative recoveries.
ARTICLE 31. INSURANCE.
As part of the Base Services, without limitation of any of UHS'
other rights or remedies, during the Term, Unisys shall maintain and shall cause
its subcontractors to maintain insurance of the type and in the amounts
specified below:
(1) statutory workers compensation insurance in accordance with all
Federal, state and local requirements;
(2) employers' liability insurance in an amount not less than
$1,000,000 per occurrence;
(3) commercial general liability or at Unisys option umbrella
liability (including contractual liability insurance) insurance
and coverage for the indemnity agreements in an amount not less
than $10,000,000 per occurrence;
(4) comprehensive automobile liability insurance covering all vehicles
that Unisys owns, hires or leases in an amount not less than
$1,000,000 per occurrence (combined single limit for bodily injury
and property damages);
(5) Errors and omissions liability insurance for computer programming
and operations in an amount not less than $35,000,000 per
occurrence;
(6) Crime/fidelity insurance for loss or damages related to
malfeasance by Unisys or its Agents in an amount not less than
$15,000,000 per occurrence and containing a loss payable clause in
favor of UHS as UHS' interest shall appear; and
(7) (a) all risk replacement cost insurance on all equipment,
furniture, inventory and software used in connection with the
Services, (b) all risk replacement cost property insurance on the
buildings and leasehold improvements on any Unisys Service
Locations, and (c) extra expense insurance covering Unisys
obligations under this Agreement.
Unisys shall furnish to UHS certificates of insurance or other appropriate
documentation (including evidence of renewal of insurance) evidencing coverage
in accordance with this ARTICLE 31 and naming UHS as an additional insured but
only to the extent of those liabilities assumed by Unisys pursuant to SECTION
29.02. Such certificates or other documentation shall include a provision
whereby 20 days' notice must be received by UHS prior to coverage cancellation
or material alteration of the coverage by either Unisys or the applicable
insurer.
ARTICLE 32. TRANSITIONED EMPLOYEES.
-34-
<PAGE>
32.01 LETTER AGREEMENT. Contemporaneously with the execution of
this Agreement, each party shall execute a letter agreement in the form of
Exhibit 28 with respect to the Transitioned Employees.
32.02 UNISYS EMPLOYEE LEASING. From the Agreement Date, Unisys
will subcontract (or "Lease") the services of some or all of the UHS employees
set forth on EXHIBIT 29 until such employees are transitioned to Unisys or
otherwise unavailable as set forth in this ARTICLE 32. Such UHS employees shall
remain on the UHS payroll, but technical work direction shall be provided by
Unisys employees. Unisys shall provide work direction to such UHS employees in
accordance with existing UHS rules, regulations and this Agreement. Any human
resource matter relating to any of these UHS employees, including, but not
limited to discipline, shall be referred to UHS for resolution.
32.03 CREDIT MECHANISM. On a monthly basis, Unisys shall pay UHS
an amount equal to base salaries, fringe benefits and allocated expenses for
each such Leased UHS employee. UHS may credit such payment amount against the
monthly Charges it pays to Unisys. Upon Unisys request, UHS shall provide a
detailed explanation of the monthly credit.
32.04 REPLACEMENT OF LEASED EMPLOYEES. Each Party recognizes that
Leased UHS employees may (1) voluntarily terminate their employment with UHS, or
(2) be involuntarily terminated by UHS. In addition, Unisys may request that a
UHS employee be replaced because of performance issues (subject to resolution by
UHS in accordance with SECTION 32.02). If any of these three scenarios occurs,
Unisys and UHS will attempt to replace such UHS employee with either another
Leased UHS employee or a Transitioned Employee as soon as practicable.
ARTICLE 33. MISCELLANEOUS PROVISIONS.
33.01 ASSIGNMENT AND CHANGE OF CONTROL.
(1) This Agreement shall be binding upon and shall inure to the
benefit of each Party hereto, its successors and assigns;
provided, however, neither Party may assign this Agreement
or any of its rights or obligations hereunder without the
consent of the other Party and any such attempted assignment
shall be void, except that either Party may assign this
Agreement or any of its rights or obligations hereunder
without the consent of the other Party pursuant to a change
of control, including a merger, consolidation or other
similar corporate transaction, or sale of substantially all
of its assets or stock.
(2) In the event of a change of control of UHS, UHS (or its
successor or assignee) and Unisys shall review the Services
being provided under this Agreement and mutually determine
an appropriate adjustment to the Services and Base Charges
to meet UHS' changing business requirements.
33.02 NOTICES. Except as otherwise specified in this Agreement,
all notices, requests, consents, approvals and other communications required or
permitted under this Agreement shall be in writing and shall be sent by
telecopy, if possible, to the number specified below. A copy of any such notice
shall also be sent by registered express air mail or U.S. certified mail
(return receipt requested) on the date such notice is transmitted by telecopy to
the address specified below:
In the case of UHS:
United HealthCare Services, Inc.
-35-
<PAGE>
450 Columbus Boulevard
Hartford, Connecticut 06183
Attn: Mario Fabrizio
For default or termination, with a copy to:
United HealthCare Services, Inc.
9900 Bren Road East
Minnetonka, Minnesota 55343
Mail Route MN08-8313
Attn: General Counsel
In the case of Unisys:
Unisys Corporation
Contracts Department
USCD Outsourcing Practice
12010 Sunrise Valley Drive
Reston, VA 22091
Either Party may change its address or telecopy number for notification purposes
by giving the other Party notice of the new address or telecopy number and the
date upon which it will become effective.
33.03 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one single
agreement between the Parties.
33.04 HEADINGS. The article and section headings and the table of
contents are for reference and convenience only and shall not be considered in
the interpretation of this Agreement.
33.05 RELATIONSHIP. The performance by Unisys of its duties and
obligations under this Agreement shall be that of an independent contractor and
nothing contained in this Agreement, except for the limited agency expressly
provided for herein, shall create or imply an agency relationship between UHS or
its Affiliates and Unisys, nor shall this Agreement be deemed to constitute a
joint venture or partnership between UHS or its Affiliates and Unisys. Unisys
agrees and represents that it is an independent contractor and its personnel are
not UHS' or its Affiliates' agents or employees for federal tax purposes, and
are not entitled to any UHS employee benefits. UHS and Unisys each assume sole
and full responsibility for the acts of their respective personnel and UHS and
Unisys and their respective personnel have no authority to make commitments or
enter into contracts on behalf of, bind or otherwise obligate the other party or
their Affiliates in any manner whatsoever, except for the limited agency
expressly provided for herein.
33.06 CONSENTS, APPROVALS AND REQUESTS. Unless otherwise
specified in this Agreement, all consents and approvals, acceptances or similar
actions to be given by either Party under this Agreement shall not be
unreasonably withheld or delayed and each Party shall make only reasonable
requests under this Agreement.
33.07 SEVERABILITY. If any provision of this Agreement (other
than a term or provision relating to any payment obligation) is held by a court
of competent jurisdiction to be contrary to law, then the remaining provisions
of this Agreement or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable shall
not be affected
-36-
<PAGE>
thereby, and each such provision of this Agreement shall be valid and
enforceable to the extent granted by law.
33.08 WAIVER. No delay or omission by either Party to exercise
any right or power it has under this Agreement shall impair or be construed as a
waiver of such right or power. A waiver by any Party of any breach or covenant
shall not be construed to be a waiver of any succeeding breach or any other
covenant. All waivers must be in writing and signed by the party waiving its
rights.
33.09 PUBLICITY. Each Party shall (1) submit to the other all
advertising, written sales promotions, press releases and other publicity
matters relating to this Agreement in which the other Party's name or mark is
mentioned or language from which the connection of said name or mark may be
inferred or implied and (2) not publish or use such advertising, sales
promotions, press releases or publicity matters without the other Party's
consent.
33.10 ENTIRE AGREEMENT. This Agreement and each of the Exhibits,
which are hereby incorporated by reference into this Agreement, is the entire
agreement between the Parties with respect to its subject matter and supersedes
all other agreements, oral or written, relating to its subject matter. There
are no other representations, understandings or agreements between the Parties
relative to such subject matter.
33.11 AMENDMENTS. No amendment to, or change, waiver or discharge
of, any provision of this Agreement shall be valid unless in writing and signed
by an authorized representative of the party against which such amendment,
change, waiver or discharge is sought to be enforced.
33.12 GOVERNING LAW. This Agreement and the rights and
obligations of the Parties hereunder shall be construed in accordance with and
be governed by the laws of the State of Minnesota.
33.13 SURVIVAL. The terms of ARTICLE 13, ARTICLE 18, ARTICLE 21,
ARTICLE 22, ARTICLE 26, ARTICLE 27, ARTICLE 28, ARTICLE 29, ARTICLE 30,
SECTION 16.01, SECTION 16.03, SECTION 23.03, SECTION 23.04, SECTION 33.09,
SECTION 33.12, this SECTION 33.13, SECTION 33.14, SECTION 33.15 and
SECTION 33.16 shall survive the expiration or termination of this Agreement for
any reason.
33.14 THIRD PARTY BENEFICIARIES. Each Party intends that this
Agreement shall not benefit, or create any right or cause of action in or on
behalf of, any person or entity other than UHS or Unisys.
33.15 COVENANT OF FURTHER ASSURANCES. UHS and Unisys covenant and
agree that, subsequent to the execution and delivery of this Agreement and
without any additional consideration, each of UHS and Unisys will execute and
deliver any further legal instruments which are or may become reasonably
necessary to effectuate the purposes of this Agreement.
33.16 SOLICITATION. Except with respect to Transitioned
Employees, Unisys shall not, without UHS' prior consent, during the Term or for
the one-year period following termination or expiration of this Agreement,
knowingly solicit, offer employment, commence employment or retain as a
consultant any employee or former employee of UHS or its Affiliates who has been
directly or indirectly employed in the performance of the Services (other than
employees who have ceased to be employed for a period of at least one year).
Neither UHS nor its Affiliates shall, without Unisys prior consent, during the
Term knowingly solicit, offer employment, commence employment or retain as a
consultant any employee or former employee of Unisys who has been directly or
indirectly employed in the performance of the Services (other than employees who
have ceased to be employed for a period of at least one year).
-37-
<PAGE>
33.17 REMEDIES. All remedies, either under this Agreement or by
law or otherwise afforded, will be cumulative and not alternative.
IN WITNESS WHEREOF, each of UHS and Unisys have each caused this
Agreement to be signed and delivered by its duly authorized representative.
UNITED HEALTHCARE SERVICES, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
UNISYS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
-38-
<PAGE>
Exhibits Index
1. Base Services
Attachment A UHS's Mainframe Production Databases
Attachment B Business Communications Plan (sample)
UHS Functional and Scope Matrix
2. Applications Software
3. Systems Software
4. Transition Plan
Attachment Sample Unisys Transition/Migration Plan
5. Performance Credits
6. Hardware Inventory
7. Customer Satisfaction
8. Service Locations
9. Key Employees
10. UHS Competitors
11. Charges
Attachment A Capital Budget
Attachment B Budget
Attachment C FTE
Attachment D NBV Software list
Attachment E NBV Hardware list
Attachment F Software Maintenance
Attachment G Lease Schedule
12. Disaster Recovery Services/Critical Applications
13. Audit Procedures
14. UHS Travel Expense Policy
15. Subcontractors
16. Termination Assistance Services
17. Termination Charges
18. Application resource Request and Rates
19. Resource Usage Reports and Data
20. Form of Performance Report
<PAGE>
21. Strategic Plan
Attachment A UHS Strategic Plan
Attachment B Ongoing and Future Projects
22. Procedures Manual Outline
23. Change Control Procedures Outline
24. UHS Affiliates
25. Deliverables
26. Service Level Agreements
Attachment A Sample Performance Reports
Attachment B List of UHS Service Level Agreements
Attachment C Service Management Targets
27. U.S. Government Contract Requirements
28. Transitioned Employee Letter Agreement
29. UHS Employee List
30. COLA
31. Variable Pricing
32. Confidential Data Release Agreement
<PAGE>
EXHIBIT 1
BASE SERVICES AND FUNCTION AND SCOPE MATRIX
Unisys will provide the following Base Services in accordance with the
Functional Matrices detailed in Section 11 and Performance Standards outlined in
Exhibit 26. Charges for Base Services will be based on system capacity as
defined in Section 1.
SECTION I BASE SERVICES
SECTION II FUNCTION AND SCOPE MATRIX
<PAGE>
EXHIBIT 1
BASE SERVICES AND FUNCTIONAL MATRICES
SECTION I. BASE SERVICES
Below is a summary of the services Unisys will provide to United HealthCare. A
description of responsibilities for each function is found on subsequent pages
and detailed in Section II, Function and Scope Matrix. Services not specified
are assumed to be the responsibility of UHS.
A. CAPACITY BASED SERVICES
Capacity based services include providing Unisys and IBM host mainframe
processing and storage resource, (identified in Exhibit 6, Machines) to run
applications in United HealthCare's production and development
environments. Resources will be "billed" based on the capacity of
resources available "on the floor" as of the effective date of this
agreement (see table below). Unisys and United HealthCare will actively
pursue an algorithm for variable based pricing in accordance with
Exhibit 31.
CPU (MIPS) DISK (GB)
Unisys Mainframe 266 670
IBM Mainframe 218 1209
United HealthCare may from time to time, modify the content of the workload
(i.e., add and/or remove applications or increase or decrease the size of
applications), so long as United HealthCare forecasts the workload resource
change requirements in accordance with agreed to procedures.
B. OPERATIONS
Unisys will provide console operations, batch support, online support,
problem resolution, tape management, file backup and recovery,
documentation, hardware planning and installation.
<PAGE>
C. PRODUCTION CONTROL
Unisys will establish mutually agreed to production control standards and
procedures based on Exhibit 22, Procedures Manual during the first 120 day
following the effective date of this agreement. This will be accomplished
by integrating the existing United HealthCare procedures with those of the
Unisys Service Center for those aspects relating to production control
including: planning, analysis, scheduling tool support, schedule
maintenance, WFL/JCL support and correction, problem tracking and reporting
after initial analysis by Unisys. Unisys will be responsible for running
and supporting the United HealthCare Production Schedule.
United HealthCare will be responsible for application program related
failures encountered in the execution of the production schedule.
D. SECURITY
Unisys will provide, in accordance with United HealthCare's policies and
procedures, and requirements, physical security in the Unisys Service
Center location and will be the custodian of the security files providing
the required backup and recovery services. Unisys will also be responsible
for making UHS requested changes to the security software system. The
security administration for hosts and applications will be the
responsibility of UHS, i.e. administration of User codes and Logons.
E. TECHNICAL SERVICES
Unisys will provide; system software planning and installation; system
performance monitoring, tuning and management; problem resolution; data
management; and assistance with new technology selection. Additionally,
Unisys will provide implementation and installation support for CICS, COMS,
DB2 and DMSII systems management System Software license management at an
agreed upon release level and other as described in Exhibit 3, Systems
Software, and required software maintenance as part of service delivery.
Unisys will continue to support current projects, identified in Exhibit 21,
Strategic Plan, On-going Projects, as of the effective date of this
agreement. New projects will be mutually evaluated by both UHS and Unisys
to determine a) whether the project is in-scope or out of scope and b)
level of effort.
<PAGE>
F. DISASTER RECOVERY
Unisys will be responsible for Disaster Recovery and backup for data center
operations and technical support Base Services, including: testing and
implementation in the event of a disaster. Unisys will provide these
services in accordance with terms and conditions of article 17 of the
agreement.
G. HOST PRODUCTION DATABASE ADMINISTRATION
Unisys will provide production and test database support and maintenance
for the existing workload including backups and re-orgs. Database
administration includes DB2/DMSII support and maintenance, and the VSAM and
DMS production environments in support of United HealthCare's application
workload. Production databases are identified in Attachment A, UHS
Mainframe Production Databases.
H. HELP DESK SERVICES
Help Desk Relationships/Dependencies
United HealthCare's Service Center, Level 1 (Golden Valley, Minnesota), and
the Unisys Service Center Help Desk, Level 2. The primary/critical
communications path between United HealthCare and Unisys will exist within
the peer to peer relationship of the respective help desks.
Level 1 (Help Desk)
United HealthCare will be responsible for all first call screening/support
from United HealthCare's user community on a seven days/week, twenty four
hours/day basis. First call support includes initial problem logging,
problem review/analysis and resolution of such things as: United HealthCare
connectivity and network (LAN/WAN) problems, application support, user
application and host systems security problems, desktop support, and
facilities issues. In addition, the first level Help Desk will provide
information to end users relating to scheduled events that affect system
and application availability and other planned changes.
Level 2 (Help Desk)
The Unisys Service Center Help Desk will receive direct calls from the
United HealthCare's Help Desk (in Golden Valley, Minnesota), for issues
related to second level support. This
<PAGE>
includes logging and responding to the following: system hardware and
operational software issues, Unisys maintained/supported network problems,
and Operations questions/changes. In addition, the Unisys Help Desk will
be the focal point for receiving and logging service requests from other
United HealthCare infrastructure groups that require direct contact and/or
technical assistance from other Unisys Service Center Operations or
Technical Services organizations.
Assumptions for second level support:
United HealthCare Service Center currently receives between 4,000 to 5,000
calls per month. It is assumed that 80% of these calls will be handled and
satisfactorily resolved exclusively by United Health Care's Level 1 Help
Desk and/or other support organizations, and that [[no more than 1,000
calls per month, or about 20% of the current call volume, will need to be
forwarded to the Unisys Level 2 Help Desk for problem resolution.]]
I. COMMUNICATIONS
Unisys will provide data center communications services required to support
connectivity between the Unisys Service Center and the United HealthCare
Network (depicted in the diagram below), including: hardware and software
operations maintenance and support, product procurement, data
communications management and problem determination. For printing, Unisys
will provide communications connections and support to United HealthCare's
Golden Valley site. In addition, Unisys will work with United HealthCare
or its third party vendor for communications problem determination, change
control and reporting.
<PAGE>
[GRAPHICS OMITTED]
Unisys will install and maintain a bridge until UHS's network outsourcing
contract is negotiated at which time the network provider will take
responsibility for providing this "bridge." Unisys anticipates this will
occur not later than the end of the migration period to the Unisys InfoHub.
Any bridge provided by UHS's third party network provider will be
compatible with the existing bridge equipment provided by Unisys.
J. PRINT
Unisys will be responsible for print file availability to United
HealthCare's print facility in Golden Valley. This includes the support
and maintenance for all processes up to the creation of the physical report
on the UHS printer. Any hardware, software, or data communications
technology necessary to support this process will be provided by Unisys.
This includes problem determination in support of print file queuing or the
transmission of print files to the printer. The printer devices and
printout distribution process will continue to be the responsibility of
UHS.
<PAGE>
K. OUTSIDE MEDIA SERVICES
Unisys will provide the same magnetic media output as United HealthCare
currently provides to their microfiche services provider in accordance with
existing schedules. Any courier/shipping charges for transporting this
media (inbound and outbound) will be borne by United HealthCare. The
microfiche services provider will return all output directly to United
HealthCare for distribution.
Unisys will provide the same magnetic media output as United HealthCare
currently provides to their ID-card services provider in accordance with
existing schedules. Any courier/shipping charges for transporting this
media (inbound and outbound) will be borne by United HealthCare. The
ID-card services provider will return all output directly to United
HealthCare for distribution.
L. FINANCIAL AND ASSET MANAGEMENT
Unisys will provide financial and asset management and reporting for
hardware and software used in the delivery of the services to UHS.
M. UNIX SUPPORT
Unisys will provide operational support (tape mounts and system resets) for
UNIX production systems listed in Exhibit 6, Machines, and housed in the
Unisys Service Center. All other responsibilities (applications,
databases, system administration) will remain the responsibility of United
HealthCare.
As each UHS's UNIX box is installed at the Unisys Service Center, Unisys
may implement its standard system monitoring software package. This will
allow the automated system and database backups to be performed using
standard processes.
N. HP 3000 SUPPORT
Unisys will provide operational support (tape mounts, system backups, and
system resets) and "as-is" operating system support for the HP-3000 system
(identified in Exhibit 6, Machines) to be housed in the Unisys Service
Center. "As is" support will include limited or best-effort problem
resolution for the installed (Version 1d) operating system. (Version 1d of
the operating system is no longer support by HP.) All other
responsibilities (applications, databases, system administration, etc.)
will remain the responsibility of United HealthCare.
<PAGE>
Due to the "age" of the operating system and other software installed on
the system, Unisys will be unable to implement its standard system
monitoring software on this platform.
O. ACCOUNT MANAGEMENT
O-1. MANAGEMENT STRUCTURE
ACCOUNT MANAGER
Unisys will provide an Account Manager who will be responsible
for day to day operations of the UHS contract and services.
TRANSITION MANAGER
Unisys will provide a Transition Manager who will be
responsible for the transition/migration activities during the
first year of the UHS contract.
SERVICE DELIVERY MANAGER
Unisys will provide a Service Delivery Manager who will be the
day to day point of contact with the UHS Client Services
Managers.
ACCOUNT EXECUTIVE ACCOUNT EXECUTIVE
Unisys will provide an Account Executive who will be
responsible for client satisfaction and be the management
point of contact between UHS Client Services Managers and
senior management, and the Unisys account team on all matters
of service delivery.
EXECUTIVE STEERING COMMITTEE
The Executive Steering Committee's charter is as follows:
- Provide overall guidance to the outsourcing engagement
- Provide a forum to articulate major Information Technology
trends or strategies in the industry
<PAGE>
- Ensure cohesive delivery of all Unisys services being
provided to UHS
- Facilitate decision-making on issues related to overall
direction of the engagement
The Account Executives from UHS and Unisys will be responsible for
convening the steering committee meetings at regular intervals
(approximately quarterly), reviewing engagement status, and
obtaining management consensus on future plans and directions.
Unisys representation on the Executive Steering Committee will
include the Unisys Account Executive and the USCD Principal. UHS
will identify members of this committee within the first 30 days of
the effective date of this agreement.
O-2. SERVICE LEVEL AGREEMENTS MANAGEMENT
During the Term of the agreement, Unisys will meet all service
levels as determined and agreed to during the Term in accordance
with Article 8 of the contract, and Exhibit 26, Performance
Standards and Service Level Agreements,
O-3. REPORTS AND MEETINGS.
REPORTS
Unisys will perform the reports functions in accordance with
Article 19 of the contract.
MEETINGS
Within 30 days after the effective date, UHS and Unisys will
determine an appropriate set of meetings to be held between
representatives of UHS and Unisys. Unisys, with input from UHS,
will prepare written agendas for such meetings, conduct the
meetings jointly with UHS, and provide written minutes to the
participants and other interested parties after the meetings. Such
meetings will include, but not be limited to the following:
- A monthly meeting among operational personnel representing UHS
and Unisys to discuss performance and planned or anticipated
activities and changes that might affect performance.
<PAGE>
- During the first three months of this Agreement, the Executive
Steering Committee will meet monthly to review contract status
and ensure that the engagement is progressing according to
schedule. The committee will then subsequently decide how
often meetings should be held.
- Senior management meetings between UHS and Unisys will be
often as deemed necessary by the parties to review relevant
contract and performance issues.
O-4. CHANGE CONTROL AND MANAGEMENT
When a change request is received, Unisys will review the change
request requirement to determine whether the projected change
constitutes an out-of-scope requirement in accordance with the
functional and scope matrix. If the requested change is out-of-
scope, it will be referred to Unisys and UHS's management for
resolution. In-scope requests will be assigned by Unisys on the
basis of availability of resources and impact on users and Service
Level requirements.
Unisys will develop (to the extent necessary) and employ standard
change management procedures that make maximum use of the existing
change management procedures and which are reasonably acceptable to
UHS.
Among other things Unisys will address:
- the need to coordinate in accordance with the change
management processes and procedures with UHS before
implementing any changes and to maintain an audit trail of
implemented changes
- the need to implement changes only in a manner that ensures
continuity when changes are initiated
- the need to schedule all proposed applications software and
processing environment changes
- the need to participate in regular (weekly) change management
meetings with UHS
- the need to obtain UHS's approval for all changes to
production processing schedules, other than in the case of an
emergency
<PAGE>
- the need to schedule outages for system maintenance,
expansions and modifications during hours that meet the
operational needs of UHS and minimizes disruption
- the need to ensure the integrity of, to control versions, and
to track the locations of custom interfaces of System
Software, and to support their operability and integration
with operating System Software and tools.
Change management procedures will be developed in conjunction with
UHS within 120 days of the effective date of this agreement
according to the Integrated Change Management Plan outlined in
Exhibit 23.
In the event that changes are instituted that may affect existing
Service Level performance, a 30-day review period will commence.
The UHS Service Level Customers will be notified by UHS of the
review period prior to commencement. During the review period,
performance for the affected Service Level will be monitored by
Unisys and UHS. At the conclusion of the review period, Unisys and
UHS will review the Service Level performance and negotiate a
mutually acceptable Service Level for future attainment.
O-5. PROBLEM MANAGEMENT
Unisys will be responsible for all problems within the scope of its
responsibility. Unisys will promptly respond to problems within
the scope of its responsibility and provide support until such
problems are resolved. Unisys will record, manage, and track
production problems that occur during the operation of the Unisys
Service Center. Within the first 90 days after the effective date
of this agreement, Unisys will develop, in conjunction with UHS,
procedures for escalating problems that cannot be resolved in
normal day-to-day operations. Such problems normally fall outside
the normal scope of day-to-day operations related problems, and
fall within the management area. These procedures will be
documented and adhered to by both parties.
Unisys will conduct periodic reviews of past problems to discover
any trends or problem areas that need special attention. Unisys
will document and provide UHS with the results of these reviews.
O-6 CUSTOMER SATISFACTION SURVEY
Unisys will conduct an annual customer satisfaction survey. This
survey will be based on the example provided in Exhibit 7, Customer
Satisfaction Survey. In addition to the annually survey Unisys
will also conduct a survey 90 days after the effective date of this
agreement.
<PAGE>
O-7 BUSINESS COMMUNICATION PLAN
Within 120 days of the effective date of this agreement, the
Account Executives, representing UHS and Unisys, will develop and
implement a business communication plan for each outsourced service
area. The plan will be based on the example provided in Attachment
B, Business Communications Plan.
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
Section II Function and Scope Matrics
Operations
Production Control
Security
IBM Technical Services
Unisys Technical Services
Disaster Recovery
IBM Database Administration
Unisys Database Administration
Distributed Systems Management
Help Desk Services
Communications
Print Services
Outside Media Services
Financial and Asset Management
UNIX Support
HP 3000 Support
Account Management
Responsibility Key
X - Responsible -- The party identified has full responsibility for
performing this function.
P - Primary -- This party has responsibility for performing the function
and obtaining concurrence from the other party.
S - Secondary -- This party provides input to and collaborates with the
party responsible for the function.
<PAGE>
EXHIBIT 1
ATTACHMENT A
UHS'S MAINFRAME PRODUCTION DATABASES
<TABLE>
<CAPTION>
Mainframe Production Databases
-------------------------------------------------------
Unisys IBM
------------------ --------------------
<S> <C> <C>
A19-4X DRALPHADB AUTH
DRCHARLIEDB COB
DRDELTADB CPT
DRPHOADB DRCLMASTA
DRARCALPHADB DRCLDETLA
DRARCCHARLIEDB ENROLL
DRARCDELTADB GRPMASTER
DRGBLDB GRPDETAIL
DRGDB SUBSCRIBE
BLDISTDB PHCLAIMSA
BLPACKDB MEMMASTER
DRWINDB PAC
LAGDB HLCLMMAST
OMSDB HLCLMDETL
PRODWINDB PRVMASTER
RESOURCEDB PPC
SECURITYDB PCO
SERVERDB DRG
A18-3X DRBRAVODB LEGALENT
DRECHODB FINPRD
DRACRBRAODB NETWORK
DRARCECHODB COUNTY
BLPACKCDB HCFA
DRGDB CATLVL2
DRWINCDB REVENUE
NEWTAPELIBDB ICD
RESOURCECDB PLAN-TABLE
SECURITYDB ADJCLAIMA
MEDRATES
MEMKEY
AFCONTROL
COMMIT
CONTROL
TRAILER
AFBALANCE
<PAGE>
<CAPTION>
Mainframe Production Databases
-------------------------------------------------------
Unisys IBM
------------------ --------------------
<S> <C> <C>
MARKETPKG
PSAMASTER
PSADETAIL
PSACATCDR
PSACNT06R
PSACNT09R
PSACNT10R
AMDAILY
AMREPORT
RTSPOST
MP-ENR
PDLOCATE
SU-CONTRL
SUICDCPT
SUMAPVALU
GUIDEMSTR
PTCLM-ADJ
PTCLM-DCD
PTCLM-DCM
PTCLM-HCD
PTCLM-HCM
PTCLM-PHC
SITE
ADJEXCL
PDNUMBERS
CS-MEMBER
CS-PROV
MEMMONTH
DRCLMASTB
DRCLDETLB
ADJCLAIMB
PHCLAIMSB
<PAGE>
<CAPTION>
EXHIBIT 1
ATTACHMENT A
UHS'S MAINFRAME PRODUCTION DATABASES
Mainframe Production Databases
------------------------------------------------------
Unisys IBM
------------------ --------------------
<S> <C> <C>
A19-4X DRALPHADB AUTH
DRCHARLIEDB COB
DRDELTADB CPT
DRPHOADB DRCLMASTA
DRARCALPHADB DRCLDETLA
DRARCCHARLIEDB ENROLL
DRARCDELTADB GRPMASTER
DRGBLDB GRPDETAIL
DRGDB SUBSCRIBE
BLDISTDB PHCLAIMSA
BLPACKDB MEMMASTER
DRWINDB PAC
LAGDB HLCLMMAST
OMSDB HLCLMDETL
PRODWINDB PRVMASTER
RESOURCEDB PPC
SECURITYDB PCO
SERVERDB DRG
A18-3X DRBRAVODB LEGALENT
DRECHODB FINPRD
DRACRBRAODB NETWORK
DRARCECHODB COUNTY
BLPACKCDB HCFA
DRGDB CATLVL2
DRWINCDB REVENUE
NEWTAPELIBDB ICD
RESOURCECDB PLAN-TABLE
SECURITYDB ADJCLAIMA
MEDRATES
MEMKEY
AFCONTROL
COMMIT
<PAGE>
<CAPTION>
Mainframe Production Databases
------------------------------------------------------
Unisys IBM
------------------ --------------------
<S> <C> <C>
CONTROL
TRAILER
AFBALANCE
MARKETPKG
PSAMASTER
PSADETAIL
PSACATCDR
PSACNT06R
PSACNT09R
PSACNT10R
AMDAILY
AMREPORT
RTSPOST
MBP-ENR
PDLOCATE
SU-CONTRL
SUICDCPT
SUMAPVALU
GUIDEMSTR
PTCLM-ADJ
PTCLM-DCD
PTCLM-DCM
PTCLM-HCD
PTCLM-HCM
PTCLM-PHC
SITE
ADJEXCL
PDNUMBERS
CS-MEMBER
CS-PROV
MEMMONTH
DRCLMASTB
DRCLDETLB
ADJCLAIMB
PHCLAIMSB
</TABLE>
<PAGE>
EXHIBIT 1
ATTACHMENT B
BUSINESS COMMUNICATIONS PLAN
(sample)
Functional Area Title:
- --------------------------------------------------------------------------------
Functional Area Description:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Daily Support:
(Daily Support Areas represent the business functions and resources supported by
the services UHS receives from Unisys.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Business Objective:
(Each Functional Area also supports business objectives that drive UHS into the
future. The business objectives are those goals UHS has set for their
corporation, to which Unisys services contribute.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Communications Vehicle:
(Communications vehicles are the tools, procedures, and schedules used to
communicate activity status, and progress to the Daily Support, and Business
Objective areas.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Communications Organization:
(The Communications Organization is the person, or group of people that use the
communications vehicles between the Functional area and the Daily, and Business
Objective Areas.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Operations -------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ---------------------------------------------------- ---------- -------
<S> <C> <C>
Operate Console X
Command Center Automation Tools
Define and maintain business process documents X
Define requirements X
Define command center requirements X
Implement Automation Programs X
Batch
Batch Monitoring X
Batch Abend Repair P S
Batch Abend Escalation P S
Tape Management
Mount Tapes X
Out of Company Tape Processing X
Off site storage X
Tape Library management X
Tape Initialization X
Silo Management
First Line problem determination X
File Back-up/Recovery Assistance (including database
recovery) X
Document Operations Procedures P S
Hardware Planning and Installation
Technology in-put, review, and general
recommendation P S
Technology plan review P S
Technology plan approval S P
Hardware facilities requirements X
Hardware installation and maintenance X
Capacity management (day to day)
Define and maintain capacity management
process documents P S
Define application requirements X
Capacity monitoring P S
Storage management (DASD, tape) P S
Maintain Optimal Storage Environment (cost, service) P S
Facilities Management
Building Management X
Environmental Management X
Space Planning Assistance X
Testing and concurrent maintenance X
Report of Problem Management X
Failure Recovery
Service Center/Data Network Machine Failure
Service Center Equipment (up to but not
including remote FEP) X
<PAGE>
<CAPTION>
Responsibility
Operations -------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ---------------------------------------------------- ---------- -------
<S> <C> <C>
Data Network Equipment (including and beyond
remote FEP) X
Channel extension to print facility X
Systems software failure X
Applications Software failure X
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Production Control ------------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ----------- -----------
<S> <C> <C>
Establish Standards P S
Standards compliance X
Operations analysis and planning X
Support scheduling software OPC, CA X
Batch Production Schedule
Scheduler input P S
Scheduler updates X
Execution X
WFL/JCL support and hang fixing X
Track Batch Problem Reports and System Crashes X
Report Problem Resolution Statistics X
Preparation of Run parameter Cards P S
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UHS FUNCTION AND SCOPE MATRIX
Responsibility
Security ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Physical Security at UHS Facilities
Administrative and technical support X
Badge distribution, alarm monitoring and response X
Emergency response (fire, medical, first aid) X
Physical Security at Unisys Facilities
Administrative and technical support X
Badge distribution, alarm monitoring and response X
Emergency response (fire, medical, first aid) X
Data Access Management
Conduct Periodic Audit S P
Host/Mainframe installation & maintenance X
Host/Mainframe upgrades X
UNIX installation and maintenance X
UNIX upgrades X
Maintain master security database (Security DB
Utility/RACF) X
Administrative support (system software) X
Administrative support (application software) X
User Password authorization policy X
Data Network - dual responsibility
Network definitions (dual responsibility) X X
User lists X X
User initialization X X
Policy and Procedures X
Procedures S P
Security Enhancement
Security consultancy P S
Identify areas for improvement P S
Recommend solutions P S
<PAGE>
<CAPTION>
UHS FUNCTION AND SCOPE MATRIX
Responsibility
IBM Technical Services ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Capacity Planning (long-term)
Define and maintain capacity planning process
documents P S
Define application requirements X
Capacity monitoring X
Storage Management (silo, DASD, tape) X
Maintain Optimal Storage Environment
(cost, service) X
Space Planning Assistance X
Development and implementation of storage standards P S
Operating Systems Support (Installation and maintenance)
System Control Program (MVS, CICS, etc.) X
Other host software (including application
development software/tools) X
Automated scheduler system X
Support of homegrown software and tools P S
Service Center Automaton Product Support (Installation and
Maintenance)
Tape Library X
File Management X
Print management X
Source code generation X
Scheduling X
Performance monitoring X
Operations automation X
System monitoring X
Develop Service Level Agreements S P
Service Level management (day to day) P S
Performance tuning
Systems X
Applications X
Troubleshooting/problem resolution (MVS, etc.) X
Data Management
Backup/recovery procedures X
File backup and recovery X
New Technology/Product Research
Technology input and review P S
Technology implementation P S
Technology selection P S
JCL Development and Support
Design Support S P
Implementation (release) S P
Testing S P
Evaluation of problem P S
Problem Drill down to root cause P S
Operational Analysis and Problem Resolution P S
Workflow Development/Support P S
<PAGE>
<CAPTION>
Responsibility
IBM Technical Services ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Scheduling P S
Capacity Planning (application) S P
Performance Monitoring and Tuning (Production Only)
Performance Thresholds Alert setup and monitoring X
System Monitoring X
Environmental X
Applications Performance Analysis S P
Performance Reporting X
System Capacity Planning (day to day) P S
Application Development Tools and Techniques
Management and Planning
Focal point to customer AD community X
Strategic planning and analysis S P
Set priorities and communicate to Unisys X
Vendor Relationships S P
Maintain corporate inventory of software products X
Tools
Product management support for host-based
application development and maintenance tools X
Tool Installation and maintenance X
Consultation for application development and
maintenance tools X
Identify and evaluate new tools features and
techniques to support strategic direction X
Recommend tools to enhance productivity and
automate the application development and
maintenance process X
Support end-user tools and techniques for timely
data retrieval and reporting X
Tools and software license costs (as specified in
Exhibit 3) P S
Ensure timely upgrades of tools (as specified in
Exhibit 3) P S
Host programming languages and productivity
support X
CASE tools support X
Host based A/I tools and support X
Repository tools support X
4GL tools support X
Object Oriented tools support X
Distributed/Workstation tools support X
Client/server tools support X
Data Management
SMS P S
Compression P S
Tape Mount Management P S
Software License Management
Host
System X
Application X
Distributed X
<PAGE>
<CAPTION>
Responsibility
IBM Technical Services ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Future/Planned Projects - as specified in Exhibit 21
(dual responsibility) X X
Quality Assurance
Application Installation
Actual Installation P S
User acceptance and verification S P
Define and develop Standards and Procedures P S
Define requirements P S
Promote to production P S
JCL standards and procedures P S
Automated Run Documentation S P
Set-up S P
Dependencies S P
Initiation S P
Recovery S P
Hardware & System Software Installation
Actual installation P S
User acceptance and verification P S
Define and develop Standards and Procedures P S
Define requirements P S
Promote to production P S
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<CAPTION>
Responsibility
Unisys Technical Services ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Operating Systems Support (Installation and
maintenance)
A Series System Software (i.e., MCP, COMS, DMSII,
etc.) X
New Release evaluation X
Interim Correction Release evaluation X
New release installation X
Supervisor Support X
Other host software (distributed A and 3rd party) X
Troubleshooting/problem resolution (i.e., MCP, System
Software, Env Software)
Evaluation of problem X
Problem Drill down to root cause X
Service Center Automation Product Support (Installation and
maintenance)
Tape Library X
File Management X
Print Management X
Source Code Control X
Scheduling X
Performance Monitoring X
Operations Automation X
Technical Product Support (Installation and maintenance)
Print Support (i.e., ISC Spool) X
Code Generation (i.e., XGen) X
PC/File transfer (i.e., FileExpress) X
Data Transfer (i.e., Data Bridge) X
Utilization Reporting (i.e., ResourceDB) X
Print Barcode Application X
Print Forms Design Utility X
Business Application Program Modules (TB7500) X
Data Transfer (i.e., Data Bridge) X
WFL Development and support
Design Support S P
Implementation (release) S P
Testing S P
Evaluation of problem P S
Problem Drill down to root cause P S
Operational Analysis and Problem Resolution P S
Workflow Development/Support P S
Scheduling P S
Capacity Planning (applications) S P
Performance Monitoring and Tuning Production Only
Performance Thresholds Alert setup and monitoring X
System Monitoring X
Environmental (Distributed A) X
Applications Performance Analysis S P
<PAGE>
<CAPTION>
Responsibility
Unisys Technical Services ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Performance Reporting X
System Capacity Planning (day to day) P S
File/Tape Management
Backup/recovery procedures X
Monitor Available Disk Space X
Define File/Tape Retention Parameters S P
Configure/Implement File/Tape Retention Parameters X
File/Tape Mount Management P S
New Technology/Product Research
Technology input and review S P
Technology implementation P S
Technology selection P S
Security Administration
Security Policy and Procedures X
User ID Administration X
Security Configuration/Parameters X
Security Application (i.e., SecurityDB) Databases P S
Future/Planned Projects - as specified in Exhibit 21
(dual responsibility) X X
Quality Assurance
Application Installation
Actual installation P S
User acceptance and verification S P
Define and Develop Standards and Procedures P S
Define requirements P S
Promote to production P S
WFL standards and procedures P S
Automated Run Documentation S P
Set-up S P
Dependencies S P
Initiation S P
Recovery S P
Hardware and System Software Installation
Actual installation P S
User acceptance and verification P S
Define and Standards and Procedures P S
Define requirements P S
Promote to production P S
Develop Service Level Agreements S P
Service Level Management (day to day) P S
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UHS FUNCTION AND SCOPE MATRIX
Responsibility
Disaster Recovery ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Disaster Recovery Planning
Define Application Disaster Recovery Levels X
Disaster Recovery Plan Development and Maintenance S P
Contract Maintenance S P
Administration (compliance, guidelines, standards,
procedures) S P
Testing S P
Tapes to Hot Site (from vault) X
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UHS FUNCTION AND SCOPE MATRIX
Responsibility
IBM Database Administration ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
DB2 Environment
Install DB2 Software (IBM Licensed) X
Install DB2 Software (Vendor Licensed) X
Monitor and control DB2 subsystem X
Execute DB2 and QMF catalog maintenance X
Maintain DB2 and QMF Governors (if applicable) P S
Physical database design X
Logical database design X
Review and support application SQL X
DB2 Production Environment
Execute and maintain production DDL P S
Build, schedule and execute application BINDs P S
Determine application DB2 space requirements X
Determine access methods for DB2 application data
(i.e., views, aliases, synonyms) X
Administer database level privileges P S
Ensure DB2 data integrity (backup/recovery) P S
Administer DB2 system level privileges P S
Retain exclusive control of SYSADM privileges X
Review plan changes (access paths) X
Identify and resolve application performance problems S P
Monitor and tune DB2 subsystem X
Identify DB2 utility requirements (type, frequency,
occurrence) S P
Build, schedule and execute DB2 utility cycle
(JCL/Utility automation tools) X
Identify and resolve DB2 related software problems X
24 X 7 database support coverage X
Automation/Tool utilization X
DB2 storage management (Database tracking, SMS usage) X
Operability standards X
Database standardization P S
Monitor table spaces (contention, growth, extents) X
DB2 Test Environment
Review and support application SQL X
Execute and maintain test DDL X
Build, schedule and execute application BINDs X
Determine application DB2 space requirements X
Determine access methods for DB2 application date (i.e., views,
aliases, synonyms) X
Administer database level privileges X
Ensure DB2 data integrity (backup/recovery) X
Administer DB2 system level privileges P S
Retain exclusive control of SYSADM privileges X
Review plan changes (access paths) X
Identify and resolve application performance problems S P
<PAGE>
<CAPTION>
Responsibility
IBM Database Administration ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Monitor and tune DB2 subsystem X
Identify DB2 utility requirements (type,
frequency, occurrence) X
Build, schedule and execute DB2 utility cycle
(JCL/Utility automation tools) P S
Identify and resolve DB2 related software problems X
24 X 7 database support coverage X
Automation/Tool utilization X
DB2 storage management (Database tracking, SMS usage) X
Operability standards S P
Database standardization S P
Monitor table spaces (contention, growth, extends) X
VSAM Production Environment
Backup and recovery for VSAM datasets P S
Identify VSAM utility requirements (type, frequency,
occurrence) S P
Build, schedule and execute VSAM utility cycle
(JCL/Utility Automation Tools) P S
Monitor space for VSAM datasets P S
REPRO VSAM datasets P S
Develop SMS Strategy for VSAM datasets P S
Performance P S
VSAM Test Environment
Backup and recovery for VSAM datasets X
Identify VSAM utility requirements (type, frequency,
occurrence) X
Build, schedule and execute VSAM utility cycle
(JCL/Utility Automation Tools) X
Monitor space for VSAM datasets X
REPRO VSAM datasets X
Develop SMS strategy for VSAM datasets X
Performance X
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UHS FUNCTION AND SCOPE MATRIX
Responsibility
Unisys Database Administration ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
DMSII Production Environment
Install DMSII Software X
Monitor and control DMSII environment X
Physical data base design P S
Logical database design S P
Review and support application DML X
Maintain production DASDL and generate Description P S
Determine database space requirements P S
Ensure data base physical integrity (backup/recovery) P S
Identify and resolve application performance problems S P
Monitor and tune database performance X
Identify database backup cycle requirements (type,
frequency, occurrence) S P
Support and perform database backup process X
Identify and resolve DMSII related software problems X
24 X 7 database support coverage X
Automation/Tool utilization X
DMSII storage management (Structure and population
growth) X
Database standardization P S
Monitor table spaces (levels, bias, loadfactor) X
DMSII Test Environment
Install DMSII Software X
Monitor and control DMSII environment X
Physical data base design P S
Logical database design S P
Review and support application DML X
Maintain production DASDL and generate Description P S
Determine database space requirements P S
Ensure data base physical integrity (backup/recovery) P S
Identify and resolve application performance problems S P
Monitor and tune database performance X
Identify database backup cycle requirements (type,
frequency, occurrence) S P
Support and perform database backup process X
Identify and resolve DMSII related software problems X
24 X 7 database support coverage X
Automation/Tool utilization X
DMSII storage management (Structure and population
growth) X
Database standardization P S
Monitor table spaces (levels, bias, loadfactor) X
DBMS capacity planning
Applications requirements X
Physical Estimation Process X
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Responsibility
Unisys Database Administration ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
DBA Functions
DBMS performance management X
DBMS performance utilization tracking X
Backup/recovery planning and design X
Involvement with application installation S P
DB Reorganization X
DB Space Management and Monitoring X
Database troubleshooting/resolution X
DB Rollbacks and Recoveries X
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Distributed Systems Management ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Distributed Systems Management (Planning)
Systems Management, Operating Systems, database
systems X
Modeling X
Gateways X
LAN Printing X
Personal Productivity, Product Support (Spreadsheet,
WP, etc.) X
Workflow
E-MAIL X
FAX X
Image X
OCR X
EDI X
Groupware (Lotus Notes) X
Distributed Systems Management Support (Operational)
Performance and availability monitoring X
End User Machine failure X
End User Machine failure diagnosis and repair
management X
Problem determination on hardware/circuits X
Vendor dispatch and coordination X
Provide status on problem resolution progress to user X
Track vendor performance X
Respond to alarms on Network Management Systems X
End-User Computing
System Software Installation and maintenance X
Access Tools X
Data Warehouse X
DSS X
EIS X
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Help Desk Services ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Level 1 Support
Answer calls from UHS users X
Problem management (UHS Service Center Help Desk -
Level 1)
Record problems X
Track problems through resolution X
Provide feedback to users X
Initial problem support X
Level 1 problem resolution X
Invoke proper problem resolution resources X
Follow-up for resolution status X
Escalate to next level of support (network, app.
