PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT DRAFT
SONY PICTURES ENTERTAINMENT INC.
EXHIBIT A WORK ORDER
WORK ORDER, Exhibit A to the Agreement dated December 11,2012, is entered into for the purposes of providing advice and in anticipation of possible current and future litigation by and between Sony Pictures Entertainment Inc. and its legal counsel (the "Company" or “SPE”) and Alvarez & Marsal Business Consulting, LLC ("Consultant" or “A&M-BC”).
1. SERVICES:
See attached Statement of Work dated March 20, 2013
2. TERM:
From April 01, 2013 until June 28, 2013, or until earlier termination pursuant to Section 11 of the Agreement, whichever is first.
3. COMPENSATION:
a. Fixed fee of $350,000.00 b. Expenses capped at 15% of fixed fee.
4. Change Requests
During the course of the Services, if a change in project scope is identified by either party, Consultant will issue a Change Request form to Company that details the change in project scope and its impact on both the project schedule and cost (“Change Request”). Changes within the scope of the Services will be made pursuant to a change order in the form set out in Appendix 1 of the Consultant Services Agreement executed by both parties. Consultant shall not commence work in connection with any change order until the fee and/or schedule impact of the change order is agreed upon by both parties in writing. If a Change Request is approved, the cost associated with it will be added to the total service fees available to Consultant as outlined in the applicable statement of work. The time required to implement approved Change Requests will also be reflected in the integrated project plan.
AGREED AND ACCEPTED this ______day of ______, 201_:
Page 1 of 11 ALVAREZ & MARSAL BUSINESS CONSULTING, LLC SONY PICTURES ENTERTAINMENT INC.
By: ______By: ______
Its: ______Its: ______
Page 2 of 11 Statement of Work
Date: March 20, 2013
This Statement of Work documents certain terms of the understanding between Alvarez & Marsal Business Consulting, LLC (the “Consultant” or “A&M-BC”) and Sony Pictures Entertainment (the “Company” or “SPE”) with respect to Information Technology Policies and Standards Compliance Tools Enhancement Initiative Phase II (“Project”). A&M-BC will provide certain services to the Company as described in this Statement of Work in connection with the Project (“Services”). These Services shall be provided under the provisions of this Statement of Work and the master Consultant Services Agreement between Consultant and Company dated 12/11/2012, including any appendices, schedules and/or attachments which, together, describe our understanding with respect to the Services (“Agreement”).
Project Background and Objectives
Sony Pictures Entertainment Inc. (SPE) Information Technology (aka SPE IT or IT) is currently governed by a Global Information Security Policy (GISP) and a set of Global Information Security Standards (GISS). GISP and GISS were developed and are maintained by SPE’s parent company, Sony Corporation of America (SCA), and SPE is required to adhere to them from an information security, risk and compliance perspective. In addition, certain groups within IT have created additional standards and/or operating procedures to supplement GISP and GISS. The Phase I project objective was to enhance the tools available to SPE IT personnel responsible for implementing SPE-applicable IT policies and standards, as well as develop operating & governance model and training plan including content. A&M Team successfully delivered Phase I project deliverables. To gain full benefit of the phase I work SPE would like to continue the momentum and commence a Phase II for the project with an objective to implement Phase I tools and recommendations supported by change management, communication and training efforts.
Project Scope
The IT Risk & Compliance program, in partnership with the Office of the CIO, would like to engage A&M-BC to continue the work during phase II to:
1. Execute Change, Adoption & Training a. Conduct iTEC detailed knowledge transfer for checklist and manuals b. Implement communication plan with targeted message b.i. Focused iTEC updates b.ii. IT Forum meeting b.iii. CIO Sr. Staff Meetings b.iv. Regular email communications b.v. WebEx c. Develop individual goals and personal accountabilities d. Further enhance existing governance structure and process e. Develop FAQ f. Track and report progress
2. Develop and maintain Meta Model and checklist a. Create plan for development of further compliance Standard Operating Procedure (SoP) a.i. Define Standard Operating Procedure enhancement needs by compliance area a.ii. Create a plan for SoP enhancement a.iii. Review plan with champions a.iv. Finalize SoP enhancement plan
Page 3 of 11 b. Share plan with responsible resources c. Provide oversight to champions working on SoP d. Develop standard template for SoP e. Design iTEC portal for IT users f. Render iTEC operating and governance model to portal ( with help from Corp BRM) g. Automate iTEC online repository for checklist, manual and SoP’s
3. Develop framework for self Assessment a. Develop measures for self assessment b. Develop self assessment process plan c. Create prioritization approach for findings (in consultation with Information Security)
4. Measure Effectiveness a. Compile data for defined measures & metrics a.i. Update measures & metrics a.ii. Define data sources a.iii. Gather data a.iv. Calculate metrics b. Develop Dashboard for reporting b.i. Gather requirements for iTEC dashboard b.ii. Design dashboard b.iii. Review dashboard with IT Sr. Staff b.iv. Finalize and publish dashboard
This effort will require coordination with multiple teams including, but not limited to: Enterprise Infrastructure Services (EIS), Application Development & Maintenance (ADM), Corporate IT Business Relationship Management (BRM), Office of the CIO (OCIO), Information Security, Legal, People & Organization, and Corporate Compliance.
