8-KMaterial AgreementsExhibits & Filings

Mondelez International, Inc. 8-K Report, Material Agreement (Apr 28, 2006)

Filed April 28, 2006For Securities:MDLZ

Summary

This 8-K filing from Kraft Foods Inc. (which was the predecessor to Mondelez International) on April 28, 2006, details a significant outsourcing agreement for information technology services. The company entered into a Master Professional Services Agreement with EDS Information Services, L.L.C. and Electronic Data Systems Corporation (EDS) for a broad range of IT support, including data centers, hosting, telecommunications, and workplace support. This agreement, with an initial seven-year term commencing June 1, 2006, is valued at approximately $1.7 billion. It includes performance standards and service levels for EDS, with potential credits for Kraft if these are not met. As part of this transition, approximately 670 Kraft employees involved in IT support are expected to transfer to EDS. The agreement also features pricing protections and benchmarking rights for Kraft to ensure services remain at market rates. This outsourcing move signifies a strategic decision to leverage external expertise and potentially reduce internal IT operational costs.

Key Highlights

  • 1Kraft Foods Inc. entered into a seven-year Master Professional Services Agreement with EDS for comprehensive IT services.
  • 2The agreement has an estimated value of $1.7 billion over the initial term, starting June 1, 2006.
  • 3The scope of services includes data centers, hosting, telecommunications, and workplace support.
  • 4Approximately 670 Kraft IT employees are expected to transition to employment with EDS.
  • 5The agreement includes performance standards and service level commitments from EDS, with potential credits for Kraft.
  • 6Kraft has incorporated pricing protections, including periodic benchmarking, to ensure market-competitive rates.
  • 7The filing also lists various forward-looking statements and risk factors, including those related to the IT services transition and EDS's performance.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose Kraft Foods Inc.'s entry into a material definitive agreement for the outsourcing of its information technology services to EDS.

Kraft Foods expects to pay EDS approximately $1.7 billion in service fees and project costs over the initial seven-year term of the agreement.

Approximately 670 employees of Kraft who currently provide certain IT support services are expected to become employees of EDS as part of this outsourcing deal.

Yes, the agreement includes performance standards and service levels that EDS must meet. If EDS fails to meet these, Kraft would, in certain circumstances, receive a credit against the charges due. Kraft also has the right to perform benchmarking studies to ensure pricing remains competitive and to terminate the agreement under specific conditions, though a termination for convenience may incur a fee.