level 2) X
Standards and procedures (UHS help desk) S P
Notify users of systems availability X
Management reporting - UHS level 1 and Internal
Client SLA/s X
Level 2 Support
Answers calls from UHS Help Desk X
Problem Management (Unisys Help Desk)
Record problems X
Track problems through resolution (UNISYS level 2) X
Provide feedback to UHS Level 1 Help Desk X
Level 2 problem resolution (in scope services) X
Invoke proper problem resolution resources X
Follow-up for resolution status X
Escalate to next level of support X
Standards and procedures UNISYS Help Desk X
Notify UHS Help Desk of system availability X
Integrate UHS Procedures into Unisys Help Desk
Procedures P S
Management reporting - Level 2 X
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Communications ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Network Hardware Maintenance and support
All LANs and network units located at the Unisys
Service Center X
WAN routers and terminating units at UHS GDV location X
WAN links between the Unisys Service Center and
UHS GDV X
CP2000 FEPs at UHS GDV P S
CP2000 RCs at UHS remote sites S P
CP2000 FEP bridge LANs (the new LANs to bridge to
Unisys Service
Center) at GDV P S
WAN links between GDV and UHS remote sites X
The current 3745-3xx at UHS GDV P S
The Trunk Group LAN (bridged between Unisys Service
Center and GDV) at GDV S P
The Ring 1 and 5 T/R LANs at UHS GDV S P
Any 3174Rs at UHS locations X
Any other existing or new controllers at UHS field
offices X
TCP/IP junction LANs at UHS GDV S P
Network Software
Configuration of Moves, Adds, Changes
3745 NCP at Unisys Service Center X
3745-3xx now at UHS GDV P S
SNI links S P
3172s at Unisys Service Center X
3174Ls at Unisys Service Center P S
3174Rs at UHS locations X
Existing RS6000s at Unisys Service Center S P
Existing RS6000s at UHS locations S P
Other UNIX/AIX units at Unisys Service Center P S
Existing/other UNIX/AIX units at UHS GDV and
field offices S P
CP2000 FEPs at UHS GDV P S
CP2000 RCs at UHS field offices S P
VTAM P S
NAU P S
Maintenance and Support
A-Series (BNA, TCP/IP, Resolver) X
CP2000 FEPs at UHS GDV X
CP2000 RCs at UHS field offices S P
UNIX/AIX network stacks at Unisys Service Center X
Existing 3745-3xx at UHS GDV X
All Network operating Systems in WAN terminating
units X
All network stacks in units located at the
UnisysService Center X
VTAM X
NAU X
Any new or out-of-scope networking entities X
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Print Services ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Document Creation and Management
Composition Tools EOS at TIC X
Document Viewing X
Print Related Support Software
System Software X
Transmission Software X
Forms Management X
Report Delivery Tracking X
File/Report Transmission (both Hardware and Software) X
Print/Report Generation
Queue Management S P
Printer Hardware X
Physical Printing X
Forms Management X
Report Delivery Tracking X
Print Delivery Metrics
Print File Availability to Printer Queue Management X
Print/Report Delivery to Customer X
Reporting Overall Metric X
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Outside Services ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Microfiche
Spool microfiche output to tape X
Ship microfiche tape(s) to services vendor X
Receive/verify microfiche output X
Distribute microfiche X
Receive/store microfiche output tape(s) X
ID-Card
Spool ID-card output to tape X
Ship ID-card tape(s) to services vendor X
Receive/verify ID-card output X
Distribute ID-card X
Receive/store ID-card output tape(s) X
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Financial and Asset Management ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Hardware and Equipment (in-scope)
Acquisition Analysis P S
Maintenance Contract Negotiation X
Expense Tracking P S
Invoice Processing X
Inventory X
Acquisition P S
Software
License Contracting - as specified in Exhibit 3
(dual responsibility) X X
Acquisition Analysis P S
Expense Tracking P S
Invoice Processing X
Inventory P S
Acquisition P S
Rate Setting and chargeback to UHS for CPU, storage,
tape, etc. P S
Provide Job Accounting Statistics and Management Reports P S
Software License Management
System Software X
Service Center Automation Utilities X
Business Application X
Hardware Management
Inventory Control (Unisys Service Center) X
Acquisitions P S
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
UNIX Support ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
System Administration
System sizing for ordering using customer information X
Order systems X
Install new hardware X
Install operating system software X
Install OS patches X
Configure OS X
Tune OS X
Upgrade OS X
Install application environment software X
Configure X
Install application environment software X
Configure application environment software X
Tune application environment software X
Upgrade environment software X
Perform file backups and recoveries X
Perform production database backups X
Manage system security X
Manage system printers and print queues X
System performance monitoring X
Database Administration
Install database software X
Configure database software X
Tune database software X
Upgrade database software X
Create databases and database objects X
Reorganize databases X
Monitor database performance X
Monitor database object sizes X
Perform database recoveries X
Assist developers in planning X
Size databases X
Tape Management
Mount Tapes X
Out of company Tape processing X
Off site storage X
Tape library management X
Tape initialization X
Hardware Planning and Installation
Technology in-put, review, and general recommendation S P
Technology plan review and approval X
Hardware facilities requirements X
Hardware installations and maintenance P S
<PAGE>
<CAPTION>
Responsibility
UNIX Support ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Disaster Recovery
Service Center/Data Network Machine failure
Service Center equipment X
Data network equipment X
Hardware Maintenance X
Scheduling S P
Other
Manage hardware procurements X
Project planning for upgrades, migrations and new
systems P S
</TABLE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
HP 3000 Support ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Mount Tapes X
Off Site Storage X
Tape Library Management X
Operating System Maintenance (as is) X
Monitor System Performance X
Hardware Maintenance X
Software Maintenance (Applications) X
Application Problem Resolution S P
Hardware Problem Resolution X
System Software Problem Resolution X
System Administration X
Database Administration X
</TABLE>
<PAGE>
UHS FUNCTION AND SCOPE MATRIX
<TABLE>
<CAPTION>
Responsibility
Account Management ----------------------
(X - Responsible, P - Primary, S - Secondary) Unisys UHS
- ------------------------------------------------------ ---------- -------
<S> <C> <C>
Management Structure
Account Executive (Unisys) X
Account Executive (UHS) X
Account Manager (Unisys) X
Participation in Executive Steering Committee X X
Reports and Meetings
Reports (performance) P S
Meetings (agenda & minutes) P S
Service Level Agreement (SLA) Management
Define service level requirements S P
Define and maintain performance process P S
Document service level agreements and service level
objectives X
Measure and analyze performance X
Implement improvement programs P S
Provide monthly reports X
Change Control and Management
Define and maintain change management process P S
Participate in UHS change management process S P
Provide change requirements for application software
installs and upgrades X
Provide Application changes X
Provide change requirements for Systems Software P S
Provide back-off procedures for system software
changes P S
Conduct change control meeting P S
Escalate change control conflicts P S
Report on change success (to UHS) X
Problem Management
Define and maintain problem management process P S
Participate in UHS problem management process S P
Record problems X
Distribute to support groups for resolution X
Track problem through resolution P S
Escalate as required (War room) (dual
responsibility) X X
Customer Satisfaction Survey P S
Business Communication Plan X X
</TABLE>
<PAGE>
EXHIBIT 2
UHS APPLICATION SOFTWARE
<TABLE>
<CAPTION>
I. UNIX
Product/Application Vendor
------------------------------------------------- -----------------
<S> <C>
ACI UHS
AdjudiPro UHS
FEAF UHS
Broker Commissions UHS
CentraMax National Health Enhance-
ment Systems UHS (CMSS)
CMM UHS (UBS)
EmployerLink UHS
EPIS/EPISLINK UHS
Episodes UHS
ICARE ISSC/UHS (CMSS)
Imaging UHS (2Q96)
INA/CPW UHS
IRIS UHS (UBS)
Letgen UHS
NFS UHS
Patterns UHS
PeopleSoft
- Final PeopleSoft
- HRM PeopleSoft
PRMS UHS
ProviderLink UHS
ProvNet UHS (UBS)
QSTAR UHS (2Q96)
SSS UHS
STEPS UHS (UBS)
Unity UHS
URNII UHS (CMSS)
Vision UHS (CMSS)
<PAGE>
II. MVS
Product/Application Vendor
------------------------------------------------- -----------------
D&B D&B
Dental Latron
DSS SAS/UHS
EPISLINK UHS
III. UNISYS
Product/Application Vendor
------------------------------------------------- -----------------
COSMOS UHS
Jobtack UHS
Security DB UHS
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
<TABLE>
<CAPTION>
Unisys A-Series Software
Unisys Proprietary Software
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
A19-CFD SYS MGMT: CAPACITY MGMT 41.2/42.3
A19-DAC SEC SE: INFOGUARD ACC 41.2/42.3
A19-HSV COM SW: HOST SERVICES 41.2/42.3
A19-ERG QUERY SW: ERGO 41.2/42.3
A19-DMT DATAMGT: DMSII DM INTRPTR 41.2/42.3
A19-DDM DATAMGT: DMSII MONITOR 41.2/42.3
A19-DBA DATAMGT: DMSII ANALYZER 41.2/42.3
A19-DMC DATAMGT: DMSII CERTIFICATION 41.2/42.3
A19-SSL SEC SW: SUPPORT LIBRARY 41.2/42.3
A19-NSS COM SW: NETWORK SRVC II 41.2/42.3
A19-OCM DATAMGT: INFOEXEC OCM 41.2/42.3
A19-ES2 COM SW: SNA 3270 CP2000 41.2/42.3
A19-LML OFIS: LINK MAIL 41.2/42.3
APL100-AFT FILE XTR: FTRAPID A SER
APL100-ENB FILE XFR: FTRAPID BNA ENB
APL90-AFT FILE XFR: FTRAPID A SER
APL90-ENB FILE XFR: FTRAPID BNA ENB
AM18-DAC SEC SW: INFOGUARD ACC 41.2/42.3
AM18-HSV COM SW: HOST SERVICES 41.2/42.3
AM18-ERG QUERY SW: ERGO 41.2/42.3
AM18-DMT DATAMGT: DMSII DM INTRPTR 41.2/42.3
AM18-DDM DATAMGT: DMSII MONITOR 41.2/42.3
AM18-DBA DATAMGT: DMSII ANALYZER 41.2/42.3
CP2000 OP. SYS. LICENSE (6)
A91000-SL2 DRIVER: SCSI-2 DISK
A91000-SL1 DRIVER: SCSI 1 DISK
A91000-SL1 DRIVER: SCSI 1 DISK
A91000-SL1 DRIVER: SCSI 1 DISK
A91000-SL1 DRIVER: SCSI 1 DISK
5073 SW: CARTRIDGE TAPE LICENSE
AM18-SSL SEC SW: SEC SUPPORT LIBRARY 41.2/42.3
AM18-CSS COM SW: A SERIES BNAV2 1022358915
AM18-OCM DATAMGT: INFOEXEC OCM 41.2/42.3
APL99-TIC COM SW: TCPIP UNRESTRICTED
APL80-TAS COM SW: TCPIP APPLICATIONS
AM18-C74 CMPLR: COBOL ANSI 74 41.2/42.3
AM18-CSC CMPLR: C 41.2/42.3
AM18-CTD DEV AID: COBOL 74 TST/DBG 41.2/42.3
C99-X25 COM SW: X.25 PROTOCOL
AM18-ES2 COM SW: SNA 3270 CP2000
A99-NCF COM SW: NETWK CTRL FAC
AM18-S71 O/S: SSF FOR MODEL 711
AL18-DAC SEC SW: INFOGUARD ACC 41.2/42.3
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
Unisys A-Series Software
Unisys Proprietary Software
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
AL18-HSV COM SW: HOST SERVICES 41.2/42.3
AL18-ERG QUERY SW: ERGO 41.2/42.3
AL18-DMT DATAMGT: DMSII DM INTRPTR 41.2/42.3
AL18-DDM DATAMGT: DMSII MONITOR 41.2/42.3
AL18-DBA DATAMGT: DMSII ANALYZER 41.2/42.3
AL18-DMC DATAMGT: DMSII CERTIFICATION 41.2/42.3
AL18-SSL SEC SW: SEC SUPPORT LIBRARY 41.2/42.3
AL18-SSL SEC SW: SEC SUPPORT LIBRARY 41.2/42.3
AK18-CSS COM SW: A SERIES BNAV2 1022358949
AL18-OCM DATAMGT: INFOEXEC OCM 41.2/42.3
APL99-TIC COM SW: TCPIP UNRESTRICTED
APL 100-TAS COM SW: TCPIP APPLICATIONS
AL18-ES2 COM SW: SNA 3270 CP2000
AL18-S73 O/S: SSF FOR MODEL 732 41.2/42.3
A11-S42 O/S: SSF FOR MODEL 422 41.2/42.3
A11-NSS COM SW: NETWORK SRVC II
A11-HSV COM SW: HOST SERVICES
APL50-TAS COM SW: TCPIP APPLICATIONS
APL99-TT3 COM SW: TCPIP 1-64 SESSONS
CP2000-00S O/S: CP2000 OPER SYS
APP-CCP COM SW: CP2000 CONFIGRTR
A99-CPC COM SW: CP2000 CONFIGRTR
C99-TTY COM SW: TTY STATION GRP
C99-ST2 EMULTR: SNA PUT2 EMULATOR
CP2000-PJT COM SW: TCP/IP LAN 1012925912
C99-TL3 COM SW: TCP/IP IEEE802.3
CP2013-6 COM SW: TCP/IP PROM
A99-NCF COM SW: NETWK CTRL FAC
C99-X25 COM SW: X.25 PROTOCOL
C99-BSC COM SW: BISYNC STATN GRP
C99-TTY COM SW: TTY STATION GRP
C99-BSC COM SW: BISYNC STATN GRP
A19-S64 O/S: SSF FOR MODEL 642 41.2/42.3
A19-CMD SYS MGT: TQ CMF.DISK 41.2/42.3
APL100-TAS COM SW: TCPIP APPLICATIONS
APL99-TIC COM SW: TCPIP UNRESTRICTED
A19-S64 O/S: SSF FOR MODEL 642 41.2/42.3
SA19-S64 O/S: SSF FOR MODEL 642 SRC 41.2/42.3
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
Unisys Unix Software
Unisys Proprietary Software
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
US6065-UX3 O/S: UNIX SVR4 RT 1-64U
US6065-ETE EMULTR: ET EMULATION
US6065 ETS COM SW: ET TRANSPORT
US6065-EFT COM SW: ET FILEXPRESS
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
<TABLE>
<CAPTION>
A-SERIES 3rd Party Software
UHS 3rd Party Software
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
BMC RECOVERPLUS
BMC DASDMGR 3,2,13
BMC COPYPLUS 4,3,00
BMC CHANGEMGR 3,5,02
BMC LOADPLUSDB2 2,1,00
BMC OPERTUNEDB2 1,5,01
BMC CATALOGMGR 3,4,01
BMC REORGPLUS 4,2,00
BMC UNLOADPLUSDB2 2,2,00
B&L ASSOCIATES BL/SOURCE17
B&L ASSOCIATES BL/PACK17
B&L ASSOCIATES BL/PACKA17
B&L ASSOCIATES BL/LIB17
B&L ASSOCIATES BL/LIB19
B&L ASSOCIATES BL/DIST
B&L ASSOCIATES BL/PACK19
B&L ASSOCIATES BL/SOURCE
B&L ASSOCIATES BLUPGRADES
B&L ASSOCIATES BL/DIST17
B&L ASSOCIATES BL/DIST19
DATAMETRICS VIEWPOINT 42.4
ATTACHMATE DATABRIDGE ICC/FILE EXPRESS 4.50
STEWART DBA TOOLS 5.0
KNUTSON
SOFTWARE ASAP DIRECTOR 113BNA
CLEARING HOUSE ASAP REMOTE 113 BNA
ISC SPOOL 7.3.112
DTEC 7.3.112
INTRAN 7.0
FLIST 2.1
FDUMP 2.1
LPD PRINTING 7.3.112
OPENWARE XGEN 2.8.032
XGEN RUNTIME 2.8.032
HBO & COMPANY PRN 09/26/95
STAHURA-BRENNER CCF 3.50/3.60/3.70
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
<TABLE>
<CAPTION>
Unix Software
UHS 3rd Party Software
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
IBM AIX 3.2.5/3.2.5.1
IBM AIX 4.1.4
NHES CENTRAMAX 1.04.OUHC
IBM DPROPR 1.1
IBM DB2/AIX 2.1.1
IBM DDCS 2.3.1
OEC ENTERA 2.1/3.0
FILENET? FILENET 3.2.2.23
IQ SFTWR IQ 3.5H
ORACLE ORACLE 6.0.37.3.2
ORACLE ORACLE 7.1.6.2.0
ORACLE ORACLE 7.2
PEOPLESOFT PEOPLESOFT 5.0
R & 0 ROCHADE 4.1
SECURE COMPUTING SIDEWINDER 2.2
PLATINUM SQLASSIST 4.3.2
IBM SNA SVR 2.1
SYBASE SYBASE 4.9.2
SYBASE SYBASE 10.X
SYBASE SYBASE 11.X
COREL WORDPERFECT 6.0
BGS BEST1 4.2.1
OPENVISION OPENEVENTMANAGER TREND 3.1
PLATINUM AUTOSECURE 2.0
MICROFOCUS COBOL 3.2.46/3.2.37
OPENWARE MICROXGEN don't use (U6000)
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
<TABLE>
<CAPTION>
ES9000 3rd Party Software
UHS 3rd Party Software
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
BMC DATA PACKER 2.4
BMC CATALOG MANAGER 3.4.01
BMC CHANGE MANAGER 3.5.02
BMC COPYPLUS 4.3
BMC DASD MANAGER 3.2.13
BMC LOAD PLUS 2.1
BMC OPERTUNE 1.5.01
BMC RECOVER PLUS 2.2
BMC REORG PLUS 4.2
BMC UNLOAD PLUS 2.2
CA CA-1 5
CA/LAGENT MIM 4
CACHE VALLEY
SOFTWARE TAPEEXPERT 1.39
CHICAGO SOFT QUICKREF 4
COMPUWARE ABENDAID 6.1.4
COMPUWARE CICS/ABENDAID 5.3.0
COMPUWARE COCS/RADR 3.2.3
COMPUWARE CICSXPEDITER 5.6.0
COMPUWARE FILEAID 6.5.1
COMPUWARE FILEAID/DB2 3.5.2
COMPUWARE XPEDITER 5.3
COMPUWARE WORKSTATION MANAGER 213
LANDMARK TMON/CICS-MVS
LANDMARK TMON/CICS-ESA 1.1
LANDMARK TMON/DB2 2
LANDMARK TMON/MVS 1.2
LANDMARK TMON/VTAM 1.4
MERRILL MXG
MACKINNEY
SYSTEMS LISTCAT PLUS
MOBIUS INFOPAC/RDS 5.1
SAS SAS 6.0.8
STERLING
SOFTWARE NDM 1.7
STERLING
COMMERCE CONNECT DIRECT SNA
SYNCSORT SORT 3.5.2
SYSDATA
INTERNATIONAL QUICKSTART 3
VANGUARD VRA 1.7
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
<TABLE>
<CAPTION>
IBM Software
UHS 3rd Party Software
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
5655-068 JES 5.2.2 5.2.2
5655-257 DSF 15
5655-HAL TCP/IP 2.2.1
5658-260 EREP 3.5
5665-279 BTAM/SP 1.0
5665-311 3270PC FTP 1.1
5665-333 NETVIEW PM 2
5665-338 ACF/SSP 3.8
5665-356 GDDM 3.1
5665-397 SLR 3.3
5665-402 ISPF/PDF 3.5
5665-488 SDSF 1.3.3
5668-717 VS PASCAL LIBRARY 1.0
5668-812 GDDM/PGF 3.1
5668-911 PLI V2 2.3
5668-949 SMP/E 1.8
5685-025 TSO/E 2.4
5685-029 RMF 4.3
5685-054 ISPF 3.5
5685-083 CICS/ESA 3.3
5685-111 NETVIEW 2.1
5685-151 AOC.MVS 1.1
5685-DB2 DB2 DM 3.1
5688-023 COBOL II 1.4
5688-188 C/370 2.1
5688-191 OGL 1.1
5688-231 ACF/NCP 6.2
5695-007 OPC/ESA 1.3
5695-040 PSF 2.1
5695-047 JES2 4.3.3
5695-117 ACF/VTAM 3.4.2
5695-167 GDDM/REXX 3
5695-171 INFOMAN 5.0
5695-DF1 DF/SMS FF 1.1
5696-234 HIGH LEVEL ASSEMBLER 1
5706-254 QMF 3.1.3
5740-XXH RACF 1.9.2
5752-VS2 TIOC 3.8
5771-AAB FONT SONORAN SS 1.1.2
5771-ADA FONT DATA 1.2
5655-076 DATA PROP 1.2.0
5688-035 X.25 NPSI 3.6
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
<TABLE>
<CAPTION>
IBM Software
UHS 3rd Party Software
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
5688-190 PPFA 1.1.0
5695-062 OP/A AUTOOPS 1.1.1
5695-064 CICS AUTOMATION 1.0
5795-DXQ ICFRU 1.1
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
<TABLE>
<CAPTION>
HP Software
UHS 3rd Party Software
- ------------------------------------------------------------------------------------------
Style Product Rev./Vers. License Holder
- ------------------ --------------------------------- ------------------ ---------------
<S> <C> <C> <C>
UV Delta 1
(Op. Sys.) MPE V/E 1
Spook
Editor
Fcopy
Sort/Merge 3000
DSCopy
TurboImage 3000 DBUtil
DBRecov
DBStore/Restore
DBLoad/Unload
DBSchema
Query
3rd Party Adager
MPEX 2.2
SuprTool 3.1.1
</TABLE>
<PAGE>
EXHIBIT 3
SYSTEMS SOFTWARE
UHS Home-Grown Software
UHS Proprietary Software
Certain software and utilities which were developed by UHS employees prior to
the agreement date to support systems and application functionality. This
category will be more fully developed and identified following the agreement
date.
<PAGE>
Exhibit 4
Transition/Migration Plan
* Transition Acceptance Criteria Section
TBD
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
1 UHS Computer Services Startup Schedule: Phase 1 - Tran 50d Mon 05/20/96 Fri 07/26/96
2 Prepare for Start-up 10d Mon 05/20/96 Fri 05/31/96
3 Assemble Start-up Team 5d Mon 05/20/96 Fri 05/24/96
4 Establish Client Coordination Team 5d Mon 05/20/96 Fri 05/24/96
5 Organize Start-up Team Logistics 5d Mon 05/27/96 Fri 05/31/96
6 Establish Accounting Infrastructure 5d Mon 05/27/96 Fri 05/31/96
7 Establish PMO Infrastructure 5d Mon 05/27/96 Fri 05/31/96
8 Prepare for Program Kick-off 5d Mon 05/27/96 Fri 05/31/96
9 Perform Transition 40d Mon 06/03/96 Fri 07/26/96
10 Kick-off Program 1d Mon 06/03/96 Mon 06/03/96
11 Transfer Subcontracts & Assets for UNIX Systems 40d Mon 06/03/96 Fri 07/26/96
12 Prepare & Deliver Letter of Intent for Subcontracts 5d Mon 06/03/96 Fri 06/07/96 [graphics omitted]
13 Prepare, Negotiate & Close Hardware Subcontracts 10d Mon 06/10/96 Fri 06/21/96
14 Prepare, Negotiate & Close Software Subcontracts 10d Mon 06/24/96 Fri 07/05/96
15 Finalize SOW & T&C for Service subcontracts 5d Mon 07/08/96 Fri 07/12/96
16 Prepare, Negotiate & Execute Service Subcontracts 10d Mon 07/15/96 Fri 07/26/96
17 Transfer Subcontracts & Assets for Unisys Mainframe 40d Mon 06/03/96 Fri 07/26/96
18 Prepare & Deliver Letter of Intent for Subcontract 5d Mon 06/03/96 Fri 06/07/96
19 Prepare, Negotiate & Close Hardware Subcontract 10d Mon 06/10/96 Fri 06/21/96
20 Prepare, Negotiate & Close Software Subcontract 10d Mon 06/24/96 Fri 07/05/96
21 Finalize SOW & T&C for Service Subcontracts 5d Mon 07/08/96 Fri 07/12/96
22 Prepare, Negotiate & Execute Service Subcontract 10d Mon 07/15/96 Fri 07/26/96
23 Transfer Subcontracts & Assets for IBM Mainframe 40d Mon 06/03/96 Fri 07/26/96
</TABLE>
Page 1 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
24 Prepare & Deliver Letter of Intent for Subcontract 5d Mon 06/03/96 Fri 06/07/96
25 Prepare, Negotiate & Close Hardware Subcontract 10d Mon 06/10/96 Fri 06/21/96
26 Prepare, Negotiate & Close Software Subcontract 10d Mon 06/24/96 Fri 07/05/96
27 Finalize SOW & T&C for Service Subcontracts 5d Mon 07/08/96 Fri 07/12/96
28 Prepare, Negotiate & Execute Service Subcontract 10d Mon 07/15/96 Fri 07/26/96
29 Transition Employees 25d Mon 06/03/96 Fri 07/05/96
30 Develop Compensation Plan 3d Mon 06/03/96 Wed 06/05/96
31 Make Group Presentation 1d Thu 06/06/96 Thu 06/06/96
32 Conduct Preliminary Interviews 2d Fri 06/07/96 Mon 06/10/96
33 Revise Compensation Plan 1d Tue 06/11/96 Tue 06/11/96
34 Make Employment Offer 1d Wed 06/12/96 Wed 06/12/96
35 Process Accepted Employees 5d Thu 06/13/96 Wed 06/19/96 [graphics omitted]
36 Conduct New Hire Orientation 1d Thu 06/20/96 Thu 06/20/96
37 Complete Necessary Forms 1d Fri 06/21/96 Fri 06/21/96
38 Develop New Employees Training & Performance 5d Mon 06/24/96 Fri 06/28/96
39 Conduct Employee Training 3d Mon 07/01/96 Wed 07/03/96
40 Establish Performance Plan 2d Thu 07/04/96 Fri 07/05/96
41 Transition Operations 40d Mon 06/03/96 Fri 07/26/96
42 Assume Responsibility for Operation 1d Mon 06/03/96 Mon 06/03/96
43 Assess Current Environment 10d Tue 06/04/96 Mon 06/17/96
44 Develop Operational Improvement Plan 5d Tue 06/18/96 Mon 06/24/96
45 Implement Operational Improvement Plan 3d Tue 06/25/96 Thu 06/27/96
46 Assess Current Service Levels 30d Mon 06/03/96 Fri 07/12/96
</TABLE>
Page 2 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
47 Define New Service Levels 5d Mon 07/15/96 Fri 07/19/96
48 Finalize Operational Performance Metrics 5d Mon 07/15/96 Fri 07/19/96
49 Implement Performance Measurement & Monitor 5d Mon 07/22/96 Fri 07/26/96
50 Transition Technical Support 40d Mon 06/03/96 Fri 07/26/96
51 Assume Responsibility for Technical Support 1d Mon 06/03/96 Mon 06/03/96
52 Assess Current Environment 30d Tue 06/04/96 Mon 07/15/96
53 Develop Technical Support Improvement Plan 4d Tue 07/16/96 Fri 07/19/96
54 Implement Technical Support Improvement Plan 5d Mon 07/22/96 Fri 07/26/96
55 Implement Performance Measurement & Monitor 5d Mon 07/22/96 Fri 07/26/96
56 Transition End User Support (Level 2 & 3) 40d Mon 06/03/96 Fri 07/26/96
57 Assume Responsibility for User Support 1d Mon 06/03/96 Mon 06/03/96
58 Assess Current Environment 30d Tue 06/04/96 Mon 07/15/96
59 Develop User Support Improvement Plan 4d Tue 07/16/96 Fri 07/19/96 [graphics omitted]
60 Implement User Support Improvement Plan 5d Mon 07/22/96 Fri 07/26/96
61 Implement Performance Measurement & Monitor 5d Mon 07/22/96 Fri 07/26/96
62 UHS Computer Services Startup Schedule: Phase 2 - UNIX 105d Mon 06/03/96 Sun 10/27/96
63 Perform Migration 105d Mon 06/03/96 Sun 10/27/96
64 Establish Push-Pull Team 5d Mon 06/03/96 Fri 06/07/96
65 Procure New Hardware for 2 Seed Systems 20d Mon 06/03/96 Fri 06/28/96
66 Procure Data Circuits & Network Equipment 20d Mon 06/03/96 Fri 06/28/96
67 Procure Auxiliary Equipment 20d Mon 06/03/96 Fri 06/28/96
68 Develop Test & Parallel Processing Plan 15d Mon 06/10/96 Fri 06/28/96
69 Negotiate & Sign Support Contracts for Ordered HW 15d Mon 06/17/96 Fri 07/05/96
</TABLE>
Page 3 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
70 Prepare Site for Installation 15d Mon 06/10/96 Fri 06/28/96
71 Install Auxiliary Equipment 1d Mon 07/01/96 Mon 07/01/96
72 Install Seed Systems HW & SW 2d Tue 07/02/96 Wed 07/03/96
73 Test Seed Systems 2d Thu 07/04/96 Fri 07/05/96
74 Install Data Circuits & Network Equipment 5d Mon 07/08/96 Fri 07/12/96
75 Test Data Circuits & Communications 5d Mon 07/15/96 Fri 07/19/96
76 Migrate Unix Batch 1 20d Sat 07/20/96 Sun 08/18/96
77 Deinstall Development Systems 2d Sat 07/20/96 Sun 07/21/96
78 Relocate Development Systems as Seed System 1d Mon 07/22/96 Mon 07/22/96
79 Install Seed Systems HW & SW 3d Tues 07/23/96 Thu 07/25/96
80 Install Data Circuits & Network Equipment 2d Fri 07/26/96 Mon 07/29/96
81 Test Selected Operations 2d Tue 07/30/96 Wed 07/31/96
82 Validate Reliability & Responsiveness of Operati 2d Thu 08/01/96 Fri 08/02/96 [graphics omitted]
83 Adjust Process and Setup, if Necessary 2d Mon 08/05/96 Tue 08/06/96
84 Test Selected Operations 2d Wed 08/07/96 Thu 08/08/96
85 Validate Reliability & Responsiveness of Operati 1d Fri 08/09/96 Fri 08/09/96
86 Make Go-No-Go Decision 0d Fri 08/09/96 Fri 08/09/96
87 Move Production Systems Disk Storage to Infoh 1d Sat 08/10/96 Sat 08/10/96
88 Validate Reliability & Responsiveness of Operati 1d Sun 08/11/96 Sun 08/11/96
89 Switch Operation 0d Mon 08/12/96 Mon 08/12/96
90 Deinstall Production Systems 2d Mon 08/12/96 Tue 08/13/96
91 Relocate Production Systems 1d Wed 08/14/96 Wed 08/14/96
92 Install Production Systems 2d Thu 08/15/96 Fri 08/16/96
</TABLE>
Page 4 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
93 Switch Production & Development Environment 2d Sat 08/17/96 Sun 08/18/96
94 Migrate Unix Batch 2 20d Sat 08/03/96 Sun 09/01/96
95 Deinstall Development Systems 2d Sat 08/03/96 Sun 08/04/96
96 Relocate Development Systems as Seed System 1d Mon 08/05/96 Mon 08/05/96
97 Install Seed Systems HW & SW 3d Tue 08/06/96 Thu 08/08/96
98 Install Data Circuits & Network Equipment 2d Fri 08/09/96 Mon 08/12/96
99 Test Selected Operations 2d Tue 08/13/96 Wed 08/14/96
100 Validate Reliability & Responsiveness of Operati 2d Thu 08/15/96 Fri 08/16/96
101 Adjust Process and Setup, if Necessary 2d Mon 08/19/96 Tue 08/20/96
102 Test Selected Operations 2d Wed 08/21/96 Thu 08/22/96
103 Validate Reliability & Responsiveness of Operati 1d Fri 08/23/96 Fri 08/23/96
104 Make Go-No-Go Decision 0d Fri 08/23/96 Fri 08/23/96
105 Move Production Systems Disk Storage to Infoh 1d Sat 08/24/96 Sat 08/24/96 [graphics omitted]
106 Validate Reliability & Responsiveness of Operati 1d Sun 08/25/96 Sun 08/25/96
107 Switch Operation 0d Mon 08/26/96 Mon 08/26/96
108 Deinstall Production Systems 2d Mon 08/26/96 Tue 08/27/96
109 Relocate Production Systems 1d Wed 08/28/96 Wed 08/28/96
110 Install Production Systems 2d Thu 08/29/96 Fri 08/30/96
111 Switch Production & Development Environment 2d Sat 08/31/96 Sun 09/01/96
112 Migrate Unix Batch 3 20d Sat 08/17/96 Sun 09/15/96
113 Deinstall Development Systems 2d Sat 08/17/96 Sun 08/18/96
114 Relocate Development Systems as Seed System 1d Mon 08/19/96 Mon 08/19/96
115 Install Seed Systems HW & SW 3d Tue 08/20/96 Thu 08/22/96
</TABLE>
Page 5 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
116 Install Data Circuits & Network Equipment 2d Fri 08/23/96 Mon 08/26/96
117 Test Selected Operations 2d Tue 08/27/96 Wed 08/28/96
118 Validate Reliability & Responsiveness of Operati 2d Thu 08/29/96 Fri 08/30/96
119 Adjust Process and Setup, if Necessary 2d Mon 09/02/96 Tue 09/03/96
120 Test Selected Operations 2d Wed 09/04/96 Thu 09/05/96
121 Validate Reliability & Responsiveness of Operati 1d Fri 09/06/96 Fri 09/06/96
122 Make Go-No-Go Decision 0d Fri 09/06/96 Fri 09/06/96
123 Move Production Systems Disk Storage to Infoh 1d Sat 09/07/96 Sat 09/07/96
124 Validate Reliability & Responsiveness of Operati 1d Sun 09/08/96 Sun 09/08/96
125 Switch Operation 0d Mon 09/09/96 Mon 09/09/96
126 Deinstall Production of Systems 2d Mon 09/09/96 Tue 09/10/96
127 Relocate Production Systems 1d Wed 09/11/96 Wed 09/11/96
128 Install Production Systems 2d Thu 09/12/96 Fri 09/13/96 [graphics omitted]
129 Switch Production & Development Environment 2d Sat 09/14/96 Sun 09/15/96
130 Migration Unix Batch 4 20d Sat 08/31/96 Sun 09/29/96
131 Deinstall Development Systems 2d Sat 08/31/96 Sun 09/01/96
132 Relocate Development Systems as Seed System 1d Mon 09/02/96 Mon 09/02/96
133 Install Seed Systems HW & SW 3d Tue 09/03/96 Thu 09/05/96
134 Install Data Circuits & Network Equipment 2d Fri 09/06/96 Mon 09/09/96
135 Test Selected Operations 2d Tue 09/10/96 Wed 09/11/96
136 Validate Reliability & Responsiveness of Operati 2d Thu 09/12/96 Fri 09/13/96
137 Adjust Process and Setup, if Necessary 2d Mon 09/16/96 Tue 09/17/96
138 Test Selected Operations 2d Wed 09/18/96 Thu 09/19/96
</TABLE>
Page 6 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
139 Validate Reliability & Responsiveness of Operati 1d Fri 09/20/96 Fri 09/20/96
140 Make Go-No-Go Decision 0d Fri 09/20/96 Fri 09/20/96
141 Move Production Systems Disk Storage to Infoh 1d Sat 09/21/96 Sat 09/21/96
142 Validate Reliability & Responsiveness of Operati 1d Sun 09/22/96 Sun 09/22/96
143 Switch Operation 0d Mon 09/23/96 Mon 09/23/96
144 Deinstall Production Systems 2d Mon 09/23/96 Tue 09/24/96
145 Relocate Production Systems 1d Wed 09/25/96 Wed 09/25/96
146 Install Production Systems 2d Thu 09/26/96 Fri 09/27/96
147 Switch Production & Development Environment 2d Sat 09/28/96 Sun 09/29/96
148 Migrate Unix Batch 5 20d Sat 09/14/96 Sun 10/13/96
149 Deinstall Development Systems 2d Sat 09/14/96 Sun 09/15/96
150 Relocate Development Systems as Seed System 1d Mon 09/16/96 Mon 09/16/96
151 Install Seed Systems HW & SW 3d Tue 09/17/96 Thu 09/19/96 [graphics omitted]
152 Install Data Circuits & Network Equipment 2d Fri 09/20/96 Mon 09/23/96
153 Test Selected Operations 2d Tue 09/24/96 Wed 09/25/96
154 Validate Reliability & Responsiveness of Operati 2d Thu 09/26/96 Fri 09/27/96
155 Adjust Process and Setup, if Necessary 2d Mon 09/30/96 Tue 10/01/96
156 Test Selected Operations 2d Wed 10/02/96 Thu 10/03/96
157 Validate Reliability & Responsiveness of Operati 1d Fri 10/04/96 Fri 10/04/96
158 Make Go-No-Go Decision 0d Fri 10/04/96 Fri 10/04;96
159 Move Production Systems Disk Storage to Infoh 1d Sat 10/05/96 Sat 10/05/96
160 Validate Reliability & Responsiveness of Operati 1d Sun 10/06/96 Sun 10/06/96
161 Switch Operation 0d Mon 10/07/96 Mon 10/07/96
</TABLE>
Page 7 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
162 Deinstall Production Systems 2d Mon 10/07/96 Tue 10/08/96
163 Relocate Production Systems 1d Wed 10/09/96 Wed 10/09/96
164 Install Production Systems 2d Thu 10/10/96 Fri 10/11/96
165 Switch Production & Development Environment 2d Sat 10/12/96 Sun 10/13/96
166 Migrate Unix Batch 6 20d Sat 09/28/96 Sun 10/27/96
167 Deinstall Development Systems 2d Sat 09/28/96 Sun 09/29/96
168 Relocate Development Systems as Seed Syste 1d Mon 09/30/96 Mon 09/30/96
169 Install Seed Systems HW & SW 3d Tue 10/01/96 Thu 10/03/96
170 Install Data Circuits & Network Equipment 2d Fri 10/04/96 Mon 10/07/96
171 Test Selected Operations 2d Tue 10/08/96 Wed 10/09/96
172 Validate Reliability & Responsiveness of Operati 2d Thu 10/10/96 Fri 10/11/96 [graphics omitted]
173 Adjust Process and Setup, if Necessary 2d Mon 10/14/96 Tue 10/15/96
174 Test Selected Operations 2d Wed 10/16/96 Thu 10/17/96
175 Validate Reliability & Responsiveness of Operati 1d Fri 10/18/96 Fri 10/18/96
176 Make Go-No-Go Decision 0d Fri 10/18/96 Fri 10/18/96
177 Move Production Systems Disk Storage to Infoh 1d Sat 10/19/96 Sat 10/19/96
178 Validate Reliability & Responsiveness of Operati 1d Sun 10/20/96 Sun 10/20/96
179 Switch Operation 0d Mon 10/21/96 Mon 10/21/96
180 Deinstall Production Systems 2d Mon 10/21/96 Tue 10/22/96
181 Relocate Production Systems 1d Mon 10/23/96 Wed 10/23/96
182 Install Production Systems 2d Thu 10/24/96 Fri 10/25/96
183 Switch Production & Development Environment 2d Sat 10/26/96 Sun 10/27/96
184 UHS Computer Services Startup Schedule: Phase 3 - Unix 60d Mon 06/03/96 Mon 08/26/96
</TABLE>
Page 8 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
185 Perform Migration 60d Mon 06/03/96 Mon 08/26/96
186 Establish Push-Pull Team 5d Mon 06/03/96 Fri 06/07/96
187 Procure Seed System (without disk storage) 20d Mon 06/03/96 Fri 06/28/96
188 Procure Data Circuits & Network Equipment 20d Mon 06/03/96 Fri 06/28/96
189 Procure Auxiliary Equipment 20d Mon 06/03/96 Fri 06/28/96
190 Develop Test Plan 5d Mon 06/10/96 Fri 06/14/96
191 Negotiate & Sign Support Contracts for Ordered HW 15d Mon 06/17/96 Fri 07/05/96
192 Prepare Site for Installation 12d Mon 06/24/96 Tue 07/09/96
193 Install Auxiliary Equipment 2d Wed 07/10/96 Thu 07/11/96
194 Install Seed System HW & SW 6d Fri 07/12/96 Fri 07/19/96
195 Install Data Circuits & Network Equipment 5d Mon 07/22/96 Fri 07/26/96 [graphics omitted]
196 Test Seed System 2d Sat 07/27/96 Sun 07/28/96
197 Test Data Circuits & Communications 2d Sat 07/27/96 Sun 07/28/96
198 Validate Reliability & Responsiveness of Operation 1d Mon 07/29/96 Mon 07/29/96
199 Adjust Process and Setup, if Necessary 2d Tue 07/30/96 Wed 07/31/96
200 Test Seed System 1d Thu 08/01/96 Thu 08/01/96
201 Test Data Circuits & Communications 1d Thu 08/01/96 Thu 08/01/96
202 Validate Reliability & Responsiveness of Operation 1d Fri 08/02/96 Fri 08/02/96
203 Make Go-No-Go Decision 0d Fri 08/02/96 Fri 08/02/96
204 Transfer Disk Storage from Iceberg Facility to Infohub 1d Sat 08/03/96 Sat 08/03/96
205 Validate Reliability & Responsiveness of Operation 1d Sun 08/04/96 Sun 08/04/96
206 Switch Operation 0d Mon 08/05/96 Mon 08/05/96
207 Deinstall and Pack Original System 2d Sat 08/10/96 Sun 08/11/96
</TABLE>
Page 9 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
208 Relocate Original System 2d Mon 08/12/96 Tue 08/13/96
209 Install and Test Original System 8d Wed 08/14/96 Fri 08/23/96
210 Switch Disk Storage to Original System 21d Sat 08/24/96 Sun 08/25/96
211 Switch Operation to Original System in Infohub 0d Mon 08/26/96 Mon 08/26/96
212 UHS Computer Services Startup Schedule: Phase 4 - IBM 60d Mon 07/15/96 Sun 10/06/96
213 Perform Migration 60d Mon 07/15/96 Sun 10/06/96
214 Establish Push-Pull Team 5d Mon 07/15/96 Fri 07/19/96
215 Procure New Hardware for Seed System 30d Mon 07/15/96 Fri 08/23/96
216 Procure Data Circuits & Network Equipment 30d Mon 07/15/96 Fri 08/23/96
217 Procure Auxiliary Equipment 30d Mon 07/15/96 Fri 08/23/96
218 Develop Test & Parallel Processing Plan 10d Mon 07/22/96 Fri 08/02/96
219 Negotiate & Sign Support Contracts for Ordered HW 15d Mon 08/12/96 Fri 08/30/96 [graphics omitted]
220 Prepare Site for Installation 10d Mon 08/19/96 Fri 08/30/96
221 Install Auxiliary Equipment 2d Mon 09/0/296 Tue 09/03/96
222 Install Data Circuits & Network Equipment 2d Wed 09/04/96 Thu 09/05/96
223 Install Seed System HW & SW 7d Fri 09/06/96 Mon 09/16/96
224 Test Seed System 7d Tue 09/17/96 Wed 09/25/96
225 Test Data Circuits & Communications 7d Tue 09/17/96 Wed 09/25/96
226 Install Application SW & Data 2d Thu 09/26/96 Fri 09/27/96
227 Parallel Process Selected Operations 2d Sat 09/28/96 Sun 09/29/96
228 Validate Reliability & Responsiveness of Operation 1d Mon 09/30/96 Mon 09/30/96
229 Adjust Process and Setup, if Necessary 2d Tue 10/01/96 Wed 10/02/96
230 Parallel Process Selected Operations 1d Thu 10/03/96 Thu 10/03/96
</TABLE>
Page 10 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
231 Validate Reliability & Responsiveness of Operation 1d Fri 10/04/96 Fri 10/04/96
232 Make Go-No-Go Decision 0d Fri 10/04/96 Fri 10/04/96
233 Transfer Data & Application to Seed System in Infohu 2d Sat 10/05/96 Sun 10/06/96
234 Switch Operation 0d Sun 10/06/96 Sun 10/06/96
235 UHS Computer Services Startup Schedule: Phase 5 - Unix 75d Mon 07/01/96 Mon 10/14/96
236 Perform Migration 75d Mon 07/01/96 Mon 10/14/96
237 Establish Push-Pull Team 5d Mon 07/01/96 Fri 07/05/96
238 Procure New Hardware for Seed System 30d Mon 07/01/96 Fri 08/09/96
239 Procure Data Circuits & Network Equipment 30d Mon 07/01/96 Fri 08/09/96
240 Procure Auxiliary Equipment 30d Mon 07/01/96 Fri 08/09/96
241 Develop Test & Parallel Processing Plan 10d Mon 07/08/96 Fri 07/19/96
242 Negotiate & Sign Support Contracts for Ordered HW 15d Mon 07/29/96 Fri 08/16/96 [graphics omitted]
243 Prepare Site for Installation 15d Mon 07/22/96 Fri 08/09/96
244 Install Auxiliary Equipment 2d Mon 08/12/96 Tue 08/13/96
245 Install Data Circuits & Network Equipment 2d Wed 08/14/96 Thu 08/15/96
246 Install Seed System HW & Sw 10d Fri 08/16/96 Thu 08/29/96
247 Test Seed System 3d Fri 08/30/96 Tue 09/03/96
248 Test Data Circuits & Communications 3d Fri 08/30/96 Tue 09/03/96
249 Install Application SW & Data 3d Fri 09/04/96 Tue 09/05/96
250 Parallel Process Selected Operations 2d Sat 09/07/96 Sun 09/08/96
251 Validate Reliability & Responsiveness of Operation 1d Mon 09/09/96 Mon 09/09/96
252 Adjust Process and Setup, if Necessary 4d Tue 09/10/96 Fri 09/13/96
253 Parallel Process Selected Operations 2d Sat 09/14/96 Sun 09/15/96
</TABLE>
Page 11 of 12
<PAGE>
Exhibit 4 - Transition/Migration Plan
<TABLE>
<CAPTION>
ID Task Name Duration Start Finish
- -- --------- -------- ----- ------
<S> <C> <C> <C> <C>
254 Validate Reliability & Responsiveness of Operation 1d Mon 09/16/96 Mon 09/16/96
255 Make Go-No-Go Decision 0d Mon 09/16/96 Mon 09/16/96
256 Adjust Process and Setup, if Necessary 4d Tue 09/17/96 Fri 09/20/96
257 Transfer Data & Application to Seed System in Infohu 2d Sat 09/21/96 Sun 09/22/96
258 Switch Operation 0d Mon 09/23/96 Mon 09/23/96
259 Deinstall and Pack Original System 3d Mon 09/30/96 Wed 10/02/96
260 Relocate Original System 2d Thu 10/03/96 Fri 10/04/96 [graphics omitted]
261 Install and Test Original System 5d Mon 10/07/96 Fri 10/11/96
262 Transfer Data to Original System 2d Sat 10/12/96 Sun 10/13/96
263 Switch Operation to Original System in Infohub 0d Mon 10/14/96 Mon 10/14/96
</TABLE>
Page 12 of 12
<PAGE>
EXHIBIT 5
PERFORMANCE CREDITS
This Exhibit describes the methodology to be used in the determination of
Performance Credits that will be due to United HealthCare in the event that
Unisys fails to meet the Performance Standards. The actual categories subject to
performance penalties, the assessment and extent of any penalty (other than the
amount payable by Unisys) will be agreed upon by the Parties no later than
ninety days after the Effective Date.