Page 4 of 11 A&M-BC Approach and Deliverables
A&M-BC has a proven approach for implementing a customized governance operating model, and a methodology to organize IT policies & standards, while minimizing ongoing maintenance and strengthening awareness & compliance across the SPE IT organization.
The following describes the key Deliverables to be produced for SPE’s IT Policies & Standards Compliance Tools Enhancement Initiative Phase II. 1) Execute Change, Adoption & Training a. Structured messages for regular communications & meetings b. Performance goals by roles c. Measure & metrics for training & communications
2) Develop and maintain Proposed Meta Model and checklist a. SoP enhancement needs by compliance area b. SoP’s development project plan c. SoP standard template and oversight for development d. iTEC Portal design e. Automated checklist & manual f. Enhance champion training content
3) Initiate Self Assessment a. Self assessment measures b. Self assessment process plan c. Prioritization approach
4) Measure Effectiveness a. Measure and metrics data for iTEC program b. Dashboard design
SPE will designate a competent employee or employees within senior management with the responsibility to make all management decisions with respect to this engagement, including, but not limited to, design of A&M-BC’s deliverables.
A&M-BC Services and Responsibilities
A&M- BC will work with key members of Company IT, Operations, Finance, and HR organizations to execute the project. It is expected that Company will provide access to all necessary documents, plans and other relevant information needed to formulate our assessment and recommendations. Company will also provide finance and other administrative support necessary to complete our assessment in the time frame requested and in a format that is consistent with other Company deliverables.
A&M-BC shall report to and provide all project deliverables to SPE’s in-house legal counsel. The deliverables shall be marked "Privileged and Confidential” and shared in draft form prior to distributing as final. SPE counsel will provide guidelines for preserving the privileged nature of A&M-BC materials.
Company Responsibilities
The following describes A&M-BC’s resource requirements for SPE’s IT Policies & standards Enhancement Initiative Phase II. 1) Weekly Project Status and Leadership Meeting Page 5 of 11 a. 1 Hour weekly project status meeting with project principles to review progress, and align expectations.
2) Primary Stakeholder Interviews a. 1 to 2 hour initial interviews with primary stakeholders; IT, Legal, P&O, and Information Security. b. Follow up work sessions with primary stakeholders; IT, Legal, P&O, and Information Security. (1-2 Sessions as needed, 1 Hr in duration)
3) Secondary Stakeholder Interviews a. 1 hour initial interviews with secondary stakeholders; OCIO; Enterprise Infrastructure Services (EIS) - Global Network Services (GNS), Global Technology Services (GTS), Company Services, Mobility, Messaging; Application Development & Maintenance (ADM); Business Relationship Management (BRM), Divisional CIO's - Home Entertainment, Television, Corporate IT, and Production Studios. b. Follow up work sessions with secondary stakeholders as needed; OCIO; Enterprise Infrastructure Services (EIS) - Global Network Services (GNS), Global Technology Services (GTS), Company Services, Mobility, Messaging; Application Development & Maintenance (ADM); Business Relationship Management (BRM), Divisional CIO's - Home Entertainment, Television, Corporate IT, and Production Studios. (1-4 Sessions as needed, 1 Hr in duration) This will be dependent on the specific level of detail and volume of existing policies, standards and SOP’s from each group.
4) Involvement for IT Sr. Staff with SoP enhancement plan a. Availability of resources assigned as champions with advance notice.
5) Corporate BRM support for iTEC Portal a. Availability of corp BRM team to implement iTEC portal b. Availability of corp BRM team to add iTEC to Know IT All
6) Acceptance Sign-off a. Provide interim review of all deliverables and acceptance sign-off
7) Project – Team Room a. A workstation with speaker phone and guest wireless connectivity.
To the extent that the Project’s Deliverables include surveys, analyses, reports, evaluations, recommendations, etc., SPE shall be responsible for implementation decisions and for any future action with respect to the Deliverables.
The Company will be responsible for any content contributed by the Company or a third party in connection with this engagement, and any use by the Company of the Deliverables.
Project Team
Following picture describes project team structure for both SPE and A&M-BC
Page 6 of 11 Page 7 of 11 Project Timeline
The following picture describes the timeline and key milestones for the project
Page 8 of 11 Project Assumptions
The Services, Deliverables, fees and delivery schedule for this engagement are based upon the following assumptions, representations or information supplied by the Company (“Assumptions”).
The following describes the key project assumptions and pricing surrounding IT policies and standards enhancement initiative. SPE primary and secondary stakeholders will be available for schedules interviews and work sessions.
