How To Make A Strategic Alliance Between Altres And Hano
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1 Strategic Marketing Agreement This Agreement is made this day of, 2007, by and between ALTRES, Inc. ("ALTRES" or Company ), its direct or indirect parent organizations, subsidiaries, divisions and associated and affiliated entities, whose principal office is located at 967 Kapiolani Boulevard, Honolulu, Hawaii and Hawaii Alliance of Nonprofit Organizations ( HANO ), whose principal office is located at 33 South King Street, Suite 501, Honolulu, Hawaii (ALTRES and HANO may be collectively referred to as the "Parties" or individually as Party in this Agreement). 1. PURPOSE AND EXCLUSIVITY. The purpose of this Agreement is to establish a strategic alliance between ALTRES and HANO, whereby ALTRES agrees to make available its outsourced employment administration and human resources management services as more fully described on Exhibit A which is attached hereto ( PEO Services ) to HANO members and HANO agrees to assist in marketing said PEO Services to HANO members, on an exclusive basis in accordance with this Agreement. HANO agrees to market ALTRES PEO Services at all times on an exclusive basis and not represent, solicit, offer, sell or otherwise provide, directly or indirectly, any products or services which are competitive with ALTRES PEO Services during the Term of this Agreement. The two exceptions for to this exclusive representation would be: A. If HANO refers a HANO member to ALTRES and ALTRES is unable to provide the required PEO Services. In that case, HANO is free to refer said member that ALTRES rejects to another PEO Services provider. ALTRES shall always and at all times reserve the right of first refusal. B. If HANO or ALTRES provides thirty (30) days written notice to the other Party of its intent to terminate this Agreement, and this Agreement is terminated. 2. TERM OF AGREEMENT. The Effective Date of this Agreement is. This Agreement shall commence on the Effective Date and remain in full force and effect for a period of two (2) years thereafter ("Initial Term"), unless sooner terminated by either Party (a) upon not less than thirty (30) days prior written notice to the other Party or (b) as provided in Section 9. After the Initial Period, this Agreement shall automatically renew for one (1) year periods ( Extended Term ), unless sooner terminated by either Party (a) upon not less than thirty (30) days prior written notice to the other Party or (b) as provided in Section 9. During the thirty (30) days from the date written cancellation is sent to the other Party, the Parties will continue to meet the obligations set forth in this Agreement. The entire period that this Agreement shall be in full force and effect is referred to as the Term. 3. RELATIONSHIP BETWEEN THE PARTIES. A. ALTRES is engaged in the business of providing PEO Services, including but not limited to: payroll administration, employee benefits administration, workers 1
2 compensation administration, risk management, and human resources administrative services. B. It is understood and agreed that the Parties are entering into a strategic alliance and HANO is an independent contractor. It is understood and agreed that no employeremployee relationship, partnership or joint venture is formed hereby. C. Nothing about this Agreement shall restrict ALTRES ability to continue to solicit and service additional PEO Services clients. 4. HANO S RESPONSIBILITIES. A. HANO shall be responsible for the following: 1. to market to and solicit HANO members as PEO Services clients exclusively for ALTRES; 2. to use only those sales materials which have been provided or approved by ALTRES; B. HANO shall not have the authority to: 1. revise or alter any ALTRES PEO Services Agreement; 2. enter into any contract on behalf of ALTRES; 3. collect or receive any payments from HANO members who become clients of ALTRES; or 4. publish or circulate any marketing materials on behalf of ALTRES without their prior written consent. 5. ALTRES RESPONSIBILITIES. ALTRES shall be responsible for the following: A. to pay HANO commissions as provided for in this Agreement; B. to provide PEO Services to the HANO members that become ALTRES clients; C. to conduct educational seminars for HANO members to foster understanding of PEO Services; and 2
3 D. to provide advice to HANO on the subject of human resources best practices as they pertain to non-profit organizations. 6. COMMISSIONS. A. Commissions payable to HANO by ALTRES shall be based on the following schedule: Total Number of Member Employees Monthly Commission Paid to HANO % of Management Fee % of Management Fee 1,000-1, % of Management Fee 2, % of Management Fee ALTRES agrees to pay these commissions monthly based on the actual composite revenue generated by management fees charged to HANO members. (For example, if 600 worksite employees were enrolled in the ALTRES program at an average management fee of $150 per employee per month, HANO s monthly commission would be 2.5% of management fee revenue, or $2,250.) B. Commissions are payable only on HANO members which sign a customer contract with ALTRES and become an ALTRES customer after the Effective Date of this Agreement. C. Commissions shall be paid to HANO only upon collected amounts for PEO Services provided during the Term of this Agreement and shall be payable on the 20th day of each month for the prior month s PEO Services. D. Upon termination of this Agreement for any reason, any Commissions due HANO as of the date of termination of this Agreement will be paid to HANO within 45 days after termination of this Agreement. Any further right to any commissions ceases upon termination of this Agreement. 7. PEO SERVICES FOR HANO. ALTRES will provide PEO Services directly to HANO and waive its management fees (normally charged per employee per month) and HANO will receive the full benefit of ALTRES PEO Services for the contracted rate, which includes state and federally mandated payroll taxes and insurances (FICA, FUTA, SUTA, TDI and workers compensation) and payroll-related costs only. 8. CONFIDENTIALITY AND NON-DISCLOSURE. A. As a result of the relationship created between HANO and ALTRES under this Agreement, certain confidential and proprietary information may be divulged to each Party. The Parties agree that at all times during and after the term of this Agreement, each Party will not disclose to any third parties any confidential or proprietary information shared with the other. Confidential and Proprietary Information as used 3