1. The penalties identified as a result of Unisys failure to meet Performance
Standards ("Performance Credits Incurred") will be determined. Of the
Performance Credits Incurred, up to a maximum of 10% of the Monthly Base
Charges for the month in which it is determined such penalties are assessed
will be paid by Unisys to United HealthCare (the "Assessed Performance
Credits"). Any amount representing the difference (or a portion thereof)
between the Performance Credits Incurred and the Assessed Performance
Credits shall in no way be carried forward or held for future
consideration, except in accordance with Article # 30 of the Agreement.
2. The methodology to assess penalties with respect to a particular SLA
category for which UNISYS has repeatedly failed to attain the performance
Standards will be determined by the Parties prior to completing migration
of each module of the United HealthCare mainframe production system.
3. Should Unisys fail to meet the Performance Standards in a category for
which it is liable for Performance Credits, such credits will be paid
according to the chart below.
4. Measurements will be taken weekly and reported to United HealthCare
monthly.
5. Weighting for categories and business functions will be reviewed at least
annually by United HealthCare and appropriately adjusted. The chart below
will be updated to reflect such changes.
6. The parties will financially resolve any Performance Credits on a quarterly
basis.
7. Service Level Agreements will be appropriate measurements based on a
particular category of Service and its relationship to a business function
in accordance with Exhibit 26, Performance Standards and Service Level
Agreements.
<PAGE>
EXHIBIT 6 - MACHINES
IBM
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
32468C 2601A02387 HP 3000 Senes 68 Own
30079A 1/O Channel
30140B Basic Computer
30140Q Power Module
30143A I/O Adapter Module
30165A 4 MB Memory Moduie
30079A I/O Channel
30143A I/O Adapter Module
30144A ATP System Interface Board
30155A ATP Modem Port Controller
30020B S/3X/4X/6X Inputs
7978B 6250/1600 Streaming Tape
30145A ATP Direct connect port controller
HP 150-II CPU
9123D Dual disc drive
30444B HP3000 series 68-to-70 upgrade
30140B Basic Computer
30140D SPU series 70
30165A 4 MB memory module
30240A HP Thinlan 3000/V link
28641A THINMAU
30240A HP Thinlan 3000N link
30242L LANIC Assembly
7937XP 571 MB disk with controller
19514A 1.6 meter cabinet
ES 9021 71109 Frame 8 - 11034 Lease
ES 9021 12006 Frame 31 Lease
ES 9021 71109 Frame 07 11691 Lease
ES 9021 71109 Frame 03 12712 Lease
ES 9021 71109 Frame 02 - 12712 Lease
ES 9021 71109 Frame 01 - 12712 Lease
3803 38C3 - 11285 Tape Control Unit Own
3990 12 - 10667 Own
3990 12 - 12922 Own
3990 12 - 12982 Own
3990 02 - 33316 Own
3990 02 - 33703 Own
3990 12 - 13060 Own
3990 12 - 14890 Own
3990 13 - 90645 Own
3990 02 - 33096 Own
3390 13 - 40810 Own
3390 13 - 11710 Own
3390 13 - 40838 Own
3390 13 - 38990 Own
3390 13 - 10782 Own
3390 13 - 31549 Own
3390 13 - 33423 Own
3390 13 - 12408 Own
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
3390 13 - 32686 Own
3390 13 - 31207 Own
3390 13 - 10592 Own
3390 13 - 31070 Own
3390 13 - 31086 Own
3390 13 - 10598 Own
3390 13 - 31089 Own
3390 13 - 33630 Own
3390 13 - 10420 Own
3390 13 - 30365 Own
3390 13 - B5532 Own
3390 13 - A2634 Own
3390 13 - B4114 Own
3390 13 - B4065 Own
3390 13 - A2238 Own
3390 13 - B1866 Own
3390 13 - 34760 Own
3390 13 - 11089 Own
3390 13 - 38228 Own
3390 13 - 37178 Own
3390 13 - 10822 Own
3390 13 - 43521 Own
3390 13 - 40304 Own
3390 13 - 11731 Own
3390 13 - 40762 Own
3390 13 - 40508 Own
3390 13 - 11162 Own
3390 13 - 40978 Own
3390 13 - 40620 Own
3390 13 - 11369 Own
3390 13 - 40934 Own
3390 13 - 39642 Own
3390 13 - 11183 Own
3390 13 - 39716 Own
3380K 13 - W2851 Own
3380K 13 - U7188 Own
3380K 13 - U7267 Own
3380K 13 - R7226 Own
3380K 13 - R3315 Own
3380K 13 - U7271 Own
3380K 13 - U2028 Own
3380K 13 - U7314 Own
3380K 82 - 05663 Own
3380K 13 - W8382 Own
3380K 13 - W8916 Own
3380K 13 - R7440 Own
3380K 13 - R3371 Own
</TABLE>
-99-
<PAGE>
IBM
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
3380K 13 - W8490 Own
3380K 13 - W9500 Own
3380K 13 - WR528 Own
3380K 13 - V1448 Own
3380K 13 - U7337 Own
3380K 13 - U2400 Own
3380K 13 - AB605 Own
3380K 13 - R0084 Own
3380K 13 - U1353 Own
3380K 13 - U1513 Own
3380K 13 - U1345 Own
3380K 13 - U0320 Own
3380K 13 - U4579 Own
3380K 13 - U8651 Own
3380K 13 - R2383 Own
3380K 13 - R9071 Own
3380K 13 - U7455 Own
3380K 13 - U7319 Own
3380K 13 - U1465 Own
3380K 13 - U0160 Own
3380K 13 - U9960 Own
3380K 13 - U4971 Own
3380K 13 - R3864 Own
3380K 13 - R3795 Own
3380K 13 - U7703 Own
3380K 13 - U5364 Own
3380K 13 - W9064 Own
3151 88 - 72510 Console/3745 Own
3151 4039830(ID) Keyboard Own
3745-Model 210 57 - 12497 Own
3746 - All 57 - 30944 Own
3174 - 1L 23 - H6278 Own
3174 - 1L 23 - N0355 Own
3174 - 1L 23 - H6279 Own
3174 - 1L 23 - D9985 Own
3174 - 1L 23 - D0552 Own
3174 - 1L 23 - B6556 Own
9309 10 - 0040770 Own
3174 - 21L PO1040GW Own
3174 - 21L PO1BCOGW Own
3172 - 001 23 - 03223 Own
3172 - 003 23 - 60557 Own
9309 10 - 0017402 Own
3172 - 003 23 - 61629 Own
3192 FH779 Monitor Own
3192 88 - KU699 Keyboard Own
3206 88 - 01941 Maint. Console Lease
</TABLE>
-100-
<PAGE>
IBM
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
3192 354X - 88ABZR1 UHCT Alternate Console Own
3206 - 100 '2001855 Keyboard Lease
3192 354X88FHF80 UHCA Master Console Own
3192 354X8810310 UHCT Master Console Own
3192 354X88BAB51 UHCU Master Console Own
3192 354X88LP469 UHCA Alternate Console Own
3192 354X8813129 UHCA Alternate Consde Own
3192 354X88DQ014 UHCT Alternate Console Own
3192 354X88ABZR1 UHCT Alternate Console Own
3192 354X88TV723 UHCU Alternate Console Own
3803 - Model 2 12404 Own
3420 - Model 8 5187976 Own
3420 - Model 8 7187686 Own
3420 - Model 8 77M3924 Own
3420 - Model 8 M1776 Own
3480 A22XF 12 - 17376 Own
3480 B22 12 - 83140 Own
3480 B22 12 - 65273 Own
3480 B22 52930 Own
3480 A22XF 12 - 18735 Own
3480 B22 12 - 67099 Own
3480 B22 12 - 62137 Own
3480 B22 12 - 62016 Own
3480 B22 12 - 61789 Own
3480 A22XF 12 - 17874 Own
3480 B22 12 - 68718 Own
3480 B22 12 - 68719 Own
3480 B22 12 - 68279 Own
3480 B22 12 - 67467 Own
3480 A22XF 12 - 20912 Own
3480 B22 12 - 70793 Own
3480 B22 12 - 82991 Own
3480 B22 12 - 70794 Own
3480 B22 12 - 66692 Own
5853 Modem Lease
5853 Modem Lease
ET - 27 - 12D 379632615 Own
T - 27 - 12D 379571441 Own
ET- 1210 326449089 Own
ET- 1210 326423563 Own
ET- 1210 324391895 Own
T - 27 379638638 Own
PWM100- MON 221725186 Terminal Own
ET-1100 338191216 Own
ET-1100 325688364 Own
T - 27 379628969 Own
ET - 1100 325689503 Own
</TABLE>
-101-
<PAGE>
IBM
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
ET-1100 338027808 Own
ET-1100 326423126 Own
ET- 1100 335138749 Own
T - 27 343853560 Own
ET - 1100 326449063 Own
ET - 1100 338058068 Own
T - 27 379638257 Own
RMl9 - 0 349524405 Cart. Drive Own
0899 - 2 347563918 Cart. Drive Own
0899 - 2 347568180 Cart. Drive Own
AP 1327 347719833 Printer Own
5073 - LSI 347413171 Controller / Cart. Drive Own
0899 - 2 347459166 Cart. Drive Own
0899 - 2 347459141 Cart Drive Own
0899 - 2 347459133 Cart Drive Own
5073 - LSI 347413155 Controller Cart. Drive Own
MX3266 334034808 Reel Drives Own
MX3266 334037025 Reel Drives Own
MX3266 334033446 Reel Drives Own
BT3262 334479524 Controller / Reel Drives Own
RM19 - 0 - CAB 3 461745663 Cart Drive Lease - Exp. 6/96
MT - 601 476935390 USR 5073 Tape Drive Lease - Exp. 6/96
MT- 601 468780002 Auto Loader Lease - Exp. 6/96
MT - 602 476934419 USR 5073 Tape Drive Lease - Exp. 6/96
MT - 602 468779788 Auto Loader Lease - Exp. 6196
RMl9 - 0 - CAB 2 461745689 Cart. Drive Lease - Exp. 6/96
MT - 218 476938352 USR 5073 Tape Drive Lease - Exp. 6/96
MT - 218 468780127 Auto Loader Lease - Exp. 6/96
MT - 219 476935309 USR 5073 Tape Drive Lease - Exp. 6/96
MT - 219 468779798 Auto Loader Lease - Exp. 6/96
RMl9 - 0 - CAB l 461745671 Cart. Drive Lease - Exp. 6/96
MT - 220 476935275 USR 5073 Tape Drive Lease - Exp. 6/96
MT - 220 468779780 Auto Loader Lease - Exp. 6/96
MT - 221 476935382 USR 5073 Tape Drive Lease - Exp. 6/96
MT - 221 468779590 Auto Loader Lease - Exp. 6/96
PWMl 00 - MON 221826799 Terminal Own
A1101 - SCP 408717916 Console Processor Lease - Exp 11/97
RM36 - 02 408717908 OSS7000 Disk Cabinet Lease - Exp 11/97
RM36 - 02 461506545 1/O Channels (A-11) Lease - Exp 11/97
RM36 - 0 408717882 A11 Processor Cabinet Lease - Exp 11/97
RM36 - 0 408717924 A11 Peripheral Cabinet Lease - Exp 11/97
RM5073-1Xl 408493369 USR 5073 Tape Control & Drive Lease - Exp 11/97
RM507301-ACL 408499614 Auto Loader Lease - Exp 11/97
RM5073-MTU 408496008 USR 5073 Tape Drive Lease - Exp 11/97
RM507301-ACL 408499515 Auto Loader Lease - Exp 11/97
RM36 - 0 408717890 A11 Processor Cabinet Lease - Exp 11/97
M9730 -62 332925932 16 Drives Own
</TABLE>
-102-
<PAGE>
IBM
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
M9730 -62 332925957 16 Drives Own
M9730 -62 332926039 16 Drives Own
M9730 -62 332925940 16 Drives Own
M9730 -62 332930049 16 Drives Own
M9730 -62 332930056 16 Drives Own
RM36 - O 461769440 Cabinet / Disk Own
USR 3000 - SDM 456906262 Disk Own
USR 3000 - SDM 456906015 Disk Own
USR 3000 - SDM 456906007 Disk Own
USR 3000 - SDM 473454049 Disk Own
USR 3000 - SDM 456906213 Disk Own
USR 3000 - SDM 456906239 Disk Own
USR 3000 - SDM 461780702 Disk Own
USR 3000 - SDM 461780728 Disk Own
USR 3000 - SDM 461780660 Disk Own
ASR 9029 - CAB 476886163 Cabinet Loan
ASR 9201 - A05 476947320 Disk Loan
ASR 9200 - A02 476953443 Disk Loan
ASR 9200 - A02 476953450 Disk Loan
M9730 - 62 332926062 Cabinet / 16 Drives Own
M9730 - 62 332925882 16 Drives Own
M9730 - 62 332926021 16 Drives Own
M9730 - 62 332925916 16 Drives Own
M9730 - 62 332925890 16 Drives Own
M9730 - 62 332925908 16 Drives Own
RM36 - 0 375944832 Cabinet Own
USR 4000 - SM2 456601434 Disk Own
USR 4000 - SM2 456601426 Disk Own
USR 4000 - SM2 456601442 Disk Own
USR 4000 - SM2 456603554 Disk Own
USR 4000 - SM2 456603547 Disk Own
USR 4000 - SM2 456603539 Disk Own
USR 4000 - SM2 C950830003 Raid Disk Own
USR 4000 - SM2 C950830002 Raid Disk Own
USR 4000 - SM2 C950830004 Raid Disk Own
M4 - PDI AS7333 - 3 Power Dist. Unit Own
Zitel Disk #0006827 Zitel Disk Own
Zitel Disk Cab #0006340 Zitel Disk "Cabinet" Own
RMA1918 - CAB 422849539 Cabinet MNA17B Lease
RMA1918 - CAB 422B54562 Cabinet GVPRODC Lease
A1960 - SCP 422816322 SCP Own
A1960 - SCP 422817809 SCP Own
EVG - 4000 - GL 481435675 MNA17B Terminal Own
EYG - 4000 - GL 481434306 GVPRODC Terminal Own
MA310 - CYT 160019931 Maintenance Box Own
PWM - 100 - MON 221725188 MNA17A Terminal Own
A1901 - CPC 422820365 Processor A-l9 Own
</TABLE>
-103-
<PAGE>
IBM
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
A1903 - CPC 336965991 1/O A-19 Own
A1911 ~ CSC 336964234 Processor A-19 Own
RM36-0 422847988 Cabinet /21/O Own
A- 12IC1 109910133 I/O Own
A- 12IC1 109910125 I/O Own
A- 12IC1 109903591 I/O Own
A- 12IC1 109903583 I/O Own
A- 12IC1 140006479 I/O Own
A- 12IC1 140006487 I/O Own
ESD3 - CRD 2960103306 CDRom Own
ESD3 - CRD 2960103197 CDRom Own
A1801 - 711 422854547 Processor A - 18 3X Lease
A1802 - 722 422854554 Processor A - 18 3X Lease
OP99-SCP 422854570 Console:Rack Mount SC P Lease
A1801 - 711 422854539 Processor 1X Lease
OP99-SC P 422853044 Console : Rack Mount SC P Lease
M4 - PDI AS7333 - 2 Power Dist. Unit Own
M4 - PDI AS7332 - 2 Power Dist. Unit Own
M4 - PDI AS7333 - 4 Power Dist. Unit Own
M4 - PDI AS7333 -1 Power Dist. Unit Own
9246 - 25H 375504982 Impac Printer (LP16) Own
LMC - Boards Qty: 8 Own
LME Qty: 11 Own
LMD Qty: 2 Own
MDC3 Qty: 1 Own
LMB Qty: 4 Own
LMH Qty: 2 Own
LMA Qty: 1 Own
LMT Qty: 1 Own
LMY Qty: 1 Own
MPC5 Qty: 1 Own
CP2000 - 3 - C 142392257 Own
CP2000 - 3 - C 142392224 Own
CP2000 - 3 - C 142387604 Own
CP2000 - 3 - C 142387612 Own
CP2000 - 3 - C 142392273 Own
CP2000 - 2 - P 142382126 Own
CP2000- P 142400837 Own
Cartridge Tape
Racks Quantity undetermined Own
Tape Cleaners/
Certifiers Ouantity undetermined Own
Barcoding
equipment Ouantity undetermined Own
Chillers Quantity undetermined Own
Operations
Console
Cabinetry Quantity undetermined Own
Abacus 2652250 7013 - J30 AIX 4.1 Own
Raid RE960130013 attached disk Own
Raid R-960230015 attached disk Own
Bandit 2624034 7011-250 AIX 3.2.5 Own
</TABLE>
-104-
<PAGE>
IBM
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
Parity 3110502 external tape drive Own
Parity 4021602 2 bay cabinet Own
8501556 extemal 8mm tape Own
Bhdata1 2648757 7013 - 59H AIX 3.2.5 Own
Raid R-950732013 attached disk Own
Bhdata2 2651771 7013 - 59H AIX 3.2.5 Own
Bhfunc1 2639063 7013 - 580 AIX 3.2.5 Own
Parity 33122 2x2 GB enclosure Own
CoComp 10000 5242C05 Own
CoComp 10000 6174C05 Own
Bis1 2646076 7013 - 590 AIX 3.2.5 Own
Raid D-9406300004 attached disk Own
Calvin 2641001 7013 - 590 AIX 3.2.5 Own
Fillet 2649881 7013 - 59H AIX 3.2.5 Own
Gar 2607532 7013 - 59H AIX 3.2.5 Own
7208-011 external 8mm tape Own
CoComp 1 0000 117710 external 700 MB disk Own
Hobbes 2643197 7013 - 590 AIX 3.2.5 Own
941000551 model 800D Own
Raid RE94055000 attached disk Own
Raid R-940650001 attached disk Own
Kestrel 414171439 Unisys UN6065-Z50 SVR4 Own
Orion 2650200 7013 - 59H AIX 3.2.5 Own
Osprey 414171652 Unisys UN6065-Z50 SVR4 Own
Pagasus 2650254 7013 - J30 AIX 4.1.4 Own
Piranha 2621567 7013 - 550 AIX 3.2.5 Own
Polaris 2650490 7013 - 590 AIX 3.2.5 Own
Prism 2648393 7013 - 59H AIX 3.2.5 Own
Raid R-950832031 attached disk Own
Rohcs 1 2639286 013 - 580 AIX 3.2.5 Own
Falcon SR272754 Own
Falcon SR271886 Own
Falcon SR273063 Own
Falcon SR268927 Own
Panty 5021501 Own
Smokey 2624035 7011-250 AIX 3.2.5 Own
8501802 external tape Own
Parity 3110501 external drive Own
Panty 4021601 2 bay enclosure Own
Susie 2649667 7013 - 590 AIX 3.2.5 Own
Tokay 2648268 7013 - 59H AIX 3.2.5 Own
Raid R-951030014 attached disk Own
Tomcat 2640842 7013 - 590 AIX 3.2.5 Own
Parity 3123009 Own
Parity 3123005 Own
Parity 3123008 Own
CoComp 1 0000 21224C05 1 GB disk Own
</TABLE>
-105-
<PAGE>
IBM
<TABLE>
<CAPTION>
MODEL SERIAL NUMBER DESCRIPTION STATUS
- ----- ------------- ----------- ------
<S> <C> <C> <C>
Topgun 2640841 7013 - 590 AIX 3.2.5 Own
Raid R-941132016 attached disk Own
Parity 3123001 Own
IBM 7204-32S Own
Alphatronix JB030793 optical jukebox Own
Uhcip6a5 2648392 7013 - 59H AIX 3.2.5 Own
Viper 2641252 7013 - 590 AIX 3.2.5 Own
Parity 4011302 Own
Zuhl 2643731 7013 - 590 AIX 3.2.5 Own
</TABLE>
-106-
<PAGE>
EXHIBIT 7
CUSTOMER SATISFACTION SURVEY
UNISYS
1996
(CUSTOMER NAME)
CUSTOMER SATISFACTION SURVEY
(SAMPLE)
NAME AND ADDRESS
_________________________
_________________________
_________________________
_________________________
_________________________
-106-
<PAGE>
(CUSTOMER NAME) SATISFACTION SURVEY
Dear (Customer name) Customer: Please note the following definitions of our
satisfaction and importance scoring scales. Your responses should reflect
experiences with Unisys during the last four months. If you've had no
experience with a particular question during that time, or it doesn't apply to
you, please check the NE box. Your comments are also important and will be
captured along with your scores to provide Unisys with additional information to
assist us in further meeting your needs and expectations. Please provide your
comments at the bottom of the next page.
<TABLE>
<CAPTION>
SATISFACTION DEFINITION RATING IMPORTANCE RATING
<S> <C> <C> <C>
Very Satisfied 5 Very Important 5
Satisfied 4 Important 4
Neither Satisfied nor Dissatisfied 3 Neither Important nor Unimportant 3
Dissatisfied 2 Unimportant 2
Very Dissatisfied 1 Very Unimportant 1
No experience within the
last 4 months NE
</TABLE>
- - Please circle the number of the "Satisfaction Score" (left column below)
that best describes your level of satisfaction with each factor.
- - Circle the number of the "Importance Scale" (right column below) that best
reflects how important each factor is to you.
- - If you had no experience with a specific factor in the last 4 months,
please check the NE (No Experience) box.
In responding to the following questions, please complete the following
statement:
PLEASE INDICATE YOUR OVERALL SATISFACTION WITH AND THE IMPORTANCE OF:
<TABLE>
<CAPTION>
SATISFACTION IMPORTANCE NE
------------ ---------- --
<S> <C> <C> <C>
1) Your overall relationship with Unisys? 5 4 3 2 1 5 4 3 2 1 [ ]
2) How easy it is to do business with Unisys? 5 4 3 2 1 5 4 3 2 1 [ ]
3) Unisys service Delivery?
-- Services are clearly defined? 5 4 3 2 1 5 4 3 2 1 [ ]
-- System response time? 5 4 3 2 1 5 4 3 2 1 [ ]
-- System on-line availability? 5 4 3 2 1 5 4 3 2 1 [ ]
-- Data Center Operations? 5 4 3 2 1 5 4 3 2 1 [ ]
-- Information security services? 5 4 3 2 1 5 4 3 2 1 [ ]
-- Disaster Recovery Services? 5 4 3 2 1 5 4 3 2 1 [ ]
-- Change Management Services? 5 4 3 2 1 5 4 3 2 1 [ ]
-- Ability to resolve problems in a timely
manner? 5 4 3 2 1 5 4 3 2 1 [ ]
-- Response to special requests? 5 4 3 2 1 5 4 3 2 1 [ ]
4) The skills and knowledge of Unisys program
personnel? 5 4 3 2 1 5 4 3 2 1 [ ]
</TABLE>
-107-
<PAGE>
PLEASE INDICATE YOUR OVERALL SATISFACTION WITH AND THE IMPORTANCE OF:
<TABLE>
<CAPTION>
SATISFACTION IMPORTANCE NE
------------ ---------- --
<S> <C> <C> <C>
5) Unisys ability to continually look for ways
to improve support through innovation? 5 4 3 2 1 5 4 3 2 1 [ ]
6) Unisys ability to provide personal attention
and timely responses to your requests? 5 4 3 2 1 5 4 3 2 1 [ ]
7) Unisys ability to perform right the first
time? 5 4 3 2 1 5 4 3 2 1 [ ]
8) Unisys personnel as effective listeners? 5 4 3 2 1 5 4 3 2 1 [ ]
9) Unisys welcoming the ideas of others? 5 4 3 2 1 5 4 3 2 1 [ ]
10) Unisys ability to conduct themselves in
a professional manner? 5 4 3 2 1 5 4 3 2 1 [ ]
11) Unisys ability to positively affect your
customers? 5 4 3 2 1 5 4 3 2 1 [ ]
12) Unisys ability to positively affect your
mission? 5 4 3 2 1 5 4 3 2 1 [ ]
</TABLE>
13) Please characterize the frequency of your personal interaction with the
following members of Unisys with an appropriate check mark? Also please rate
the importance of these interactions on a scale of 1-5 where 5 is very important
Unisys Personnel Too Often Often Enough Too Seldom Importance
- ---------------- --------- ------------ ---------- ----------
Senior Management
Program Management
Technical Support
Computer Operations
Disaster Recovery
Security
Change Management
14) What is the one thing Unisys can do to improve your effectiveness in meeting
the needs and expectations of your customers?
Question
Number/s Comment/s
- -------- ---------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
-108-
<PAGE>
EXHIBIT 8
SERVICE LOCATION
Unisys Corporation
3199 Pilot Knob Road
Eagan, MN 55121
United HealthCare Services, Inc.
6300 Olson Memorial Highway
Golden Valley, MN 55427
-110-
<PAGE>
EXHIBIT 9
KEY EMPLOYEES
The parties will mutually agree to the list of Key Employees within 30 days of
the effective date of the agreement.
-112-
<PAGE>
EXHIBIT 10
UHS COMPETITORS
Aetna/US HealthCare
CIGNA
Prudential
Blue Cross/Blue Shield
John Alden
Principal
Health Source
Humana
Well Point
FHP
Foundation Health
Value Health
Sanus
Oxford Health Plans
PacifiCare
Mid Atlantic Medical
Sierra
Coventry
PCA (Phys. Corp. of America)
Physicians Health Services
United Wisconsin Services
Well Care Management
-113-
<PAGE>
EXHIBIT 11
MONTHLY PAYMENT SCHEDULE
<TABLE>
<CAPTION>
Gross Unisys (A) Net
Monthly Monthly Base Comdisco Less: Plus: Monthly
Payment Due UHC Comdisco Line Lease Asset Transition Unisys Annual Total
Number Date Budget Payments Charge Credit Credits Charge Charge Calendar Contract
- ------ -------- ------- -------- ---------- -------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 6/1/1996 *** *** *** *** *** *** *** *** ***
2 7/1/1996 *** *** *** *** *** *** *** *** ***
3 8/1/1996 *** *** *** *** *** *** *** *** ***
4 9/1/1996 *** *** *** *** *** *** *** *** ***
5 10/1/1996 *** *** *** *** *** *** *** *** ***
6 11/1/1996 *** *** *** *** *** *** *** *** ***
7 12/1/1996 *** *** *** *** *** *** *** *** ***
8 1/1/1997 *** *** *** *** *** *** *** *** ***
9 2/1/1997 *** *** *** *** *** *** *** *** ***
10 3/1/1997 *** *** *** *** *** *** *** *** ***
11 4/1/1997 *** *** *** *** *** *** *** *** ***
12 5/1/1997 *** *** *** *** *** *** *** *** ***
13 6/1/1997 *** *** *** *** *** *** *** *** ***
14 7/1/1997 *** *** *** *** *** *** *** *** ***
15 8/1/1997 *** *** *** *** *** *** *** *** ***
16 9/1/1997 *** *** *** *** *** *** *** *** ***
17 10/1/1997 *** *** *** *** *** *** *** *** ***
18 11/1/1997 *** *** *** *** *** *** *** *** ***
19 12 1/1997 *** *** *** *** *** *** *** *** ***
20 1/1/1998 *** *** *** *** *** *** *** *** ***
21 2/1/1998 *** *** *** *** *** *** *** *** ***
22 3/1/1998 *** *** *** *** *** *** *** *** ***
23 4/1/1998 *** *** *** *** *** *** *** *** ***
24 5/1/1998 *** *** *** *** *** *** *** *** ***
25 6/1/1998 *** *** *** *** *** *** *** *** ***
26 7/1/1998 *** *** *** *** *** *** *** *** ***
27 8/1/1998 *** *** *** *** *** *** *** *** ***
28 9/1/1998 *** *** *** *** *** *** *** *** ***
29 10/1/1998 *** *** *** *** *** *** *** *** ***
30 11/1/1998 *** *** *** *** *** *** *** *** ***
31 12/1/1998 *** *** *** *** *** *** *** *** ***
32 1/1/1999 *** *** *** *** *** *** *** *** ***
33 2/1/1999 *** *** *** *** *** *** *** *** ***
34 3/1/1999 *** *** *** *** *** *** *** *** ***
35 4/1/1999 *** *** *** *** *** *** *** *** ***
36 5/1/1999 *** *** *** *** *** *** *** *** ***
37 6/1/1999 *** *** *** *** *** *** *** *** ***
38 7/1/1999 *** *** *** *** *** *** *** *** ***
39 8/1/1999 *** *** *** *** *** *** *** *** ***
40 9/1/1999 *** *** *** *** *** *** *** *** ***
41 10/1/1999 *** *** *** *** *** *** *** *** ***
42 11/1/1999 *** *** *** *** *** *** *** *** ***
43 12/1/1999 *** *** *** *** *** *** *** *** ***
44 1/1/2000 *** *** *** *** *** *** *** *** ***
45 2/1/2000 *** *** *** *** *** *** *** *** ***
46 3/1/2000 *** *** *** *** *** *** *** *** ***
47 4/1/2000 *** *** *** *** *** *** *** *** ***
48 5/1/2000 *** *** *** *** *** *** *** *** ***
49 6/1/2000 *** *** *** *** *** *** *** *** ***
50 7/1/2000 *** *** *** *** *** *** *** *** ***
51 8/1/2000 *** *** *** *** *** *** *** *** ***
52 9/1/2000 *** *** *** *** *** *** *** *** ***
53 10/1/2000 *** *** *** *** *** *** *** *** ***
54 11/1/2000 *** *** *** *** *** *** *** *** ***
55 12/1/2000 *** *** *** *** *** *** *** *** ***
56 1/1/2001 *** *** *** *** *** *** *** *** ***
57 2/1/2001 *** *** *** *** *** *** *** *** ***
58 3/1/2001 *** *** *** *** *** *** *** *** ***
59 4/1/2001 *** *** *** *** *** *** *** *** ***
60 5/1/2001 *** *** *** *** *** *** *** *** ***
61 6/1/2001 *** *** *** *** *** *** *** *** ***
62 7/1/2001 *** *** *** *** *** *** *** *** ***
63 8/1/2001 *** *** *** *** *** *** *** *** ***
64 9/1/2001 *** *** *** *** *** *** *** *** ***
65 10/1/2001 *** *** *** *** *** *** *** *** ***
66 11/1/2001 *** *** *** *** *** *** *** *** ***
67 12/1/2001 *** *** *** *** *** *** *** *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24b-(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
<TABLE>
<CAPTION>
Gross Unisys (A) Net
Monthly Monthly Base Comdisco Less: Plus: Monthly
Payment Due UHC Comdisco Line Lease Asset Transition Unisys Annual Total
Number Date Budget Payments Charge Credit Credits Charge Charge Calendar Contract
- ------ -------- ------- -------- ---------- -------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
68 1/1/2002 *** *** *** *** *** *** *** *** ***
69 2/1/2002 *** *** *** *** *** *** *** *** ***
70 3/1/2002 *** *** *** *** *** *** *** *** ***
71 4/1/2002 *** *** *** *** *** *** *** *** ***
72 5/1/2002 *** *** *** *** *** *** *** *** ***
73 6/1/2002 *** *** *** *** *** *** *** *** ***
74 7/1/2002 *** *** *** *** *** *** *** *** ***
75 8/1/2002 *** *** *** *** *** *** *** *** ***
76 9/1/2002 *** *** *** *** *** *** *** *** ***
77 10/1/2002 *** *** *** *** *** *** *** *** ***
78 11/1/2002 *** *** *** *** *** *** *** *** ***
79 12/1/2002 *** *** *** *** *** *** *** *** ***
80 1/1/2003 *** *** *** *** *** *** *** *** ***
81 2/1/2003 *** *** *** *** *** *** *** *** ***
82 3/1/2003 *** *** *** *** *** *** *** *** ***
83 4/1/2003 *** *** *** *** *** *** *** *** ***
84 5/1/2003 *** *** *** *** *** *** *** *** ***
85 6/1/2003 *** *** *** *** *** *** *** *** ***
86 7/1/2003 *** *** *** *** *** *** *** *** ***
87 8/1/2003 *** *** *** *** *** *** *** *** ***
88 9/1/2003 *** *** *** *** *** *** *** *** ***
89 10/1/2003 *** *** *** *** *** *** *** *** ***
90 11/1/2003 *** *** *** *** *** *** *** *** ***
91 12/1/2003 *** *** *** *** *** *** *** *** ***
92 1/1/2004 *** *** *** *** *** *** *** *** ***
93 2/1/2004 *** *** *** *** *** *** *** *** ***
94 3/1/2004 *** *** *** *** *** *** *** *** ***
95 4/1/2004 *** *** *** *** *** *** *** *** ***
96 5/1/2004 *** *** *** *** *** *** *** *** ***
97 6/1/2004 *** *** *** *** *** *** *** *** ***
98 7/1/2004 *** *** *** *** *** *** *** *** ***
99 8/1/2004 *** *** *** *** *** *** *** *** ***
100 9/1/2004 *** *** *** *** *** *** *** *** ***
101 10/1/2004 *** *** *** *** *** *** *** *** ***
102 11/1/2004 *** *** *** *** *** *** *** *** ***
103 12/1/2004 *** *** *** *** *** *** *** *** ***
104 1/1/2005 *** *** *** *** *** *** *** *** ***
105 2/1/2005 *** *** *** *** *** *** *** *** ***
106 3/1/2005 *** *** *** *** *** *** *** *** ***
107 4/1/2005 *** *** *** *** *** *** *** *** ***
108 5/1/2005 *** *** *** *** *** *** *** *** ***
109 6/1/2005 *** *** *** *** *** *** *** *** ***
110 7/1/2005 *** *** *** *** *** *** *** *** ***
111 8/1/2005 *** *** *** *** *** *** *** *** ***
112 9/1/2005 *** *** *** *** *** *** *** *** ***
113 10/1/2005 *** *** *** *** *** *** *** *** ***
</TABLE>
Totals
(a)Gross Monthly UHC Budget minus Comdisco Payments times ***% for months 6
through 65; ***% for months 66 through 113; ***% for months 1 through 5.
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24b-(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
Schedule A to Exhibit 11
<TABLE>
<CAPTION>
Cost Center 3420
To Be
Budget Actual* Purchased
<S> <C> <C> <C> <C>
Purchases
Aug - Dec 95 $ **** $ **** $ ****
1996 $ **** $ **** $ ****
---------------------------------------
Total Cost $ **** $ **** $ ****
Cost Center 3425
To Be
Budget Actual** Purchased
Purchases
Aug - Dec 95 $ **** $ **** $ ****
1996 $ **** $ **** $ ****
---------------------------------------
Total Cost $ **** $ **** $ ****
Cost Center 3430
To Be
Budget*** Actual* Purchased
Purchases
Aug - Dec 95 $ **** $ **** $ ****
1996 $ **** $ **** $ ****
---------------------------------------
Total Cost $ **** $ **** $ ****
Total for
Cost Centers
To Be
Budget Actual* Purchased
Purchases
Aug - Dec 95 $ **** $ **** $ ****
1996 $ **** $ **** $ ****
---------------------------------------
Total Cost $ **** $ **** $ ****
Adjustment for Unix
box lease $ ****
Adjusted total $ ****
---------
---------
</TABLE>
*Capital additions through 4/30/96
**Capital additions through 5/31/96
***adjusted for leases
**** Indicates the omission of confidential information filed separately with
the Securities and Exchange Commission in connection with a confidential
treatment request made pursuant to Rule Rule 24b-2 of the Securities and
Exchange Act of 1934, as amended.