A&M-BC team will have full access to existing IT policies, standards and SOP documents.
A&M-BC will not be producing IT functional area standard operating procedure (SOP’s) documentation with the exception of standard template.
A&M-BC will not be performing and training of IT policies & standards material.
SPE is providing availability of key leadership resources to serve in project advisory roles, specifically, timely access to senior executives. Core team members will be available up to 25% time for this project.
The project will start on a mutually agreeable date by A&M-BC and SPE.
The Fixed fees for this project are $350,000 (plus Expenses) completing no later than 12 weeks from the date of start.
If A&M-BC does not complete the assignment in the aforementioned timeline or deliverables do not meet the acceptance criteria, a Root Cause Analysis (RCA) of the failure(s) shall be undertaken by A&M-BC. If the RCA points A&M-BC to be responsible for the failure, any additional effort needed to complete the assignment or deliverables to a satisfactory level of quality shall be provided by A&M-BC at no additional cost to the Company. The estimated expenses capped at 15% of fixed fee
In Addition, SPE will:
o Assist in scheduling of all meetings/interviews and off site visits
o Provide relevant project logistics and office support
o Ensure appropriate SPE personnel are made readily available to attend interviews and participate in follow-up discussions
o Review and approve all project deliverables in a timely manner
o Provide relevant, accurate information in a timely manner per project data request
A&M-BC’s delivery of the Services and the fees charged are dependent on the Company’s timely adherence to the terms and conditions of this Agreement, including, without limitation, timely and effective completion of the Company Responsibilities described in this Statement of Work. The Company shall be responsible for any delays, additional costs, or other liabilities to the extent solely caused by or associated the Company’s failure to satisfy these Assumptions. Project Quality
A&M-BC is dedicated to the success of our clients and the quality of our services. A&M-BC has defined a structured approach to identifying risks, developing strategies to mitigate those risks, and delivering quality on our engagements. To
Page 9 of 11 that end, A&M-BC will provide at no charge a QRM Director as is deemed necessary. The role of the QRM Director will be to provide an independent and objective perspective on the Project’s key risks and success factors to help both the Company and A&M-BC achieve Project objectives.
Acceptance Criteria
SPE must confirm in writing that each deliverable or service complies with the requirements of that deliverable or service. Specific deliverable or service requirements that are a condition of written acceptance by SPE must be provided for each deliverable or service to A&M during the first 15 business days of the engagement. All deliverable and service requirements will be derived from the scope defined in this SOW.
Acceptance shall be deemed rendered by SPE if SPE has signed-off on the applicable deliverable or service. If no objection or feedback is raised by SPE within ten (10) business days after delivery, such deliverable(s) or service(s) will be deemed to be accepted.
SPE shall provide acceptance or any objections in writing or by email to A&M-BC, identifying the deliverable or service in question and the reason for objection within ten (10) business days of delivery.
Fees & Expenses
A&M-BC’s fees for the scope of Services described in this Statement of Work will be a fixed fee of $350,000, plus out-of- pocket expenses. This fee is based on the Company fulfilling the Company Responsibilities described in this Statement of Work. We will bill you in accordance with the following billing schedule.
Billing Description Fees to be Billed Billing Date April Billing $128,000, plus expenses April 30, 2013 May Billing $117,000, plus expenses May 31, 2013 June Billing $105,000, plus expenses June 30, 2013
No Audit or Duty To Update
The Company acknowledges that A&M-BC and its personnel are not being requested to perform an audit, review or compilation, or any other type of financial statement reporting engagement that is subject to the rules of the AICPA, SEC or other state or national professional or regulatory body. The Company also acknowledges that A&M-BC is entitled to rely on the accuracy and validity of the data disclosed or supplied by employees and representatives of the Company to A&M-BC. A&M-BC and its personnel are under no obligation to update data submitted to them or review any other areas unless specifically requested by the Company to do so.
Not a Public Accounting Firm
A&M-BC employs individuals who are licensed as certified public accountants (CPAs) who focus on providing independent business advisory services. The Company understands and acknowledges that A&M-BC is not a public accounting firm or CPA firm and does not issue opinions on financial statements or provide audit or other attestation services. Additionally, A&M-BC has no responsibility related to regulatory requirements, securities laws or accounting principles.
Internal Controls
The Company acknowledges to A&M-BC that it is the Company’s responsibility to (i) design, establish and maintain a system of internal accounting controls in compliance with the U.S. Securities Exchange Act of 1934 and applicable Securities and Exchange Commission regulations (collectively, the “SEC Rules”), including “disclosure controls and procedures” and “internal controls and procedures for financial reporting,” as each such term is used and defined under the Sarbanes-Oxley Act of 2002 and the interpretive guidance and regulations relating to such Act, and (ii) make such disclosures with respect to this engagement that are required by applicable SEC Rules. Page 10 of 11
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