4 herein includes (without limitation) trade secrets (as defined by the Hawaii law), as well as any information in the possession of the either Party which is kept or intended to be kept as a secret from others, whether or not the secret or confidential information provides a measurable commercial benefit to the Party, such as the Party s underlying costs, and information which concerns the business of the Party and the manner in which the Party conducts its business, its future plans, customers, customer lists, and any other information relating to development and marketing which is used by the Party in the conduct of its business and which is not generally known to others. B. The Parties agree that all data, technical information, and reports prepared by each Party or anyone acting on behalf of the Party for the purpose of marketing each Party s services, are the property of that Party and will not be disclosed to others at any time or used for any purpose other than for the sole benefit of that Party. C. Upon termination of this Agreement, or at any other time either Party requests, the other Party will transmit to the requesting Party any written, printed, or other materials embodying such Confidential and Proprietary Information, including all copies and excerpts thereof, given to or prepared by the other Party. 9. TERMINATION OF CONTRACT. A. Either party may terminate this Agreement without cause upon giving the other party 30 days written notice. The parties shall deal with each other in good faith in the event of termination without cause and during the 30 day period after notice of intent to terminate without cause has been given. In the event of termination of this Agreement for any reason, any and all rights to continued commissions will cease as of the date of termination of this Agreement, including any right to continued commissions of current or subsequent members who become ALTRES customers. 10. INSURANCE, CLAIMS AND SUBROGATION HANO shall maintain in full force and effect business and personal insurance with limits of at least $500,000 of valid and collectible Comprehensive General Liability insurance. HANO holds ALTRES harmless from any claim arising from any event of any nature whatsoever addressed by the above coverages. HANO also waives any right to subrogation against ALTRES under any circumstances. 11. INDEMNIFICATION. A. HANO agrees to defend and indemnify ALTRES for, and hold it harmless from, any and all claims, suits, damages, costs, losses, expenses, fines, penalties, and attorney's fees suffered or incurred by ALTRES in any manner resulting from or arising directly or indirectly out of the obligations undertaken herein or out of the HANO s acts, errors or omissions, save and except claims or suits arising through the negligence of ALTRES. 4
5 B. ALTRES agrees to defend and indemnify HANO for, and hold it harmless from, any and all claims, suits, damages, costs, losses, expenses, fines penalties and attorney's fees suffered or incurred by HANO in any manner resulting from or arising directly or indirectly out of ALTRES acts, errors or omissions, save and except claims or suits arising through the negligence of HANO. 12. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Hawaii, and both Parties consent to venue and personal jurisdiction over them in the courts of that state, including the federal courts, for purposes of construction and enforcement of this Agreement. 13. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding between the Parties with respect to its subject matter and supersedes all prior agreements and understandings, written or oral, with respect to its subject matter. 14. MODIFICATION. This Agreement may not be altered or amended except by written agreement duly executed by all Parties hereto. 15. ASSIGNMENTS. This Agreement cannot be assigned by HANO without the written consent of ALTRES. It is expressly understood and agreed between the Parties that this Agreement may be assigned by ALTRES at its sole discretion. 16. SEVERABILITY. Should any term, condition or provision of this Agreement be held to be invalid or unenforceable, the balance of this Agreement shall remain in force and shall stand as if the unenforceable part did not exist. 17. NOTICES. Whenever notices are required to be sent to either party, the notices shall be sent to the following addresses by US mail certified - return receipt: ALTRES, Inc. Hawaii Alliance of Nonprofit Organizations 967 Kapiolani Boulevard 33 South King Street, Suite 501 Honolulu, Hawaii Honolulu, Hawaii Attn: Marketing Director Attn: IN WITNESS WHEREOF, the Parties enter into this Agreement as of the date first written above. ALTRES, Inc. Witness By Its Hawaii Alliance of Nonprofit Organizations Witness By Its 5