<PAGE>
6/6/96
Attachment B to Exhibit 11
ICEBERG--1996 BUDGET BY ORG #
With Unix=0, else 1
(Sets 3425 to retained)
<TABLE>
<CAPTION>
#3420 #3445 #3430 #3475 #3585 #3425 #3495 #3400 #3415 #3000 #3480 Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Salaries *** *** *** *** *** *** *** *** *** *** *** ***
Fringe *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Labor *** *** *** *** *** *** *** *** *** *** *** ***
Education *** *** *** *** *** *** *** *** *** *** *** ***
Recruiting *** *** *** *** *** *** *** *** *** *** *** ***
Printing *** *** *** *** *** *** *** *** *** *** *** ***
Rent Allocation *** *** *** *** *** *** *** *** *** *** *** ***
Non-cap Equip *** *** *** *** *** *** *** *** *** *** *** ***
Non-cap Sftw *** *** *** *** *** *** *** *** *** *** *** ***
Hdwr Maint *** *** *** *** *** *** *** *** *** *** *** ***
Sftw Main *** *** *** *** *** *** *** *** *** *** *** ***
Move Install *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Non-cap
Equip *** *** *** *** *** *** *** *** *** *** *** ***
Hdwr Leases *** *** *** *** *** *** *** *** *** *** *** ***
Sftw Leases *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Leases *** *** *** *** *** *** *** *** *** *** *** ***
Communications *** *** *** *** *** *** *** *** *** *** *** ***
Office Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Comp Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Travel *** *** *** *** *** *** *** *** *** *** *** ***
Dep Fixed Equip *** *** *** *** *** *** *** *** *** *** *** ***
Dep F&F *** *** *** *** *** *** *** *** *** *** *** ***
Dep Comp Hdwr *** *** *** *** *** *** *** *** *** *** *** ***
Dep Comp Sftw *** *** *** *** *** *** *** *** *** *** *** ***
Dep Vehicles *** *** *** *** *** *** *** *** *** *** *** ***
Amort Leasehold
Imp *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Dep &
Amort *** *** *** *** *** *** *** *** *** *** *** ***
Dues *** *** *** *** *** *** *** *** *** *** *** ***
Subs/Pub *** *** *** *** *** *** *** *** *** *** *** ***
Offsite Storage *** *** *** *** *** *** *** *** *** *** *** ***
Insurance *** *** *** *** *** *** *** *** *** *** *** ***
External DP *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Misc *** *** *** *** *** *** *** *** *** *** *** ***
Consultants *** *** *** *** *** *** *** *** *** *** *** ***
Total *** *** *** *** *** *** *** *** *** *** *** ***
FTE Months *** *** *** *** *** *** *** *** *** *** *** ***
Avg FTE *** *** *** *** *** *** *** *** *** *** *** ***
Adjustments *** *** *** *** *** *** *** *** *** *** *** ***
Adjusted Total *** *** *** *** *** *** *** *** *** *** *** ***
***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
<TABLE>
<CAPTION>
ICEBERG--1996 OUTSOURCED BUDGET
#3420 #3445 #3430 #3475 #3485 #3425 #3495 #3400 #3415 #3000 #3480 Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Salaries *** *** *** *** *** *** *** *** *** *** *** ***
Fringe *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Labor *** *** *** *** *** *** *** *** *** *** *** ***
Education *** *** *** *** *** *** *** *** *** *** *** ***
Recruiting *** *** *** *** *** *** *** *** *** *** *** ***
Printing *** *** *** *** *** *** *** *** *** *** *** ***
Rent Allocation *** *** *** *** *** *** *** *** *** *** *** ***
Non-cap Equip *** *** *** *** *** *** *** *** *** *** *** ***
Non-cap Sftw *** *** *** *** *** *** *** *** *** *** *** ***
Hdwr Maint *** *** *** *** *** *** *** *** *** *** *** ***
Sftw Maint *** *** *** *** *** *** *** *** *** *** *** ***
Move Install *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Non-
Cap Equip *** *** *** *** *** *** *** *** *** *** *** ***
Hdwr Leases *** *** *** *** *** *** *** *** *** *** *** ***
Sftw Leases *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Leases *** *** *** *** *** *** *** *** *** *** *** ***
Communications *** *** *** *** *** *** *** *** *** *** *** ***
Office Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Comp Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Travel *** *** *** *** *** *** *** *** *** *** *** ***
Dep Fixed Equip *** *** *** *** *** *** *** *** *** *** *** ***
Dep F&F *** *** *** *** *** *** *** *** *** *** *** ***
Dep Comp Hdwr *** *** *** *** *** *** *** *** *** *** *** ***
Dep Comp Sftw *** *** *** *** *** *** *** *** *** *** *** ***
Dep Vehicles *** *** *** *** *** *** *** *** *** *** *** ***
Amort Leasehold
Imp *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Dep &
Amort *** *** *** *** *** *** *** *** *** *** *** ***
Dues *** *** *** *** *** *** *** *** *** *** *** ***
Subs/Pubs *** *** *** *** *** *** *** *** *** *** *** ***
Offsite Storage *** *** *** *** *** *** *** *** *** *** *** ***
Insurance *** *** *** *** *** *** *** *** *** *** *** ***
External DP *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Misc *** *** *** *** *** *** *** *** *** *** *** ***
Consultants *** *** *** *** *** *** *** *** *** *** *** ***
Total *** *** *** *** *** *** *** *** *** *** *** ***
FTE Months *** *** *** *** *** *** *** *** *** *** *** ***
Avg FTE *** *** *** *** *** *** *** *** *** *** *** ***
Adjustments *** *** *** *** *** *** *** *** *** *** *** ***
Adjusted total *** *** *** *** *** *** *** *** *** *** *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
<TABLE>
<CAPTION>
ICEBERG--1996 RETAINED COST
#3420 #3445 #3430 #3475 #3585 #3425 #3495 #3400 #3415 #3000 #3480 Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Salaries
Fringe *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Labor *** *** *** *** *** *** *** *** *** *** *** ***
Education *** *** *** *** *** *** *** *** *** *** *** ***
Recuriting *** *** *** *** *** *** *** *** *** *** *** ***
Printing *** *** *** *** *** *** *** *** *** *** *** ***
Rent Allocation *** *** *** *** *** *** *** *** *** *** *** ***
Non-cap Equip *** *** *** *** *** *** *** *** *** *** *** ***
Non-Cap Sftw *** *** *** *** *** *** *** *** *** *** *** ***
Hdwr Maint *** *** *** *** *** *** *** *** *** *** *** ***
Sftw Maint *** *** *** *** *** *** *** *** *** *** *** ***
Move Install *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Non-Cap
Equip *** *** *** *** *** *** *** *** *** *** *** ***
Hdwr Leases *** *** *** *** *** *** *** *** *** *** *** ***
Sftw Leases *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Leases *** *** *** *** *** *** *** *** *** *** *** ***
Communications *** *** *** *** *** *** *** *** *** *** *** ***
Office Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Comp Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Supplies *** *** *** *** *** *** *** *** *** *** *** ***
Travel *** *** *** *** *** *** *** *** *** *** *** ***
Dep Fixed Equip *** *** *** *** *** *** *** *** *** *** *** ***
Dep F&F *** *** *** *** *** *** *** *** *** *** *** ***
Dep Comp Hdwr *** *** *** *** *** *** *** *** *** *** *** ***
Dep Comp Sftw *** *** *** *** *** *** *** *** *** *** *** ***
Dep Vehicles *** *** *** *** *** *** *** *** *** *** *** ***
Amort Leasehold
Imp *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Dep &
Amort *** *** *** *** *** *** *** *** *** *** *** ***
Dues *** *** *** *** *** *** *** *** *** *** *** ***
Subs/Pubs *** *** *** *** *** *** *** *** *** *** *** ***
Offsite Storage *** *** *** *** *** *** *** *** *** *** *** ***
Insurance *** *** *** *** *** *** *** *** *** *** *** ***
External DP *** *** *** *** *** *** *** *** *** *** *** ***
Subtotal Misc *** *** *** *** *** *** *** *** *** *** *** ***
Consultants *** *** *** *** *** *** *** *** *** *** *** ***
Total *** *** *** *** *** *** *** *** *** *** *** ***
FTE Months *** *** *** *** *** *** *** *** *** *** *** ***
Avg FTE *** *** *** *** *** *** *** *** *** *** *** ***
Adjustments *** *** *** *** *** *** *** *** *** *** *** ***
Adjusted total *** *** *** *** *** *** *** *** *** *** *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
Attachment C to Exhibit 11
In-Scope FTE Reconciliation
<TABLE>
<CAPTION>
FTE FTE Total FTE
In-Scope Unisys Retained-UHC
Functions Staff Tbh Contr Total Staff Tbh Contr Total Staff Tbh Contr Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UNISYS SYSTEM
Manager 0 0 0 0 1 0 0 1 1 0 0 1
Oper. Systems 3 1 0 4 0 0 0 0 3 1 0 4
Barcode 2 0 0 2 2 0 0 2
Barcode 0 0 0 0 0 0 0 0 0 0 0 0
Database 5 1 0 6 0 0 0 0 5 1 0 6
Performance 1 1 0 2 1 0 0 1 2 1 0 3
QA/OA (Prod Ctl) 6 1 0 7 1 0 0 1 7 1 0 8
Scheduling 3 0 0 3 0 0 0 0 3 0 0 3
Proj Mngt 1 0 0 1 0 0 0 0 1 0 0 1
Total 19 4 0 23 5 0 0 5 24 4 0 28
IBM SYSTEMS
Manager 1 0 0 1 0 0 0 0 1 0 0 1
Oper Sys(Tech) 5 2 0 1 0 0 0 0 5 2 0 7
Applic (OA) 3 0 0 3 0 0 0 0 3 0 0 3
Database 2 0 0 2 0 0 0 0 2 0 0 2
EDI 0 0 0 0 3 1 0 4 3 1 0 4
Unix 0 0 0 0 12 1 0 13 12 1 0 13
Total 11 2 0 13 15 2 0 17 26 4 0 30
CUSTOMER SERVICE
Client Service Mgr 0 0 0 0 3 0 0 3 3 0 0 3
Tehnical Writer 2 0 0 2 0 0 0 0 2 0 0 2
Technical Anyst 0 0 0 0 1 0 0 1 1 0 0 1
CVSLA 0 1 0 1 0 0 0 0 0 1 0 1
Project Mgr 0 0 0 0 0 0 0 0 0 0 0 0
Total 2 1 0 3 4 0 0 4 6 1 0 7
HELP DESK
Manager 0 0 0 0 1 0 0 1 1 0 0 1
Level 1 Support
(Scheduler) 0.5 0 0 0.5 9.5 2 0 10.5 9 2 0 11
NCC 0 0 0 0 6 0 0 6 6 0 0 6
Fld Spt(remote) 0 0 0 0 1 0 10 11 1 0 10 11
Project Manager 0 0 0 0 0 0 0 0 0 0 0 0
Change/Config Mgmt 1 0 0 1 1 0 0 1 2 0 0 2
Total 1.5 0 0 1.5 17.5 2 10 29.5 19 2 10 31
OPERATIONS
Manager 1 0 0 1 0 0 0 0 1 0 0 1
Tape Lib 4 0 0 4 0 0 0 0 4 0 0 4
IBM Operations 9 1 0 10 0 0 0 0 9 1 0 10
Ops Analyst 0 0 0 0 1 0 0 1 1 0 0 1
QCOM 0 0 0 0 13 3 0 16 13 3 0 16
Unlsys Ops (incl
Spvr) 13.5 0 0 13.5 0.5 0 0 0.5 14 0 0 14
Total 27.5 1 0 29.5 14.5 3 0 17.5 42 4 0 46
ADMINISTRATION
Director 1 0 0 1 0 0 0 0 1 0 0 1
Admin Assist 1 0 0 1 1 0 0 1 2 0 0 2
Total 2 0 0 2 1 0 0 1 3 0 0 3
Department #3415 0 0 0 0 1 0 0 1 1 0 0 1
Total Billets 63 8 0 71 58 7 10 75 121 15 10 148
</TABLE>
<PAGE>
Attachment D to Exhibit 11
Software Credit
(Remaining Amortization)
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial Value
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1229 3400 sw 96073 software lotus 123 - qty 2 ***
1229 3400 sw 96277 software iccAntercom ter-emul ***
1999 3400 sw 99351 sftw-extra (#p6200) ***
1229 3400 sw 104765 wordperfect v5.1 ***
1229 3400 sw 104772 f/windows 3.5"attachment extra ***
1229 3400 sw 104775 intercom ms-windows; ***
1229 3400 sw 105384 paradox v4.0 by borland ***
1229 3400 sw 106505 cobol compiler w/toolset v3.0 ***
1229 3400 sw 107822 data ease A.5 ***
1299 3400 sw 107843 sql server v4.2 ***
1229 3400 sw 108303 jetform design ***
1229 TOTAL ***
1230 3400 sw 108326 wordperfect v6.0 ***
1230 3400 sw 108327 lotus 123 v4.01 ***
1230 3400 sw 108328 hcl exceed/W v3.3 ***
1230 3400 sw 108329 ms office v4.0 ***
1230 3400 sw 108330 intercomwin term emul/filexpr ***
1230 3400 sw 108635 intercom win term emul ***
1230 3400 sw 108650 pagemaker v5.0 ***
1230 3400 sw 109127 attachmate etra ***
1230 3400 sw 109128 powerbuilder 3.0 ee sql ***
1230 3400 sw 109127 attachmate extra ***
1230 TOTAL ***
3400 TOTAL ***
1153 3420 sw 115681 upgrade to group cpu infopac ***
1153 TOTAL ***
1237 3420 sw 97910 sftw for ibm sys various ***
1237 3420 sw 98105 sftw for ibm sys. 5664-301 A7864,virtual mach ***
1237 3420 sw 98106 vmcenter 11 mgmt for ibm 52317 ***
1237 3420 sw 97983 sftw, ibm vmbackup mgt system 00B0024,003938 ***
1237 3420 sw 98030 sttw-ibm vm backup mngmnt syst & gddm/vmxa ***
1237 3420 sw 98065 sftw-wmbackup management sys 00B0024, 003938 ***
1237 3420 sw 98185 sftw for ibm profs v2 0663 & 00A8484 ***
1237 3420 sw 99110 sftw upgrade-ibm 0084 rscs 00A7861 ***
1237 3420 sw 99111 sftw upgrade ibm, os pl/l 84684 ***
1237 3420 sw 99113 sftw upgrade-ibm acf/vtam 00A7862 ***
1237 3420 sw 99114 sftw upgrade ibm, sqVds otc: 9121 ***
1237 3420 sw 99355 installation 001 for d&b sttw cntrct#901224310000 ***
1237 3420 sw 99466 acf2 for vse ***
1237 3420 sw 99467 unipack/srm w/cicsort for vse ***
1237 3420 sw 99468 uipack wm w/opera for vm ***
1237 3420 sw 99726 sftw-doctor d. sftw & license ***
1237 3420 sw 99727 sftw-raps for vse ***
1237 3420 sw 99728 sftw-netman/olcf for vm ***
1237 3420 sw 99729 sftw-librarian for vse ***
1237 3420 sw 99730 sftw-vollie for vse ***
1237 3420 sw 99731 sftw-netman for vm ***
1237 3420 sw 99732 sttw-office vision/vm 5684-084 10170 ***
1237 3420 sw 99733 sftw-workstation mgr lic fee n/a ***
1237 3420 sw 100333 inter-partition command procsr ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
Attachment D to Exhibit 11
Software Credit
(Remaining Amortization)
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial Value
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1237 3420 sw 100997 ca-1 tape mgmt f/9121-480 21251 ***
1237 3420 sw 100998 license agreement f/cics mvs,5 cpu type ibm es9121 ***
1237 3420 sw 101339 unipack vm w/opers vm ***
1237 3420 sw 100998 license agreement f/cics; mvs.5 cpu type ibm es9121 ***
1237 3420 sw 101613 installment 002 for d&b sftwre contract#901223410000 ***
1237 3420 sw 101819 basic license, assembler#v2rl OOEL954 ***
1237 3420 sw 101824 sttw-mvs/tso OOGD305 ***
1237 3420 sw 101827 sftw-cache rmf reporter OOK0599 ***
1237 3420 sw 101829 sftw-icfru OOK0531 ***
1237 3420 sw 101924 raps vse software contract#270131-025 ***
1237 3420 sw 101925 netman/olcf vm software contract#2701.31-023 ***
1237 3420 sw 101926 librarian vse sottware contract#270131-024 ***
1237 3420 sw 101927 vollie vse software contract#270131-021 ***
1237 3420 sw 101928 sftw-tapexpert-tape utility ***
1237 3420 sw 101929 netman va software contract#270131-0,29 ***
1237 3420 sw 102377 5695-064 cica ao/mvs,ano/mvs sonoran serif fonts ***
1237 3420 sw 101928 sftw-tapexpert-tape utility ***
1237 3420 sw 102643 quick ref sftw,perpet lic w/ma w/maintenance ***
1237 3420 sw 102643 quick ref sftw,perpet lic w/ma w/maintenance ***
1237 3420 sw 103212 sftw lic-31038 sas/calc ***
1237 3420 sw 103213 interconnect control program ***
1237 3420 sw 103214 otc for ibm, opca.opcesa ***
1237 3420 sw 103747 terminal image mgr f/ibm, 3 ***
1237 3420 sw 103751 ibm ca-acf2 ***
1237 3420 sw 103753 ibm ca-unipack/srm w/cicsort ***
1237 3420 sw 104128 perp license-vangauard racfadmi ***
1237 3420 sw 104128 perp lice nse-vangauard racfadmi ***
1237 3420 sw 105873 abend-aid for db2 ***
1237 3420 sw 105874 cics aben-aid db2 ***
1237 3420 sw 105875 xpediter/tso ***
1237 3420 sw 105876 xpediter/cics ***
1237 3420 sw 105877 abend-aid xcs upgrade ***
1237 3420 sw 105878 xpediter/tso f/db2 ***
1237 3420 sw 105879 abend-aid/mxa upgrade ***
1237 3420 sw 105881 file-aid/spf/batch/xe upgrade ***
1237 3420 sw 106521 installment 001 -dun&brad sftw ***
1237 3420 sw 106523 dbs implementation costs inv#s:x00-6392, 3365 ***
1237 3420 sw 107259 ndm-mvs network sftw licenses ***
1237 3420 sw 107250 cpu-multi image integrity lic ***
1237 3420 sw 107540 shaman, 4 ***
1237 3420 sw 108345 afp driver f/intran ***
1237 3420 sw 108633 intercom win term emul ***
1237 3420 sw 109133 the monitor f/cics/dsa ***
1237 3420 sw 109134 the monitor for mvs ***
1237 3420 sw 109135 the monitor for db2 ***
1237 3420 sw 110131 mvs/quicl-ref 2nd group 40 cpu ***
1237 3420 sw 111148 attahcmate extra windows ***
1237 3420 sw 111153 abend-aid/xcs ***
1237 3420 sw 111154 abend-aid f/db2 ***
1237 3420 sw 111155 cics abend-aid db2 ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
<TABLE>
<CAPTION>
Attachment D to Exhibit 11
Software Credit
(Remaining Amortization)
5/31/96
Page Org Flag Asset ID Description Serial Value
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1237 3420 sw 111156 file-aid/mvs ***
1237 3420 sw 111157 xpediter/ts f/db2 ***
1237 3420 sw 111158 xpediter/tso ***
1237 3420 sw 111159 xpediter/cics ***
1237 3420 sw 114755 dist mgr host upgfee 3090-600J ***
1237 3420 sw 114759 quickstart grp 50/60 3090-600J ***
1237 3420 sw 202100 mvs software ***
1237 3420 sw 202099 cpu software db2 ***
1237 3420 sw 202101 upgrade fee for software ***
1237 3420 sw 202102 upgrade 80 cpu infopac-jcl-rds ***
1237 TOTAL ***
Add 3420 sw 203650 cpu upgrade ***
ADD TOTAL ***
3420 TOTAL ***
699 3425 sw 115949 lic risc system ***
699 3425 sw 116226 ncdware end user lic ***
699 3425 sw 124165 lic risc 6000 system ***
699 3425 sw 124166 risc 6000 lic ***
699 3425 sw 125002 aix windows envmnt/6000 ***
699 Total ***
1240 3425 sw 108344 regular updates-sql server ***
1240 3425 sw 108348 sql server ibm rs6000 aix ***
1240 3425 sw 109152 multimedia toolbook ***
1240 3425 sw 109565 ca clipper v5.2 ***
1240 3425 sw 110142 cobol unx rs6000 v3.1 ***
1240 3425 sw 110168 sybase regular updates ***
1240 3425 sw 111187 sybase sql server ibrTVrs6000 ***
1240 3425 sw 112042 5765/172 db2 aix/6000 ***
1240 3425 sw 112045 1761 pgf5 dotc dbdcs/6000vl ***
1240 3425 sw 112046 process group f5 basic db2 ***
1240 3425 sw 112052 oec server license aix/6000 ***
1240 3425 sw 112563 softwindows ***
1240 3425 sw 112577 processor group f5 basic otc ***
1240 3425 sw 112045 1761 pgf5 dotc dbdcs/6000vl ***
1240 3425 sw 113736 sybase sql server ibm risc6000 ***
1240 3425 sw 113738 wordperf ect unx ibm rs6 ***
1240 3425 sw 113739 wordperfect unix aol 05rsl ***
1240 3425 sw 113740 wordperf ect unix adl 01 rsl ***
1240 3425 sw 114492 intelquery-unix rs6000/590 upgrade fee ***
1240 3425 sw 114764 procgroup-f5basic:risc6000sftw ***
1240 3425 sw 114765 procgroup-g5basic:risc6000nsftw ***
1240 3425 sw 114769 rpc painter option ***
1240 3425 sw 115572 ibm db2/600 non qda sftw ***
1240 3425 sw 115577 event manager ***
1240 3425 sw 115578 event mgr db agt orc ***
1240 3425 sw 115579 event manager agent ***
1240 3425 sw 115581 perforrn/trend db orcl 6 ***
1240 3425 sw 115582 perform/trend agent ***
1240 3425 sw 115580 perforrn/trend ***
1240 3425 sw 124172 aix 6000 ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
Attachment D to Exhibit 11
Software Credit
(Remaining Amortization)
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial Value
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1240 3425 sw 124173 infoconnect intercom ***
1240 3425 sw 124174 risc 6000 aix cpu ***
1240 3425 sw 125100 license fee xgen al 8-326 hte ***
1240 3425 sw 127110L swI backtrack licenses ***
1240 3425 sw 127110A runti me site license ***
1240 3425 sw 127110N r3 rack drive ***
1240 3425 sw 127110O lic risc 6000 ***
1240 3425 sw 202098 license software mntr sftw ***
1240 3425 sw 202103 sybase sql server risc 6000 ***
1240 3425 sw 202105 mgr bets version ***
1240 TOTAL ***
Add 3425 sw 203652 sybase sql server ***
Add 3425 sw 204039 fx6700 chassis ethernet module ***
ADD TOTAL ***
3425 TOTAL ***
705 3430 sw 201136 license upgrade ***
705 TOTAL ***
1245 3430 sw 94999 software job flow mgmt 330 ***
1245 3430 sw 95000 software job flow mgmt ***
1245 3430 sw 95001 software lion tape library ***
1245 3430 sw 95002 software lion tape library ***
1245 3430 sw 95003 software packit license fee ***
1245 3430 sw 95004 software packit license fee ***
1245 3430 sw 95005 software packit disk mgmt ***
1245 3430 sw 95006 software packit disk mgmt ***
1245 3430 sw 95427 sales tax for software A#94999 ***
1245 3430 sw 95428 sales tax for software A#95005 ***
1245 3430 sw 95429 sales tax for software A#95003 ***
1245 3430 sw 96599 group four upgrade ***
1245 3430 sw 96600 info retrieval system license ***
1245 3430 sw 97266 cp200 protocol 1005326695-001 ***
1245 3430 sw 97311 software-bVlib tape mgmt sys ***
1245 3430 sw 97312 custom protocol generatio a s ***
1245 3430 sw 97470 total recovery planning system ***
1245 3430 sw 97623 total recovery planning system ***
1245 3430 sw 97877 sales tax fpr spss.inc sftw 12/85 24864 $ *** ***
1245 3430 sw 98063 software upgrade-support for multiple locatio ***
1245 3430 sw 98064 sftw. sage advice w/maintenance w/annual maintenance ***
1245 3430 sw 98179 sftw. icc/intercom 102 ***
1245 3430 sw 98330 sftw. sage advice (see A#098064 2nd payment ***
1245 3430 sw 98344 accounts rec.syst module, msa 1424325921 -000 ***
1245 3430 sw 98428 sftw-icc 102 termnal emulation 1 3.5disk, 1 5.25dsk ***
1245 3430 sw 98589 software-jcl 7-tpa/tpm ***
1245 3430 sw 99115 sf1w module-prnl med records 9352400390-001 ***
1245 3430 sw 99189 sftw-source-comm. mgmt. system 4122760003-001 ***
1245 3430 sw 99190 sftw-dms 11 db monitor 4122760001-001 ***
1245 3430 sw 99191 sftw-dms 11 inquiry, ntw adm 4122760002-001 ***
1245 3430 sw 100810 kes 11 v3.2 develpmnt license n/a 1091 usetax ***
1245 3430 sw 100810 kes 11 v3.2 develpmnt license n/a 1091 usetax ***
1245 3430 sw 101832 sftw-1.2 tcpAp Ian 101292- 5912 ***
</TABLE>
<PAGE>
Attachment D to Exhibit 11
Software Credit
(Remaining Amortization)
<TABLE>
<CAPTION>
Page Org Flag Asset ID Description Serial Value
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1245 3430 sw 101833 emulator-sna put 2 1012878632-001 ***
1245 3430 sw 101834 sftw-sna3270cp2000 1012878627-001 ***
1245 3430 sw 101835 sftw-tcp/ip 101878631-001 ***
1245 3430 sw 101836 sftw-tcp/ip, application 1012878629-001 ***
1245 3430 sw 103215 viewpoint license baselines,coms, host ***
1245 3430 sw 103215 viewpoint license baselines,coms, host ***
1245 3430 sw 103755 uisys a17 disk mngmt license ***
1245 3430 sw 103755 unisys a17 disk mnmgt license ***
1245 3430 sw 104767 paradox for dos 4.0 ***
1245 3430 sw 104787 cane monitor software ***
1245 3430 sw 105145 tax for a19 sftw lic 01/96-98 ***
1245 3430 sw 104787 cane monitor software ***
1245 3430 sw 105402 perpetual license fee-wfl rngr ***
1245 3430 sw 105404 com sw:et fileexpress;transport; emulation ***
1245 3430 sw 105405 o/s:unix svr4 ***
1245 3430 sw 105414 a-19 mainframe sftw ***
1245 3430 sw 105661 a19 s/n24-tp analyzer realtime monitor sftw ***
1245 3430 sw 105402 perpetual license fee-wfl mgr ***
1245 3430 sw 105661 a19 s/n24-tp analyzer realtime monitor sftw ***
1245 3430 sw 106156 intercom win term emul ***
1245 3430 sw 106179 autoscan sftw pkg w/4scanners fc9330522,24,26,28 ***
1245 3430 sw 106520 dba tools -perpetual license ***
1245 3430 sw 106522 os/2:unix svr4 unimt users ***
1245 3430 sw 106179 autoscan sftw pkg w/4scanners fc9330522,24,26,28 ***
1245 3430 sw 106772 intercom win emul v3.22, 8 ***
1245 3430 sw 106780 bl/distr report dist&control ***
1245 3430 sw 106780 bl/distr report dist&control ***
1245 3430 sw 107524 wordperfect 5.2 f/windows,3 ***
1245 3430 sw 107527 attachmate extra f/windows,4 ***
1245 3430 sw 107530 attachmate extra f/Windows,5 ***
1245 3430 sw 107531 wordperfect v5.2 w/Windows, 6 ***
1245 3430 sw 108383 unisys a17n system sftw licens ***
1245 3430 sw 108634 icw-mtx corplicense ***
1245 3430 sw 109140 viewpoint performance analyzer ***
1245 3430 sw 109141 viewpoint capacity manager ***
1245 3430 sw 109142 coms module ***
1245 3430 sw 112033 sna svcs f/uhc rs6rn 426 ***
1245 3430 sw 114761 file xfr:ftrapid-bna enb;a ser ***
1245 3430 sw 115592 unisys a19-642 proc sftw ***
1245 3430 sw 115970 lic mdmt systems bl/pack dist ***
1245 3430 svv 127110E viewpoint performance analyzer ***
1245 3430 sw 127110G dba upgrade ***
1245 3430 sw 127110M snap license aix 6000 ***
1245 3430 sw 127110R ***
1245 3430 sw 127100S ***
1245 TOTAL ***
3430 TOTAL ***
1247 3445 sw 101657 icw-mtxx sftw ***
1247 3445 sw 111152 fiche replacement enhancements to bl/pack & Mist ***
1247 3445 sw 114218 scanner-vedfier magnetic ink ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
Attachment D to Exhibit 11
Software Credit
(Remaining Amortization)
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial Value
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1247 3445 sw 114616 sales tax re a#114218 ***
1247 TOTAL ***
3445 TOTAL ***
Grand Total ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NBV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
690 3420 116198 reloc. mgmt. Services ***
690 3420 202048 nec monitor lens xv1 7" ***
690 Total ***
697 3420 * 96061 ibm cache disk - 3 2812al 8255,2803di 825 ***
697 3420 98024 tape backup, mountain 150mb ***
697 3420 98232 adapter, 16 port coax extend ***
697 3420 98840 disk drive controller 28498 ***
697 3420 98859 terminal, operator console A6841 ***
697 3420 98863 cptr equip-3274 cntd unit tel F5818 ***
697 3420 98864 controller master telecorn 3725 2172 ***
697 3420 99180 multi cassette unit ***
697 3420 99181 printer, 12ppm laser 6095496 ***
697 3420 99180 multi cassette Unit (sales tax) ***
697 3420 99181 printer, 12ppm Laser (sales tax) 6095496 ***
697 3420 99552 3084Q ref a#099553 187,358,313,983,140 ***
697 3420 99553 3084Q w/pif,3089,3800-3 cntrl 56409,a0896,m8980,n7 ***
697 3420 99949 liebert chiller M 25 kva invr chilld water strg tn ***
697 3420 100544 dir access storage device qty 4 r8008,9262,u7413 ***
697 3420 100960 disk controller ibm 4 path-32m 36401 ***
697 3420 101167 direct acess storage & conver 05850618,v4773, ***
697 3420 101301 s/370 channel snatnon-sna d052,r4839 ***
697 3420 101704 modem,5853 ooe: c2797 ***
697 3420 101719 printer ibm laser 2069 ***
697 3420 102333 infopac/rds/jc/pc sitelicense ***
697 3420 102335 disk drives-3380bk4 w/m3contro ***
697 3420 102333 infopac/rdsrjc/pc sitelicense (sales tax) ***
697 3420 102831 3880 disk controller ibm , 3 ***
697 3420 102832 3990 disk controller 31654 ***
697 3420 102833 3380 dir access disk drive, 14 ***
697 3420 102834 6690dasd disk storage units, 6 ***
697 3420 102835 ibm 1512 add'l channel f/taped ***
697 3420 102836 ibm tape controller-2reel 26057 ***
697 3420 102837 ibm tape drive 8reel, 2 m3924,m1776 ***
697 3420 102838 ibm mb channel attachment, 2 ***
697 3420 102839 ibm idrc feature ***
697 3420 102840 cartridge tape drive autoload3 65273,54412,52930 ***
697 3420 103104 hp laserjet3 printer - 3207a77598 ***
697 3420 103155 ibm 3172 interconnect controll 3223 ***
697 3420 103458 3084-qc8 upgrade from q64 ***
697 3420 103659 modem-microcom qx4232bis, 6 ***
697 3420 104619 ibm 3390 disk control ler/driv5 14046,70436,32036, ***
697 3420 105001 distrib mgmt sub system ***
697 3420 105304 3420-008 mag tape unit, 2 87686,87976 ***
697 3420 105311 4245-012 printer ***
697 3420 105001 distrib mgmt sub system ***
697 3420 105546 ibm thinkpad 700c486sIc complt 97h1wc9 ***
697 3420 105552 modernicroporte 4232bis ***
697 3420 105556 disk drive-3380-bkr, 2 ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
697 3420 105557 monitor-nec multisync 4dscolor 241L32803A ***
697 3420 105578 3990-603 disk controller 15145 ***
697 3420 105579 rack-5wide, 8high,1600cap, 3 ***
697 3420 105580 20high density packs 3490-22 ***
697 3420 105581 rack-5w8h 800cap ***
697 3420 104619 ibm 3390 disk controller/driv5 14046,70436,32036 ***
697 3420 106018 ibm ps/2 76 486sx: complete 2323A2 ***
697 3420 106057 1-3390/a28:2-3390/b2c;l -3990/2 11304/31591, 31683/ ***
697 3420 106063 monitor ibm 6319 color 1231065 ***
697 3420 106331 thinkpad expansion unit ibm 97BF234 ***
697 3420 106358 3725-1561 channel adapter ***
697 3420 106359 modemicroporte.4232bis ***
697 3420 106380 1-9309:4-3480 tape cntrVdrive 40770,17376,61789 ***
697 3420 106657 (2)3480-a22:(7)348Ob22 tape ***
697 3420 106685 rack-3480cartridge w/slider,7 (3)3492-80;(4)3491-4 ***
697 3420 106937 ibm 3745-210 commun frontend processor ***
697 3420 106946 cable assembly ***
697 3420 107088 modem-microcom qx4232bis, 6 ***
697 3420 107139 printer-ibm 4028nsi laser 6934 ***
697 3420 107176 3380/ak4 direct access storage ***
697 3420 107373 ibm pp/2 76 486sx/33 1048mbhd 23FX364 ***
697 3420 107409 disk drive:1)3390/a2:2)b2c 12408,33423,32686 ***
697 3420 107414 monitor -ibm 9515 14" 23R1646 ***
697 3420 108081 diskdrive-3380/bk4-u0320,u7337 ***
697 3420 108121 controller-2 disk drives ***
697 3420 108125 cable -1 50'excon ***
697 3420 109399 ibm 3390dasd A2634,A2238,B4065 ***
697 3420 109422 3081 -k32 w/3082-024 processor 20715 ***
697 3420 109423 3990-006 lic storage control 90645 ***
697 3420 109424 ibm laser printer 3816-01d 71744 ***
697 3420 110484 ibm ps/2 76ua 486sx/33 208mbhd ***
697 3420 110485 monitor-nec 3fge color 15" ***
697 3420 110550 3390 dasd -ibm disk drive 43521 ***
697 3420 111081 5455456 bus&tag ***
697 3420 112080 controllers 3803-2 w/bus&tag 11285,12404 ***
697 3420 112429 3480 cartridge rack -extreme ***
697 3420 112430 3480 cartridge rack slider ***
697 3420 112431 pacs-extreme auto 11 ***
697 3420 112460 3380 direct access storage dev 5663 ***
697 3420 114443 ibm 3390-b2c dasd b5532 ***
697 3420 114444 ibm 3390-b3c dasd 37178 ***
697 3420 114705 3380 dasd bk4 w2851 w2851 ***
697 3420 115134 3390 direct access storage dev a28-0011162 ***
697 3420 115135 3390 direct access storage dev a28-0011183 ***
697 3420 115136 3390 direct access storage dev a28-0011369 ***
697 3420 115137 3390 direct access storage dev a28-001171 0 ***
697 3420 115138 3390 direct access storage dev a28-0011731 ***
697 3420 115139 3390 direct access storage dev b2c-0039642 ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
697 3420 115140 3390 direct access storage dev b2c-0039716 ***
697 3420 115141 3390 direct access storage dev b2c-0040304 ***
697 3420 115142 3390 direct access storage dev b2c-0040508 ***
697 3420 115143 3390 direct access storage dev b2c-0040620 ***
697 3420 115144 3390 direct access storage dev b2c-0040762 ***
697 3420 115145 3390 direct access storage dev b2c-0040810 ***
697 3420 115146 3390 direct access storage dev b2c-0040838 ***
697 3420 115147 3390 direct access storage dev b2c-0040934 ***
697 3420 115148 3390 direct access storage dev b2c-0040978 ***
697 3420 115149 3990 storage control 4path32mb g03-0033096 ***
697 3420 115150 3990 storage control 4path32mb g03-00333,16. ***
697 TOTAL ***
Add 3420 203010a nbc cu cards ***
ADD TOTAL ***
3420 TOTAL ***
405 3425 115648 ccs customization services ***
405 3425 124144 misc equip scsi adapters ***
405 3425 124145 docking station ***
405 3425 124580 125007uip ***
405 3425 124581 computer equip ***
405 3425 124582 misc equip ***
405 3425 124584 computer equip ***
405 TOTAL ***
699 3425 116120 ibm data propagator/pc ***
699 3425 116246 rs/6000 confi ***
699 3425 124143 risc 6000 ***
699 3425 124552 risc 6000 ***
699 3425 124552a ris/6000 part of 124552 ***
699 3425 124553 platform base ***
699 3425 124554 risc system 6000 ***
699 3425 124120 pc/keyboard/monitor 23P2238 ***
699 3425 125004 4.5gb scsi f/w disk ***
699 3425 125003 8mm tape drive ***
699 3425 125021 ibm pc ***
699 3425 125022 ibm token ring 92G7682230X6H4 ***
699 3425 125033 scsi 2 fast-wide ***
699 3425 125023 ibm pc ***
699 3425 125026 ***
699 3425 125027 upgrade ***
699 3425 124578 misc equip ***
699 3425 124579 computer equip ***
699 3425 124583 computer equip ***
699 3425 124585 pc ibm monitors ***
699 3425 125035 risc sys 6000 ibm ***
699 3425 * 125099 external disk array 4.5gb 21864 ***
699 3425 * 125093 37" multiscan monitor 4031035881406103862 ***
699 3425 127056 pc/keyboard/ringnode 23HTADF ***
699 3425 202096 storage module Ian ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
699 Total ***
705 3425 102091 ibm rs6000 token ring board ***
705 3425 106901 2.4gb disk drives-seagate ext2 ***
705 3425 108571 modem-14.4 data/fax 9600 ***
705 3425 109005 ibm rs/6000 m590 41252 ***
705 3425 109007 ncd mcxI 7 xterminal w/tr ***
705 3425 109041 56s9-20dcm3 ***
705 3425 110639 nec ulversa 75ec 486dx4/75 340 44006514 ***
705 3425 110640 nec dock station -ulversa 43011251 C ***
705 3425 110641 monitor-nec 3v 15" 4131321 NA ***
705 3425 110980 ncd xterminal 15r 5mb xremote ***
705 3425 111139 56s9-20dcm3 ***
705 3425 111844 ibm rs6000 590 43731 ***
705 3425 112533 2gb harddrive- 5676-20dcm3 ***
705 3425 112534 56s9-20dcm3 harddrive ***
705 3425 112535 58sk-20dcm3 harddrive ***
705 3425 112879 ibm t.ring adp mes to vhc 59 73731 ***
705 3425 112881 addI t.r. adp mes f/uhc22 ***
705 3425 112996 harddrive-71 sw-206pp3 ***
705 3425 113643 ibm m590,002,317 ***
705 3425 113675 monitor-nec Sfge 17" 4700104DA ***
705 3425 113676 ibm enhanced keyboard ***
705 3425 113677 mouse v2.0 serial -ibmps2 ***
705 3425 113713 desl 34 mb memory array ***
705 3425 113713 scsi-2 fast&wide dualport ***
705 3425 113714 rackmount chassis ***
705 3425 113642 ibm m590 t7013;mOO2 t0463 4OTMT, 4QTMV ***
705 3425 114148 disk drive ***
705 3425 114160 nec 486dx/50 340 mbi 44mb 4XO14431 ***
705 3425 114161 docking station 11 for ultalit 49014801 ***
705 3425 114162 multisync 5fge .28mm 17in flat 4700104DA ***
705 3425 114203 ibm rs6000 w/enhancements ***
705 3425 114204 rs6000 barracuda drive ***
705 3425 114481 722*ba-20dcm3 drive ***
705 3425 114743 20hm dsply.tknmg pskybd ***
705 3425 114744 17hm dsply, pep, kybrd terminal ***
705 3425 114745 17lc dsply,tt,kybd terminal ***
705 3425 114746 lc1 base sys, tt, kybd terminal ***
705 3425 114752 raid-7 cptr w/proc array hd's ***
705 3425 115133 scsi-2 f ast/wide adpt/a 2415 ***
705 3425 115180 xterminal-20hm,tr,kyb ***
705 3425 115186 r3 rack encl 18*3 1/4"drive ***
705 3425 115187 486dx/66 processor embed cpu ***
705 3425 115188 array computer 64mb cache ***
705 3425 115189 dualhost controllers 20mb/sec ***
705 3425 115190 sl triple scsi dev adapt 5mb/s ***
705 3425 115191 raid 7 embeded os sngl unit ***
705 3425 115192 raid 7 set-up &config ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
705 3425 115193 raid 7 realtime system perf ***
705 3425 115194 seagate cuda 4.1 gb diskdrive ***
705 3425 115392 sales tax re A#1 14481 ***
705 3425 115439 monitor-nec xp2l color 5510967CB ***
705 3425 115508 scsi-2 f ast/wide apadt/a ***
705 3425 115509 64mb hd3 memory card ***
705 3425 115553 terminal-1 5r xstrt tr mem ***
705 TOTAL ***
977 3425 111450 terminal -wyse 30+amber 14" w/k ***
977 3425 111451 american power conversion smart ups 2000 ***
977 3425 111452 powerchute t1unix-xenix ap9OO4 ***
977 3425 111453 ibm rs/6000 m590 43186 ***
977 TOTAL ***
1240 3425 201135 misc telephone equip ***
1240 TOTAL ***
Add 3425 204037 ibm 4.5 gb drive ***
Add 3425 204038 rs6000 cust server aix ***
Add 3425 204060 scsi adapter cards ***
3425 bambarn ***
3425 ibm rs/6000 7011-250-aix 3.2.5 2624034/bandit ***
3425 ibm rs/6000 7013-59h-aix 3.2.5 2648757/bhdatal ***
3425 ibm rs/6000 7013-59h-aix 3.2.5 bhdata2 ***
3425 bhdata3 ***
3425 ibm rs/6000 7013-580-aix: 3.2.5 2639063/bhfuncl ***
3425 ibm rs/6000 7013-590-aix 3.2.5 2646076/bisl ***
3425 ibm rs/6000 7013-590-aix 3.2.5 2641001/calvin ***
3425 cpw/ina ***
3425 ibm rs/6000 7013-59h-aix 3.2.5 2649881/fillet ***
3425 rs/6000 aix 3.2.5 26075321gar ***
3425 ibm rs/6000 7013-590-aix 3.2.5 2643197/hobbes ***
3425 ibm rs/6000 7013-59h-aix 3.2.5.1 2646969/kazoo ***
3425 unisys; u6000 svr4 474171439/kestrel ***
3425 ibm rs/6000 701M9h-aix 3.2.5 26500200/orion ***
3425 unisys u6000 svr4 ?/osprey ***
3425 ibm rs/6000 7013-j30-aix 4.1.4 2650254/pegasus ***
3425 ibm rs/6000 7013-550-aix 3.2.5 2621567/piranha ***
3425 ibm rs/6000 7013-590-aix 3.2.5 2650490/polaris ***
3425 ibm rs/6000 7013-59h-aix 3.2.5 2648393/prism ***
3425 qstar ***
3425 ibm rs/6000 7013-580-aix: 3.2.5 2639286/rohcs ***
3425 ibm rs/6000 7011-250-aix 3.2.5 2624035/smokey ***
3425 ibm rs/6000 7013-59h-aix 3.2.5 2649667/susie ***
3425 ibm rs/6000 7013-59h-aix 3.2.5 2648268/tokay ***
3425 ibm rs/6000 7013-590-aix 3.2.5 2640842/tomcat ***
3425 ibm rs/6000 7013-590-aix 3.2.5 2640841 /topgun ***
3425 ibm rs/6000 7013-59h-aix 3.2.5 2648392/uhcip6a5 ***
3425 ibm rs/6000 7013-590-aix: 3.2.5 2641252/viper ***
3425 ibm rs/6000 7013-590-aix 3.2.5 2643731/zuhl ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3425 Net Book Value Adjustment ***
Add Total ***
3425 Total ***
407 3430 * 93532 cmi office equipment ***
407 3430 * 93533 cmi computer equipment ***
407 3430 * 93572 cmi equipment ***
407 3430 * 93615 cmi computer/office equipment ***
407 3430 * 93629 cmi computer/office equipment ***
407 3430 * 93633 cmi computer/office equipment ***
407 3430 * 94180 printer sperry m3l 713581 ***
407 3430 * 94181 printer sperry m3l 713599 ***
407 3430 * 94183 printer sperry laser m37 #1696 1696 ***
407 3430 * 94186 printer sperry m115 #126358 126358 ***
407 3430 * 94192 printer sperry m11 5 #126209 126209 ***
407 3430 * 96501 cmi computer/office equip ***
407 3430 96610 reader printer 5000 #4481 4481 ***
407 3430 96721 console recorder w/printer ***
407 3430 97015 reader printer 9160471 ***
407 3430 97016 reader prt w/controller ***
407 3430 97084 reader printer ***
407 3430 97227 uarco burster, deleaver ***
407 3430 97342 dcu data cntl unit, line card ***
407 3430 97586 drive, cipher 9-track & card ***
407 3430 97687 dcu data cntl unit, line card ***
407 3430 97718 processor, burroughs; ***
407 3430 97869 reader 32x, motorized alos 380941005-000 ***
407 3430 98153 printer, 15ppm laser w/1.5mb 380941005-000 ***
407 3430 98153 printer, 15ppm laser w/1.5mb ***
407 Total ***
705 3430 107175 xterminal-19"color w/tring, 2 415370-191-37 ***
705 3430 119090 transportation unisys ***
705 3430 124176 transportation trfr fromm #100 ***
705 3430 11 8089b unisys drive from cc#1 00 ***
705 3430 201039 laser printer ***
705 Total ***
706 3430 202013 pc nec versa S5YO112378 ***
106 3430 202013A nec pc versa, memo-ry,ringnode S5YO12378 ***
706 3430 202030 docking station,coloer monitor S5YO3168RA ***
706 Total ***
719 3430 93456 cable burr. proc&cont qty 8 ***
719 3430 93604 cmi computer equipment ***
719 3430 93619 cmi computer/office equipment ***
719 3430 93620 cmi computer equipment ***
719 3430 * 93908 network sys ethernet cards(20 ***
719 3430 * 4193 cards exchg 4x 16 gcr/pe qty 5 ***
719 3430 * 94242 power syst 75kva modular used ***
719 3430 * 94700 drive mag tape unisys qty (2) 300813359,300801172 ***
719 3430 * 95219 use tax for asset 94193 ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
719 3430 * 95246 keybrd maxiswitch me101 14258 ***
719 3430 * 95587 tape drive emerald nov 80 ***
719 3430 * 95592 tape drive qualstar subsystem 711164 ***
719 3430 95895 sales-use tax 1986 ref A#93957 ***
719 3430 * 96064 univ uniline/odt - qty 3 ***
719 3430 * 96350 7100 75kva & 7200c 75kva ***
719 3430 * 96469 excelerator block version ***
719 3430 * 96478 tape cleaner/evaluator ***
719 3430 96540 sales tax ref asset 96469 ***
719 3430 96543 sales tax ref asset 96064 ***
719 3430 96553 cpu equip unisys settle/agree ***
719 3430 96589 cpu unisys pwo.500/12 4611,68727 ***
719 3430 96590 cpu-unisys 408090 & 991 408990 & 991 ***
719 3430 96591 remote printer " 1004563059-001 ***
719 3430 96593 pit laser 15 ppm w/1.5mb 349033894,349919423 ***
719 3430 96611 tape drive unit 1052-812029 812079 ***
719 3430 96680 unisys upgrade nec: 88 qty 9 100-428068, 3731305. ***
719 3430 96682 color printer 651005290-000 ***
719 3430 97087 cables, disk & tape drives ***
719 3430 97224 6391 hssi printer + cable ***
719 3430 97578 upgrade/retum w/4.01 cdr sftvv 1641 ***
719 3430 98589 data link processor w1laser pr comp prt mgt facil ***
719 3430 97913 printer,6391 hssi w/cables ***
719 3430 98017 printer, 15pprn laser w/1.5mb 349059998 ***
719 3430 98020 monitor-harris 14" mt cir dspl 6081753w1kyb6018525 ***
719 3430 98021 monftor-harris 14" mt cir dspl 6042903 wkyb6029529 ***
719 3430 98137 cptr. pw2 500/12 deluxe system 605490-000 ***
719 3430 98165 monitor it mono display green 147325-000 ***
719 3430 98170 cable for ibm 4245-12 printer ***
719 3430 98171 cable for electric printer connection ***
719 3430 98321 cables, fa5460185 buss/tag ibm for tape & cartrdg ***
719 3430 98321 cables, fa5460185 buss/tag ibm for tape & cartrdg ***
719 3430 99082 printer-unisys b924B-25h hssi 375504982-000 ***
719 3430 99233 batteries for exide ups system proj#90114 ***
719 3430 99571 check verification machine n/a tax added 5/91 ***
719 3430 99648 coupler-ps2td micro chni board n/a umcusetacO591 ***
719 3430 99679 batteries for 6100 ups unit inv#du141686-01 ***
719 3430 99571 check verification machine n/a tax added 5/91 ***
719 3430 99739 ivr system, complete 4-line job#7076inv#403097 ***
719 3430 99891 freight for A#099679 1#404583 ***
719 3430 99892 processor, data link (install) ***
719 3430 99893 processor, data link (to xerox printer interface ***
719 3430 99929 cable, printer interface sales tax added 7/91 ***
719 3430 99648 coupler-ps2td micro chnl board n/a umcusetac0591 ***
719 3430 100030 terminals-ibm 3290-220 qty 2 Z4314,D3877 ***
719 3430 99893 processor, data link (to xerox printer interface ***
