Exhibit 10.1
Minimum Premium Financial Agreement
Amended And Restated Effective January 1, 2005
By And Between
ADMINISTAFF OF TEXAS, INC.
And
UNITED HEALTHCARE INSURANCE COMPANY
Hartford, Connecticut
*** indicates material has been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission. A complete copy of
this agreement has been filed separately with the Securities and Exchange
Commission.

 

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Minimum Premium Financial Agreement
Table of Contents

     
Section 1:
  Definitions
 
   
Section 2:
  Insurance
 
   
Section 3:
  Premium
 
   
Section 4:
  Term and Termination of the Agreement
 
   
Section 5:
  Changes in Maximum Monthly Employer Benefit Obligation and Premium
 
   
Section 6:
  Representations of the Parties
 
   
Section 7:
  Guaranty of Administaff Inc.
 
   
Section 8:
  Notices
 
   
Section 9:
  Choice of Law
 
   
Section 10:
  Entire Agreement, Amendment and Waiver
 
   
Exhibit A
  Reviews and Establishment of Monthly Payable Rates and Premiums
 
   
Exhibit B
  Non-MP Policies
 
   
Exhibit C
  Minimum Premium Financial Agreement Banking Arrangement
 
   
Exhibit D
  Policies, Rates and Factors

     
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Minimum Premium Financial Agreement
Amended And Restated Effective January 1, 2005
By And Between
ADMINISTAFF OF TEXAS, INC.
And
UNITED HEALTHCARE INSURANCE COMPANY
Hartford, Connecticut
WHEREAS, the Employer is a “professional employer organization” that establishes
employment relationships with the employees of its clients; and
WHEREAS, the Employer has established an employee welfare plan (the “Plan”) for
certain employees, former employees and their dependents of the Employer; and
WHEREAS, the Company has issued several group health insurance policies with
respect to the Plan; and
WHEREAS, on or about June 25, 2002, the Employer and the Company executed the
Minimum Premium Financial Agreement effective January 1, 2002 (“Original
Agreement”), and on or about December 3, 2004, the Employer and the Company
executed an amendment to the Original Agreement generally effective January 1,
2004; and
WHEREAS, the Employer and the Company now wish to further amend and restate the
Original Agreement, as amended, in its entirety, effective January 1, 2005;
NOW THEREFORE, in consideration of the mutual promises contained in the
Agreement, the Employer and the Company agree as follows:

     
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     1. Definitions

  (a)   “Agreement” means this Minimum Premium Financial Agreement, Amended and
Restated Effective as of January 1, 2005, including any attached Exhibits, as
amended from time to time.     (b)   “Arrangement Month” means each calendar
month during the period that both a Policy and the Agreement are effective.    
(c)   “Arrangement Quarter” means each calendar quarter during the period that
both a Policy and the Agreement are effective.     (d)   “Check” means the
instrument of payment issued by the Company for the payment of Health Benefits
pursuant to the Agreement, whether such instrument is a draft, a check, an
electronic funds transfer or similar instrument.     (e)   “Claims Account”
shall have the meaning assigned to it in section 2(a) of the Agreement.     (f)
  “Company” means United HealthCare Insurance Company.     (g)   “Employer”
means Administaff of Texas, Inc.     (h)   “Employee” means an employee or
former employee of the Employer or of a member of Employer’s controlled group as
defined in Section 414(b) and (c) of the Internal Revenue Code of 1986, as
amended, which is a participating employer under the Plan who is covered under
the Plan, and a “qualified beneficiary” who is covered under the Plan pursuant
to Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended from time to time (“COBRA”), except that members of a family unit who
elect COBRA coverage as a single family unit shall be considered a single
“Employee.”     (i)   “Health Benefits” means the benefits that are payable by
the Company under the terms of the Policies. For purposes of the Agreement,
overpayment and subrogation recoveries (less the percentage of each such
recovery that the Company retains or is charged by its vendors for its services
in pursuing the recovery) shall be included as a credit to Health Benefits.
There shall be no credit to Health Benefits for any *** or other

