Policy Statement
Introduction.
WBS Financial Corporation’s (the “Company”)
policy is to provide a reasonable assessment of our firm’s
business advisory and financial services and any
disbursements advanced by the firm on our Client’s behalf.
Our experience shows that policy procedures for billing and
payment may vary from other business advisory or financial
service firms. The Company’s Policy and Procedures Statement
(“Statement”) is intended to explain our standard policies
and procedures concerning invoices for services rendered and
expenses incurred by us on your behalf as well as our policy
concerning payments to the firm.
Terms of Engagements.
In consideration of the services we are to
provide, unless other arrangements are made in specific
instances, it is understood that clients engaging our firm
to perform business advisory and financial services have
agreed to pay fees that may be described as a Good Faith
Acceptance Fee, Engagement Fee, Transaction Fee and / or
Correspondence Fee. These fees are based on our normal
hourly rates, in effect from time to time during the course
of the engagement, for the business advisory, financial,
marketing and professional personnel of this firm who
perform such services.
This policy statement is provided on the
Company’s website and may be provided to existing and
prospective clients of our firm, upon request. Unless
indicated to the contrary in writing, it will be understood
that services which we are asked to perform on behalf of our
clients will be rendered pursuant to the terms and
conditions of this statement.
Performance of Services.
The majority of the services required by our
firm's clients will be performed by principals of the firm,
business, financial and marketing analysts and
administrative personnel who are either contracted or
employed by the firm and supervised by the partners of the
firm. All individual client requests are assigned to a
specific principal who is responsible for assuring that the
matters are addressed in a timely and professional manner.
The firm also has referral and working relationships with
other business advisors, financial analysts, lenders,
investors, attorneys, subject matter experts, business
brokers and other professional organizations / companies who
are occasionally requested to assist our firm's personnel in
serving our clients. The determination of the appropriate
strategy for staffing individual situations from sources
both within and outside the firm is based generally on
considerations of experience, expertise, time availability
and billing efficiency. The overall goal in such situations
is to utilize the resources available to the firm in a
manner which provides our clients with high quality, timely
and cost-effective services, which are commensurate with the
client's stated objectives.
In cases where the services obtained from
such sources outside the firm are expected to involve
significant costs, the client's approval will ordinarily be
sought in advance. Generally, fees and expenses of such
referral sources may be included in the firm's bills to its
clients, but statements may be rendered directly to the
clients by direct sources utilized in a particular situation
(i.e., lender, investor, attorney). Ultimately, however, our
firm will be responsible for assuring that services are
being performed to the client's satisfaction and for
addressing any questions which may arise in that regard.
Methods of Computing Fees.
Our firm follows the canons of professional
conduct regarding the reasonableness of fees charged to our
clients. Under these rules, the factors to be taken into
account in determining the reasonableness of fees in
particular instances include the following: (a) the type of
service involved, whether it is a simple and routine matter,
or whether it is a complex, highly technical matter; (b) the
time and labor required; (c) the expertise utilized to
facilitate a client’s request; (d) the amount of expenses
and / or resources involved to obtain a desired result; (e)
the likelihood that the client’s request in question will
preclude other professional service provider(s); (f) fees
for similar services; (g) the time limitations or
circumstances within the guidelines of the firm; (h) the
nature and length of the firm’s professional relationship
with the client; (i) the experience and ability of the firm
and whether work on the matter may be delegated to other
qualified resources or other less qualified resources; and
(j) whether the fee is fixed or contingent. Our firm assigns
standard hourly rates which have been determined by taking
the foregoing factors into account.
Several methods are considered for
determining the fees to be charged for our services in
particular instances. Generally, our fees will be calculated
on the basis of the time expended on the client's matter in
accordance with our hourly rates as determined in accordance
with this policy statement or an engagement agreement made
in advance. In certain hourly rate billing arrangements,
agreements may also be made in advance that our fees will be
subject to maximum and/or minimum amounts based on the
service our firm is engaged to facilitate.
Hourly Rate Billing Procedures.
The
standard method of computing fees for business, marketing
and financial services rendered by our firm with respect to
a particular client request is to record in quarter-hour
increments on a daily basis the time spent by each person
performing services in connection with such matters (whether
such services be telephone or email consultations, office
consultations, research, drafting documents, consulting
third-party resources, travel or the like), and to total the
time expended during the duration of the engagement. There
is then applied to the time so computed the applicable
hourly rate for the respective individuals who performed
service on such matters. Unless otherwise agreed in
particular instances, our standard hourly rates are utilized
for such purposes.
Our hourly rates may change from time to time
as warranted by the nature of the request, but the current
standard rates for business, marketing and financial
services employed by or associated with our firm are as set
forth on a Rate Schedule that will be furnished only upon
request.
