GPS » Topics » 9. PROCESS FOR ADDITIONS AND DELETIONS OF SERVICE LEVELS

This excerpt taken from the GPS 10-K filed Mar 28, 2006.

9. PROCESS FOR ADDITIONS AND DELETIONS OF SERVICE LEVELS

Gap may add Critical Service Levels, Performance categories, and Service Levels by sending written notice in accordance with Section 8 (Additions, Deletions, Modifications and Notice Requirements).

 

  9.1 Additions. Gap may add Service Levels in accordance with this Section 9 (Process for Additions and Deletions of Service Levels) by providing written notice in accordance with Section 8 (Additions, Deletions, Modifications and Notice Requirements). Expected Service Levels and Floor Service Level commitments associated with added Service Levels will be computed as follows:

 

  (a) Where Gap is elevating a Service Level Objective to Critical Service Level status, the Expected Service Level and Floor Service Level shall be as set forth in Exhibit B.1 (Service Level Matrix).

 

  (b) In all other situations, where at least * of Supplier-provided service measurements exist for a particular Service that is being provided by Supplier, the Parties agree that the Expected Service Level shall be defined as the average of such service measurements for the * Measurement Study Period and that the Floor Service Level shall be defined as the least-favorable service measurement achieved during the * Measurement Study Period. If the * average equals *%, the Expected Service Level and the Floor Service Level shall be mutually agreed by the Parties.

 

  (c) Where no measurements exist or less than * exist for a particular Service that is being provided by Supplier, the Parties shall use best efforts to agree on an Expected Service Level and a Floor Service Level commitment using industry standard measures or Third Party advisory services (for example, Gartner Group, Yankee Group, etc.), or such other process upon which the Parties agree.

 


* Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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GAP CONFIDENTIAL

 

  (d) If measurements must be obtained for a Service Level addition, and the required measurement tool is not listed in Exhibit B.3 (Measuring Tools and Methodologies) such tool will be implemented and the Measurement Study Period will commence when the tool has been obtained, installed and is operational.

 

  9.2 Deletions. Gap may delete Critical Service Levels or Service Level Objectives by sending written notice in accordance with Section 8 (Additions, Deletions, Modifications and Notice Requirements).

 

  9.3 Impact of Additions and Deletions of Critical Service Levels on Service Level Credit Allocation Percentages. When adding or deleting a Critical Service Level, Gap shall adjust the Service Level Credits so that Supplier’s total Service Level Credit At Risk Amount is not increased.

Certain of Supplier’s obligations under the Agreement are one-time or periodic obligations to deliver Critical Deliverables. Exhibit B.2 (Critical Deliverables) sets forth the Deliverable Credits that shall be payable by Supplier to Gap in the event Supplier fails to deliver any of the Critical Deliverables (“Deliverable Credits”), within the time period relative to the Initiation Date, specified in Exhibit B.1 (Service Level Matrix). Notwithstanding the foregoing, the total pool for Deliverable Credits shall not exceed * as set forth in Table C-1 (Annual Services Charge) to Exhibit C (Fees and Resource Baselines). The total amount of Deliverable Credits that Supplier will be obligated to pay to Gap shall be reflected on the invoice that contains charges for each month during which the Deliverable Credits occurred (for example, the amount of Deliverable Credits payable for failure to deliver any Critical Deliverable(s) in August shall be set forth in the invoice for August charges issued in September). Unlike Service Level Credits, Deliverable Credits shall be shown in each monthly invoice as an actual credit to the charges and will not be subject to *.

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