     
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      payments received by the Company from *** or other third parties in
connection with *** under the Plan.         In the second and third Arrangement
Months of an Arrangement Quarter, Health Benefits shall also include those
Health Benefits Paid during the prior Arrangement Month to the extent that they
exceeded the ***.     (j)   “Incurred” when referring to Health Benefits means
that the Company has become liable for payment of such Health Benefits under a
Policy.     (k)   “Investment Grade” means a debt rating of BBB- or better (in
the case of Standard & Poor’s) and Baa3 or better (in the case of Moody’s). If
the debt in question is rated by both Standard & Poor’s and Moody’s, such debt
shall not be deemed Investment Grade for purposes of the Agreement unless the
ratings provided by both rating services qualify as Investment Grade as defined
herein.     (l)   “MP Administrative Services Agreement” means the Minimum
Premium Administrative Services Agreement between the Employer and the Company,
as amended from time to time.     (m)   “Maximum Monthly Employer Benefit
Obligation” for an Arrangement Month shall be the amount determined in Exhibit D
hereto. The Maximum Monthly Employer Benefit Obligation for an Arrangement Month
(other than the first Arrangement Month of an Arrangement Quarter) shall be
increased by the amount by which the *** in the prior Arrangement Month exceeded
the Health Benefits Paid in that Month.     (n)   “Minimum Premium Arrangement”
and “Arrangement” mean the minimum premium payment arrangement with respect to
the Policies as described in the Agreement.     (o)   “MP Premium” has the
meaning assigned to it in section 3(a) of the Agreement.     (p)   “Non-MP
Policy” means a policy or group contract issued by the Company (or another
member of the Company’s controlled group) providing medical benefits under the
Plan which are not covered by the Minimum Premium Arrangement. “Non-MP

     
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      Policies” refer collectively to two or more such policies, group contracts
or both. Non-MP Policies are identified in Exhibit B.     (q)   “Paid” when
referring to Health Benefits means that a Check for payment of the Health
Benefit has been     ***    .     (r)   “Plan” has the meaning assigned to it in
the recitals to the Agreement.     (s)   “Policy” means each of the policies
identified in Exhibit D as amended from time to time.     (t)   “Policy Year”
means each calendar year or portion thereof during which a Policy is in effect.
    (t-1)   “Pooling Charge” has the meaning assigned to it in section 3(c) of
the Agreement.     (u)   “Prior Policy” means Group Policy No. GP-608634 issued
by Aetna Life Insurance Company to the Employer. Expenses for medical and dental
benefits incurred under the Prior Policy are not covered by any of the Policies.
    (v)   “Quoted Premium” means the total amount of premium the Employer would
have been charged for Health Benefits of each Policy for an Arrangement Month if
the provisions of the Agreement were not in effect, as determined by the Company
in accordance with the terms of the Agreement. For purposes of calculating the
Maximum Monthly Employer Benefit Obligation and the MP Premium during the term
of the Agreement, the Quoted Premium for an Arrangement Month shall be deemed to
include any adjustments authorized in Exhibit E of the MP Administrative
Services Agreement in respect of previous Arrangement Months including any
enrollment additions, terminations or changes in coverage not known at the
beginning of the Arrangement Month to which such Quoted Premium applies. Any
such adjustment shall be based on the Quoted Premium in effect for the
Arrangement Month in respect of which an adjustment is made.

     
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      The Quoted Premiums under the Policies shall be periodically reviewed and
adjusted in accordance with Exhibit A to the Agreement.     (w)   “Security
Deposit” has the meaning assigned in the Security Deposit Agreement.     (x)  
“Security Deposit Agreement” is the Security Deposit Agreement between the
Company and the Employer, as amended from time to time.

     2. Insurance
The Company’s agreement under the Policies to insure the Employer’s Employees is
changed as follows:

  (a)   Benefit Payments Paid during Policy Continuance. The Company shall pay
from the claims account established as provided in section 2(d) below (the
“Claims Account”) those Health Benefits of the Policies that are Paid during the
Arrangement Month and that in the aggregate are equal to or less than the
Maximum Monthly Employer Benefit Obligation for the Arrangement Month. The
Employer shall fund that Claims Account as provided in section 2(d) of the
Agreement. For Health Benefits that are Paid prior to termination of the
Policies, the Company shall pay from its own funds those Health Benefits that
are Paid during an Arrangement Month to the extent that they exceed the Maximum
Monthly Employer Benefit Obligation for the Arrangement Month.     (b)  
Benefits Paid After Policy Termination. In the event that a Policy is
terminated, the Company shall be responsible for paying from its own funds
Health Benefits of such Policy that are Incurred but not Paid before such Policy
terminates. The Maximum Monthly Employer Benefit Obligation does not apply to
such Health Benefits.     (c)   Company’s Obligation. Any Health Benefits of the
Policies that are required to be paid from the Claims Account shall be paid by
the Company from its own funds if the Health Benefits are not paid by another
source, which may include the Employer or another funding vehicle established or
maintained by the Employer for that purpose. The Employer agrees to reimburse

     
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      the Company for any Health Benefits paid by the Company pursuant to this
obligation.     (d)   Claims Account. The Company and the Employer shall
establish and maintain those banking arrangements, including the Claims Account,
described in Exhibit C to the Agreement. In addition to its obligations under
Exhibit C, the Employer shall fund the Claims Account as necessary to enable the
Company to pay in a timely manner from the Claims Account the Health Benefits
described in section 2(a).