719 3430 99929 cable, printer interface sales tax added 7/91 ***
719 3430 100240 memory storage,24mb, a17 qty 2 1011414756-001 ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
719 3430 101108 cd-rom drive-ibm rs-6000 int ***
719 3430 101109 disk drive poa7ir,800 ma scsi ***
719 3430 101131 memory-ibm model 5031-61 2mb,5 ***
719 3430 101137 modem-multi tech 9600b xt/at/m ***
719 3430 101155 printer-hp 1jet III 8ppm, p&s 3126A93096 ***
719 3430 101164 terminal, amber 3151-610 f/rs-6 88FL2H3 ***
719 3430 101168 tape drive-ibm rs-6000 150mb 28543 ***
719 3430 101196 monitor-ibm 19" monochrome, 5 230OC2717,12,21,16, ***
719 3430 101204 tape backup unit-ibm rs-6000 ***
719 3430 101205 powerstation/power server-ibm- 2621567 ***
719 3430 101245 interposer-ibm rs-6000 pmtr/t ***
719 3430 101265 adapter-rs-6000 ehtemet Ian n/a 1136-2980 ***
719 3430 101274 token ring adaOtors 4 or 16, 5 ***
719 3430 101290 basic otc-ibm rs-16000 aix xsta ***
719 3430 101292 aix station mgr wrkstn map,5 ***
719 3430 101294 basic otc 1-2,ibm rs-6000 f/f5 ***
719 3430 101297 basic otc-ibm rs-6000 aix cobo ***
719 3430 101298 basic otc 3.32-ibm rs-6000 aix: ***
719 3430 101300 autoloader,f/unisys cartridg,2 1011780323-001,1066- ***
719 3430 101305 cable, printer. ibm rs-6000 ***
719 3430 101306 cable. async,rs-6000,rs232, 2 ***
719 3430 101531 processor,data link. isc7OO ***
719 3430 101531 processor,data link. 1sc7OO ***
719 3430 102825 ap9230-mex mem opt exp, brd cm2156404 ***
719 3430 102841 0899-02 dual cartridge drive 2 ***
719 3430 102842 125ips2xmt tape subsystem ***
719 3430 103105 hp laserjet3si prinetr, 6 32111IJ02702,J14011 ***
719 3430 103141 channel switch, 3-a bea;;2*2,2 ***
719 3430 103445 data link processor-jaguar ***
719 3430 103651 a17 mem-24mb memory board ***
719 3430 103445 data link processor-jaguar ***
719 3430 104301 tape drive;tape controller ***
719 3430 104618 a19 dual processor-mainframe,8 ***
719 3430 104621 unisys disk drives m9613-01,11 ***
719 3430 104622 m961 3-01 disk drives,unisys, 18 ***
719 3430 104997 hp laserjet3 si printer 3211JI8903 ***
719 3430 105002 freight,tax,a19 mainframe ***
719 3430 105300 adptr,ctrl-scsi external dIp, 3 disk-cd rom ***
719 3430 105302 unix 6000/65f wtworkstation,2 ***
719 3430 105303 zitel casd/rawdisk complete,2 ***
719 3430 105413 a-19 mainframe ***
719 3430 105566 token ring-jetdirect f/hp1j ***
719 3430 105792 4213 laser printer-xerox 56V-000410 ***
719 3430 105815 controller-unsys x604-icp 1016928838-000 ***
719 3430 105817 bar code reader/scanner w/sftw ***
719 3430 106014 ibm ps/2 70 386 complete 23XCTL2 ***
719 3430 106378 disk:mass mod diff8 1gb ***
719 3430 106652 printer xerox 9790 laser syste ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
719 3430 106686 rack-3480cartridge w/sliders (3)3492-80:(4)3491-4 ***
719 3430 106914 microcom ax/chassis G31800212 ***
719 3430 106915 modem - microcom qx4232bis, 2 ***
719 3430 106918 al7f cpu ***
719 3430 106944 shipping ratesa f/a19 cpu's ***
719 3430 107130 scsi adapter w/cable f/rs6m970 ***
719 3430 107145 monitor-ibm 9515 color 14" 23M4000 ***
719 3430 107155 token ring-madge 16/at ***
719 3430 107168 printer- xerox 4213-56v ***
719 3430 107170 data link processor-isc 700 3043 ***
719 3430 107172 spectra physics 400 laserscanr ***
719 3430 107173 percon pt2000 terminal, 5 ***
719 3430 107177 wand-f/percon pt2000, med dens4 ***
719 3430 107181 channel switch-2-12 baell 3a ***
719 3430 105302 unix 6000/65f w/workstation.2 ***
719 3430 107377 ibm ps/2 77 486sx/33 200mbhd 2323AFF11 ***
719 3430 107383 nec ul versa 486sl/25 w/option 3600829in ***
719 3430 107388 dock station-nec ul versa 37015291B ***
719 3430 107411 monitor -ibm 9515 14"color 23X0897 ***
719 3430 107168 printer- xerox 4213-56v ***
719 3430 107170 data link processor-isc 700 3043 ***
719 3430 107181 channel switch-2*2 beall 3a ***
719 3430 107599 al7n cpu mainframe w/peripherals ***
719 3430 107725 a-17 memory 24mb ***
719 3430 107729 monitor-nec 3fge 15" 39CO0540B ***
719 3430 108050 ibm pp/2 76 486sx/33 208mbhd 231bmx8,myl ***
719 3430 108099 monitor-nec 3fge 3x3071 1 ma,22ma ***
719 3430 108123 percon pocket reader 128k ***
719 3430 108384 disk ipi 5.7gb 2*4 332930049,56 ***
719 3430 108385 disk: m9730 1.42gb ***
719 3430 108386 memory: al 9 board w/48mb ***
719 3430 109008 printer-hp laserjet4 ustcl 20577 ***
719 3430 109015 compaq deskpro xe 466 w/optns 6353HGY50157 ***
719 3430 109016 monitor-compaq 171 fs color 34442601A874 ***
719 3430 109040 i/f distribution modulea995-92 ***
719 3430 109081 ibm pp/2 76 486sx/33 231brd8,lcbg7,lcdd6 ***
719 3430 109082 monitor-nec 3fge 15" 3Z58530,555,587ma ***
719 3430 108040 i/f distribution modulea995-92 ***
719 3430 110566 monitor-nec 3fge 15" S4336529NB,6565NB ***
719 3430 110567 ibm pp/2 76 486sx/33 208mbhd 23LBYN5 ***
719 3430 110568 ibm pp/2 76 486sx/33 104mbhd 23FCVPV ***
719 3430 110646 cable 40' scsi i/o ***
719 3430 110647 desk:dev cage 1545 mb sp ***
719 3430 110648 disk:pkg sp 2x1 545 basic ***
719 3430 110649 controller:scsi ext dlp ***
719 3430 111145 a9l 00-sll scsi-1 disk driver ***
719 3430 111502 unisys lease #3-cp,tapedrives, terminals:caplease ***
719 3430 111960 ibm pp/2 77 486dx2/33 8mb ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT E TO EXHIBIT 11
Asset Transfer
(Net Book Value)
hardware
<TABLE>
<CAPTION>
5/31/96
Page Org Flag Asset ID Description Serial NSV
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
719 3430 111961 monitor- nec 6fgp 21 " ***
719 3430 111972 monitor-nec 3fge 15" 45DO4754B ***
719 3430 112001 docking station -nec ulversa. 46002021D ***
719 3430 112027 tape drive w/cabinet, storage auto loader ***
719 3430 112028 controller-icpl-=al2-17 ***
719 3430 111971 nec ulversa 50ec 486dx2/50 42009755 ***
719 3430 112510 modem-microcom 2x4232bis ***
719 3430 113367 mu-91 s 4 meg fu lipop 39bit mem ***
719 3430 113368 casd -3.5", 2.2gb 54OOrpm ***
719 3430 113715 60' scsi cable i/o ***
719 3430 113716 1u power dist unit ***
719 3430 113717 usd2l 00-s28 disk:3ucage 1545mb ***
719 3430 113718 cabinet:uity stbfage 36 ***
719 3430 113719 usr3142-s22 disk*pkg sp 2xI 545 ***
719 3430 113720 ctrl:scsiu ext dip ***
719 3430 113721 ctd:scsi dual initiator ***
719 3430 113776 unisys a17 24mb memory board ***
719 3430 114209 enhnc: upgrade kit ***
719 3430 114723 ibm pp/2 77 486dx2 270mb 23ZPNHD,H,NMANTF ***
719 3430 114724 monitor-nec 3v 15" 4Y09818RP,22,11404RP ***
719 3430 114727 nec ulversa v/50c 4816dx2/50 51010149 ***
719 3430 114728 nec docking station f/ulversa 4ZO20991K ***
719 3430 114729 monitor-nec xel 7 5253836NE ***
719 3430 115151 integra level 11 tapecleaner/ 49005 ***
719 3430 115153 monitor-nec 3v 15" 4YO2496EP ***
719 3430 115198 a16-48b mem:48mb memory w/brd 1021708413 ***
719 3430 115199 cable-80'scsi Vo ***
719 3430 115200 disk:pkg sp 7x3019basic 461780660,702,728 ***
719 3430 115201 cntd:scsiextdlpx3lO-91 ***
719 3430 115561 unisys proc upg to al 9-642 499848010 ***
719 TOTAL ***
Add 3430 201136 license upgrade ***
Add 3430 203707 raid 7200 syst ***
ADD TOTAL ***
3430 TOTAL ***
719 3445 127042 pc750 16mb 540 sc 23PA358 ***
719 3445 201016 pc, monitor, keyboard ***
719 TOTAL ***
3445 TOTAL ***
GRAND TOTAL ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
ATTACHMENT F TO EXHIBIT 11
EXHIBIT 34
HARDWARE/SOFTWARE LICENSE SUPPORT CHARGES
<TABLE>
<CAPTION>
ORG CATEGORY PRODUCT VENDOR DESCRIPTION
- --- -------- -------- ------- -----------
<S> <C> <C> <C> <C>
3420 Hrdwr MA Hardware IBM ESY9000 System
3420 Hrdwr MA Hardware HP HP Unix
3420 Hrdwr MA Hardware IBM EW9000 System
HRDWR MA TOTAL
3420 Sftwr MA Software BMC Software
3420 Sftwr MA Software Cache Valley TAPEMNGL Tape Utility
3420 Sftwr MA Software Chicago Soft MVS/Ouick-Rel
3420 Sftwr MA Software Computer Assoc ONE MVS
3420 Sftwr MA Software Compuware ABEND-AID/XLS
3420 Sftwr MA Software Compuwdre CICS ABEND-AID/MVS
3420 SIIwr MA Software Compuware FILE-AID
3420 Sftwr MA Software Compuware ABEND-AID for DB2
3420 Sftwr MA Software Compuware CICS ABEND-AID
3420 Sftwr MA Software Compuware FILE-AID/MVS
3420 Sftwr MA Software Compuware XPEDITER/CICS
3420 Sttwr MA Software Compuware XPEDITERITSO
3420 Sftwr MA Software Landmark The Monitor for EICS/ESA
3420 Sftwr MA Software Landmark The Monitor for MVS
3420 Sftwr MA Software Landmark The Monitor for DBS
3420 Sftwr MA Software Landmark The Monitor for GICS/MVS
3420 Sftwr MA Software Landmark The Monitor for VTAM
3420 Sftwr MA Software Landmark Navigraph Data Interface for CICS/MVS
3420 Sfiwr MA Software Landmark Navlgraph Data Inerface MVS
3420 Sftwr MA Software Landmark Navigraph Data Interface DB2
3420 Sftwr MA Software Landmark Navigraph Data Interface VTAM
3420 Sftwr MA Software Legent Corp Mufti-image Inlerity with EDIF
3420 Sftwr MA Software Mackinney Systems LISTCAT PLUS
3420 Sftwr MA Software Merrill Consultants MXG Software
3420 Sftwr MA Software Mobius Mgmt Sys INFOPAC-JCL & PC (Site License)
3420 Sftwr MA Software SAS Institute RCS - Annual Fees
3420 Sftwr MA Software SAS Institute Base SAS
3420 Sftwr MA Software SAS Institute SAS/Connecl
3420 Sftwr MA Software SAS Institute SAS/Access DB2
3420 Sftwr MA Software SAS Institute SAS/FSP
3420 Sftwr MA Software SAS Institute SAS/GRAPH
3420 Sftwr MA Software SAS Institute SAS/AF
3420 Sftwr MA Software SAS Institute SAVSHARE
3420 Sftwr MA Software SAS Institute SAS/STAT
3420 Sftwr MA Software SAS Institute SAS/CPE
3420 Sftwr MA Software SAS Institute SAWASSIST
3420 Sftwr MA Software SAS Institute SAS/CALC
3420 Sf1wr MA Software Sterling Commerce Direct SNA MVS
<CAPTION>
ANNUAL ANNUAL
PERIOD DATE $$ IMPACT COMMENT
- ------ ---- -- ------- ---------
<C> <C> <C> <C> <C>
Quarterly *** ***
Annual *** ***
Quarterly *** ***
***
Annual July *** ***
Annual October *** ***
Annual November *** *** Agreement # 9211258
Annual October *** *** Product Code ONE 00200
Annual February *** ***
Annual February *** ***
Annual February *** ***
Annual February *** ***
Annual February *** ***
Annual February *** ***
Annual February *** ***
Annual February *** ***
Annual August *** ***
Annual August *** ***
Annual August *** ***
Annual August *** ***
Annual August *** ***
Annual August *** ***
Annual August *** ***
Annual August *** ***
Annual August *** ***
Annual April *** ***
Annual May *** ***
Annual Sept *** ***
Annual March *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual July *** ***
Annual June *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with
the Securities and Exchange Commission in connection with a confidential
treatment request made pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
-1-
<PAGE>
HARDWARE/SOFTWARE LICENSE & SUPPORT CHARGES
<TABLE>
<CAPTION>
ORG CATEGORY PRODUCT VENDOR DESCRIPTION
- ---- -------- ------- ------ ------------
<S> <C> <C> <C> <C>
3420 Sftwr MA Software Sys Data Quickslarl
SFTWR MA TOTAL
3420 Sftwr Lease Software IBM TCP/IP
3420 Sftwr Lease Software IBM MVS/ESA SP JES2
3420 Sftwr Lease Software IBM Dataprop Rel Capture/MVS V1
3420 Sftwr Lease Software IBM Netview Perf Monitor MVS
3420 Sftwr Lease Software IBM ACF/SSP
3420 Sftwr Lease Software IBM Netview Access
3420 Sftwr Lease Software IBM Service Level Reporter V3
3420 Sftwr Lease Software IBM ISPF/PDF V3 (MVS)
3420 Sftwr Lease Software IBM Sys Disp & Search Facil
3420 Sftwr Lease Software IBM VS Pascal Library
3420 Sftwr Lease Software IBM GDDM-PGF V2
3420 Sftwr Lease Software IBM OS P/IA V2 Library
3420 Sftwr Lease Software IBM Assembler H 2RI
3420 Sftwr Lease Software IBM IBM Database 2 MVS Ver 3
3420 Sftwr Lease Software IBM TSO/E V2
3420 Sftwr Lease Software IBM SMP/E for OS/VS2
3420 Sftwr Lease Software IBM RMF V.4
3420 Sftwr Lease Software IBM ISPF V3 for MVS
3420 Sftwr Lease Software IBM CICS/ESA V3
3420 Sftwr Lease Software IBM ACF/VTAM for MVS/ESA V3
3420 Sftwr Lease Software IBM NETVIEW V2 MVS/ESA
3420 Sftwr Lease Software IBM AOCA/MVS
3420 Sftwr Lease Software IBM X.25 NPSI V3
3420 Sftwr Lease Software IBM C/370 LIBRARY V2
3420 Sftwr Lease Software IBM PAGE PRINT FORMAT AID/370 V1
3420 Sftwr Lease Software IBM ACF/NCP VERSION 6
3420 Sftwr Lease Software IBM DFSMS/MVS VERSION 1
3420 Sftwr Lease Software IBM OPC/ESA V1
3420 Sftwr Lease Software IBM PSF/MVS
3420 Sftwr Lease Software IBM JES2 MVS/ESA V4.3
3420 Sftwr Lease Software IBM INFORMATION/MANAGEMENT V5
3420 Sftwr Lease Software IBM OCF/VTAM V4 MVS/ESA
3420 Sftwr Lease Software IBM IBM GDDM REXX/MVS V3
3420 Sftwr Lease Software IBM HIGH LEV ASSEM MVS, VM, VSE
3420 Sftwr Lease Software IBM QMF MFS V3
3420 Sftwr Lease Software IBM SALES TAX
3420 Sftwr Lease Software IBM OS/VS COBOL COMPLIER
3420 Sftwr Lease Software IBM RESOURCE ACCESS CONTROL FAC
SFTWR LEASE TOTAL
<CAPTION>
ANNUAL ANNUAL
PERIOD DATE $$ IMPACT COMMENTS
- ------ ----- --- ------ --------
<C> <C> <C> <C> <C>
Annual Feb *** *** Item 0 CIS M 80
*** ***
Monthly *** ***
Monlhly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
Monthly *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with
the Securities and Exchange Commission in connection with a confidential
treatment request made pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
-2-
<PAGE>
HARDWARE/SOFTWARE LICENSE & SUPPORT CHARGES
<TABLE>
<CAPTION>
ORG CATEGORY PRODUCT VENDOR DESCRIPTION
- --- -------- -------- ------ ------------
<S> <C> <C> <C> <C>
3425 Hrdwr MA Hardware IBM RS6000 (32 boxes @ $1500/01r)
3425 Hrdwr MA Hardware IBM RS6000 Poripheral
HRDWR MA TOTAL
3425 Sftwr MA Software Greenbrier & Russel RPC; Painter
3425 Sftwr MA Software IQ Software WIN s/u (5 copies)
3425 Sftwr MA Software IQ Software IBM RS6000 POWERserver 590
3425 Sftwr MA Software IQ Software IBM RS6000 POWERserver 590
3425 Sftwr MA Software IQ Softw4ae IBM RS6000 POWERserver 590
3425 Sftwr MA Software Open Environment Maintenance
3425 Sftwr MA Software Pitney Bowes Platinum
3425 Sftwr MA Software Sybase Advantage Support Fees
3425 Sftwr MA Software Sybase Add'l Advantage Support Contacts
SFTWR MA TOTAL
3430 Hdwr MA Hardware Unisys Surety Maintenance
HDWR MA TOTAL
3430 Sftwr MA Software Attachmate DATABRIDGE
3430 Sftwr MA Software Attachmate FileXpress AT for A15
3430 Sftwr MA Software B&L LIB/PACK/SOURCE/DIST
3430 Sftwr MA Software Dalametric Viewpoint Software
3430 Sftwr MA Software HBO&Cornpany PRN1000 Medical Records Slats
3430 Sftwr MA Software ISO INTRAWR
3430 Sftwr MA Software ISO SPOOLJLPM-R
3430 Sftwr MA Software ISO DETC-R
3430 Sftwr MA Software ISO INTRAWR
3430 Sftwr MA Software ISO SPOOULPM.R
3430 Sftwr MA Software ISO DTEC-R'
3430 Sftwr MA Software ISO SPOOLAN OUT
3430 Sftwr MA Software ISO FLIST-R
3430 Sftwr MA Software ISO FDUMP-R
3430 Sftwr MA Software ISO DTEC-R
3430 Sftwr MA Software ISC, INTRAWR
3430 Sftwr MA Software ISO SPOOLILPM-R
3430 Sftwr MA Software OpenWare Tech unxXGN, AIX, etc
3430 Sftwr MA Software Openware Tech XGEN
3430 Sftwr MA Software Software Clearing Hse 3 ASAP DIRECTORS
3430 Sftwr MA Software Steward DalaTech dbaTOOLs
3430 Sftwr MA Software Unisys Surety
SFTWR MA TOTAL
GRAND TOTAL
<CAPTION>
ANNUAL ANNUAL
PERIOD DATE $$ IMPACT COMMENTS
- ------- ----- --- ------- --------
<C> <C> <C> <C> <C>
Quarterly
Quarterly
Annual Janaury *** ***
Annual January *** *** Product #PWDB003885
Annual November *** *** Product #PIUB002374
Annual November *** *** Product #PIUB002459
Annual December *** *** Product #PIUB002564
Annual August *** ***
Annual March *** ***
Annual March *** *** Catalog #98323
Annual March *** *** Catalog #98407
*** ***
Monthly *** ***
*** ***
Annual November *** ***
Annual March *** ***
3 Year January *** *** Agreement D93030643-R2
Annual June *** ***
Annual August *** ***
Annual June *** ***
Annual June *** ***
Annual June *** ***
Annual June *** ***
Annual June *** ***
Annual June *** ***
Annual June *** ***
Annual December *** ***
Annual December *** ***
Annual June *** ***
Annual June *** ***
Annual June *** ***
Annual July *** ***
Annual January *** ***
Annual August *** ***
Annual December *** ***
Monthly *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with
the Securities and Exchange Commission in connection with a confidential
treatment request made pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
-3-
<PAGE>
EXHIBIT 12
DISASTER RECOVERY SERVICES AND
CRITICAL APPLICATIONS
SECTION 1: DISASTER RECOVERY SERVICES
1) As part of the Base Services, Unisys will provide the Disaster Recovery
Services described below. Beginning on the Effective Date, and for the
Term of the Agreement, Unisys will undertake financial and administrative
responsibility for portions (Schedules A & B) of the Disaster Recovery
Agreement between UHS and SunGard and the Storage Agreement between UHS and
Mohawk [NOTE: Unisys is yet to receive the Mohawk agreement]. Copies of
these agreements are attachments to Exhibit 12.
2) As part of the base services, Unisys will implement those portions of UHS's
Disaster Recovery Plan applicable to the Services.
3) The services and functions provided by UHS's existing Disaster Recovery
Plan and the Disaster Recovery Agreement will represent the baseline scope,
service level, priority, responsiveness, performance and system
configuration requirements for disaster recovery services provided by
Unisys under this Agreement.
4) Disaster declarations will be at UHS's sole discretion. Any declaration,
usage and/or network fees are payable by UHS.
5) As soon as practicable after the Effective Date and prior to each Module
Completion Date, Unisys shall, in cooperation with UHS, SunGard, Mohawk,
and other applicable vendors, update or modify the UHS Disaster Recovery
Plan to reflect the relocation of UHS's workload to the Unisys facility and
govern the provision of disaster recovery capability and services on or
after the effective date. After the transition, the modified disaster
recovery plan will replace the existing UHS disaster recovery plan.
6) During the term, Unisys may propose to UHS that Unisys provide the disaster
recovery capability and services itself or obtain them from a different
vendor, providing that UHS consents and that the scope, access, priority,
service level responsiveness, performance and systems configuration
requirements of such services shall not be less than those provided to UHS
under its current Disaster Recovery Plan. The backup facility and Unisys
primary processing facility shall be sufficiently distant from the primary
facility such that a single event would not compromise the backup facility
and processing facility simultaneously.
7) As part of the Base Services, Unisys will provide a designated Service
Center representative who is knowledgeable in disaster recovery and in UHS
Disaster Recovery Plan to serve as a single point of contact for disaster
recovery-related communications and activities.
8) Per the Base Services, Unisys, in conjunction with UHS, SunGard, Mohawk,
and other applicable vendors, will participate in updating the UHS Disaster
Recovery Plan on an annual basis. Prior to completing installation of new
machines or software into production in accordance with the change
management processes and procedures, Unisys, will assist UHS, Mohawk,
SunGard, and other applicable vendors, in updating the UHS Disaster
Recovery Plan as appropriate to reflect such items.
The following describes the Disaster Recovery Plan with responsibilities
for updating and maintaining the plan
<TABLE>
<S> <C>
a) provide brief description of the critical services and
functions, including a UHS
<PAGE>
prioritized listing of the Critical Applications;
b) changes to backup and off-site procedures; Both
c) sizing Hardware and Software for Backup Site(s) configuration; Both
d) negotiation with Backup Site(s) for changes to the Backup Site Unisys
configurations for Unisys backup sites;
negotiation with Backup Site(s) for changes to the Backup Site UHS
configurations for UHS backup sites;
e) identifying Hardware and Software requirements for data
network; Both
f) contact listings of key personnel; Both
g) identification of recovery teams and responsibilities; Both
h) criteria for Disaster declaration; UHS
i) criteria for Disaster recovery and testing; UHS
j) names of those individuals who are authorized to declare a
Disaster; UHS
k) declaration notification procedures; Both
l) recovery information, procedures, schedules, etc.; Both
m) testing results and any required corrective action plans; Both
n) updates to the system recovery procedures; and Both
o) procedures and tools for maintaining the Disaster Recovery
Plan. Both
p) publish exercise results UHS
</TABLE>
9) As part of the Base Services, Unisys, in cooperation with UHS, SunGard
and Mohawk will test the Disaster recovery Plan at least once a year (as
frequently as currently contracted with SunGard).
10) Unisys shall maintain current testing schedules and off-site tools and
procedures that are in effect at United HealthCare prior to the Base Services.
Unisys may recommend changes to these procedures and methods for improving
services for the Base Services by requesting such changes through United
HealthCare's Recovery Manager.
11) Unisys, will assist United HealthCare, or its designated representatives,
in developing a data network recovery plan to be included in the UHS Disaster
Recovery Plan. The data network recovery plan will utilize the strategy for
redundancy in place at the time of a declared Disaster and will include
recoverability only to the extent to which the necessary network connectivity to
United HealthCare's control units is included in the configuration. Unisys is
not responsible for logical network or end user recovery.
13) Additional services, functions or capacity beyond that specified in the
Disaster Recovery Plan may require adjustments to the Base Charges as agreed
to by the Parties.
SECTION II: CRITICAL APPLICATIONS
<PAGE>
TO BE PROVIDED BY UHS
<PAGE>
EXHIBIT 13
AUDIT PROCEDURES
United HealthCare Internal Audit Department (IAD) will perform periodic audits
based on a universe of auditable areas, the results of other reviews, and
management requests. These audits will be performed throughout the year in a
manner consistent with generally accepted auditing principles and pursuant to
the terms of the Agreement. The procedures followed will consist of, but not be
limited to, the following:
1. TYPE II SAS 70 LETTER
Pursuant to the terms of Article 21 of the Agreement, Unisys will support
United HealthCare in providing the Type II SAS 70 letter. This letter will
be reviewed by United HealthCare Internal Audit Department, as needed, in
planning audits.
2. ANNUAL PLANNING
Each year, United HealthCare Internal Audit Department (IAD) produces its
annual plan. The applicable portion of the plan will be distributed to
UNISYS and United HealthCare Project Executives. This plan, however, may
be altered during the year.
3. INITIATION OF THE AUDIT
A visit to the data center for an overview of an area may be done as part
of the annual plan. This may include questionnaires, interviews, and
walk-throughs. IAD will use this information to determine the scope and
objectives of the audit and the general time frame in which it will be
performed.
4. ANNOUNCEMENT OF THE AUDIT
Written notification will be sent to United HealthCare IS management and
UNISYS indicating the scope, objectives, and timing of the audit. It may
also indicate the need for specific documentation and/or other materials.
Occasionally audits/investigations may require immediate access,
coordinated through appropriate UNISYS personnel.
5. PERFORM THE AUDIT
IAD's visit to the data center and will require access to those individuals
necessary to assist in the performance of the fieldwork and testing.
During this phase IAD may require logical access to system software,
application software, and data files associated with them. Physical access
to the data center may also be required.
6. DISCUSS FINDINGS
All findings and recommendations will be discussed with United HealthCare
and Unisys as soon after they are determined as possible.
<PAGE>
7. RESPONSES TO RECOMMENDATIONS
Unisys will be responsible for providing a response addressing each audit
recommendation and an action plan for implementing the recommendation.
8. ISSUE REPORTS
A draft of the audit report will be issued for review and discussion
purposes. Upon completion of the process, a final report will be issued to
appropriate individuals at both Untied HealthCare and Unisys.
9. FOLLOW UP
Each quarter, Unisys will provide a written status of all outstanding audit
recommendations. IAD will perform periodic follow-up audits to ensure
compliance with implemented recommendations.
<PAGE>
TRAVEL POLICY UNITED HEALTHCARE CORPORATION
- -------------------------------------------------------------------------------
EXHIBIT 14
The objective of the United HealthCare Travel and Entertainment Policy is to
provide standard procedures and guidelines for all United HealthCare employees
who travel, minimize the costs of travel to the company, ensure consistent
treatment among employees, and meet IRS and other compliance requirements.
POLICY
A. GENERAL
It is the Company's policy to reimburse employees for ordinary, necessary
and reasonable travel and entertainment (T&E) expenses that are directly
connected with or pertaining to the transaction of Company business. Such
expenses are to be properly documented and reported on prescribed expense
reports. Failure to comply with policy may result in denial of
reimbursement for claimed expenses via deduction from the approved expense
report, and/or appropriate management action up to and including
termination.
The use of our preferred suppliers is of paramount importance. Only with
your cooperation will we maintain the integrity and optimal pricing of our
programs.
All business expenses should be charged to the United HealthCare Corporate
Card. This card will be issued upon request to any employee expected to
incur $500 per year in T&E related expenses.
All business travel including air, car rentals, and hotels must be booked
through the designated Corporate Travel Agency.
All group meetings (10 or more participants) must be directed to United
HealthCare's internal conference/meeting planning department at
860-277-1582.
B. EXPENSE GUIDELINES
1. Air Transportation
a. All domestic business air travel will be by coach/tourist/economy
class. Upgrades are allowed at the traveler's personal expense.
b. International flights in excess of 5 hours will be automatically
booked in business class.
c. When making airline reservations, employees are required to
accept flights that utilize Lowest Logical Fare Routing.
Employees may be required to take a connecting flight, a direct
flight or go to an alternate airport if the savings to the
company is greater than $50.00 and the routing does not increase
the one-way total elapsed trip time by more than two hours.
d. An employee choosing a higher fare routing, who has been
contacted by United HealthCare Finance regarding the fare, may be
responsible for the difference between the fares.
<PAGE>
TRAVEL POLICY UNITED HEALTHCARE CORPORATION
- --------------------------------------------------------------------------------
e. The company has negotiated special discounts with specific
carriers. Employees must use these preferred carriers when
possible. Booking must be done through the designated travel
agency in order to utilize these fares.
f. Frequent Flyer program benefits must in no way influence flight
selection.
g. Employees must make travel reservations as soon as they are made
aware of the business need for travel to take advantage of lower
airfares. 30-day advance purchase tickets may be reimbursed
prior to trip commencement. Simply complete an expense report in
the amount of the ticket, attach a photocopy of the passenger
receipt with a memo indicating the ticket will not be expensed
again upon your return, and submit the voucher using normal
procedures.
h. Ticketless Travel--Employees must ask for receipts at airline
counter.
i. Employees are encouraged to consider Saturday night stay airfares
when the airfare savings exceeds the cost of a hotel and meals
and realizes a minimum of $50 savings to the company. Only meals
and hotel costs will be reimbursed.
j. The company will reimburse for non-refundable tickets canceled
due to changes in business plans. Non-refundable tickets can be
used toward the purchase of another ticket for a service fee.
Tickets are valid for exchange for a minimum of one year. Advise
the travel agency to update your profile with the ticket
information. Retain ticket until you are able to exchange it.
2. Car Rental
a. Employees may rent a car of intermediate or smaller size.
b. Car rentals for local business travel should be utilized only when the
cost of the rental car is more cost effective than the usage of
personal vehicles, airline, rail travel, or taxi.
c. Rental car reservations must be made through the designated travel
agency with our preferred supplier. Again, the Company has negotiated
special rates with this supplier and it is imperative that you utilize
their services.
d. Decline any insurance offered at the counter. The Company's Car Rental
Company and Corporate Card Program provide all necessary insurance.
e. Every reasonable effort must be made to return the rental car to the
original rental location (unless approved for a one way rental). Cars
must be returned on time to avoid additional hourly charges (late fees
begin to accrue after a I hour grace period), and with a full tank of
gas. Every attempt should be made to refuel the car to avoid
refueling charges imposed by the rental car company.
f. Gas purchased for the rented vehicle at a service or gasoline station
is always reimbursable.
g. Wear your seatbelt and drive safely.
<PAGE>
TRAVEL POLICY UNITED HEALTHCARE CORPORATION
- --------------------------------------------------------------------------------
3. Private Auto
The Company will reimburse employees for incidental use of their private auto
for trips to/from the airport and to local meetings at the rate per mile allowed
by the IRS (minus standard commute miles). This rate will be reviewed annually.
Employees who work at home or regularly use their personal car for business will
be reimbursed per the following IRS guidelines:
<TABLE>
<CAPTION>
Then the following expenses are And the following expenses are
If reimbursable not reimbursable
- ----------------------------- ----------------------------------- ----------------------------------
<S> <C> <C>
You have an office at a local Expenses of traveling between your Expenses of traveling between your
United HealthCare facility United HealthCare office and home and your United HealthCare
that you use on a regular business site . office.
Expenses of traveling between two
business sites.
Expenses of traveling between your
home and a business site minus
standard commute miles.
You DO NOT have an office at a Expenses of traveling between two Expenses of traveling from your
local United HealthCare facility, or business sites. home to the first business site
you have one but do not use it on a visited that day and from the last
regular basis, or if you have a business site of the day to your
qualifying home office. home.
</TABLE>
"Business site" means any site visited for business purposes, including business
meetings, (including lunch and dinner meetings in restaurants), seminars, visits
to clients, prospective clients, or vendors.
4. Parking
Parking at the airport or while visiting customers will be reimbursed to a
reasonable level. Negotiated programs will be announced periodically and
employees are expected to take advantage of these rates.
5. Taxi and Other Local Transportation
Cost of taxis and approved car services to and from places of business,
hotels and airports are reimbursable. Again, negotiated programs will be
announced periodically and employees are expected to take advantage of
these rates. Car services more costly than taxis must not be utilized.
6. Lodging
Employees are expected to use quality, reasonably priced hotels or motels
that provide a corporate discount rate. The company has negotiated
special United HealthCare rates with key properties, and will keep the
travel agency informed as to which properties are to be used.
a. All hotels must be booked through the designated travel agency, NOT
directly through the hotel.
<PAGE>
TRAVEL POLICY UNITED HEALTHCARE CORPORATION
- --------------------------------------------------------------------------------
b. All rooms will be guaranteed for late arrival with employees'
Corporate Card number unless the Travel Counselor is otherwise
instructed.
c. Employees are responsible for canceling hotel rooms and must do so
through the designated agency. Employees will be held responsible for
requesting and recording the cancellation number and will not be
reimbursed for "no-show" charges.
d. All hotel costs must be paid for with your Corporate Card.
e. Frequent Guest programs may in no way influence hotel choice.
f. Always charge hotel phone calls to your AT&T calling card. Utilize
800 numbers provided by the Company to access Company voice mail.
7. Meals
a. Personal meals are defined as meal expenses incurred by employees when
dining alone on an overnight trip. Daily individual meal expenses
should not cost more than $40.00 total (except in some select cities,
for example, Chicago, New York City, Los Angeles).
b. Business meals are defined as meals taken with clients, prospects and
for direct reports during which a specific business discussion takes
place.
c. Business meals with other employees are not reimbursable unless at
least one employee is traveling on business from out of town. The
most senior United HealthCare employee should pay for and expense the
meal. Please use good business judgment and evaluate cost when
choosing your restaurant. Only reasonable meal costs will be
reimbursed.
d. Reasonable and customary gratuities will be reimbursed. (Reasonable
gratuities up to 15%).
e. Entertainment expense including such events as theater, sports or
nightclubs, where a business discussion takes place before or
immediately after the event, will be reimbursed if the person
entertained has a potential or actual business relationship with the
company.
f. Employees traveling on one day trips will be reimbursed for dinner
expenses when the trip extends beyond 6:00 p.m. No other meals will
be reimbursed.
g. Meals will be reimbursed for actual expense when a proper receipt is
provided with the expense report. A proper receipt is defined as a
Corporate Card Record of Charge. If you must pay cash, an itemized
receipt will be accepted. Tear Tabs are not, under any circumstances,
acceptable meal receipts.
h. For business meal and entertainment expenses, the following
documentation is required by the IRS and must be included on the
expense report:
- Names of individuals present, their titles and company name
- Name and location of meal or event
- Exact amount and date of expense
<PAGE>
TRAVEL POLICY UNITED HEALTHCARE CORPORATION
- --------------------------------------------------------------------------------
- Specific business topic
- In the case of entertainment events, the specific time the
business discussion took place (before, during or after the
event).
8. Telephone, Facsimile, etc.
a. The company will pay charges for long-distance business calls made
outside a company office provided the calls are substantiated by an
appropriate bill (i.e., a telephone bill with all pertinent call
detail). Employees should use the AT&T calling card provided by
United HealthCare.
b. Phone calls made from hotels should be charged to the AT&T calling
card, NOT directly to the room bill.
c. A reasonable level of phone calls home while traveling on business
will be reimbursed.
d. For employees whose jobs require excessive travel (such as
salespeople), cellular telephone calls will be reimbursed up to $75.00
per month. Employees must acquire tier two written approval prior to
expensing any cellular telephone usage (refer to General
Administrative Expense Policy for approval limit tiers). Each expense
voucher must have a copy of the tier two authorization memo, and
original documentation of business call detail. Access fees and for
cellular telephone equipment and accessories are not reimbursable.
9. Other Expenses
a. Expenses incurred for reasonable laundry and dry cleaning when away
from home for more than five days are allowed when supported by
out-of-town receipts.
b. Reasonable and customary gratuities to hotel, valet and wait staff
will be reimbursed (maid $1-2 per day, luggage $1 per bag, doorman $1,
wait staff 15%).
C. ADDITIONAL GUIDELINES
1. Cash Advances
Due to the excessive expense involved in the administration of cash
advances, and the usually minimal amount of cash necessary for the
completion of business travel, the company will not issue cash
advances to any employee.
2. Spouse/Companion Travel
Travel expenses for a spouse or guest are only reimbursable if the
trip is made at the Company is request or if there is a bona fide
business purpose for taking the spouse or other individual. All
spouse/companion travel must have tier two written approval prior to
trip commencement (refer to General & Administrative Expense Policy
for approval limit tiers).
3. Expenses resulting from unavoidable travel delays, such as inclement
weather, are reimbursable within the parameters of this policy.
<PAGE>
TRAVEL POLICY UNITED HEALTHCARE CORPORATION
- --------------------------------------------------------------------------------
4. Expenses for supplies, equipment or other non-travel/entertainment
related items should not be submitted on travel reimbursement forms.
Vendors should invoice the company and payment will be processed
through Accounts Payable.
5. Personal expenses incurred while traveling are not reimbursable.
Samples of these expenses include:
a. Airline or other travel insurance.
b. Annual fees for Frequent Flyer or Frequent Guest clubs.
c. Doctor bills, prescriptions, over the counter medication, or
other medical services incurred while traveling (see your
personal UHC Medical Benefits Plan).
d. Personal telephone calls considered to be excessive.
e. Traffic and parking violations.
f. Hotel expenses incurred from failing to cancel reservations.
g. Luggage lost/delayed on Company business employees should file
claims with the airlines.
h. Snacks and refreshments such as coffee, soda, candy, mini bar
snacks, etc., which are in addition to meal charges for
breakfast, lunch and dinner.
i. Hotel room movies.
j. Hotel health and fitness center charges.
k. Car service no-show charges.
l. Corporate Card interest delinquency fees.
m. Magazines and/or books.
n. Telephone or data calls made from airplane (i.e., AirFones,
AirOne Communications Network).
o. Airline Clubs or Social Clubs.
p. Season tickets.
q. Shoe shines, haircuts, etc.
r. Meals or other food consumed at UHC employee meetings, including
staff meetings.
s. Clothing and related accessories.
<PAGE>
TRAVEL POLICY UNITED HEALTHCARE CORPORATION
- --------------------------------------------------------------------------------
D. EMPLOYEE RESPONSIBILITY
1. Employee travelers and their managers are jointly accountable for T&E
policy compliance.
2. Provide a current travel profile to your travel agency.
3. Prepare Expense Voucher as outlined on page 8 and keep a copy for
account reconciliation when monthly corporate card statement is
received.
4. Prepare monthly expenses no later than 5 days after month end.
Prepare weekly or per trip expenses no later than 3 days after prior
week or end of trip. (Please accrue expenses until total amount of
the request is greater than $'25.00.) Expenses must be submitted
within 60 days of incurring the charges.
5. According to IRS regulations, any expenses submitted beyond the sixty
day IRS limit will be paid through payroll and is subject to all
appropriate tax deductions.
