Summary
ACE Limited (now Chubb Ltd) filed a Form 8-K on February 5, 2008, to report an amendment to its material definitive agreement with IBM. This amendment pertains to the outsourcing of the company's information technology infrastructure management. The key change is the extension of the IT outsourcing agreement for an additional two years, pushing its term to 2014. This extension is expected to reduce ACE Limited's annual projected payments to IBM by an estimated $7 million. Investors should note that the amendment also restricts ACE Limited's ability to terminate the agreement for convenience until after December 31, 2009, and allows IBM to potentially provide services from outside the U.S. with consent.
Key Highlights
- 1ACE Limited amended its IT infrastructure outsourcing agreement with IBM, effective January 1, 2008.
- 2The amendment extends the agreement's term by two years, now set to expire in 2014.
- 3Projected annual payments to IBM are reduced by an estimated $7 million.
- 4ACE Limited's right to terminate the agreement for convenience is restricted until after December 31, 2009.
- 5IBM may provide services from locations outside the U.S. with ACE Limited's prior written consent.
- 6The filing was made on February 5, 2008, with the earliest event date being January 30, 2008.