Table II outlines the total investments cost related to outsourcing the IT services operation and one-time project costs to transition to new equipment and services provided by the third-party vendor. Unilever was required to incur the software licensing costs for all existing programs. The table also includes all one-time capital and project expense to implement new PCs in all NA locations. The EUS costs in Table II reflect the dual running costs while the transition to the third party is in process. This includes, primarily, employee related costs of the existing departments supporting EUS. The contract termination fees reflect the termination fee of an existing contract with a third-party provider, previously supporting part of the internal function within Unilever.

Table 2 Outsourcing Investment (All financial information in the case was provided by Unilever from the actual Request for Project approval (RFP) document - Submitted to the Unilever NA Board of Directors during October 2005.) One-time capital costs ($11.4 million) for new equipment and one-time project expense ($15.3 million) are detailed below: EUS Transformation (related to transfer of services Odyssey - New PC Equipment Costs to 3rd party provider) Total 2004 2005 2006 2007/2008 2005-2008 Capital $2.2 $8.6 $0.6 $11.4 Software/Licenses 5.1 0.6 Servers (W2K/Messaging) 1.3 1.3 LAN/WAN Upgrade 2.2 Client (PC) Back Up 0.9 One Time Project Expense $0.5 $5.5 $3.7 $.8 $4.8 $15.3 Dual Running/Employee Backfill Costs 1.0 1.0 2.5 Employee Severance 1.1 1.1 Existing Supplier Contract Termination 2.1 Supplier Transition Fee 0.2 0.3 0.8 Project Management Costs, Travel, Training 0.9 0.3 Application Packaging 1.0 Messaging Implementation 0.3 0.3 Software License Fees 0.5 Other, e.g. Maintenance 1.0 0.7 0.2Table 3 Project Savings Savings As a result of the Client Services outsourcing agreement, total End User Services (EUS) costs will be reduced by $3 million in 2006. Expected savings over the three-year life of the contract is $12.6 million and is primarily a result of the supplier's lower operational cost per seat, including a complete replacement of the existing services solution and a 50% EUS full time equivalent head count reduction. Following is a table outlining the key components of the program savings: $ Millions 2006 2007 2008 2009 Total Current Service Model: Employee related costs 6.0 6.2 6.3 6.5 25.0 Telecommunications and related costs 4.0 4.1 4.2 4.3 16.6 Lab to script applications to run in Unilever's environment 1.0 1.0 1.1 1.1 4.2 Total Costs 11.0 11.3 11.6 11.9 45.8 Service Provider Costs Per Seat:* 8.0 8.2 8.4 8.6 33.2 Savings: 3.0 3.1 3.2 3.3 12.6 "The pricing is based on an agreed upon seat price per quarter. The agreement allows for some flexibility in number of seats with no change in pricing structure. The seat count will be reviewed on a quarterly basis