6. Employees must have their expense reports approved by the person to
whom they report, and then by an authorized approver if that
individual does not have expense authority.
7. Corporate Card:
a. Utilize only for business purposes.
b. Maintain account on a current basis.
c. Reconcile charge activity to expense voucher submissions.
d. Must be utilized for all possible business expenses.
e. Employees who expend more than $500 of company funds on an annual
basis must carry a United HealthCare Corporate Card.
E. EXPENSE VOUCHER SUBMISSIONS
The following original documentation, at a minimum, is required for all
expenditures:
<TABLE>
<CAPTION>
SUPPORT
<S> <C>
Air Transportation Airline Ticket Receipt and travel agency itinerary.
Car Rental Car rental agreement, agency itinerary, and record
of charge or billing receipt.
Lodging Record of Charge indicating name and business
purpose. If meal is before or after the business
discussion, the place, date and duration of the
discussion are required.
Personal Meals Record of Charge for all meals greater than $10.00.
Entertainment Record of Charge indicating name and business
purpose; if meal is before or after the business
discussion, then the place, date and duration of the
discussion are required. All entertainment costs in
excess of $500.00 must have tier 3 approval.
Telephone Receipt, hotel bill (for access charges only) or
telephone bill.
Taxi/local transport Transportation receipts required for all items of
$10.00 or more.
Other expenses Receipts and/or supporting documentation for all
items of $10.00 or more.
</TABLE>
<PAGE>
EXHIBIT 15
SUBCONTRACTORS
<TABLE>
<CAPTION>
VENDOR USER
<S> <C>
ADT Security Systems Facility
Anacomp InfoHub
Honeywell InfoHub
Infrastructures InfoHub
Mohawk InfoHub
Nordplan InfoHub
</TABLE>
<PAGE>
EXHIBIT 16
TERMINATION ASSISTANCE SERVICES
Upon termination or expiration of the Agreement, at UHS's option, Unisys will
provide assistance in transferring contracted operations and systems to either
UHS and/or another vendor. UHS's primary objectives for the Project Turnover
task are as follows:
- - Provide for an orderly and controlled transition to either UHS or a
successor of Unisys.
- - Minimize any disruption of processing and services provided to the users of
UHS's systems.
- - Retain the value of the applications systems, procedures, and operating
practices developed during the relationship with Unisys, in a manner equal
to that which might have been achieved if UHS had itself performed the
Services.
Should UHS decide, at the expiration or termination of the Agreement, to develop
its own data processing facilities, Unisys will be required to support the
turnover of UHS's entire system. Unisys must also provide information about the
systems used by Unisys to process UHS's account. UHS to configure and price
data processing systems for running its current workload.
Should UHS decide, at the expiration or termination of the Agreement, to choose
another vendor, Unisys will be required to support the turnover of UHS's entire
system to such vendor. Unisys must also provide information about the systems
used by Unisys to process UHS's account.
The responsibility of both UHS and Unisys to protect the confidentiality of each
other's data and proprietary information will survive the termination or
expiration of the Agreement. Upon termination or expiration of the Agreement,
each party will return to the other party all confidential and proprietary
information and materials.
Unisys will provide, and UHS will approve, a plan for operational turnover of
all software and accumulated data files, documentation, and other related
information to UHS or another vendor, in order to allow a smooth transfer of the
operation. All of the above must be made available in a machine readable format
that UHS can utilize.
<PAGE>
EXHIBIT 17
TERMINATION CHARGES
(000's)
<TABLE>
<CAPTION>
CHARGE
------------------------------------------------------------
Year Month All Platforms IBM Only Unisys Only Unix Only
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5 49 *** *** *** ***
50 *** *** *** ***
51 *** *** *** ***
52 *** *** *** ***
53 *** *** *** ***
54 *** *** *** ***
55 *** *** *** ***
56 *** *** *** ***
57 *** *** *** ***
58 *** *** *** ***
59 *** *** *** ***
60 *** *** *** ***
6 61 *** *** *** ***
62 *** *** *** ***
63 *** *** *** ***
64 *** *** *** ***
65 *** *** *** ***
66 *** *** *** ***
7 67 *** *** *** ***
68 *** *** *** ***
69 *** *** *** ***
70 *** *** *** ***
71 *** *** *** ***
72 *** *** *** ***
7 73 *** *** *** ***
74 *** *** *** ***
75 *** *** *** ***
76 *** *** *** ***
77 *** *** *** ***
78 *** *** *** ***
79 *** *** *** ***
80 *** *** *** ***
81 *** *** *** ***
82 *** *** *** ***
83 *** *** *** ***
84 *** *** *** ***
8 85 *** *** *** ***
86 *** *** *** ***
87 *** *** *** ***
88 *** *** *** ***
89 *** *** *** ***
90 *** *** *** ***
91 *** *** *** ***
92 *** *** *** ***
93 *** *** *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 17
TERMINATION CHARGES
(000's)
<TABLE>
<CAPTION>
CHARGE
------------------------------------------------------------
Year Month All Platforms IBM Only Unisys Only Unix Only
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
94 *** *** *** ***
95 *** *** *** ***
96 *** *** *** ***
9 97 *** *** *** ***
98 *** *** *** ***
99 *** *** *** ***
100 *** *** *** ***
101 *** *** *** ***
102 *** *** *** ***
103 *** *** *** ***
104 *** *** *** ***
105 *** *** *** ***
106 *** *** *** ***
107 *** *** *** ***
108 *** *** *** ***
10 109 *** *** *** ***
110 *** *** *** ***
111 *** *** *** ***
112 *** *** *** ***
113 *** *** *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 18
APPLICATION RESOURCE REQUEST AND RATES
1. APPLICATION RESOURCE REQUEST FOR
To Be Determined
2. APPLICATION RESOURCE RATES
For Applications Support System Technical Support, Configuration
Management, and SAS management.
Manager Level - ***/hour
Senior Level - ***/hour
Mid Level - ***/hour
Junior Level - ***/hour
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 19
RESOURCE USAGE REPORTS AND DATA
UHS will require various reports detailing UHS's resource usage. Resource
reports will primarily focus on the following elements:
- - CPU Time (application)
- Prime
- OffPeak
- - DASD Gigabytes (application)
- - Tape Mounts (application)
Resource reports will be required with a variety of detail levels,
groupings/summarizations, reporting periods and sort options. UNISYS will
generate the resource usage reports and provide them to UHS in both hardcopy and
electronic formats. UHS will also be provided with access to the UNISYS
reporting tool(s) for the purpose of ad-hoc report generation.
In addition to the reports, UHS will also require electronic access to the data
used to generate the resource reports for input into appropriate UHS charge-back
systems.
<PAGE>
EXHIBIT 20
FORM OF PERFORMANCE REPORT
This Exhibit provides the framework for the type and form of performance
reports. The actual reports and their respective form and content are to be
agreed upon by the Parties.
1. DAILY PRODUCTION EXCEPTION REPORTS
On a daily basis, Unisys will report on severity of problems encountered in
the previous 24 hours.
1.1 Problem reports impacting production batch processing will include:
a) the date and the duration of the problem
b) description of the problem
c) business function impact
d) temporary fix or bypass
e) permanent solution (including time and date)
f) current status (closed permanently or awaiting permanent fix)
1.2 Problem reports impacting production on-line processing will include:
a) the date and the duration of the problem/outage
b) description of the problem
c) business function impact
d) temporary fix or bypass
e) permanent solution (including time and date)
f) current status (closed permanently or awaiting permanent fix)
2. MONTHLY SERVICE LEVEL REPORTS
Service level reports will be provided to United HealthCare by the tenth
workday of each month. The following reports will be provided:
2.1 Average response time reports by business function as defined in
the SLA, and during prime versus total hours, as defined in the SLA.
These will be measured weekly.
2.2 Production availability by business function, as defined in the SLA,
and during prime versus total hours, as defined in the SLA. These
will be measured weekly.
2.3 Print file availability, to UHC's print queue, by business function or
as defined in the SLA. These will be measured weekly.
2.4 Monthly reports of security violations will be made available to
United HealthCare. These reports will include lists of unauthorized
attempts to access United HealthCare data.
2.5 Unisys will provide monthly help desk statistics that identify service
levels by analysis of calls placed to the Help Desk, as well as
tickets open/closed. Phone statistics will
<PAGE>
include: total number of calls received, average speed answered, and
percentage abandoned. Ticket breakdown will be as follows:
open/closed by priority call, total initiated, total closed, and total
open (at end of reporting cycle).
3. MONTHLY RESOURCE USAGE REPORTS
Unisys will provide United HealthCare with monthly reports in accordance
with Exhibit 25, Deliverable Schedule
<PAGE>
EXHIBIT 21
UHS STRATEGIC PLAN
A. UHS STRATEGIC PLAN
Waiting for UHS input
B. ONGOING AND FUTURE PROJECTS
<PAGE>
ATTACHMENT 21.B
DATA CENTER OPERATIONS
1996 PROJECTS
Establish employee orientation program for the Data Center staff. Ensure that
policy and procedure is clearly understood and followed to guarantee a secure
and safe work environment. Provide staff with better understanding of UHS.
2nd/3rd qtr
Implement bar code management systems for IBM output. Enables tracking &
management of report output.
2nd Qtr.
Replacement of Xerox 8790 with 4635. 2nd Qtr.
I delayed this until July, this again is something that will need to be
revisited.
Reduction or elimination of microfiche copies. Ongoing
Move 4090 to Edina.
4th Qtr.
Support Unix initiatives.
Define and implement tools/processes to support the production UNIX/AIX
infrastructure.
Ensure reliability and availability for systems provided in the UNIX/AIX
environment. Expand operators roles & responsibility in support of UNIX
environment.
Security
Central Backup & recovery
Capacity management
Scheduling
Disaster recovery plan
Print Management
Disaster recovery test
1
<PAGE>
ATTACHMENT 21.B
CLIENT SERVICES MANAGEMENT
1996 TEAM PROJECTS
OBJECTIVE: Participate in the budget planning process as required, set 1997
goals and objectives.
TARGET: 2Q - 3Q.
PRESENT STATUS: To be initiated as directed by UHS Finance.
OBJECTIVE: Provide a means for assessing weaknesses in the organization and
recommending areas that could benefit from additional training/educational
opportunities and/or continuous improvement projects.
TARGET: Begin immediate, ongoing process.
PRESENT STATUS: Active, incorporated into job role.
OBJECTIVE: Build the communication bridges that will enable Computer Services to
become a more attentive and responsive service organization. TARGET: Begin
immediate, ongoing process.
PRESENT STATUS: Active, incorporated into job role.
OBJECTIVE: Establish a home page on the UHS portion of the WWW. Begin to
utilize the WWW to communicate pertinent service level information to the
Customer.
TARGET: 4Q.
PRESENT STATUS: Working with Technical groups to roll up into their existing
and/or new projects similar to and overlapping with this one.
OBJECTIVE: Update Open Systems Production Acceptance policy and procedure.
TARGET: 2Q/4Q
PRESENT STATUS: In progress
OBJECTIVE: Define and implement resource tracking and allocation process.
Implement project management tools and methodology
TARGET: lQ/2Q.
PRESENT STATUS: In progress
OBJECTIVE: Implement Continue Improvement process and procedures through all of
Computer Services. This includes training for all individuals as well as
identifying a quality council.
TARGET: 2Q/3Q.
PRESENT STATUS: Working
2
<PAGE>
EXHIBIT 22
PROCEDURES MANUAL OUTLINE
Unisys, in cooperation with United HealthCare, will assemble a Procedures
Manual, in an agreed to format and in similar form and content as outlined
below:
- United HealthCare Request Procedures
- System User ID's
- Help Desk and Alert Communications
- Systems Configurations
- Network Information
- CICS / DB2 / IMS Region Procedures
- Netview Automation
- United HealthCare Applications Support
- IPL Procedures
- Disaster Recovery Procedures
- Tape Library
- Computer Operations
- Help Desk
- Systems Support
- Product Administration
- Storage Management Procedures
- Unisys/ United HealthCare Contact List
Security Access Procedures
The Procedures Manual is a working document and will change from time to time as
required. Unisys will maintain this document with periodic reviews and approval
by United HealthCare.
<PAGE>
EXHIBIT 23
INTEGRATED CHANGE CONTROL MANUAL OUTLINE
Unisys, in cooperation with United HealthCare, will assemble a Change Control
Procedures Manual in similar form and content as outlined below:
- Responsibilities
- Change Management Process Owner
- Change Management Product Manager
- Change Management Local Representative
- Change Requester
- Meetings
- Change Management Meetings
- Process Descriptions and Tasks
- Policies and Process Definitions Define Access Requirements
Establish Rules and Guidelines Define and Implement Change
Process
- Define Roles and Responsibilities
- Define Approval Criteria
- Change Administration
- Change Request
- Technical Assessment
- Business Assessment
- Change Notification
- Schedule Changes
- Approve Changes
- Close Change
- Change Execution
- Test Change
- Distribute Change
- Install Change
- Verify Change
- Backout (Contingency)
- Change Reporting and Control
- Emergency Changes
The Change Controls Procedures Manual is a working document and will change from
time to time as required. Unisys will maintain this document with periodic
reviews and approval by United HealthCare.
<PAGE>
EXHIBIT 24
UHS AFFILIATES
Principal Health Care - St. Louis
Physicians Plus Insurance Corporation
Diversified Pharmaceutical Services
PHP, Inc.
Physicians Health Plan of South Carolina, Inc.
Allina
ACTIMED
FOCUS HealthCare Management Inc.
<PAGE>
EXHIBIT 25
DELIVERABLE SCHEDULE
The parties mutually agree to the content of the deliverable schedule within
30 days following the contract effective date
<PAGE>
United HealthCare Services
Contract Deliverable List
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
A B C D
1 Deliverable Contract Reference Frequency Due Date
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ART 7.01 Baseline
Customer Satisfaction
Survey, EXH 7-Sample
2 Baseline Customer Satisfaction Customer Satisfaction 90 days afer Effective
Survey Survey 1 Time Date
ART 7.02 Customer
Satisfaction Survey, EXH 7-
Sample Customer
3 Customer Satisfaction Survey Satisfaction Survey TBD
ART 7.02 Customer
Satisfaction Survey, EXH 7-
Customer Satisfaction Detailed Sample Customer 30 days after survey
4 [action] Plan Satisfaction Survey As Require completion
5 Performance
Standard ???? ???? ????
this to me -- I don't get it
Yearly Performance Standards ART 8.03 Adjustment of
6 Review Performance Standards Once a year Last quarter
ART 8.04 Performance
Reports, EXH 20 - Form of 10th business day of
7 Performance Reports Performance Report Monthly each month
ART 8.05 Root-Cause Monthly management
8 Root-Cause Analysis Report Analysis As required meeting
Continuous Benchmark Program 180 days after effective
9 (Established) ART 9. Benchmarking Once date
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------
E F G
Status
O=Open Responsible
1 C=Closed Person Comments
-----------------------------------------------------------
<C> <C> <C>
2 for each module
3 for each module
required if "unisys fails to
4 achieve any of these measurements
5 Note: someone needs to explain
???? ????
Executive
6 Committee
7 Per Exhibit 20
8
Joint -
9 UHS/Unisys
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
A B C D
1 Deliverable Contract Reference Frequency Due Date
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Not more
than one
Benchmarking Cost-Benefits every 12 Upon written request by
10 Analysis & Implementaiton Plan ART 9. Benchmarking months UHS
Review & Update Safety & ART 10.02 - Security
11 Security Procedures Procedures Periodically not specified
Appointment of Executive ART 11.01 - Executive 30 days after effective
12 Committee Committee Once date
ART 11.06 - Review promptly after Effective
13 Establish Review Meetings Meetings Once Date
ART 11.06 - Review to be
14 Operations Meetings Meetings determined to be determined
ART 11.06 (2) - Review to be
15 Management Meetings Meetings determined to be determined
ART 11.06 (3) - Review to be
16 Senior Management Meetings Meetings determined to be determined
ART 12.01 - Procedures prior to each [moduel]
Manual, EXH 22 - transition [migration]
17 Procedures Manual Procedures Manual Update initial date
ART 12.01 - Procedures within a reasonable
Manual, EXH 22 - time after changes are
18 Procedures Manual (updates) Procedures Manual Update periodic made
ART 12.01 - Procedures
Manual, EXH 22 - prior to first transition
19 Change Management Procedures Procedures Manual Update initial completion date
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------
E F G
Status
O=Open Responsible
1 C=Closed Person Comments
-----------------------------------------------------------
<C> <C> <C>
10 "FREE"???
Specifically applies to Unisys
11 Service locations
Joint-
12 UHS/Unisys
Jonit -
13 UHS/Unisys
"meetings among operational
personnel to discuss ongoing
issues relating generally to daily
performance and planned or
14 anticipated activities and changes"
"management meetings to review
the performance report, the
project schedule report, the
changes report and others such
15 matter as appropriate"
"senior amangement meetings to
review relevant contract and
16 performance issues"
17 One for each module?
18 One for each module?
Note: The Change Control
Procedures are part of the
19 Procedures Manual
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
A B C D
1 Deliverable Contract Reference Frequency Due Date
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ART 12.02 (2) Change
Control Procedures, EXH
Change Management Rolling 23 - Change Control
20 Schedule Procedures monthly to be determined
no later than the next
business day after the
change was made, can
ART 12.02 (4) Change be given orally but
Control Procedures, EXH written notice must
23 - Change Control follow within 5 business
21 Temporary Change Notification Procedures as required days
ART 12.02 (5) Change
Control Procedures, EXH 180 days after delivery
Change Management Procedures 23 - Change Control every 180 of initial Change
22 Update Procedures days Management Procedures
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------
E F G
Status
O=Open Responsible
1 C=Closed Person Comments
-----------------------------------------------------------
<C> <C> <C>
20
21
Note: Since this has a 180
review/update cycle and is part of
the Procedures Manual that the
Procedures Manual itself would
have the same 180 review update
22 requirement but it doesn't
</TABLE>
<PAGE>
EXHIBIT 26
PERFORMANCE STANDARDS AND SERVICE LEVEL AGREEMENTS
This exhibit, and associated attachments, provide the framework for the levels
of service to be provided to UHS by Unisys for the Base Services. It will
contain, mutually agreed to, targets for performance which is equal to or better
than currently provided by UHS.
The areas of measurement will included, but are not limited to, availability,
response time, problem resolution and management, and the timeliness of output
files.
<PAGE>
This Exhibit 26 establishes the levels of service to be provided to UHS by
Unisys. Host computing work done in support of UHS, including production,
development, and support activities, will be operated from Unisys Service
Center. All development-related activities are the responsibility of UHS, while
all technical and sub-system support activities are the responsibility of
Unisys.
This document sets targets for performance on items critical to the processing
of UHS's mainframe applications, including the availability and response times
of production systems, the response by Unisys to problems, as well as the
timeliness of print files.
SECTION A. UHS BUSINESS FUNCTIONS
(To be supplied by UHS)
<PAGE>
SECTION B. PERFORMANCE STANDARDS
1. OVERVIEW
This section represents established targets, to be benchmarked according to
Section 8.01 during the 90 day benchmark period as referenced in section 2
of this Exhibit 26. These standards may be revised based on the results of
the benchmark. The Base Services will be provided in accordance with the
following Performance Standards. Actual reports will be similar to those
currently produced by UHS. (Attached hereto as Attachment A-26,
Representative Samples.)
UHSUHSUHSUHS
Most production systems will be measured for availability during scheduled
hours, and On-Line transactions will be measured for percent completed
within a determined timeframe. These targets, agreed to by both parties,
vary depending on the business function and are detailed in the Host
On-Line Availability and Host Response Time matrix. Standards for delivery
of (printed) output files to UHS customers is given for several levels of
service and problem response times are also measured. Unisys performance
measurements do not include physical delivery of output to UHS' end users.
This Exhibit 26 also includes descriptions of the various facilities used
to manage data processing operations such as network connectivity, support
for the underlying operating system, and disaster recovery
responsibilities. Other sections outline problem resolution procedures,
and plans for escalating problems if that becomes necessary.
2. PURPOSE
This Exhibit 26 establishes the preliminary performance standards for the
Services provided by Unisys to UHS. The intent is to monitor mutually
agreed upon indexes of performance, issue reports concerning those
measurements, conduct regularly scheduled status meetings to identify
problems and remedial action, and provide a mechanism to allow for
modifications to the systems, operations, or levels of service.
During the 90 day benchmarking period Unisys will define, measure, monitor,
and report on the Performance Standards for:
1) Host On-Line Availability
2) Host Response Time
<PAGE>
3) Host Problem Response/Resolution Time
4) Timeliness of Output and Print Files
Normal host business hours for On-Line interactive processing are defined as
6:00 A.M. to 12:30 A.M. Central Time, Monday through Saturday. Reporting will
be performed for the time period 8:00 A.M. to 5:00 P.M. Central Time, Monday
though Friday.
<PAGE>
3. SCOPE
PERFORMANCE TARGETS ARE DEFINED FOR THE FOLLOWING BUSINESS FUNCTIONS:
Critical
Business Function Real-Time Application Batch*
----------------- --------------------- --------
To be provided by UHS To be provided by UHS To be
provided
by UHS
[blank matrix]
* Critical batch jobs will be run between 7.30 PM and 5:30 AM Central
time. Batch jobs will continue in background mode when on-lines come
up provided no significant degradation occurs. Should on-line systems
be significantly affected, UHS will determine priority.
4. PERFORMANCE STANDARDS CRITERIA AND TARGETS
The following criteria have been defined as Performance Standards, and are
the basis for measuring the Performance targets. Wherever possible,
measurement
<PAGE>
standards that are logically related for the purposes of establishing these
Performance Standards have been grouped together.
These criteria represent Unisys responsibility for the host components of
on-line availability and response time. These components consist of the
host processor and Unisys FEP and network lines up to the UHS point of
demarcation depicted in Exhibit 1, Section I, paragraph 1, Communications.
a. HOST ON-LINE AVAILABILITY
Host On-Line Availability is the percentage of time computer data can be
accessed by UHS during normal business hours. Host On-Line Availability
includes host production On-Line systems, critical files, and network
connected components.
An outage is a measurable interruption of Service that adversely affects
Availability. Scheduled outages for the purposes of agreed upon system
maintenance during or outside normal business hours will not affect or
detract from Availability measurements.
Unisys is responsible for meeting host On-Line Performance targets. It is
UHS's responsibility to communicate to Unisys during Performance review
meetings any sustained changes to volume level thresholds for the
transactions that are being monitored. This measurement pertains to all
the business functions identified below. Any exceptions to this
requirement will be noted below.
Measurements:
HOST ON-LINE AVAILABILITY = (SCHEDULED MINUTES - OUTAGE MINUTES)
PERCENTAGE ______________________________ X 100
SCHEDULED MINUTES
OUTAGE MINUTES = MAXIMUM DURATION OF ALL UNSCHEDULED OUTAGES DURING
THE SCHEDULED BUSINESS PERIOD.
UHS Application anomalies which cause a delay in batch processing shall not
be counted against host on-line availability.
b. HOST RESPONSE TIME
Unisys will be responsible for that portion of the response time that
occurs within the host processor. Unisys will initiate contact with the
network services provider or any other service provider if an identified
problem is not within the host system, but is suspected of being within the
network. Unisys will manage any such host problem to its conclusion.
<PAGE>
It is UHS's responsibility to communicate to Unisys any sustained changes
to volume level thresholds for the transactions that are being monitored.
This measurement pertains to all the applications identified below. Any
exceptions to this requirement will be noted below.
In the event that the volume thresholds are exceeded by more than 5% over
UHS defined volumes, Unisys shall not be held liable for performance
penalties for failure to attain host on-line availability and host response
time objectives, or Unisys and UHS may negotiate revised objectives for
cases where the volume thresholds are exceeded by more that 5%.
Measurements:
Host Response Time is tracked during the normal on-line window (6:00
AM to 12:30 AM Central time). "Meeting the goal" refers to having all
tracked periods during each business day meet the goal as defined
elsewhere in this Performance Standards. Tracked periods will be
established during the benchmarking period. Response Time is
expressed as a percentage of application transactions whose Response
Time falls into predetermined time goals (for example 98% < or = 2
seconds or 100% < or = 3 seconds etc.).
Total Number of Transactions
Processed Within Goal
Percentage of Trans = _____________________________ X 100
Meeting Goal Total Number of Transactions
Processed
<PAGE>
c. Performance Standard For host On-Line Availability and Response Time:
<TABLE>
<CAPTION>
Business Monthly Availability Hours Monthly Monthly Average
Function Volume (C.S.T.) Availability NPM Response
(K) Percentage
- --------------------------------------------------------------------------------------------------------------
To be provided To be provided
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
IBM
Dental Online Mon-Fri 06:00-23:30 ***
Sat-Sun Not Available
TDD Files ***
Finance Online Mon-Fri 07:00-20:00 ***
Sat-Sun 08:00-19:00
AR2 Mon-Fri 07:00-20:00 ***
Sat 08:00-19:00
Sun Not Available
AR3 Mon-Fri 07:00-20:00 ***
Sat 08:00-19:00
Sun Not Available
AR4 Mon-Fri 07:00-20:00 ***
Sat 08:00-19:00
Sun Not Available
AR5 Mon-Fri 07:00-20:00 ***
Sat 08:00-19:00
Sun Not Available
AP2 Mon-Fri 07:00-20:00 ***
Sat 08:00-19:00
GL Mon-Fri 07:00-20:00 ***
Sat-Sun 08:00-19:00
ML Mon-Fri 07:00-20:00 ***
Sat-Sun 08:00-19:00
DSS Mon-Fri 06:00-19:00 ***
Sat-Sun Not Available
Unisys
Alpha ***
Bravo ***
Charlie ***
Delta ***
Echo ***
QCOM
Capacity %
(K) denotes 1,000 transactions
System Transaction per/Month
Unisys (all) 100,000,000
</TABLE>
*** Indicates the omission of confidential information filed separately with
the Securities and Exchange Commission in connection with a confidential
treatment request made pursuant to Rule Rule 24b-2 of the Securities
and Exchange Act of 1934, as amended.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
MVS-Dental 900,000
MVS - Finance 1,875,000
</TABLE>
d. Unisys Level 2 Problem Response/Resolution Time
Host Problem Response/Resolution Time refers to target goals for the elapsed
time between opening a Unisys Service Center problem ticket to the resolution
of that problem. Unisys will report monthy on Level 2 activity according to
Exhibit 20, Form of Performance Report.
<TABLE>
<CAPTION>
PROBLEM TYPES
TYPE DEFINITION AND POTENTIAL BUSINESS IMPACT TARGET RESTART
- ---- ---------------------------------------- --------------
<C> <S> <C>
1 MISSION CRITICAL BUSINESS FUNCTION OR ENTITY DOWN ***
Services Are Not Available To One Or More Locations
Due To A Host System Failure Or A
Telecommunications Problem.
2 CRITICAL APPLICATION PROBLEM
A critical application is not working properly and is ***
severely impacting the business process.
3 APPLICATION PROBLEMS
One or more locations are experiencing application ***
problems which is impacting the business process. This
type may include slow responses and/or file transfer
problems.
4 END USER DOWN
One or a small number of end users are experiencing ***
problems with a critical process.
5 NON-CRITICAL APPLICATION PROBLEM ***
Miscellaneous system problems causing minor
operational problems.
</TABLE>
<TABLE>
<CAPTION>
Measurements:
<S> <C>
Average
Host Problem = Sum of Problem Response/Resolution Times
----------------------------------------
Response/Resolution Time Total Outages
</TABLE>
<PAGE>
Note: While application issues can drive severity levels and war room
initiation, Unisys is not responsible for or graded against
application problems.
e. Escalation Procedures
Escalation procedures should be followed for every outage situation. While
there is no practical method to define all the potential problem situations
which may arise, the following represents a broad categorization of typical
problem scenarios and their potential impact on the Unisys business process.
<TABLE>
<CAPTION>
ESCALATION MATRIX
<S> <C> <C> <C> <C> <C> <C> <C>
Escalation
Level From To Type 1 Type 2 Type 3 Type 4 Type 5
A Help Desk 2nd level 15 minutes 15 minutes 30 minutes 2 hours 4 hours
Tech
Support
OPCON Tech Immediately Immediately Immediately Immediately Immediately
Support
2nd level
B Tech Manager 1 hour 2 hours 3 hours 4 hours 8 hours
Support
Help Desk Account 1 hour 2 hours 3 hours 4 hours 8 hours
Manager
Help Desk Crisis 1 hour 2 hours N/A N/A N/A
Manager
C Manager Account 2 hours 3 hours 4 hours 8 hours 24 hours
Executive
D Account VP SDO 4 hours 8 hours 24 hours 48 hours N/A
Executive
E VP SDO President 8 hours 24 hours N/A N/A N/A
-ISG
</TABLE>
Crisis Manager
The Crisis Manager will handle type 1 and type 2 problems. It is the duty of
the Crisis Manager to manage the problem, making sure the appropriate resources
are being applied, that proper notifications are made and continuous status
updates are communicated. A teleconference bridge will be established for use
as necessary.
The Crisis Manager must keep a log of the events as they occur and prepare a
problem report. This report will be submitted to the problem report
coordinator.
<PAGE>
The Crisis Manager must be aware of key system activities for the week, Service
Agreement customer escalation requirements, contact lists, and host/application
lists.
f. Timeliness of Output and Print Files
Timeliness of Output refers to the percentage of application outputs (direct
product that is generated during the Batch process) "delivered" (queued) on time
to UHS.
Unisys is responsible for the availability of all print files to UHS's print
queue mechanism(s).
Application outputs will be identified, and schedules agreed to prior to the
start of actual production processing at Unisys site.
Measurements:
Number of Print files out on-time
Print File Availability % = ---------------------------------
Total Print Files
<PAGE>
Performance Standards For Print File Availability Time
<TABLE>
<CAPTION>
Business Function Print Files Avaiability Times Print File Availability
<S> <C> <C>
MEC AU004 Mon-Fri 2:00 AM ***
MEC NR4200-M03-2 Mon-Fri 2:00 AM ***
MEC NR4200-M 11-2 Mon-Fri 2:00 AM ***
MSP NR4200-M07-1 Mon-Fri 2:00 AM ***
MSP NR4200-M07-4 Mon-Fri 2:00 AM ***
MSP NR4200-M09-1 Mon-Fri 2:00 AM ***
MSP NR 4200-M11-4 Mon-Fri 2:00 AM ***
MEC NRH001-M0l Mon-Fri 2:00 AM ***
MEC NRH001-M02 Mon-Fri 2:00 AM ***
MSP NRH0010-M14 Mon-Fri 2:00 AM ***
A/P Checks Mon-Fri 2:00 AM ***
MSP NR4200-M05-1 Fri 2:00 AM ***
MSP NR4200-M06-1 Fri 2:00 AM ***
MSP NR4200-M05-4 Fri 2:00 AM ***
MEC NRH002 Fri 2:00 AM ***
MSP CL4120-M0l-01 Sat 2:00 AM ***
MSP CL4120-M0l-02 Sat 2:00 AM ***
MSP-CL4122-M0l-03 Sat 2:00 AM ***
MSP CL4122-M0l-04 Sat 2:00 AM ***
MEC NRH001-M16 Sun 2:00 AM ***
MSP NRHO01-M07 Sun 2:00 AM ***
Outbound File Transfers
System Application Schedule
ProviderLink CL5022 After batch processing
CL5026 After batch processing
EmployerLink Reports EP5002 After batch processing
EP4200 After batch processing
DPS Enrollment Bridge After Audit Trail Close
DPS R&O Updates After Quarterly Extract
DSS Updates After Audit Trail Close
Cosmos ID Cards Via tape by 00:00 Mon-Fri
</TABLE>
5. Problem Definition and Escalation Procedures
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
UHSUHS
<PAGE>
Section C. UHS Service Level Agreements
Currently UHS has eight (8) Service Level Agreements (SLA) formally documented
(attached as B-26, Service Level Agreements) and in place with internal UHS
business units. Unisys will support the requirements of these SLA's as they
pertain to the overall Service Levels defined elsewhere in this exhibit and
within the Agreement.
Those UHS business units which do not have a formalized SLA established will be
provided service in accordance with a Global SLA to be mutually developed
between Unisys and UHS during the first ninety days following the effective date
of the Agreement. This Global SLA will be based upon the UHS provided Service
Management Targets document (dated xx/yy/zz) and attached as C-26.
Section D. Service Level Benchmark Plan
During the 90 day benchmarking period, Unisys will measure, monitor, and report
on the Performance Standards outlined in section II of the Statement of Work. At
the end of that period, service level metrics will be formally reviewed by both
Unisys and UHS to insure that they accurately reflect the current UHS
environment and are reliable indicators of service levels.
Except as outlined in the following sections, Unisys will strive to use the same
tools and techniques for measuring performance as currently in place at UHS.
1. Host On-Line Availability
The primary technique for measuring and reporting Host On-Line Availability will
be a review and consolidation of the outage events. All outages resulting in a
measurable interruption that affect service to the customer will be reported,
with agreed upon scheduled outages excluded from Availability measurements.
Outage information will be collected from a number of sources, including
Operations Shift Notes, customer trouble ticket reports, the OPCON system
monitoring heartbeat, and various; architecture dependent reporting tools (such
as Viewpoint and SPI on the A series; SLR on the IBM mainframe).
2. Host Response Time
Unisys is responsible for the portion of the response time that occurs within
the host processor - the "in box" response time. The primary technique for
measuring Host Response Time will be automated reporting using host based
measurement tools and utilities. For both the IBM (SLR) and the Unisys systems
(Viewpoint), the primary software tools for tracking and reporting host response
time will not be changing.
<PAGE>
3. Timeliness of Output and Print Files
Unisys is responsible for the availability of all print files to the UHS's print
queue mechanism. The printer devices and printout distribution process will
continue to be the responsibility of UHS. Therefore, the currently measured
metric for timeliness of reports is a shared responsibility, with Unisys
responsible for the creation and queuing of the print file and United Health
Care responsible for the physical print and delivery process.
During the Service Level Benchmark period, Unisys will enhance the current print
tracking system to report each metric separately. Unisys will be responsible for
providing a defined turnaround for printout creation, based or, the report size,
which is consistent with meeting the current overall shared objective.
<PAGE>
ATTACHMENTS
A-26. Sample Performance Reports
B-26. List of UHS Service Level Agreements
C-26. Service Management Targets
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
DATA CENTER SERVICES STATISTICS
MARCH 1996
BY: STAN BERSCHELT
UNITED HEALTHCARE CONFIDENTIAL
<TABLE>
<CAPTION>
SYSTEM AVAILABILITY:
SLA% Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9120-942 *** *** *** *** *** *** *** *** *** ***
Unisys
MNA17A *** *** *** *** *** *** *** *** *** ***
MNA17B *** *** *** *** *** *** *** *** *** ***
GVPRODC *** *** *** *** *** *** *** *** *** ***
ON-LINE/FILE
AVAILABILITY:
IBM:
Dental Online *** *** *** *** *** *** *** *** *** ***
TDD Files *** *** *** *** *** *** *** *** *** ***
Finance Online *** *** *** *** *** *** *** *** *** ***
AR2 *** *** *** *** *** *** *** *** *** ***
AR3 *** *** *** *** *** *** *** *** *** ***
AR4 *** *** *** *** *** *** *** *** *** ***
AR5 *** *** *** *** *** *** *** *** *** ***
AP2 *** *** *** *** *** *** *** *** *** ***
AP4 *** *** *** *** *** *** *** *** *** ***
GL *** *** *** *** *** *** *** *** *** ***
ML *** *** *** *** *** *** *** *** *** ***
DS *** *** *** *** *** *** *** *** *** ***
UNISYS:
Alpha *** *** *** *** *** *** *** *** *** ***
Bravo *** *** *** *** *** *** *** *** *** ***
Charlie *** *** *** *** *** *** *** *** *** ***
Delta *** *** *** *** *** *** *** *** *** ***
Echo *** *** *** *** *** *** *** *** *** ***
QCOM:
Capacity% *** *** *** *** *** *** *** *** *** ***
Scan Rate *** *** *** *** *** *** *** *** *** ***
PROLEM
RESOLUTION
IBM *** *** *** *** *** *** *** *** ***
Unisys *** *** *** *** *** *** *** *** ***
HP *** *** *** *** *** *** *** *** ***
QCOM *** *** *** *** *** *** *** *** ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
UNITED HEALTHCARE IBM AVAILABILITY
ALLINA SERVICE LEVEL AGRE4EMENT
MARCH 1996
UNITED HEALTHCARE CONFIDENTIAL
<TABLE>
<CAPTION>
TOTAL MINUTES TOTAL MINUTES MONTHLY AVAILABILITY %
MINUTES DOWN PROMISED AVAILABILITY
<S> <C> <C> <C> <C>
CICSPR3
AR2 *** *** *** ***
AR3 *** *** *** ***
AR4 *** *** *** ***
AR5 *** *** *** ***
APP2 *** *** *** ***
APP4 *** *** *** ***
ML *** *** *** ***
GL *** *** *** ***
TOTAL *** *** *** ***
CICSPR4 *** *** *** ***
TOTAL *** *** *** ***
DB2 Database *** *** *** ***
TOTAL *** *** *** ***
9021-42 *** *** *** ***
TOTAL *** *** *** ***
Overall Online % *** *** *** ***
</TABLE>
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
IBM ONLINE MONTHLY AVAILABILITY - MARCH 1996
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
UNITED HEALTHCARE
1996 IBM DENTAL TRANSACTIONS BY MONTH
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
UNITED HEALTHCARE
1996 IBM FINANCIAL TRANSACTIONS BY MONTH
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
UNITED HEALTHCARE
1996 IBM SYSTEMS/ONLINES YEAR TO DATE AVAILABILITY
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
SYSTEM AVAILABILITY
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
UNISYS ONLINE AVAILABILITY - MARCH 1996
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
UNISYS DATABASE AVAILABILITY - MARCH 1996
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
UNISYS 1996 YEAR TO DATE SYSTEM AVAILABILITY
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
UNISYS ONLINE 1996 YEAR TO DATE AVAILABILITY
UNITED HEALTHCARE CONFIDENTIAL
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 26 ATTACHMENT A (SAMPLE)
Unisys Database 1996 Year to Date Availability
United HealthCare Confidential
GRAPHICS OMITTED***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
Exhibit 26
Attachment B
The following applications have established service level agreements, herein
referred to by reference:
EmployerLink
ProviderLink
Allina
Premium Billing
Finance
Dental
Pool Ledger/Finance
DSS
<PAGE>
United HealthCare Corporation
Service Management Targets
(First Pass)
This is a very high-level compilation of service levels that currently exist. As
the scope of this project is further refined, many more details can be
identified.
I. SYSTEMS AVAILABILITY
Availability is measured as the number of ACTUAL hours available as a percentage
of total available hours. Planned systems downtime is NOT included in the total
availability time. This calculation assumes a 24 hours a day, 7 days a week
base. The following definitions are used for calculating the availability
measurement:
DEFINED HOURS are the total days in the month multiplied by 24 hours.
PLANNED HOURS are the planned and published hours that any system is
down for maintenance and other planned outages. Standing Planned
Maintenance Windows:
Unisys Systems 00:00-05:30 Every Sunday
MVS Systems 00:00-08:00 Every Sunday
Unix Systems 00:00-05:30 Every Sunday
AVAILABLE HOURS are the DEFINED House minus the PLANNED Hours.
UNPLANNED HOURS are the unplanned hours of downtime experienced
during the month.
ACTUAL HOURS are the AVAILABLE Hours minus the UNPLANNED Hours.
AVAILABILITY PERCENTAGE is determined by dividing the ACTUAL Hours by
the AVAILABLE Hours and multiplying the remit by 100.
UNISYS SYSTEMS
* Note: Due to the nature of the online and batch applications running on the
Unisys hosts, databases and online windows need to be available 7x24.
Online and batch programs run independent of each other. Transaction
routing to unix (U to A) or other A Series hosts (A to A) run via the
online regions and need to process 7x24.
TARGET: Online regions, databases, and Unisys network components (CP2000s,
LAN routers, etc.) are accessible *** of AVAILABLE Hours.
*** Indicates the omission of confidental information filed separately with
the Securities and Exchange Commission in connection with a confidential
treatment request made pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
<PAGE>
UNITED HEALTHCARE CORPORATION
MVS SYSTEMS
* Note: Millennium, AP/PO/IC, General Ledger, A/R and Dental applications are
designed to run online and batch systems on a co-dependent
relationship (i.e. when online systems are open, batch systems
(except for some reporting) are closed and vice versa). DSS databases
are not available during file re-fresh processing.
TARGET: Online (real-time) regions are available *** of AVAILABLE Hours.
Databases and/or base file structures (DB2, VSAM, etc.) are
accessible *** of AVAILABLE Hours.
<TABLE>
<CAPTION>
ONLINE AVAILABILITY WINDOWS HOURS
- -------------------------- -----
<S> <C> <C>
Millennium Mon-Fri 07:00-20:00
Sat-Sun 08:00-19:00
AP/PO/IC Mon-Fri 07:00-20:00
Sat-Sun 08:00-19:00
General Ledger Mon-Fri 07:00-20:00
Sat-Sun 08:00-19:00
Accounts Receivable Mon-Fri 07:00-20:00
Saturday 08:00-19:00
Sunday Not Available
Dental Mon-Fri 06:00-23:30
Sat-Sun Not Available
Decision Support Mon-Fri 06:00-19:00
Sat-Sun Not Available
</TABLE>
UNIX HOSTS
* Note: Availability for unix/AIX-based applications running on RS/6000
servers is calculated by the host availability. For most,
transactions and requests are serviced by logical servers which are
made available as requests are received.
TARGET: RS/6000 hosts are accessible *** of AVAILABLE Hours.
Applications included in this arena: EmployerLink, ProviderLink, Imaging,
INA/CPW, SSS, ACI, AdjudiPro, ProvNet, National Fee Schedule, Patterns, Broker
Commission, Episodes, BEAF, PRMS, URNII, Visions, CentraMax, CMM, STEPS, Letter
Generation, EPIS, etc.
Most of these applications run as a single application on a RS/6000 box(s).
There are other independent RS/6000 boxes that serve as gateways and security
servers for the unix host base infrastructure.
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
UNITED HEALTHCARE CORPORATION
II. RESPONSE TIME
TARGETS: (See below)
<TABLE>
<CAPTION>
SYSTEM TRANSACTIONS PER MONTH TARGET TAT
- ------ ---------------------- ----------
<S> <C> <C>
Unisys (all) 100,000,000 *** < 2 seconds (in-box)
MVS - Dental 900,000 *** < 2 seconds (in-box)
MVS - Finance 1,875,000 *** < 2 seconds (in-box)
Unix Not applicable at this time Not applicable at this time
</TABLE>
II. OUTPUT MANAGEMENT
* Note: All existing production batch schedules across all platforms remain
intact.
PRINT
The following jobs must be done processing by 02:00 so that print files are
queued for printing:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Monday-Friday MEC-AU4004 Friday MSP NR4200 M05-1
MEC-NR4200-M03-2 MSP NR4200-M06-1
MEC NR4200-M11-2 MSP NR4200-M05-4
MSP NR4200 M07-1 MEC NRH002
MSP NR4200-M07-4 Saturday MSP CL4120-M
MSP MR4200-M09-1 MSP CL4122-M01-01
MSP NR4200-M11-4 MSP CL4122-M01-02
MEC NRH001-M01 MSP CL4122-M01-03
MEC NRH001-M02 MSP CL4122-M01-04
MSP NRH001-M14 Sunday MEC NRH001-M16
A/P Checks MSP NRH001-M07
</TABLE>
OUTBOUND FILE TRANSFERS
<TABLE>
<CAPTION>
<S> <C> <C>
ProviderLink Reports CL5022 Transferred after batch processing
CL5026 Transferred after batch processing
EmployerLink Reports EP5002 Transferred after batch processing
EP4200 Transferred after batch processing
Recycle Files Transferred after batch processing
DPS Enrollment Bridge Transferred after Audit Trail Close
DPS R&O Updates Transferred after Quarterly Extract
DSS Updates Transferred after Audit Trail Close
Cosmos ID Cards Transferred via tape by 00:00 Mon-Fri
</TABLE>
OTHERS TO BE IDENTIFIED ONCE SCOPE HAS BEEN DETERMINED
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
UNITED HEALTHCARE CORPORATION
IV. MISCELLANEOUS
Other considerations:
1. Data integrity - all backups, disk file and tape file retentions to remain
intact.