We occasionally adjust our hourly rates for
some projects to reflect particular circumstances, but our
general practice is to evaluate our hourly rates annually in
January of each year to determine whether adjustments are
appropriate to reflect additional knowledge and experience
acquired during the preceding year or to reflect changing
market conditions. Any such adjustments in our hourly rates
are applied to services rendered during the month in which
such adjustments become effective and thereafter. Unless
otherwise agreed in specific instances, any such adjustments
in our standard hourly rates will not be subject to prior
client approval. Notice of any such adjustments in our
hourly rates will be provided, however, to those clients
with whom we have engagement relationships utilizing pre-set
rates.
Because our hourly rate fees are based on the
time expended, it is beneficial for our clients to make
efficient use of our time, to be conscious of the time which
may be required for particular tasks we are requested to
perform and to define clearly for us the scope of the work
which we are to perform at the outset of each project where
our clients have preconceived budgetary notions. Where no
budgetary limitations are discussed in advance, we will use
our best judgment as to what efforts are necessary to
achieve the desired result.
Since for the most part we base our fees on
the nature of the client’s project request and the estimated
time to be expended to facilitate a client’s request, our
production capacity may be limited by the time available to
perform such services, so it is our practice to apply the
applicable hourly rates and any expenses required to
facilitate a transaction. This practice is based on the
assumption that most companies, firms or individuals are not
compensated on an hourly basis and that it is more
economical for them to attend meetings at our offices.
Nevertheless, if it is desirable for us to attend meetings
out of our offices, we are always willing to do so and
frequently do so. We retain detailed records of time spent
on any matter or transaction, which are the basis on which
our hourly rate statements are computed.
If a client is billed on a monthly basis, and
at any time that client has questions about the basis of
compilation of any statement for services or expenses, we
will be happy to meet with the client to assist the client
in understanding the fee computation. We urge our clients to
raise questions as statements are rendered in order for us
to be able to gain a mutually satisfactory feeling for our
financial relationship as well as our professional
relationship.
Reimbursement of Expenses.
Amounts advanced or paid to third parties by
us on behalf of our clients for expenditures such as
processing of documents to electronic media / photocopying
and telecopying charges, postage charges, other shipping
charges (i.e., US Mail, UPS, FedEx), courier expenses,
travel expenses, printing costs, research costs,
preliminary underwriting cost, development of business
marketing models, financial compilation / analysis and the
like are considered to be reimbursable by our clients unless
otherwise agreed in particular instances and are generally
included within an engagement agreement or fee agreement
signed by the client in which such amounts are advanced or
incurred. Certain costs which are incurred internally for
items such as photocopying, telecopying and long distance
telephone costs may be billed to our clients at rates
comparable to third-party charges, which do not necessarily
reflect the firm's direct out-of-pocket expenses and may
include amounts which represent recovery of the
administrative costs and investment expenses which the firm
has incurred in making such services available and
accounting for such expenses.
Unless otherwise agreed in connection with
specific engagements, it is understood that our firm has no
obligation to advance any of the foregoing costs on behalf
of our clients. We may require the clients to make
arrangements in advance to fund such expenses either by
means of an Good Faith Acceptance Fee of Services,
Engagement Retainer Fee and / or Transaction Fee with our
firm or by means of direct arrangements with third-party
vendors or a combination of such arrangements.
Supplemental Services.
Our standard policy is that any involvements
which our firm may have with regard to the development of
business, marketing and financial presentations, including
any dissemination of these plans to lenders, investors or
other Capital Resources of the company and / or
communicating with third-party resources on behalf of the
client, are a part of the engagement and we are entitled to
be paid for our time, services and expenses attributable to
such activities.
Unless otherwise specified by the terms of
our original engagement, in particular instances or
subsequently agreed in connection with the performance of
such supplemental services, it is understood that our fees
for any such supplemental services will be determined on the
basis of our hourly rates which are in effect at the time
such supplemental services are rendered regardless of the
billing arrangement which was applicable in connection with
the original engagement.
Payment Terms.
As to the method of billing and payment, our
practice is to perform services for most financial requests
on a retainer plus a success fee basis. This method of
payment includes a retainer / deposit at the engagement of
services with a success fee based on a percentage of the
transaction; referred to as a Corresponding Fee or
Transaction Fee. The amount of the Corresponding /
Transaction Fee is determined by the scope of work required
to facilitate a transaction as well as the financial aspects
of the transaction.
Example: A project to facilitate / obtain
/ structure the financing for $500,000.00 for a business. A
retainer / deposit may be required in the amount of
$4,000.00 with a two percent (2%) Transaction Fee. This
transaction may be based on an average hourly billable rate
of $175.00 and estimated to consume a total of 80 billable
hours (billable hours includes the administrative costs to
facilitate the transaction); therefore, the estimated bill
to the client is $14,000.00.
We have found this procedure is desired by
clients so that they will know what their expected total
fees are and so that they will not receive any accumulated
surprises. In the event that a lender, investor or other
applicable laws prohibit a transaction fee to be included in
the financing, a client is billed for the Transaction /
Corresponding Fee within five (5) business days upon
closing, providing evidence of such services have been
provided. These Clients are allocated continued services as
it relates directly to the project for a period of 30 to 60
days beyond the closing, typically without incurring
additional costs.