6 Exhibit A Description of Outsourced Professional Employer Organization (PEO) Services ALTRES will make available the following list of specific services to HANO member organizations that become customers of ALTRES: 1.1 Human Resources Management & Employment Administration Employee Enrollment Employee data packet processing I-9 documentation verification New hire processing New employee enrollment orientations, including employee handbook orientations Workplace policy review Employee benefit explanations and enrollment activities Employment Administration Provide, review and periodic update to job descriptions for all staff Publish and distribute customized, state and federally compliant employee handbooks Maintain employment related personnel records such as I-9, EEO, Work Authorization, HIPAA-compliant medical benefits information, FMLA and more Provide a complete package of human resources forms, including applications, employee data packets, status changes, disciplinary actions and evaluation forms Processing of time and attendance data, garnishments, W2 and other payroll-related activities Create new hire reports Payroll tax reporting Track benefits eligibility Vacation, sick time and other paid-time-off (PTO) accruals Benefits enrollment processing Field employee questions about benefit programs, payroll, W2s, and more Document of disciplinary actions Employee counseling or disciplinary action support services Exit interviews where necessary Process workers comp and unemployment claims, including management of a light-duty program 6
7 Review federal, state or other regulatory agency matters relating to employment Pre-employment and random drug testing (lab fees charged separately) 1.2 Human Resources-related Training Performance Management Training for Managers Sensitivity Training on Harassment Discrimination and Workplace Violence Interviewing Skills Training 1.3 Regulatory Compliance Federal payroll tax audits State payroll tax audits Wage and hour Equal Employment Opportunity (EEO) Disability insurance Disability insurance audits Unemployment claims Unemployment audits Social service inquiries Employment verification inquiries Health Insurance Portability and Accountability Act (HIPAA) compliance Fair Labor Standards Act (FLSA) compliance Family and Medical Leave Act (FMLA) compliance Civil rights compliance Hawaii Family Leave Act (HFLA) compliance Hawaii Victims Leave Act (HVLA) compliance Form 5500 filings 1.4 Workers Compensation Insurance, Risk Management & Safety Custom-designed Safety Programs Evaluate workplace safety Provide safety recommendations Provide safety manuals and documentation Provide safety equipment training Make available state-certified consultants for safety and health programs 7
8 Customized Classes & Site-specific Training Lifting and Back Safety Defensive Driving Alcohol and Drug Awareness in the Workplace Emergency Preparedness and Fire Safety Hazardous Chemical Awareness Self-Awareness and Defense Ergonomics Awareness Slip and Fall Awareness Inspection & Site Evaluation OSHA compliance preparation and consulting Site surveys and mock OSHA inspections Self-inspection checklists Hazard assessment Accident investigations Record Keeping & Claims Management Maintain OSHA 300 log Provide comprehensive claims management services Generate follow-up reports Safety Resources Design and implement light-duty back to work programs 24-hour employee injury hotline 1.5 Employee Benefits The following is a growing list of standard benefit plans and programs included in the ALTRES solution. Core Benefits Comprehensive Medical, Dental and Vision plans $10,000 life and AD&D insurance for employee $5,000 life insurance for spouse $100 - $2,500 life insurance for children Low-cost voluntary supplemental group life and AD&D insurance 401(k) retirement savings plan Payroll-deducted IRAs (Traditional, Roth & Educational) 8
9 Section 125 cafeteria (pre-tax flexible spending) plan for medical expenses & dependent care Employee Assistance Program (EAP) Lifestyle Benefits Supplemental health insurance options (AFLAC) Section 132 pre-tax parking and mass transit program Section 529 college savings plan Employee support hotline Tuition assistance program Entertainment and car rental discounts AAA membership Group movie tickets Health club discounts with 24-Hour Fitness Comprehensive Healthcare Plans ALTRES makes available health plans from HMSA, Kaiser, UHA and HDS Employee Assistance Program (EAP) ALTRES makes available a comprehensive Employee Assistance Program ( EAP ). This valuable program is provided at no cost to either client companies or their worksite employees. The EAP provides confidential personal and family counseling, financial and legal services, and online support resources Retirement Plans ALTRES offers its non-profit clients several options: Keep an existing 403(b) plan in place and allow ALTRES to do payroll withholdings. Rollover individual balances of an existing 403(b) plan into an ALTRES plan or merge an existing 401(k) plan into an ALTRES plan. (Note: ALTRES and its third party administrator take on the administrative and fiduciary responsibility for the ALTRES plan.) Create a new 401( k) plan based on client needs. There are no setup fees and plan administration is free if more than nine employees participate. Otherwise, a nominal annual fee applies. 1.6 Payroll Processing Services The following is a list of payroll-related services provided by ALTRES: Calculating gross payroll Calculating and depositing federal and state withholding taxes 9
10 Calculating and directing employee garnishments and attachments Calculating and directing employee deductions Tracking time and attendance, overtime, holidays, vacation, sick leave and family leave Issuing deduction reimbursement checks Providing earnings summaries and year-end reports Processing payroll checks Handling direct deposit and delivery of paychecks New hire processing and reporting Completing and filing forms 940, 941, 942, 943 Issuing W-2 and W-3 forms Completing monthly, quarterly and annual state forms 10
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