2. Development Support - all test systems database creation, tuning and reorgs
to be serviced as they are today. All compiles and performance testing as
provided today.
3. Metrics Reporting - All current measurements and reporting for systems
availability, response time performance, batch turnaround reporting, etc.
to be provided as today. Eagan network segment availability numbers to be
provided by host platform.
<PAGE>
EXHIBIT 27
U.S. GOVERNMENT CONTRACTING REQUIREMENTS
EQUAL EMPLOYMENT OPPORTUNITY. Unisys agrees that Unisys will not discriminate
against any employee or applicant for employment because of race, color,
religion, sex or national origin; and that Unisys will take affirmative action
to ensure that applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex, or national
origin. Without limiting the foregoing, Unisys agrees to and shall be bound by
the provisions of the equal opportunity clause set forth at 41 CFR 60-1.4, which
is incorporated by reference.
CERTIFICATION OF NONSEGREGATED FACILITIES. Unisys agrees as follows:
Unisys certifies that it does not and will not maintain or provide for its
employees any segregated facilities at any of its establishments, and that it
does not and will not permit its employees to perform their services at any
location under its control where segregated facilities are maintained. Unisys
agrees that a breach of this certification is a violation of the Equal
Opportunity clause required by Executive Order 11246 of September 24, 1965. As
used in this certification, the term "segregated facilities" means any waiting
rooms, work areas, rest rooms and wash rooms, restaurants and other eating
areas, time clocks, locker rooms and other storage or dressing areas, parking
lots, drinking fountains, recreation or entertainment areas, transportation, and
housing facilities provided for employees which are segregated by explicit
directive or are in fact segregated on the basis of race, color, religion, or
national origin because of habit, local custom, or otherwise.
Unisys further agrees that (except where it has obtained identical
certifications from proposed subcontractors for specific time periods) it will
obtain identical certifications from proposed subcontractors prior to the award
of subcontracts exceeding $10,000 which are not exempt from the provisions of
the Equal Opportunity Clause; that it will forward the following notice to such
proposed subcontractors (except where the proposed subcontractors have submitted
identical certifications for specific time periods):
NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT
FOR CERTIFICATIONS OF NONSEGREGATED FACILITIES
A Certification of Nonsegregated Facilities, as required by the May 21, 1968,
order on Elimination of Segregated Facilities, by the Secretary of Labor (33
Fed. Reg. 7804, May 28, 1968), must be submitted prior to the award of a
subcontract exceeding $10,000 which is not exempt from the provisions of the
Equal Opportunity Clause. The certification may be submitted either for each
subcontract or for all subcontracts during a period (i.e., quarterly,
semiannually, or annually).
NOTE: The penalty for making false statements in offers is prescribed in 18
U.S.C. Section 1001.
AFFIRMATIVE ACTION COMPLIANCE PROGRAM. Unisys will develop a written
Affirmative Action Compliance Program for each of its establishments consistent
with the rules and regulations of the Department of Labor at 41 CFR 60-1 and
60-2, as such rules and regulations may be amended from time to time.
EQUAL EMPLOYMENT OPPORTUNITY REPORTING REQUIREMENTS. Unisys will complete and
file Government Standard Form 100, Equal Employment Opportunity Employer
Information Report EEO-I, in accordance with the instructions contained therein.
EQUAL EMPLOYMENT OPPORTUNITY - VETERANS. Unisys agrees to take affirmative
action to employ and advance in employment qualified disabled veterans and
veterans of the Vietnam era consistent with the rules and regulations of the
Department of Labor at 41 CFR 60-250.4, as such rules and regulations may be
amended from time to time. Without limiting the foregoing, Unisys agrees to and
shall be bound by the provisions of the affirmative action clause set forth at
41 CFR 60-250.4, which is incorporated by reference.
<PAGE>
EQUAL EMPLOYMENT OPPORTUNITY - HANDICAPPED. Unisys agrees to take affirmative
action to employ, advance in employment, and otherwise treat qualified
handicapped individuals without discrimination consistent with the rules and
regulations of the Department of Labor at 41 CFR 60-741, as such rules and
regulations may be amended from time to time. Without limiting the foregoing,
Unisys agrees to and shall be bound by the provisions of the affirmative action
clause set forth at 41 CFR 60-741.4, which is incorporated by reference.
EXAMINATION OF RECORDS. Unisys agrees that the Controller General of the UHS
States or a duly authorized representative of the General Accounting Office
shall have access to, and the right to examine books, documents, papers or other
records pertaining to such contracts or purchase order(s).
Unisys will furnish all information and reports required by Executive Order No.
11246, as amended, and by the rules and regulations promulgated thereunder, and
will permit access to its books, records and accounts by the contracting agency
and the Secretary of Labor for purposes of investigating compliance with such
rules and regulations.
CLEAN AIR AND WATER. Unisys certifies as follows:
(a) No facility to be utilized in the performance of its contracts with
UHS has been listed on the Environmental Protection Agency List of
Violating Facilities for one or more violations of the Clean Air Act
(42 U.S.C. 7401 ET SEQ.) or the Clean Water Act (33 U.S.C. 1251 ET
SEQ.).
(b) Unisys will promptly notify UHS of the receipt of any communication
from the Director, Office of Federal Activities, Environmental
Protection Agency, indicating that any facility which Unisys proposes
to use for the performance of its contracts with UHS is under
consideration to be listed on the EPA list of Violating Facilities.
(c) Unisys will include substantially this certification, including this
paragraph (c), in every nonexempt subcontract.
UTILIZATION OF SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS. Unisys
understands that it is the policy of the UHS States that small business and
small business concerns owned and controlled by socially and economically
disadvantaged individuals shall have the maximum practicable opportunity to
participate in the performance of contracts let by any Federal agency.
Unisys hereby agrees to carry out this policy in the awarding of subcontracts to
the fullest extent consistent with the efficient performance of its contracts
with UHS. Unisys further agrees to cooperate in any studies or surveys as may be
conducted by the UHS States Small Business Administration or the awarding agency
of the UHS States as may be necessary to determine the extent of Unisys's
compliance with this clause.
The term "small business concern" shall mean a small business as defined
pursuant to Section 3 of the Small Business Act and relevant regulations
promulgated under that Act. The term "small business concern owned and
controlled by socially and economically disadvantaged individuals" shall mean a
small business concern-
(a) which is at least 51 per centum owned by one or more socially and
economically disadvantaged individuals; or, in the case of any
publicly owned business, at least 51 per centum of the stock of which
is owned by one or more socially and economically disadvantaged
individuals; and
(b) whose management and daily business operations are controlled by one
or more of such individuals. The contractor shall presume that
socially and economically disadvantaged individuals include Black
Americans, Hispanic Americans, Native Americans, Asian-Pacific
Americans, and other minorities, or any other individuals found to be
disadvantaged by the Small Business Administration pursuant to Section
8(a) of the Small Business Act.
<PAGE>
Unisys acting in good faith may rely on written representations by its
subcontractors regarding their status as either a small business concern or a
small business concern owned and controlled by socially and economically
disadvantaged individuals.
Unisys agrees to adopt and comply with a small business and small disadvantaged
business subcontracting plan containing all the terms and provisions required of
such plans by the Small Business Act, as amended, and all pertinent regulations
promulgated under that Act.
CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO INFLUENCE CERTAIN FEDERAL
TRANSACTIONS. Unisys certifies to the best of its knowledge and belief on or
after December 23, 1989, that:
(a) No Federal appropriated funds have been paid or will be paid to any
person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee
of Congress, or an employee of a member of Congress on his or her
behalf in connection with the awarding of any Federal grant, the
making of any Federal grant, the making of any Federal ban, the
entering into of any cooperative agreement, and the extension,
continuation, renewal amendment or modification of any Federal
continuation, renewal, amendment.
(b) If any funds other than Federal appropriated funds (including profit
or fee received under a covered Federal transaction) have been paid,
or will be paid, to any person for influencing or attempting to
influence an officer or employee of any agency, a member of Congress,
an officer or employee of Congress, or an employee of a Member of
Congress on his or her behalf in connection with any solicitation of
the Federal government, the Unisys shall complete and submit, with its
offer, OBM Standard Form LLL, Disclosure of Lobbying Activities, to
the contracting officers.
(c) The definitions and prohibitions contained in FAR 52.203-12 are hereby
incorporated by reference in this certification.
<PAGE>
EXHIBIT 28
LETTER AGREEMENT
In order to facilitate the smooth and orderly transition of employees from
United HealthCare Services, Inc. ("UHS") to Unisys Corporation ("Unisys"), and
to memorialize certain agreements made by and between UHS and Unisys, the
parties agree to the following terms with regard to Transitioned Employees.
1. STAFFING PROCEDURES. On or after the Effective Date, Unisys shall
offer employment to certain mutually designated employees of UHS as set forth
below. Unisys shall identify the jobs and number of open and available positions
for each job which it deems necessary to provide Services under this Agreement.
For each job, UHS shall identify the employees currently in the job at UHS. If
the number of current UHS incumbents is equal to or less than the number of
positions open and available at Unisys, Unisys shall interview all current
incumbents and, unless performance issues otherwise dictate and with the input
of UHS, offer to transition the current UHS incumbents to Unisys positions with
comparable initial salary and benefits packages. If the number of current UHS
incumbents is greater than the number of positions open and available at Unisys,
Unisys shall interview all current incumbents and, with the input of UHS,
designate the employees who shall be offered transition to Unisys positions. UHS
reserves the right to approve the selection of designated employees, but such
approval shall not be withheld without written notice to Unisys explaining the
rationale for denying the approval, prior to the offer.
Employees on a medical leave of absence or leave of absence under the
Family and Medical Leave Act ("FMLA") on or after the Effective Date shall be
included as current incumbents for purposes of the above procedure, and shall be
considered for interview and transition. However, in the event an employee
designated to transition to Unisys is on a medical leave of absence or leave of
absence under the FMLA on the Employment Transition Date, the employee shall
remain employed by UHS until the earlier of the employee's release to return to
work or expiration of the employee's eligibility for medical leave or FMLA leave
under UHS's policies. If the employee is designated as an employee to be
transitioned to Unisys, Unisys shall transition the employee to Unisys provided
that the employee returns to work within twelve (12) weeks after the date the
leave began.
2. INITIAL SALARY AND BENEFITS PACKAGE. As of the Employment Transition
Date, Unisys agrees that it shall make a good faith effort, to the extent
practicable and consistent with Unisys salary and benefits programs and the
terms of this Agreement, to offer each Transitioned Employee an initial salary
and benefits package, in the aggregate, at the same or comparable level as paid
by UHS. UHS shall provide appropriate information to Unisys regarding a
Transitioned Employee's salary and benefits only upon the Transitioned Employee
signing a valid authorization which permits UHS to release such information to
Unisys. In the event the Transitioned Employee does not sign such a valid
authorization, Unisys agrees that it shall make a good faith effort, to the
extent practicable, to offer the Transitioned Employee with an initial salary
and benefits package, in the aggregate, which is consistent with Unisys's salary
and benefits policies and the terms of this Agreement. The method of determining
comparability will be made at the discretion of Unisys, with appropriate input
by UHS.
3. SALARY REVIEW. From the Employment Transition Date to December 31,
1996, Unisys shall review each Transitioned Employee's salary on or about the
date the employee was next scheduled for a salary review at UHS. Any salary
increases associated with the salary review, and any future salary reviews and
increases, shall be in accordance with Unisys policies.
4. HEALTH INSURANCE BENEFITS. Unisys shall permit Transitioned
Employees, and their eligible dependents, to participate in the Unisys Medical
Plan no later than the first of the month on or after the Employment Transition
Date, provided the Transitioned Employee enrolls for such coverage.
5. DENTAL INSURANCE BENEFITS. Unisys shall permit Transitioned
Employees, and their eligible dependents, to participate in the Unisys Dental
Plan no later than the first of the month on or after the Employment Transition
Date, provided the Transitioned Employee enrolls for such coverage.
6. VACATION. Unisys shall credit Transitioned Employees with an
equivalent number of available, unused vacation hours as each Transitioned
Employee had at UHS as of the day immediately preceding the Employment
Transition Date, which the Transitioned Employee must use prior to the end of
the 1996 calendar year or otherwise forfeit those benefits. Unisys shall credit
Transitioned Employees with prior service at UHS and its Affiliates and Unisys
to determine the benefit under the Unisys Paid Time Off policy which the
Transitioned Employees will begin to accrue as of the Employment Transition
Date. During 1996, Transitioned Employees must exhaust vacation transferred from
UHS prior to utilizing vacation under the Unisys Paid Time Off policy. UHS shall
provide appropriate information to Unisys regarding Transitioned Employees'
vacation balances on or before the Employment Transition Date.
Unisys shall pay the Transitioned Employee a lump sum vacation payment,
minus appropriate legal deductions, equal to the amount of vacation the employee
would have been granted in calendar year 1997 if
<PAGE>
employed at UHS, less the amount of vacation the employee is projected to accrue
in calendar year 1997 under the Unisys Paid Time Off policy, provided the
employee is employed by Unisys on January 1, 1997. Such lump sum shall be paid
to the employee on January 1, 1997, or as soon as administratively possible
thereafter. This lump sum payment is intended to be a one time payment only.
7. 401(k) PLAN. Unisys shall credit each Transitioned Employee with
prior service at UHS and its Affiliates and Unisys to determine eligibility and
vesting of the Transitioned Employee under the Unisys Savings Plan. Unisys shall
permit eligible Transitioned Employees to participate in the Unisys Savings Plan
on the earliest date allowable under the Plan terms, but in no event any later
than the first of the month on or after the Employment Transition Date.
8. PENSION PLAN. Unisys shall credit each Transitioned Employee with
prior service at UHS and its Affiliates and Unisys to determine eligibility and
vesting of the Transitioned Employee under the Unisys Pension Plan. Unisys shall
permit eligible Transitioned Employees to participate in the Unisys Pension Plan
on the earliest date allowable under the Plan terms, but in no event any later
than the first of the month on or after the Employment Transition Date.
9. GLOBAL PERFORMANCE EQUITY PROGRAM. Unisys shall credit each
Transitioned Employee with prior service at UHS and its Affiliates and Unisys to
determine eligibility of the Transitioned Employee under the Global Performance
Equity Program.
10. FLEXIBLE SPENDING/REIMBURSEMENT ACCOUNT. Unisys shall credit each
Transitioned Employee with prior service at UHS and its Affiliates and Unisys to
determine eligibility of the Transitioned Employee under the Unisys
Reimbursement Accounts. Unisys shall permit eligible Transitioned Employees to
participate in the Unisys Dependent Care Reimbursement Account on the earliest
date allowable under the Plan terms, but in no event any later than the first of
the month on or after the Employment Transition Date.
Unisys shall permit each Transitioned Employee who had been a participant
in the United HealthCare Health Care Flexible Spending Account ("UHC Account")
as of the day immediately preceding the Employment Transition Date to
participate in the Unisys Health Care Reimbursement Account at the same level of
contribution as the UHC Account on the earliest date allowable under the Plan
terms, but in no event any later than the first of the month on or after the
Employment Transition Date. Such participation shall be allowed only if such
Transitioned Employee has not elected continuation coverage of the UHC Account
under COBRA and the employee has not been reimbursed for the entire amount of
the annual election. The Unisys Health Care Reimbursement Account shall only
provide reimbursement for eligible expenses incurred on or after the
Transitioned Employee's first day of employment at Unisys.
11. SEVERANCE PAY PLAN. For a period of eighteen months after the
Employment Transition Date, Unisys shall provide Transitioned Employees who are
involuntarily terminated from employment due to layoff a severance benefit equal
to two weeks of salary as pay in lieu of notice, plus one week of salary for
each full year of employment at Unisys and UHS and its Affiliates. Thereafter,
Transitioned Employees will be paid severance in accordance with the Unisys
Income Assistance Plan with pay and benefits determined using Unisys service
only.
12. EDUCATION/TUITION REIMBURSEMENT. Unisys shall credit each Transitioned
Employee with prior service at UHS and its Affiliates and Unisys to determine
eligibility and benefits under the Unisys Educational Reimbursement Program.
Unisys shall permit Transitioned Employees who are eligible for educational
reimbursement under UHS's policy and who are enrolled in a qualified class as of
the Employment Transition Date which ends after the Employment Transition Date
to receive reimbursement under Unisys's Educational Reimbursement Program. All
other eligible Transitioned Employees shall be eligible to enroll in qualified
classes and receive educational reimbursement on the earliest date allowable
under the program, but in no event any later than the first of the month on or
after the Employment Transition Date.
13. SHORT-TERM DISABILITY. Unisys shall credit each Transitioned Employee
with prior service at UHS and its Affiliates and Unisys to determine eligibility
of the Transitioned Employee under the Unisys Short-Term Disability Plan. Unisys
shall permit eligible Transitioned Employees to participate in its Short-Term
Disability Plan on the earliest date allowable under the Plan terms, but in no
event any later than the first of the month on or after the Employment
Transition Date.
14. LONG-TERM DISABILITY. Unisys shall credit each Transitioned Employee
with prior service at UHS and its Affiliates and Unisys to determine eligibility
of the Transitioned Employee under the Unisys Long-Term Disability Plan. Unisys
shall permit eligible Transitioned Employees to participate in its Long-Term
Disability Plan on the earliest date allowable under the Plan terms, but in no
event any later than the first of the month following the Employment Transition
Date, provided the Transitioned Employee enrolls for such coverage.
<PAGE>
15. LIFE INSURANCE. Unisys shall credit each Transitioned Employee with
prior service at UHS and its Affiliates and Unisys to determine eligibility of
the Transitioned Employee under the Unisys Company-Provided Life Insurance Plan,
including any plans offering supplemental life insurance coverage or benefits.
Unisys shall permit eligible Transitioned Employees to participate in the Unisys
Company-Provided Life Insurance Plan on the earliest date allowable under the
Plan terms, but in no event any later than the first of the month following the
Employment Transition Date, provided the Transitioned Employee enrolls for such
coverage.
16 LEAVES OF ABSENCE. Unisys shall credit each Transitioned Employee
with prior service at UHS and its Affiliates and Unisys to determine eligibility
of the Transitioned Employee for leaves of absence under statute, regulation,
and Unisys corporate policies, including but not limited to the federal Family
and Medical Leave Act and the Minnesota Parental Leave Act.
17. BONUS PROGRAMS. Unisys shall credit each Transitioned Employee with
service at UHS and its Affiliates and Unisys to determine eligibility of the
Transitioned Employee for any Unisys bonus or incentive pay programs which may
be applicable.
UNITED HEALTHCARE SERVICES, INC.
Date: By: /s/
---------- ---------------------------------------
Its: COO
---------------------------------------
UNISYS CORPORATION
Date: 6/12/96 By: /s/
------------------ ---------------------------------------
Its: VP
---------------------------------------
<PAGE>
EXHIBIT 29
UHS EMPLOYEE LIST
<PAGE>
Exhibit 29
<TABLE>
<CAPTION>
EMP# NAME STATUS JOB TITLE DEPT#
IBM SYSTEMS SERVICES
<S> <C> <C> <C> <C>
9863 Terhaar, Joseph IN Mgr, Technical System 3420
10168 Sutton, Richard IN Sr. DBA 3420
21637 Kotlowski, Theodore IN Technical Systems Analyst, Lead 3420
6227 Benson, Frederick IN Sr. Data Base Analyst 3420
12191 Schlegel. Roger Resigned Technical System Analysts,Lead 3420
5137 Zorawski. Janusz IN Sr. Operations Analyst 3420
10811 Carpenter, Kim IN Technical Systems Analyst 3420
12085 Mills, Ronald IN Sr. Operations Analyst 3420
12461 Barrientes, Jim IN Sr. Operations Analyst 3420
TBH(Hovrud) IN Technical Systems Analyst 3420
New Hire IN Sr. Technical Systems Analyst 3420
12656 Brant, Dave IN Operations Analyst 3420
New Hire IN Sr. Technical Systems Analyst 3420
</TABLE>
Confidential Confidential 6/11/96,+
<PAGE>
EXHIBIT 29
<TABLE>
<CAPTION>
EMP# NAME STATUS JOB TITLE DEPT#
IBM SYSTEMS SERVICES
<S> <C> <C> <C> <C>
24635 Williams, Brian IN Sr. Database Analyst 3430
20171 Liard, Felix IN Project Lead 3430
18412 Wills, Thomas IN Ld. Technical Systems Analysts 3430
5911 Harding, William IN Sr. Technical Systems Analysts 3430
5330 DeFoe, Daniel IN Sr. Technical Systems Analysis 3430
2670 Sorsen, Steven IN Ld. Technical Systems Analysts 3430
19893 Trost, Edward IN Data Base Analyst 3430
544 Hanzely, Linda IN Technical Systems Analyst 3430
6651 Moss, Darcey IN Supv. Scheduling 3430
8241 Bennett, Cynthia IN Operations Analyst 3430
274 Glynn, Annette IN Operations Analyst 3430
1373 Demet,Denise IN Operations Analyst 3430
1376 Demorett, Carol IN Operations Analyst 3430
9913 Delgado, Kim IN Operations Analyst 3430
4054 Nicoson, Janeen IN Operations Analyst 3430
5833 Eckerson, Larry IN Operations Analyst 3430
4581 Atkinson, Robert IN Source Code Admin 3430
12404 BechtholdNancy IN Scheduler 3430
5590 Carlson, Donald IN Scheduler 3430
New Hire IN Operations Analyst 3430
New Hire IN Technical Analyst 3430
New Hire IN Sr. Technical Analyst 3430
New Hire IN Sr. Technical Analyst 3430
</TABLE>
Confidential Confidential 6/11/96,+
<PAGE>
Exhibit 29
<TABLE>
<CAPTION>
EMP# NAME STATUS JOB TITLE DEPT#
QUALITY CONTROL/PRINT OUTPUT for UNISYS AND TAPE LIBRARY
<S> <C> <C> <C> <C>
7769 Newton, Skip IN Part time scheduler 3445
TBH IN Ld. Tape Librarian 3445
6769 Schaffhausen, David IN Tape Librarian 3445
13723 Vaala, Juanita IN Tape Librarian 3445
</TABLE>
Confidential Confidential 6/11/96,+
<PAGE>
Exhibit 29
<TABLE>
<CAPTION>
EMP# NAME STATUS JOB TITLE DEPT#
UNISYS OPERATIONS
<S> <C> <C> <C> <C>
16377 Kenney, Patrick IN Spvsr, Operations 3475
3892 Cederholm, Joel IN Lead Computer Operator 3475
5556 Abair, Michael IN' Lead Computer Operator 3475
5960 Braziel,Rbonda IN Lead Computer Operator 3475
5970 Lobeck, Gregory IN Lead Computer Operator 3475
21535 Geving, Lloyd IN SR. Computer Operator 3475
1154 Behl, Stephen IN SR Computer Operator 3475
24115 Free, Lawrence IN SR. Computer Operator 3475
9411 Rauschendorfer, Patricia IN Computer Operator 3475
22020 TBH (HANZLIK REPL) IN Computer Operator 3475
23677 Leverty, Lana IN SR. Computer Operator 3473
5830 Carter, Michael IN Computer Operator 3475
2422 Janssens, Charles IN SR. Computer Operator 3475
10748 Boho, Grant IN Computer Operator 3475
</TABLE>
Confidential Confidential 6/11/96,+
<PAGE>
Exhibit 29
<TABLE>
<CAPTION>
EMP# NAME STATUS JOB TITLE DEPT#
UNISYS OPERATIONS
<S> <C> <C> <C> <C>
10740 Berscheit, Stanley IN Mgr, Data Center Ops 3485
11039 Lucier, James IN Supervisor Operations 3485
12100 Jacobson, Peter IN Lead Computer Operator 3485
7746 Frett, Daryl IN Lead Computer Operator 3485
14471 Buscher, James IN SR Computer Operator 3485
7107 TBH (KOLASA REPL) IN SR. Computer Operator 3485
8122 Moerke, David IN SR. Computer Operator 3485
9476 Orth, Kevin IN Computer Operator 3495
20279 Dillon, Michael IN SR. Computer Operator 3485
24220 Miller, Pda IN Computer Operator 3485
New Hire Prifrel,Julie IN Computer Operator 3485
New Hire IN Computer Operator 3485
</TABLE>
Confidential Confidential 6/11/96,+
<PAGE>
Exhibit 29
<TABLE>
<CAPTION>
EMP# NAME STATUS JOB TITLE DEPT#
SERVICE CENTER
<S> <C> <C> <C> <C>
5688 TBH IN Problem/Change Admin 3495
</TABLE>
This depament includes 9 contracted resources which are out of scope
Confidential Confidential 6/11/96,+
<PAGE>
Exhibit 29
<TABLE>
<CAPTION>
EMP# NAME STATUS JOB TITLE DEPT#
ADMINISTRATION/CLIENT SERVICES MANAGEMENT
<S> <C> <C> <C> <C>
Lynn, Anne Groebner IN Director, Computer Services 3400
New Hire IN CI/Service level analyst 3400
TBH IN Admin Asst. 3000
</TABLE>
Confidential Confidential 6/11/96,+
<PAGE>
Exhibit 29
<TABLE>
<CAPTION>
EMP# NAME STATUS JOB TITLE DEPT#
ADMINISTRATIVE
<S> <C> <C> <C> <C>
13783 Bolton, Jeffrey IN Lead Technical Communicator 3400
15379 Zukor, Lee IN Assoc. Technical Communicator 3400
</TABLE>
Confidential Confidential 6/11/96,+
<PAGE>
EXHIBIT 30
COLA
18.06 Adjustment to Charges
a) UHS shall pay Unisys the Monthly Base Charge in accordance with Exhibit 11.
b) The Monthly Base Charge payable by UHS under Section 18.06 of this
Agreement will be adjusted on an annual basis as follows:
(i) DEFINITIONS. For purposes of this Section 18.06:
A) "CPI" shall mean the Consumer Price Index for All Urban Consumers,
U.S. City Average, for All Items ( 1982~1984 = 100), as published by
the Bureau of Labor Statistics of the U.S. Department of Labor.
B) "Base CPI" shall mean the CPI published as final by the Bureau of
Labor Statistics for December of the second year preceding the year in
which an adjustment calculation is made.
C) "Base Date" shall mean January 31 of the year in which an adjustment
calculation is made.
D) "Current CPI" shall mean, with respect to the Base Date, the CPI
published as final by the Bureau of Labor Statistics for December of
the previous calendar year.
E) "Net CPI" shall mean, with respect to the Base Date, the Current CPI
date minus the Base CPI.
F) "Percentage Change" shall mean, with respect to the Base Date, the Net
CPI for that date divided by the Base CPI.
(ii) ANNUAL ADJUSTMENT. The Monthly Base Charge, as then previously adjusted
pursuant to this annual adjustment methodology, will be adjusted, prospectively,
effective as of each Base Date as follows:
***
(iii) CPI REPLACEMENT. In the event that the Bureau of Labor Statistics
stops publishing the CPI or substantial changes the content or format of the
CPI, Unisys and Client will substitute another comparable measure published by a
mutually agreeable source; provided, however, that if the change is merely to
redefine the base period for the CPI from 1984-1986 to some other period, Unisys
and Client will continue to use the CPI but will, if necessary, convert either
the
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
<PAGE>
Current CPI or the Base CPI or the Base CPI to the same basis as the other by
multiplying such CPI by the appropriate conversion factor.
<PAGE>
EXHIBIT 31
Below is an outline of the process outlining the evolution of pricing structure
for the Agreement:
***
Variable Pricing Guiding Principles
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
***
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 31-1
UNISYS OUTSOURCING RATE CARD PROPOSAL
BASE VOLUMES AND RATES
<TABLE>
<CAPTION>
METRIC 1997 1998 1999 2000 2001 2002
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UNISYS CPU USAGE* BASE VOLUME 5,368.81 5,368.81 5,368.81 5,368.81 5,368.81 5,368.81
(HOURS) BASE RATE *** *** *** *** *** ***
RATE REDUCTION *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------
***
UNISYS DISK USAGE BASE VOLUME 677.11 677.11 677.11 677.11 677.11 677.11
(GB) BASE RATE *** *** *** *** *** ***
RATE REDUCTION *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------
UNISYS TAPE USAGE BASE VOLUME 35,553.00 35,553.00 35,553.00 35,553.00 35,553.00 35,553.00
(MOUNTS) BASE RATE *** *** *** *** *** ***
RATE REDUCTION *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------
IBM MIPS BASE VOLUME 231.00 231.00 231.00 231.00 231.00 231.00
(MIPS) BASE RATE *** *** *** *** *** ***
RATE REDUCTION *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------
IBM DISK USAGE BASE VOLUME 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00
(GB) BASE RATE *** *** *** *** *** ***
RATE REDUCTION *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------
IBM TAPE MOUNTS BASE VOLUME 33,000.00 33,000.00 33,000.00 33,000.00 33,000.00 33,000.00
(MOUNTS) BASE RATE *** *** *** *** *** ***
RATE REDUCTION *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------
COLA *** *** *** *** ***
CREDIT % ON BASE RATE FOR UNUSED UNITS *** *** *** *** *** ***
<CAPTION>
METRIC 2003 2004 2005
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
UNISYS CPU USAGE* BASE VOLUME 5,368.81 5,368.81 5,368.81
(HOURS) BASE RATE *** *** ***
RATE REDUCTION *** *** ***
- ---------------------------------------------------------------------------------
***
UNISYS DISK USAGE BASE VOLUME 677.11 677.11 677.11
(GB) BASE RATE *** *** ***
RATE REDUCTION *** *** ***
- ---------------------------------------------------------------------------------
UNISYS TAPE USAGE BASE VOLUME 35,553.00 35,553.00 35,553.00
(MOUNTS) BASE RATE *** *** ***
RATE REDUCTION *** *** ***
- ---------------------------------------------------------------------------------
IBM MIPS BASE VOLUME 231.00 231.00 231.00
(MIPS) BASE RATE *** *** ***
RATE REDUCTION *** *** ***
- ---------------------------------------------------------------------------------
IBM DISK USAGE BASE VOLUME 1,300.00 1,300.00 1,300.00
(GB) BASE RATE *** *** ***
RATE REDUCTION *** *** ***
- ---------------------------------------------------------------------------------
IBM TAPE MOUNTS BASE VOLUME 33,000.00 33,000.00 33,000.00
(MOUNTS) BASE RATE *** *** ***
RATE REDUCTION *** *** ***
- ---------------------------------------------------------------------------------
COLA *** *** ***
CREDIT % ON BASE RATE FOR UNUSED UNITS *** *** ***
</TABLE>
<TABLE>
<CAPTION>
VOLUME DISCOUNT RATES
* A SERIES, CLEARPATH FAMILY GREATER OF % OF
EQUAL TO LESS THAN DISCOUNT
-------- --------- --------
<S> <C> <C>
0% 100% ***
100% 105% ***
105% 110% ***
110% 115% ***
115% 120% ***
120% 125% ***
125% and over ***
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 31-2
LEASE/DEPRECIATION CHARGES
<TABLE>
<CAPTION>
UNIX PROCESSORS: STYLE SERIAL 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 TOTAL
- --------------- ----- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ABACUS 7013-J30 2652250 *** *** *** *** - - - - - - ***
BAMBAM 7013-39H 2687366 *** *** *** *** - - - - - - ***
BHDATA1 7013-59H 2648757 *** *** *** *** - - - - - - ***
BHDATA2 7013-59H 2651771 *** *** *** *** - - - - - - ***
BAMBAM 7013-39H 2687366 *** *** *** *** - - - - - - ***
BHFUNC1 7013-580 2639063 *** *** *** *** - - - - - - ***
BIS1 7013-590 2646076 *** *** *** *** - - - - - - ***
BIS3 7013-J30 2654414 *** *** *** *** - - - - - - ***
CALVIN 7013-591 2641001 *** *** *** *** - - - - - - ***
CEREBUS 7012-G30 2687935 *** *** *** *** - - - - - - ***
BAMBAM 7013-39H 2687366 *** *** *** *** - - - - - - ***
BAMBAM 7013-39H 2687366 *** *** *** *** - - - - - - ***
GAR 7013-690 2646104 *** *** *** *** - - - - - - ***
HOBBES 7013-590 2643186 *** *** *** *** - - - - - - ***
KAZOO 7013-J40 2646969 *** *** *** *** - - - - - - ***
KESTREL U6000/65 414171439 *** *** *** *** - - - - - - ***
ORION 7013-59H 2650200 *** *** *** *** - - - - - - ***
OSPRAY U6000/65 414171652 *** *** *** *** - - - - - - ***
PEGASUS 7013-J30 2650254 *** *** *** *** - - - - - - ***
PIRANHA 7013-550 2621567 *** *** *** *** - - - - - - ***
POLARIS 7013-590 2650490 *** *** *** *** - - - - - - ***
STARFISH 7013-J30 2653745 *** *** *** *** - - - - - - ***
BAMBAM 7013-39H 2687366 *** *** *** *** - - - - - - ***
ROHCS1 7013-580 2639286 *** *** *** *** - - - - - - ***
SUSIE 7013-59H 2649667 *** *** *** *** - - - - - - ***
TOKAY 7013-59H 2648268 *** *** *** *** - - - - - - ***
DUKE 7013-590 1640842 *** *** *** *** - - - - - - ***
TOPGUN 7013-590 2640841 *** *** *** *** - - - - - - ***
UHC16A5 7013-59H 2648392 *** *** *** *** - - - - - - ***
VIPER 7013-590 2641251 *** *** *** *** - - - - - - ***
ZUHL 7013-590 264373 *** *** *** *** - - - - - - ***
-----------------------------------------------------------------------------------
S/T BASE SYSTEMS *** *** *** *** - - - - - - ***
-----------------------------------------------------------------------------------
PIKE 7013-J40 2655199 *** *** *** *** *** - - - - - ***
VIPER2 7013-J40 2656294 *** *** *** *** *** - - - - - ***
TOMCAT 7013-J40 2656295 *** *** *** *** *** - - - - - ***
POSEIDON 7013-J30 2653583 *** *** *** *** *** - - - - - ***
-----------------------------------------------------------------------------------
S/T 1996 GROWTH SYSTEMS *** *** *** *** *** - - - - - ***
-----------------------------------------------------------------------------------
TOTAL UNIX *** *** *** *** *** - - - - - ***
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
</TABLE>
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 31-2
<TABLE>
<CAPTION>
UNIX TOTAL CHARGES
PROCESSORS: STYLE SERIAL JAN-97 FEB-97 MAR-97 APR-97 MAY-97 JUN-97 JUL-97 AUG-97 SEP-97 OCT-97 NOV-97 DEC-97
- ---------- ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ABACUS 7013-J30 2652250 *** *** *** *** *** *** *** *** *** *** *** ***
BAMBAM 7013-39H 2687366 *** *** *** *** *** *** *** *** *** *** *** ***
BHDATA1 7013-59H 2648757 *** *** *** *** *** *** *** *** *** *** *** ***
BHDATA2 7013-59H 2651771 *** *** *** *** *** *** *** *** *** *** *** ***
BHFUNC1 7013-580 2639063 *** *** *** *** *** *** *** *** *** *** *** ***
BIS1 7013-590 2646076 *** *** *** *** *** *** *** *** *** *** *** ***
BIS3 7013-J30 2654414 *** *** *** *** *** *** *** *** *** *** *** ***
CALVIN 7013-591 2641001 *** *** *** *** *** *** *** *** *** *** *** ***
CEREBUS 7012-G30 2687935 *** *** *** *** *** *** *** *** *** *** *** ***
FILLET 7013-59H 2649881 *** *** *** *** *** *** *** *** *** *** *** ***
GAR 7013-690 2646104 *** *** *** *** *** *** *** *** *** *** *** ***
HOBBES 7013-590 2643186 *** *** *** *** *** *** *** *** *** *** *** ***
KAZOO 7013-J40 2646969 *** *** *** *** *** *** *** *** *** *** *** ***
KESTREL U6000/65 414171439 *** *** *** *** *** *** *** *** *** *** *** ***
ORION 7013-59H 2650200 *** *** *** *** *** *** *** *** *** *** *** ***
OSPRAY U6000/65 414171652 *** *** *** *** *** *** *** *** *** *** *** ***
PEGASUS 7013-J30 2650254 *** *** *** *** *** *** *** *** *** *** *** ***
PIRANHA 7013-550 2621567 *** *** *** *** *** *** *** *** *** *** *** ***
POLARIS 7013-590 2650490 *** *** *** *** *** *** *** *** *** *** *** ***
STARFISH 7013-J30 2653745 *** *** *** *** *** *** *** *** *** *** *** ***
ROHCS1 7013-580 2639286 *** *** *** *** *** *** *** *** *** *** *** ***
SUSIE 7013-59H 2649667 *** *** *** *** *** *** *** *** *** *** *** ***
TOKAY 7013-59H 2648268 *** *** *** *** *** *** *** *** *** *** *** ***
DUKE 7013-590 1640842 *** *** *** *** *** *** *** *** *** *** *** ***
TOPGUN 7013-590 2640841 *** *** *** *** *** *** *** *** *** *** *** ***
UHC16A5 7013-59H 2648392 *** *** *** *** *** *** *** *** *** *** *** ***
VIPER 7013-590 2641252 *** *** *** *** *** *** *** *** *** *** *** ***
ZUHL 7013-590 2643731 *** *** *** *** *** *** *** *** *** *** *** ***
------------------------------------------------------------------------------------------------
S/T BASE SYSTEMS *** *** *** *** *** *** *** *** *** *** *** ***
------------------------------------------------------------------------------------------------
PIKE 7013-J40 2655199 *** *** *** *** *** *** *** *** *** *** *** ***
VIPER2 7013-J40 2656294 *** *** *** *** *** *** *** *** *** *** *** ***
TOMCAT 7013-J40 2656295 *** *** *** *** *** *** *** *** *** *** *** ***
POSEIDON 7013-J30 2653583 *** *** *** *** *** *** *** *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------------
S/T 1996 GROWTH SYSTEMS *** *** *** *** *** *** *** *** *** *** *** ***
------------------------------------------------------------------------------------------------
TOTAL UNIX *** *** *** *** *** *** *** *** *** *** *** ***
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
</TABLE>
PAGE 1 OF 1
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 31-2
LEASE & DEPRECIATION RECOVERY
<TABLE>
<CAPTION>
UNIX
PROCESSORS: STYLE SERIAL JAN-97 FEB-97 MAR-97 APR-97 MAY-97 JUN-97 JUL-97 AUG-97 SEP-97 OCT-97 NOV-97 DEC-97
- ---------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ABACUS 7013-J30 2652250 *** *** *** *** *** *** *** *** *** *** *** ***
BAMBAM 7013-39H 2687366 *** *** *** *** *** *** *** *** *** *** *** ***
BHDATA1 7013-59H 2648757 *** *** *** *** *** *** *** *** *** *** *** ***
BHDATA2 7013-59H 2651771 *** *** *** *** *** *** *** *** *** *** *** ***
BHFUNC1 7013-580 2639063 *** *** *** *** *** *** *** *** *** *** *** ***
BIS1 7013-590 2646076 *** *** *** *** *** *** *** *** *** *** *** ***
BIS3 7013-J30 2654414 *** *** *** *** *** *** *** *** *** *** *** ***
CALVIN 7013-591 2641001 *** *** *** *** *** *** *** *** *** *** *** ***
CEREBUS 7012-G30 2687935 *** *** *** *** *** *** *** *** *** *** *** ***
FILLET 7013-59H 2649881 *** *** *** *** *** *** *** *** *** *** *** ***
GAR 7013-690 2646104 *** *** *** *** *** *** *** *** *** *** *** ***
HOBBES 7013-590 2643186 *** *** *** *** *** *** *** *** *** *** *** ***
KAZOO 7013-J40 2646969 *** *** *** *** *** *** *** *** *** *** *** ***
KESTREL U6000/65 414171439 *** *** *** *** *** *** *** *** *** *** *** ***
ORION 7013-59H 2650200 *** *** *** *** *** *** *** *** *** *** *** ***
OSPRAY U6000/65 414171652 *** *** *** *** *** *** *** *** *** *** *** ***
PEGASUS 7013-J30 2650254 *** *** *** *** *** *** *** *** *** *** *** ***
PIRANHA 7013-550 2621567 *** *** *** *** *** *** *** *** *** *** *** ***
POLARIS 7013-590 2650490 *** *** *** *** *** *** *** *** *** *** *** ***
STARFISH 7013-J30 2653745 *** *** *** *** *** *** *** *** *** *** *** ***
ROHCS1 7013-580 2639286 *** *** *** *** *** *** *** *** *** *** *** ***
SUSIE 7013-59H 2649667 *** *** *** *** *** *** *** *** *** *** *** ***
TOKAY 7013-59H 2648268 *** *** *** *** *** *** *** *** *** *** *** ***
DUKE 7013-590 1640842 *** *** *** *** *** *** *** *** *** *** *** ***
TOPGUN 7013-590 2640841 *** *** *** *** *** *** *** *** *** *** *** ***
UHC16A5 7013-59H 2648392 *** *** *** *** *** *** *** *** *** *** *** ***
VIPER 7013-590 2641252 *** *** *** *** *** *** *** *** *** *** *** ***
ZUHL 7013-590 2643731 *** *** *** *** *** *** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------
S/T BASE SYSTEMS *** *** *** *** *** *** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------
PIKE 7013-J40 2655199 *** *** *** *** *** *** *** *** *** *** *** ***
VIPER2 7013-J40 2656294 *** *** *** *** *** *** *** *** *** *** *** ***
TOMCAT 7013-J40 2656295 *** *** *** *** *** *** *** *** *** *** *** ***
POSEIDON 7013-J30 2653583 *** *** *** *** *** *** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------
S/T 1996 GROWTH SYSTEMS *** *** *** *** *** *** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------
TOTAL UNIX *** *** *** *** *** *** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
</TABLE>
PAGE 1 OF 1
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 31-2
TOTAL CHARGES
<TABLE>
<CAPTION>
UNIX
PROCESSORS: STYLE SERIAL 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 TOTAL
- ---------- ----- ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ABACUS 7013-J30 2652250 *** *** *** *** - - - - - - ***
BAMBAM 7013-39H 2687366 *** *** *** *** - - - - - - ***
BHDATA1 7013-59H 2648757 *** *** *** *** - - - - - - ***
BHDATA2 7013-59H 2651771 *** *** *** *** - - - - - - ***
BHFUNC1 7013-580 2639063 *** *** *** *** - - - - - - ***
BIS1 7013-590 2646076 *** *** *** *** - - - - - - ***
BIS3 7013-J30 2654414 *** *** *** *** - - - - - - ***
CALVIN 7013-591 2641001 *** *** *** *** - - - - - - ***
CEREBUS 7012-G30 2687935 *** *** *** *** - - - - - - ***
FILLET 7013-59H 2649881 *** *** *** *** - - - - - - ***
GAR 7013-690 2646104 *** *** *** *** - - - - - - ***
HOBBES 7013-590 2643186 *** *** *** *** - - - - - - ***
KAZOO 7013-J40 2646969 *** *** *** *** - - - - - - ***
KESTREL U6000/65 414171439 *** *** *** *** - - - - - - ***
ORION 7013-59H 2650200 *** *** *** *** - - - - - - ***
OSPRAY U6000/65 414171652 *** *** *** *** - - - - - - ***
PEGASUS 7013-J30 2650254 *** *** *** *** - - - - - - ***
PIRANHA 7013-550 2621567 *** *** *** *** - - - - - - ***
POLARIS 7013-590 2650490 *** *** *** *** - - - - - - ***
STARFISH 7013-J30 2653745 *** *** *** *** - - - - - - ***
ROHCS1 7013-580 2639286 *** *** *** *** - - - - - - ***
SUSIE 7013-59H 2649667 *** *** *** *** - - - - - - ***
TOKAY 7013-59H 2648268 *** *** *** *** - - - - - - ***
DUKE 7013-590 1640842 *** *** *** *** - - - - - - ***
TOPGUN 7013-590 2640841 *** *** *** *** - - - - - - ***
UHC16A5 7013-59H 2648392 *** *** *** *** - - - - - - ***
VIPER 7013-590 2641251 *** *** *** *** - - - - - - ***
ZUHL 7013-590 264373 *** *** *** *** - - - - - - ***
----------------------------------------------------------------------------------
S/T BASE SYSTEMS *** *** *** *** - - - - - - ***
----------------------------------------------------------------------------------
PIKE 7013-J40 2655199 *** *** *** *** *** - - - - - ***
VIPER2 7013-J40 2656294 *** *** *** *** *** - - - - - ***
TOMCAT 7013-J40 2656295 *** *** *** *** *** - - - - - ***
POSEIDON 7013-J30 2653583 *** *** *** *** *** - - - - - ***
----------------------------------------------------------------------------------
S/T 1996 GROWTH SYSTEMS *** *** *** *** *** - - - - - ***
----------------------------------------------------------------------------------
TOTAL UNIX *** *** *** *** *** - - - - - ***
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
</TABLE>
PAGE 1 OF 1
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
BASE CHANGES - VOLUME AND RATE
If the actual unit volume consumed for a specific category exceeds or falls
below the base by 40% or more for three consecutive months, the Account
Executives shall negotiate an adjustment to the base volume and base rate. The
principles underlying this adjustment would be that the adjusted base volume
would not exceed the prior 90 day average volume and the adjusted base rate
would not exceed the prior 90 day unit average.