For clients that are billed on a strictly
hourly basis, the procedure is to normally close our books
on or about the last day of each calendar month and render
statements on or before the 15th day of the next calendar
month. Unless other arrangements are mutually agreed upon in
writing in specific instances, payment of statements is due
within five (5) business days after the date the statement
is received.
It is also understood that we reserve the
right to add interest at the rate of one percent (1%) per
month (or the maximum rate permitted by applicable law, if
lower), compounded monthly, to all billed and unpaid
balances beginning thirty (30) days following the date upon
which such charges are actually billed.
It is also understood that this firm shall be
entitled to recover reasonable attorneys' fees and expenses
and court costs in connection with any efforts necessary to
collect amounts due and unpaid pursuant to any engagement
between a particular client and our firm.
Retainer Deposits.
Clients are typically required to deposit a
cash retainer with us as security for payment of our fees
and expenses. Our practice is to refund any unallocated
deposits that have not been used in the event that
the firm is unable to facilitate the transaction. In the
event our firm is unable to facilitate the transaction, a
detailed accounting will be provided of the application of
all funds used.
In addition, when representing a new client
to facilitate a business, financial and / or marketing
service or existing clients on large projects which will
require substantial personnel and costs over a long period
of time, such as significant major real estate and business
acquisitions, or structuring a business and financial model
to acquire equity and / or debt financing, we may require a
monthly project retainer. If the work for a particular
client or project continues beyond an extended period of
time and / or exceeds the engagement period, we may require
and bill additional retainers monthly until the work is
completed.
Termination of Engagement.
We reserve the right to suspend or terminate
any representation in progress, in the event of non-payment
of our statements within twenty (20) days after a statement
is due, in the event that a client has provided documents
and / or information with the intent to misrepresent and /
or in the event the client has provided indication to
terminate services. In the event that we exercise such right
to suspend or terminate work in progress, we will be
entitled to apply any fees deposited or retained as payment
for the engagement of our services. In addition to our
right to withdraw from a representation engagement at any
time if the payment terms described above are not satisfied,
it is understood that, subject to certain exceptions with
respect to contingent fee matters, our clients reserve the
right to terminate their engagement of our firm at any time,
upon payment in full of fees and expenses accrued up to that
time.
Ownership of Files.
We consider the files which are generated and
maintained by us in connection with services for our clients
to be the property of our firm and not the property of our
clients, except for documents and materials ("Client
Papers") which fall within the following categories: (i)
original documents and materials which are furnished to us
by our clients and noted as an “original document” to be
returned; (ii) original documents and materials, such as
executed contracts and corporate records; and (iii) other
documents and materials which may affect our clients' rights
or the exercise of such rights. We will assert and maintain
a possessory retaining lien on all such Client Papers as
security for the payment of our fees and expenses, except to
the extent that retention of such Client Papers would
prejudice the rights of our clients. In the event of a
termination of our engagement, except as stated above, we
will release such Client Papers and copies of the materials
in our files to our clients only upon (i) written request
and instructions from the client; (ii) payment in full of
all of our unpaid fees and expenses; and (iii) payment in
advance of all reasonable copying costs which will be
incurred in making copies of the Client Papers for our
permanent files and in making copies of the other materials
in our files for the client. Client papers still in our
possession after more than two (2) years after the
termination of our engagement may be destroyed if not
returned to the client upon client’s request.
Services for Related Entities.
It is contemplated that we may be requested
on occasion to render services for individuals,
partnerships, corporations and other entities which are
affiliated with our principal client in a particular
engagement. In such instances, unless otherwise agreed in
advance, we will consider all participants in the
transaction to be jointly and severally liable for the
payment of our fees and expenses as outlined in this
statement and the relevant engagement letter. Unless other
arrangements are made in advance, however, we will render
our statements to, and will expect full payment from, our
principal client and will not be responsible for honoring
any internal cost-sharing arrangements which may be in
effect between the participants in the transactions.
Personal Guaranties.
We understand that individuals whom we
consider to be our clients may sometimes request statements
for our services to be rendered to entities which they
control and / or through which their business activities are
conducted. In order to avoid any confusion in this regard,
however, and in recognition of the fact that our services
will be primarily for the benefit of the individual client,
we may ask that our engagement be executed by both the
entity and the individual in order to acknowledge that both
the individual and the entity will be responsible for
payment of our fees and expenses in connection with the
engagement.
Privacy Policies.
Our firm has adopted privacy policies in
accordance with federal requirements governing providers of
financial services. Our policies are described on the
Company’s website at:
http://www.wbscorps.com/Privacy_Notice.htm.
Conclusion.
It is hoped that the foregoing discussion
will anticipate most, if not all, of the issues which will
arise in connection with billing, policy and payment
procedures of our firm. Clients having general or specific
questions regarding the policies and procedures set forth
above are encouraged, however, to raise those issues with
the firm at an early date in order to resolve any such
questions as soon as practicable.
Changes to the Policy Statement
WBS reserves the right to change its Policy Statement at any
time. |