If the actual unit volume for three consecutive months is 0 and the forecast for
the next 3 months is also 0, the base volume for that particular metric will be
set at 0.
VOLUME DISCOUNT RATES
The volume discount percentages apply only to the units in the range for that
particular percentage. For example, if the actual volume is 114% of the base,
the units below 100% receive no discount, the units between 100 - 105% receive
6%, the units between 105 - 110% receive 10% and the units between 100 - 115%
receive 15%.
CREDITS FOR UNUSED UNITS BELOW BASE VOLUME
Credits for unused units below the base volume will be granted only for unused
units that have been forecasted. No credits be given for unused units below the
forecast. For example, if the forecasted volume is 75% of the base and the
actual volume is 65% of the base, then credits for the unused units between 75%
and 100% of the base volume will be granted per the schedule. No credits will
be given for units between 65% and 75%. However, if in the same example the
actual volume is 80%, credits are granted for the units between 80% and 100%.
If the volume consumed for a category falls below the base, then the amount
billed will equal the base units times the base rate for that period with a
credit for each unused unit below the base, providing the forecasted volume was
below the actual volume. The amount of the credit is a percentage of the base
rate to be determined according to the rate card schedule.
MINIMUM CHARGES
ALL PERIODS
If the base volume falls below 60% of the initial base volume for a particular
category, for example "Unisys CPU Hour" and the UHS volume forecast for that
category is flat or projecting continued decline, the Account Executives for
Unisys and UHS will jointly agree on a revised rate card for that category as
well as a one-time charge for the reduced capacity requirement, or if UHS
reassigns the volume of one product family (IBM, Unisys, UNIX) to other product
families supported by Unisys, the Account Executives for Unisys and UHS will
jointly agree on an appropriate one-time charge for the eliminated capacity
requirement. This charge will be supported by Unisys and limited to the
remaining Unisys book value of capitalized assets as of the month of termination
less any remaining fair market value of associated equipment, early termination
penalties and/or notice period requirements on hardware and software maintenance
contracts and redeployment costs of affected human resources.
INITIAL 48 MONTHS
Rate Card based charges (Total of Unisys, IBM and UNIX/NT) will not fall below
the "contract to date" values contained in Exhibit 11 of the Agreement.
AFTER MONTH 48
Rate Card based charges (Total of Unisys, IBM and UNIX/NT) will not fall below
the "contract to date" values contained in Exhibit 11 of the agreement.
Page 1 of 12
<PAGE>
If UHS reassigns the volume of one product family (IBM, Unisys, UNIX) to another
vendor, the Account Executives for Unisys and UHS will jointly agree on an
appropriate one-time charge for the eliminated capacity requirement. This
charge will be supported by Unisys and limited to the remaining Unisys book
value of capitalized assets as of the month of termination less any remaining
fair market value of associated equipment, early termination penalties and/or
notice period requirements on hardware and software maintenance contracts and
redeployment costs of affected human resources.
The one-time charge referenced above replaces the product family (IBM, Unisys,
UNIX) termination charges contained in Exhibit 17 of the Agreement.
If UHS reassigns the volume of all product families (IBM, Unisys, UNIX/NT) to
another vendor, the Termination Charges from Exhibit 17 of the Agreement are
applicable.
Unisys and UHS agree that the standard depreciation schedule for calculation of
Unisys book value for capitalized assets will be 4 years. Exceptions will be
authorized if both parties agree in advance.
UNIX
END OF TERM:
BASE SYSTEMS
Effective with January, 1998, Unisys will provide a 90 day notice UHS on systems
reaching the end of their initial term. The initial notification will include
all systems which were fully depreciated by December, 1997. UHS has the option
to terminate, replace, or extend systems at the end of their initial term. If
the system is terminated, Unisys will discontinue charges after the initial
term. If the system is replaced, Unisys will discontinue all capital costs
effective with the end of initial term and discontinue the remaining charges
with deinstallation of the system. If the system is to be extended as
configured, Unisys will submit a new quote for the system without capital costs.
GROWTH SYSTEMS
At 90 days prior to the end of their term as defined in the ASR document, Unisys
will notify UHS of the end of the initial agreement. UHS has the option to
terminate, replace or extend systems after their individual term. If the system
is terminated, Unisys will discontinue all future charges after the initial
term. If the system is replaced, Unisys will discontinue all capital costs
effective with the first month after the initial term and discontinue the
remaining charges with deinstallation of the system. If the system is to be
extended as configured, Unisys will submit a new quote for the system without
capital costs.
EARLY TERMINATION
With a 90 day notice, UHS will be allowed to terminate UNIX systems prior to the
end of their term by paying Unisys an "Early Termination Charge" equal to the
remaining Unisys book value as of the month of termination less any remaining
fair market value.
VOLUME FORECAST
United HealthCare Services will provide Unisys with a 12 month consumption
forecast for all mainframe metrics on a quarterly basis. That forecast will be
delivered on the 15th of the final month of each quarter (March, June, September
and December).
Page 2 of 12
<PAGE>
UHS FORECASTING AND BILLING METRICS
The following metrics will be used for forecasting and Billing Consumption.
A SERIES/CLEARPATH MACHINES
A SERIES/CLEARPATH DISK FORECASTING/BILLING METRICS
FORECASTING AND MEASURING
Metrics to be used 1. Average gigabytes allocated (total for each
system)(1)
2. Maximum gigabytes allocated any time within a
month (total for each system)(1)
Unit of Measure Gigabytes of Fault tolerant disk
How computed
Viewpoint will monitor disk usage by taking snapshots of the disk usage each
minute. These minutely samples are automatically consolidated into summary
records by Viewpoint (e.g., 15 minute, hourly and daily records). On a monthly
basis, the average disk allocated and the maximum disk allocated for each pack
family at any point during that month will be reported from data in the daily
summary records.
What forecasted Concept: all non-system related disk
requirements will be forecasted by UHS.
(System related disk requirements will be a
computed factor and not forecasted by UHS).
Specific pack families that need to be
included in UHS forecast number:
PRODUCTION SYSTEMS:
- All database families
- ARCPK
- DSSPK
- LAGPK
- RAMPK
- DBPACK
- CODEPACK
- PRTBKUP
- FLATPACK
- SORTPACK
- WFMPACK
DEVELOPMENT SYSTEMS
- DISK
- DEVPACK
- DEVDBPK
Page 3 of 12
<PAGE>
- SRCPACK
- PACK
- GENPK
- AUDIT1
- LOGPACK
Missing Viewpoint Data In the event that Viewpoint data is missing
or corrupted for any given time period
(minute, 15 minute, hour, day, etc.), Unisys
will average the data from the previous good
time period with the following good time
period. For example, if 14 minutes of data
are missing, Unisys would average the
previous 15 minute sample with the next 15
minute sample to compute an average for the
missing period. If 23 hours of data was
missing, the previous and next daily samples
would be used to compute an average.
Unisys would clearly report exactly what
method and samples it used in computing
metrics for any lost period.
(1) This will be computed from the A Series statistic "sectors in use." The
formula to convert to Gigabytes Allocated = sectors in use * ***
BILLING UNITS
The billing metric will be the sum of the maximum gigabytes allocated (as
defined above) for each forecasted pack family, for each system, within each
month.
Page 4 of 12
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT 31-3
A SERIES/CLEARPATH PROCESSOR FORECASTING/BILLING METRICS
Forecasting and Measuring
Forecasting metric to be used Total Application CPU
Hours/Month/Workgroup (database)
forecasted on machine that the database
is running on.(1)
Unit of Measure Viewpoint will capture processor
utilization statistics for the various
workgroups. The utilization statistics
for multi-processor A18's need to be
converted into a common metric (A18- 1x
Application CPU hours) for that class of
machine.(2) Different processor classes
(e.g., A19) will require a conversion
factor to produce compatible hourly
projections. The Relative Performance
Measure (RPM) as reported by Unisys
product specifications will be used to
make this conversion.
How forecasted and measured Computed and tracked via Viewpoint CPU
USER PERCENT samples
When computed Viewpoint will monitor processor usage
by taking snapshots of the usage each
minute. These minutely samples are
automatically consolidated into summary
records by Viewpoint (e.g., 15 minutes,
hourly and daily records). The daily
records will be used in computing total
monthly usage.
What forecasted/measured A workgroup will be defined for each
database.
For the production machines, one total
will be forecasted for each database
plus one total for "OTHER." OTHER will
contain programs that aren't easily
broken out by database even though their
time may be attributable to a particular
database.(3)
For the development machines, one
monthly total for everything will be
provided.
What programs are included/ Since UHS has several thousand programs
excluded from forecast running in production on the various
machines under various usercodes, and
the list of programs change on a
frequent basis, an inclusive list of all
programs would be unmanageable.
Excluded programs are:
SYSTEM/A=, A TO A Routers
SYSTEM/U=, U to A Routers
SYSTEM/CO=, SYSTEM/COMS
SYSTEM/CA=, SYSTEM/CANDE
SYSTEM/CC=, Application to Appl calls
(PROD)SYSTEM/=. A to A, U to A
(PROD)CCF/=, ---
Missing Viewpoint Data In the event that Viewpoint data is
missing or corrupted for any given time
period (minute, 15 minute, hour, day,
etc.), Unisys will average the data from
the previous good time period with the
following good time period. For
example, if 4 minutes of data are
missing, Unisys
Page 5 of 12
<PAGE>
would average the previous 15 minute
sample with the next 15 minute sample to
compute an average for the missing
period. If 23 hours of data are
missing, the previous and next daily
samples would be used to compute an
average.
Unisys would clearly report exactly what
method and samples it used in computing
metrics for any lost period.
(1) - When available, the forecast should include a breakout by div within a
database
(2) - The formula for computing the daily Application CPU hours will be:
Processor Utilization Percentage * hours/day * # of processors. For
example, if a A18-3x has
***
(3) - OTHER will be defined in Viewpoint as all programs not included in the
database workgroups except for the programs specifically excluded from
the forecast (as noted above).
BILLING UNITS
Total application CPU hours per month for all A SERIES machines
MACHINE/RESOURCE UTILIZATION
In general, for an on-line oriented machine, as the machine utilization
approaches saturation, technical support requirements increase exponentially.
Efficient and cost effective computer operations requires executing the hardware
resources at the highest level possible that doesn't require oppressive human
intervention. The billing rates will be based on a best fir of machine
utilization and technical resource utilization.
Conversation Factor
Since a variety of processor speeds/models are in use by UHS and it is expected
that new processor speeds/models will be used, a conversion must be done to
convert application CPU hours on all machines to a common metric. The
conversation factor is the multiplier that will be applied to convert that
machine to A18 - 1x Application CPU hours (the base metric). For example, ***
Machine Style Conversion Factor
A18 - all models ***
A16-82L ***
A19 - all models ***
NX4801 ***
BILLING REPORTING
Unisys and UHS have defined workgroups into which the Viewpoint data will be
defined. The hours in these workgroups will be converted to a common metric and
summed monthly to provide the total Application CPU hours used. One workgroup
exists for each A Series database plus one workgroup for all applications
("OTHER") that don't easily fit into a database workgroup. Unisys will provide
billing detail at the summarized workgroup level.
Page 6 of 12
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
A SERIES/CLEARPATH MEDIA MOUNTS FORECASTING/BILLING METRICS
The total of all media mounts (tape, CD-ROMS, etc.) will be forecast. Actual
numbers will be calculated using OPCON statistics.
Page 7 of 12
<PAGE>
IBM ES9000 MACHINE - CURRENTLY IN EFFECT
DISK FORECASTING/BILLING METRICS
Metric to be used Total disk available on system
Unit of Measure Gigabytes of non-fault tolerant disk
How computed Total gigabytes of all the disk connected to the
system.
When computed Each time additional disk is added to system.
What forecasted The available disk will be forecasted into the
following categories:
- System Requirements
- Financial Production and Test
- Dental Systems
- Center Files
- DPS Files
- Other: Infopac, Other Prd, Temp, Work, ML1
- DSS Production and Management
- Available
BILLING UNITS
The forecasted disk usage number will assume all disk is non-fault tolerant.
Any other type of disk purchase requested by UHS will be handled as an exception
to Variable Pricing.
The billing metric will be the total disk space available on the system.
IBM PROCESSOR FORECASTING/BILLING METRICS
FORECASTING AND MEASURING
Forecasting metric to be used Maximum MIPS available on system
Unit of Measure MIPS as defined by IBM product specifications
What forecasted/measured Entire system
What programs are excluded
from forecast None
BILLING UNITS
Maximum MIPS available on machine
IBM MEDIA MOUNTS FORECASTING/BILLING METRICS
The total of all media mounts (tape, CD-ROMS, etc.) will be forecast. Actual
numbers will be calculated using OPCON statistics.
Page 8 of 12
<PAGE>
IBM ES9000 MACHINE - DRAFT PROPOSAL
DISK FORECASTING/BILLING METRICS
Metric to be used Maximum GB used within month
Unit of Measure Gigabytes of fault tolerant disk(1)
How computed The DCOLLECT tool will run multiple times per
day capturing the maximum disk used in each
of the disk pools plus the SPOOL and
Migration volumes.(2) At the end of the
month, the maximum GB of disk for the month
will be computed using this formula:
Max GB consumed -
max (SPOOL/Migration) + max (pool 1) +
max (pool 2)
+ xxx + (pool n)
where the "max" will be the highest value
recorded for that pool at any time within the
month and "n" will be the
last pool being forecasted.
For example: if 2 pools are being used in
the computation:
Pool 1:6/1@ 12:00 = 90 GB
...
Pool 1:6/12@ 12:00 = 100 GB
Pool 1:6/12@ 18:00 = 110 GB
...
Pool 1:6/30@ 18:00 = 95 GB
Pool 2:6/1@ 12:00 = 190 GB
...
Pool 2:6/15@ 12:00 = 200 GB
...
Pool 2:6/1@ 12:00 = 1095GB
The maximum for pool 1 = 110 GB and the
maximum for pool 2 = 200 GB. The Max Disk
Consumed metric reported for the month would
be 310 GB.
DCOLLECT Run Frequency To be run as needed.(3)
Page 9 of 12
<PAGE>
Pools forecasted/Used
in Computation POOLS:
CENTER1
CENTER2
HEDIS
DBDSST
DBDSSP
DBTECH
DENTAL
DPSCENTR
DSSPROD
DSSTEST
EPIS
FINPROD
FINTEST
INFOPAC
PROD
TEMP
TEST
UMWA
OTHER VOLUMES:
All volumes associate with SPOOL and
Migration (currently MLxxxxpqcks).
Missing Data In the event that data is missing or
corrupted for any given time, Unisys will
average the data from the previous good time
period with the following good time period.
For example, if a 4 hour collection period is
used and if 4 hours of data are missing,
Unisys would average the previous 4 hour
sample with the next 4 hour sample to compute
an average for the missing period.
Unisys would clearly report exactly what
method and samples it used in computing
metrics for any lost period.
Data Retention The summarized daily information will be kept
for one year.
(1) - BILLING UNITS
The forecasted disk usage number will assume all disk is fault tolerant. Any
other type of disk purchase requested by UHS may be handled as an exception to
Variable Pricing by Unisys.
(2) - SPOOL AND MIGRATION VOLUMES
Although the SPOOL and Migration volumes are not true "pools," the amount of
space consumed on these packs is directly related to the retention setting
requested by UHS>
(3) - DCOLLECT Frequency
Unisys will initially run this tool once per hour. Since the CPU consumption
for this product is chargeable to Unisys, Unisys may change the schedule of its
use to optimize machine resources.
Page 10 of 12
<PAGE>
IBM PROCESSOR FORECASTING/BILLING METRICS
FORECASTING AND MEASURING
Forecasting Metric to be used Total CPU consumed within selected account
codes by Prime and Off-Prime shifts.
Unit of Measure ES9021-340 (1 processor) CPU Hours
What forecasted/measured All CPU time for the following Account Codes
will be excluded from the consumption totals:
3400 - Unisys Scheduling
3420 - Unisys Operations Analysts
3440 - Unisys Operations, Technical Staff
All CPU time for other account codes will be
included.
Prime/Off-Prime Shifts All Reporting will be done by prime and
off-prime periods using an Interval
Accounting method.(1)
Prime Shift Period: 8AM - 5 PM Central Time,
Monday through Friday except Holidays.
Off-Prime Shift Period: 5:01PM - 7:59AM
Weekdays plus weekends and holidays.
How forecasted and measured Extract the SMF Type 30 Subtypes 2, 3, and 5
records. These records will be used to
calculate CPU times using TCB, SRB, HPT and
IO. All the data will be contained in a
monthly file, and retained for one year.
This file will be kept at the detailed level
not summarized at any level, allowing the
smallest base of raw data anyone could work
from.
Missing Data In the event that data is missing or
corrupted for any given time, Unisys will
average the data from the previous good time
period with the following good time period.
For example, if a 4 hour collection period is
used and if 4 hours of data are missing,
Unisys would average the previous 4 hour
sample with the next 4 hour sample to compute
an average for the missing period.
Unisys would clearly report exactly what
method and samples it used in computing
metrics for any lost period.
Data Retention The summarized daily information will be kept
for one year.
(1) - Interval Accounting: The actual time a job executes within prime shift
and off-prime shift will be accounted for separately. For example,
assuming prime shift is 8AM to 5PM, and a job runs from 7 AM to 9AM
(regardless of when it was submitted), it will accumulate 1 hour of
off-prime shift time and 1 hour of prime shift time.
Conversion Factor
Since it is expected that new processor speeds/models will be used, a
conversation must be done to convert application CPU hours on all machines to a
common metric. The conversation factor is the multiplier that will be applied
to convert that machine to ES9021-340 CPU hours (the base metric).
Page 11 of 12
<PAGE>
Machine Style Conversion Factor(2)
ES9021-340 1
ES9021-711 2.66
ES9021-962 2.66
(2) - Based on Cheryl Watson's Tuning Letter Information
BILLING REPORTING
From the SMF data, Unisys will sum all CPU hours for all appropriate account
codes (see prior list). The hours in these Account Codes will be converted to a
common metric and summed monthly to provide the total CPU hours consumed.
Unisys will provide two monthly metrics; one metric for total prime shift CPU
hours and one metric for off-prime shift CPU hours. Unisys will also provide an
EXCEL spreadsheet that contains the detail used to create this report.
IBM MEDIA MOUNTS FORECASTING /BILLING METRICS
Forecasting metric to be used Total media mounts consumed within selected
account codes.
Unit of Measure Count as supplied by SMF records
What forecasted/measured All media mounts for the following Account
Codes will be excluded from the consumption
totals:
3400 - Unisys Scheduling
3420 - Unisys Operations Analysts
3440 - Unisys Operations, Technical Staff
All media mounts for other account codes will
be included.
How forecasted and measured Extract the SMF Type 30 Subtypes 2, 3, and 5
records. These records will be used to
calculate CPU times using TCB, SRB, HPT and
IO. All the data will be contained in a
monthly file, and retained for one year.
This file will be kept at the detailed level
not summarized at any level, allowing the
smallest base of raw data anyone could work
from.
Missing Data In the event that data is missing or
corrupted for any given time, Unisys will
average the data from the previous good time
period with the following good time period.
For example, if a 4 hour collection period is
used and if 4 hours of data are missing,
Unisys would average the previous 4 hour
sample with the next 4 hour sample to compute
an average for the missing period.
Unisys would clearly report exactly what
method and samples it used in computing
metrics for any lost period.
Data Retention The summarized daily information will be kept
for one year.
Page 12 of 12
<PAGE>
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of June 1, 1996, by and between UNITED
HEALTHCARE SERVICES, INC. ("Seller") and UNISYS CORPORATION ("Buyer").
Seller and Buyer have entered into that certain Information Technology Services
Agreement dated as of June 1, 1996 (the "Outsourcing Agreement"). Section 3.17
of the Outsourcing Agreement requires that the parties execute an asset purchase
agreement for certain of the assets of Seller.
ACCORDINGLY, the parties hereto hereby agree as follows:
1. Seller, for and in consideration of *** payable as hereinafter provided
from Buyer, hereby bargains, sells transfers, assigns, sets over and conveys
unto Buyer, its successors and assigns forever, all of the personal property
(the "Equipment") (a) identified on either Exhibit 6 or Attachment E to Exhibit
11 of the Outsourcing Agreement and (b) personal computers and related equipment
used by the Transitioned Employees identified on Exhibit 29 of the Outsourcing
Agreement, to have and to hold the Equipment unto Buyer, its successors and
assigns, to its and their own use and behalf forever.
2. Seller hereby affirms, represents and warrants that it has (a) the power
and authority to sell the Equipment, and (b) full right, title and interest in
the Equipment free and clear from any and all liens, claims and encumbrances of
any nature whatsoever arising by, through or under Seller.
3. Seller shall indemnify, defend and hold Buyer harmless from and against any
and all claims or liabilities resulting from any misrepresentation by, or breach
of warranty, covenant or agreement of Seller set forth herein.
4. Seller, for itself and its successors and assigns, further covenants and
agrees to do, execute and deliver, or to cause to be done, executed and
delivered, all such further acts, transfers and assurances reasonably requested
by Buyer for the better assuring, conveying and confirming unto Buyer and its
successors and assigns, all and singularly, the Equipment hereby bargained,
sold, assigned, transferred, set over and conveyed.
5. This Asset Purchase Agreement and the representations, warranties and
covenants herein contained shall inure to the benefit of and shall be binding
upon Buyer and Seller and their respective successors, assigns and transferees
and shall survive the execution and delivery hereof.
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
6. BUYER ACKNOWLEDGES THAT IT IS PURCHASING THE EQUIPMENT "AS IS, WHERE IS."
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE
CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY
PARTICULAR PURPOSE AND NO OTHER WARRANTIES, EXPRESS OF IMPLIED, AND NO
REPRESENTATIONS, PROMISES OR STATEMENTS WITH RESPECT TO THE EQUIPMENT EXCEPT
THOSE EXPRESSLY CONTAINED IN THE OUTSOURCING AGREEMENT AND THIS ASSET PURCHASE
AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR LOSS OF PROFITS OR
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS ASSET PURCHASE
AGREEMENT, WHETHER BASED ON BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE
OR ANY OTHER LEGAL THEORY.
7. Buyer shall pay the Purchase Prices to Seller in the form of monthly Asset
Credits against the Unisys Baseline Charge as set forth in Exhibit 11 of the
Outsourcing Agreement. Notwithstanding the foregoing, an amount equal to ***
will be deducted from the ***. Each party acknowledges that such *** referenced
in Section 1(b) of this Asset Purchase Agreement.
8. Terms used herein but not otherwise defined herein shall have the meaning
given them in the Outsourcing Agreement.
IN WITNESS WHEREOF, Seller and Buyer have caused this Asset Purchase Agreement
to be executed as of the date first above written.
UNITED HEALTHCARE SERVICES, INC.
By:
--------------------
Its:
--------------------
UNISYS CORPORATION
By:
--------------------
Its:
--------------------
*** Indicates the omission of confidential information filed separately with the
Securities and Exchange Commission in connection with a confidential treatment
request made pursuant to Rule 24-b(2) of the Securities and Exchange Act of
1934, as amended.
<PAGE>
Exhibit 32
INTRODUCTION
United HealthCare Corporation (UHC) is a national leader in health care
management. In the course of their employment, Company employees and
contractors are exposed and made privy to confidential information about the
Company and its business activities. This information can include medical
claims, mergers and acquisitions, and employee salaries. These are all used to
implement Company operations. The information can be stored in any medium, such
as computer systems, tape, or databases. UHC has expended a great deal of time,
energy, and expense in the development and collection of its unique, valuable,
and sensitive information. The Company would suffer irreparable harm from any
unauthorized disclosure or use of this information.
This policy details document handling for confidential, private and proprietary
information and the guidelines for implementing that policy.
AUDIENCE
These policies and procedures are for all UHC employees and contractors who
obtain, create, or maintain UHC information, along with their supervisors and
management. These policies and procedures apply to any information stored on
any tangible medium, including computer-produced paper documents, tapes,
microfiche, hard drives, and to all activities using Company computers,
networks, and service bureaus.
REVIEW
This information is reviewed and modified as required, with reviews occurring on
a regular basis. Please send all recommendations for modification to the
Subject Matter Expert (SME).
STANDARD
All UHC confidential, private or proprietary information must be handled in a
secure manner, including proper labeling, storage, copying, mailing, disposal
and loss notification.
DEFINITIONS
Following are the information classifications established by UHC:
CONFIDENTIAL
CONFIDENTIAL information generally provides the company with significant
competitive advantage. Unauthorized disclosure could cause the company
significant harm (financial loss, embarrassment, loss of competitive advantage,
or possible litigation). Examples are:
- - sensitive management information
- - merger and acquisition information
- - company stock information
- - legal documents
- - underwriting documents
PRIVATE
PRIVATE information relates to individuals. It generally consists of
information that is protected by law. Examples are:
- - claims information
- - performance evaluation
- - salary information
- - personal stock options
- - personal savings information
PROPRIETARY
PROPRIETARY information provides the company with a competitive advantage.
Unauthorized disclosure is against the company's interests. Examples are:
<PAGE>
- - financial information not yet made public
- - product rate information
- - system software or any system developed for business application
- - long range or strategic plans
- - research and development programs
NON-CLASSIFIED
NON-CLASSIFIED information comprises the majority of UHC information. Because
it is NON-CLASSIFIED does not mean that access is unlimited. Access is allowed
only on a "need-to-know" basis.
GUIDELINES
The general guidelines for ensuring that confidential, private or proprietary
information is given adequate security are:
- - Lock up, log off or screen protect computers during interruptions.
- - Label document, envelope, tape or diskette UHC CONFIDENTIAL.
- - Store documents in a locked area when unattended.
- - Owner must authorize all copies. Do not make unauthorized extra copies.
- - For external mailing, use opaque inner envelope marked CONFIDENTIAL and
plain unmarked outer envelope.
- - For internal mailing, use opaque envelope marked CONFIDENTIAL or sealed
with a CONFIDENTIAL seal.
- - Paper copies must be shredded or disposed in authorized containers.
Diskettes and tapes must be overwritten or disposed in authorized
containers.
- - Immediately notify the owner and Corporate Security if sensitive
information is lost or stolen.
<PAGE>
EXHIBIT 15
LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION
May 7, 1998
Dear United HealthCare Corporation:
We are aware that United HealthCare Corporation and Subsidiaries has
incorporated by reference in its Registration Statements No. 33-3558,
2-95342, 33-22310, 33-27208, 33-36579, 33-50282, 33-67918, 33-68300,
33-75846, 33-79632, 33-79634, 33-79636, 33-59083, 33-59623, 33-63885,
333-05717, 333-02525, 333-04875, 333-04401, 333-06533, 333-01517, 333-01915,
333-25923, 333-05291, 333-44569, 333-44613, 333-45319, 333-41661, 333-45289
and 333-50461 its Form 10-Q for the quarter ended March 31, 1998, which
includes our report dated May 7, 1998, covering the unaudited interim
condensed consolidated financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933, that report is not considered a
part of the registration statement prepared or certified by our firm or a
report prepared or certified by our firm within the meaning of Sections 7 and
11 of the Act.
Very truly yours,
/s/ Arthur Andersen LLP
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1996 JAN-01-1996
<PERIOD-END> MAR-31-1996 JUN-30-1996 SEP-30-1996
<CASH> 1,040 996 732
<SECURITIES> 2,206 2,137 2,587
<RECEIVABLES> 641 649 686
<ALLOWANCES> 30 31 37
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 2,942 2,860 2,803
<PP&E> 540 472 602
<DEPRECIATION> 282 175 291
<TOTAL-ASSETS> 6,404 6,495 6,701
<CURRENT-LIABILITIES> 2,435 2,344 2,451
<BONDS> 0 0 0
500 500 500
0 0 0
<COMMON> 2 2 2
<OTHER-SE> 3,431 3,602 3,713
<TOTAL-LIABILITY-AND-EQUITY> 6,404 6,495 6,701
<SALES> 2,272 4,719 7,263
<TOTAL-REVENUES> 2,318 4,810 7,398
<CGS> 2,093 4,456 6,861
<TOTAL-COSTS> 2,125 4,519 6,957
<OTHER-EXPENSES> 31 63 97
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 193 276 425
<INCOME-TAX> 73 106 164
<INCOME-CONTINUING> 119 169 260
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 119 169 260
<EPS-PRIMARY> .64 .88 1.34
<EPS-DILUTED> .62 .85 1.30
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JAN-01-1997 JAN-01-1997
<PERIOD-END> MAR-31-1997 JUN-30-1997 SEP-30-1997
<CASH> 904 610 444
<SECURITIES> 2,527 2,924 3,103
<RECEIVABLES> 730 748 777
<ALLOWANCES> 48 45 46
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 2,529 1,988 2,124
<PP&E> 600 629 669
<DEPRECIATION> 277 296 317
<TOTAL-ASSETS> 7,063 7,126 7,241
<CURRENT-LIABILITIES> 2,600 2,479 2,449
<BONDS> 0 0 0
500 500 500
0 0 0
<COMMON> 2 2 2
<OTHER-SE> 3,932 4,122 4,270
<TOTAL-LIABILITY-AND-EQUITY> 7,063 7,126 7,241
<SALES> 2,801 5,667 8,569
<TOTAL-REVENUES> 2,852 5,782 8,741
<CGS> 2,639 5,350 8,085
<TOTAL-COSTS> 2,673 5,419 8,191
<OTHER-EXPENSES> 34 69 106
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 179 363 550
<INCOME-TAX> 70 138 209
<INCOME-CONTINUING> 109 225 341
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 109 225 341
<EPS-PRIMARY> .55 1.13 1.71
<EPS-DILUTED> .54 1.11 1.68
</TABLE>
<PAGE>
EXHIBIT 99
CAUTIONARY STATEMENTS
The statement contained in this Form 10-Q include forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"PSLRA"). When used in this Form 10-Q and in future filings by the Company with
the Securities and Exchange Commission, in the Company's press releases,
presentations to securities analysts or investors, and in oral statements made
by or with the approval of an executive officer of the Company, the words or
phrases "believes," "anticipates," "intends," "will likely result," "estimates,"
"projects" or similar expressions are intended to identify such forward-looking
statements. Any of these forward-looking statements involve risks and
uncertainties that may cause the Company's actual results to differ materially
from the results discussed in the forward-looking statements.
The following discussion contains certain cautionary statements regarding the
Company's business that investors and others should consider. This discussion is
intended to take advantage of the "safe harbor" provisions of the PSLRA. In
making these cautionary statements, the Company is not undertaking to address or
update each factor in future filings or communications regarding the Company's
business or results, and is not undertaking to address how any of these factors
may have caused results to differ from discussions or information contained in
previous filings or communications. In addition, any of the matters discussed
below may have affected the Company's past, as well as current, forward-looking
statements about future results. The Company's actual results in the future may
differ materially from those expressed in prior communications.
HEALTH CARE COSTS. The Company uses a large portion of its revenue to pay the
costs of health care services or supplies delivered to its members. Total health
care costs incurred by the Company are affected by the number of individual
services rendered and the cost of each service. Much of the Company's premium
revenue is priced before services are delivered and the related costs are
incurred, usually on a prospective annual basis. Although the Company tries to
base the premiums it charges in part on its estimate of future health care costs
over the fixed premium period, competition, regulations and other circumstances
may limit the Company's ability to fully base premiums on estimated costs. In
addition, many factors may, and often do, cause actual health care costs to
exceed what was estimated and reflected in premiums. These factors may include
increased use of services, increased cost of individual services, catastrophes,
epidemics, the introduction of new or costly treatments, general inflation, new
mandated benefits or other regulatory changes, and insured population
characteristics. In addition, the Company's earnings reported for any particular
quarter include estimates of covered services incurred by the Company's
enrollees during that period for which claims have not been received or
processed. Because these are estimates, the Company's earnings may be adjusted
later to reflect the actual costs.
In addition, the Company's operating results may be affected by seasonal changes
in the level of health care use during the calendar year. Although there are no
assurances, per member medical costs generally have been higher in the first
half of each year than the second half.
INDUSTRY FACTORS. The managed care industry frequently receives significant
amounts of negative publicity. This publicity has contributed to increased
legislative activity, regulation and review of industry practices. These factors
may adversely affect the Company's ability to market its products or services,
may require the Company to change its products and services, and may increase
the regulatory burdens under which the Company operates, further increasing the
costs of doing business and adversely affecting profitability.
COMPETITION. In many of its geographic or product markets, the Company competes
with a number of other entities, some of which may have certain characteristics
or capabilities that give them an advantage in competing with the Company. The
Company believes that barriers to entry in these markets are not
18
<PAGE>
substantial, so the addition of new competitors can occur relatively easily.
Certain Company customers may decide to perform functions or services provided
by the Company for themselves, which would decrease Company revenues. Certain
Company providers may decide to market products and services to Company
customers in competition with the Company. In addition, significant merger and
acquisition activity has occurred in the industry in which the Company operates
as well as in industries that act as suppliers to the Company, such as the
hospital, physician, pharmaceutical and medical device industries. This activity
may create stronger competitors or result in higher health care costs. To the
extent that there is strong competition or that competition intensifies in any
market, the Company's ability to retain or increase customers or providers, or
maintain or increase its revenue growth, its pricing flexibility, its control
over medical cost trends and its marketing expenses may be adversely affected.
AARP CONTRACT. In early 1997, the Company finalized its contract arrangements
with the American Association of Retired Persons ("AARP"). Under that long-term
contract the Company provides Medicare supplemental and hospital indemnity
health insurance products to AARP members. As a result of this agreement, the
number of members served by the Company, the products offered and the services
provided has significantly expanded. The success of the AARP arrangement will
depend, in part, on the Company's ability to service these new members, develop
additional products and services, price the products and services competitively,
and respond effectively to federal and state regulatory changes.
GOVERNMENT PROGRAMS AND REGULATION. The Company's business is heavily regulated
on federal, state and local levels. The laws and rules governing the Company's
business and interpretations of those laws and rules are subject to frequent
change. Broad latitude is given to the agencies administering those regulations.
Existing or future laws and rules could force the Company to change how it does
business, restrict the Company's revenue and enrollment growth, increase its
health care and administrative costs and capital requirements, and increase its
liability for medical malpractice or other actions. The Company must obtain and
maintain regulatory approvals to market many of its products and services.
Delays in obtaining or failure to obtain or maintain these approvals could
adversely affect the Company's revenue or the number of its members, or could
increase costs. A significant portion of the Company's revenues relates to
federal, state and local government health care coverage programs. These types
of programs, such as the federal Medicare program and the federal and state
Medicaid programs, generally are subject to frequent change, including changes
that reduce the number of persons enrolled or eligible, reduce the amount of
reimbursement or payment levels, or may reduce or increase the Company's
administrative or health care costs under such programs. Such changes have
adversely affected the Company's results and willingness to participate in such
programs in the past and may also do so in the future.
The Company also is subject to various governmental reviews, audits and
investigations. Such oversight could result in the loss of licensure or the
right to participate in certain programs, or the imposition of fines, penalties
and other sanctions. In addition, disclosure of any adverse investigation or
audit results or sanctions could damage the Company's reputation in various
markets and make it more difficult for the Company to sell its products and
services. The National Association of Insurance Commissioners (the "NAIC") has
proposed rules that will require certain capitalization levels for health care
coverage provided by insurance companies, HMOs and other risk-bearing health
care entities. The requirements would take the form of risk-based capital rules.
Currently, similar risk-based capital rules apply only to insurance companies.
Depending on the nature and extent of any new minimum capitalization
requirements ultimately adopted, there could be an increase in the capital
required for certain of the Company's subsidiaries, and there may be some
potential for disparate treatment of competing products. If the NAIC fails to
act, some form of federal solvency regulation of companies providing
Medicare-related benefit programs may be issued.
PROVIDER RELATIONS. One of the significant techniques the Company uses to
manage health care costs and utilization and monitor the quality of care being
delivered is contracting with physicians, hospitals and other providers. Because
the Company's health plans are so geographically diverse and most of those
19
<PAGE>
health plans contract with a large number of providers, the Company currently
believes its exposure to provider relations issues is limited. In any particular
market, however, providers could refuse to contract, demand higher payments, or
take other actions that could result in higher health care costs, less desirable
products for customers and members, or difficulty meeting regulatory or
accreditation requirements. In some markets, certain providers, particularly
hospitals, physician/hospital organizations or multi-specialty physician groups,
may have significant market positions or near monopolies. In addition, physician
or practice management companies, which aggregate physician practices for
administrative efficiency and marketing leverage, continue to expand. These
providers may compete directly with the Company. If these providers refuse to
contract with the Company, use their market position to negotiate favorable
contracts, or place the Company at a competitive disadvantage, those activities
could adversely affect the Company's ability to market products or to be
profitable in those areas.
LITIGATION AND INSURANCE. The Company may be a party to a variety of legal
actions that affect any business, such as employment and employment
discrimination-related suits, employee benefit claims, breach of contract
actions, tort claims and shareholder suits, including securities fraud and
intellectual property related litigation. In addition, because of the nature of
its business, the Company is subject to a variety of legal actions relating to
its business operations. These could include claims relating to the denial of
health care benefits; medical malpractice actions; provider disputes over
compensation and termination of provider contracts; disputes related to
self-funded business, including actions alleging claim administration errors and
the failure to disclose network rate discounts and other fee and rebate
arrangements; disputes over copayment calculations; and claims relating to
customer audits and contract performance. Recent court decisions and legislative
activity may increase the Company's exposure for any of these types of claims.
In some cases, substantial non-economic or punitive damages may be sought. The
Company currently has insurance coverage for some of these potential
liabilities. Other potential liabilities may not be covered by insurance,
insurers may dispute coverage, or the amount of insurance may not cover the
damages awarded. In addition, certain types of damages, such as punitive
damages, may not be covered by insurance, and insurance coverage for all or
certain forms of liability may become unavailable or prohibitively expensive in
the future.
INFORMATION SYSTEMS. The Company's business depends significantly on effective
information systems, and the Company has many different information systems for
its various businesses. The Company's information systems require an ongoing
commitment of resources to maintain and enhance existing systems and develop new
systems in order to keep pace with continuing changes in information processing
technology, evolving industry standards, and changing customer preferences. As a
result of the Company's acquisition activities, the Company is reducing the
number of systems and upgrading and expanding its information systems
capabilities. Failure to maintain effective and efficient information systems
could cause loss of existing customers, difficulty in attracting new customers,
customer and provider disputes, regulatory problems, increases in administrative
expenses or other adverse consequences. In addition, the Company may from time
to time obtain significant portions of its systems-related or other services or
facilities from independent third parties, which may make the Company's
operations vulnerable to such third parties' failure to perform adequately.
THE YEAR 2000. The Company is in the process of modifying its computer systems
to accommodate the Year 2000. The Company currently expects to complete this
modification enough in advance of the Year 2000 to avoid adverse impacts on its
operations. The Company is expensing the costs incurred to make these
modifications. If the Company is unable to complete its Year 2000 modifications
in a timely manner or other companies with which the Company does business fail
to complete their Year 2000 modifications in a timely manner, such
non-compliance could adversely affect the Company's operations.
ADMINISTRATION AND MANAGEMENT. Efficient and cost-effective administration of
the Company's operations is essential to the Company's profitability and
competitive positioning. While the Company attempts to effectively manage such
expenses, staff-related and other administrative expenses may rise from time to
20
<PAGE>
time due to business or product start-ups or expansions, growth or changes in
business, acquisitions, regulatory requirements or other reasons. These expense
increases are not clearly predictable and may adversely affect results. The
Company believes it currently has an experienced, capable management and
technical staff. The market for management and technical personnel, including
information systems professionals, in the health care industry is very
competitive. Loss of certain managers or a number of such managers could
adversely affect the Company's ability to administer and manage its business.
MARKETING. The Company markets its products and services through both employed
salespeople and independent sales agents. Although the Company has many sales
employees and agents, the departure of certain key sales employees or agents or
a large subset of such individuals could impair the Company's ability to retain
existing customers and members. In addition, certain of the Company's customers
or potential customers consider rating, accreditation or certification of the
Company by various private or governmental bodies or rating agencies necessary
or important. Certain of the Company's health plans or other business units may
not have obtained or may not desire or be able to obtain or maintain such
accreditation or certification, which could adversely affect the Company's
ability to obtain or retain business with these customers.
ACQUISITIONS. The Company has made several large acquisitions in recent years
and has an active ongoing acquisition program. These acquisitions may entail
certain risks and uncertainties and may affect ongoing business operations
because of unknown liabilities, unforeseen administrative needs or increased
efforts to integrate the acquired operations. Failure to identify liabilities,
anticipate additional administrative needs or effectively integrate acquired
operations could result in reduced revenues, increased administrative and other
costs, or customer confusion or dissatisfaction.
DATA AND PROPRIETARY INFORMATION. Many of the products that are part of the
Company's knowledge and information-related business depend significantly on the
integrity of the data on which they are based. If the information contained in
the Company's databases were found or perceived to be inaccurate, or if such
information were generally perceived to be unreliable, commercial acceptance of
the Company's database-related products would be adversely and materially
affected. Furthermore, the use by the Company's knowledge and
information-related business of patient data is regulated at federal, state and
local levels. These laws and rules are changed frequently by legislation or
administrative interpretation. These restrictions could adversely affect
revenues from these products and, more generally, affect the Company's business,
financial condition and results of operations.
The success of the Company's knowledge and information-related business also
depends significantly on its ability to maintain proprietary rights to its
products. The Company relies on its agreements with customers, confidentiality
agreements with employees, trade secrets, copyrights and patents to protect its
proprietary rights. The Company cannot assure that these legal protections and
precautions will prevent misappropriation of the Company's proprietary
information. In addition, substantial litigation regarding intellectual property
rights exists in the software industry, and the Company expects software
products to be increasingly subject to third-party infringement claims as the
number of products and competitors in this industry segment grows. Such
litigation could have an adverse effect on the ability of the Company's
knowledge and information-related business to market and sell its products and
on the Company's business, financial condition and results of operations.
STOCK MARKET. The market prices of the securities of the Company and certain of
the publicly held companies in the industry in which the Company operates have
shown volatility and sensitivity in response to many factors, including general
market trends, public communications regarding managed care, legislative or
regulatory actions, health care cost trends, pricing trends, competition,
earnings or membership reports of particular industry participants, and
acquisition activity. The Company cannot assure the level or stability of the
Company's share price at any time, or the impact the foregoing or any other
factors may have on the share price.
21