  (i)   If the Employer does not maintain the banking arrangements required in
this section or in Exhibit C, including any required balance, the Company will
provide notice to the Employer so that it can take corrective action, and the
Company may terminate the Agreement in accordance with section 4 of the
Agreement.     (ii)   After a reasonable period of time as determined by the
Company, the Company shall place stop payment instructions on Checks issued
pursuant to the Agreement that are not Paid. The Company shall be responsible
for complying with applicable abandoned property laws, if any, with respect to
any Checks that are not Paid prior to the termination of the Agreement. Any
amount transferred to a state in compliance with such laws shall be treated as
Paid on the date that the transfer is made.     (iii)   Upon termination of the
Agreement, the Claims Account shall be closed as soon as reasonably practicable
after the Company determines that all Health Benefits required to be Paid from
the Claims Account have been Paid, and any funds remaining in the Claims Account
shall be recovered by the Employer, subject to the Company’s right to offset
such funds against amounts owed to it under the Minimum Premium Arrangement.

     3. Premium
The amount of premium to be paid by the Employer to the Company for insurance of
the Health Benefits payable under the Policies, as

     
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modified by the Agreement, is changed to be equal to the sum of (a) the MP
Premium, and (b) ***. All of the provisions of each Policy that apply to
“premium” for Health Benefits of the Policy apply to the MP Premium and the ***.

  (a)   MP Premium. The MP Premium for the Policies for the Arrangement Month
shall be the amount determined pursuant to Exhibit D hereto. The MP premium is
due on the first day of the Arrangement Month to which it applies. As provided
in section 1(v) of the Agreement, the MP Premium may include any adjustments
authorized in Exhibit E of the MP Administrative Services Agreement in respect
of previous Arrangement Months including any additions, terminations or changes
in coverage not known at the beginning of the Arrangement Month to which such MP
Premium applies.     (b)   Additional Quarterly Premium. For each Arrangement
Quarter, the Employer shall pay an Additional Quarterly Premium to the Company
in an amount equal to the ***, before the *** of the Agreement, for the
Arrangement Months in such Arrangement Quarter less the Health Benefits Paid by
the Company from the Claims Account in such Arrangement Quarter. Such invoice
shall be sent by the Company no later than *** months following the close of the
Policy Year which includes the Arrangement Quarter to which such invoice
relates. An Additional Quarterly Premium shall not be due with respect to any
Arrangement Quarter in a Policy Year if a written invoice for such Additional
Quarterly Premium is not sent by the Company to the Employer within *** of the
close of the Policy Year; provided that the Company shall not have been
prevented by the Employer from exercising its right to audit the Employer as
provided in section 5(c) of the MP Administrative Services Agreement. The
Additional Quarterly Premium shall be paid by the Employer within *** calendar
days of the date of the Company’s invoice and *** provided in any Policy shall
be applicable to the payment of the Additional Quarterly Premium.     (c)  
Pooling Charge. Effective January 1, 2005, Employer may elect, with respect to
Arrangement Years 2005, 2006 and/or 2007, a pooling option under which it shall
pay a pooling charge to the Company in the amount described in Exhibit D. In the
event that Employer elects the pooling option for Arrangement Year 2005, 2006
and/or 2007, the Company will

     
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      apply the pooling adjustment described in Section 7 of Exhibit A to this
Agreement with respect to such Arrangement Year. To elect the pooling option for
an Arrangement Year, Employer shall notify the Company in writing of its
election on or before February 1st of the Arrangement Year to which such option
relates, provided, however, that, for the 2005 Arrangement Year, the Company
shall provide additional terms and conditions of the pooling option, if any, by
April 5, 2005, and the Employer shall have 30 days from receipt of such
information to provide written notification to the Company of its acceptance or
rejection of the pooling option for 2005. For Arrangement Years after 2007,
Company may, in its sole discretion, determine whether or upon what terms to
offer the pooling option. Any Pooling Charge paid by the Employer shall not be
treated as Policy Revenue.         The Pooling Charge is due on the first day of
each Arrangement Month in the Arrangement Year for which an election has been
made, provided that (i) the grace period described in section 4.(b)vii. of the
Agreement shall apply to the Pooling Charge, and (ii) paragraph 4 of Exhibit E
of the MP Administrative Services Agreement shall apply in determining the
appropriate number of Employees covered under a Policy or Non-MP Policy for each
month.

     4. Term and Termination of the Agreement

  (a)   Agreement shall be effective as of January 1, 2005 (“Effective Date”).
The Agreement shall be in effect for an initial period of twelve (12) months
(“Agreement Period”) and shall continue automatically for successive Agreement
Periods of twelve (12) months each unless it is terminated earlier in accordance
with this section 4.     (b)   The Agreement may be terminated as follows:

  i.   Either party may elect to terminate the Agreement upon the insolvency of
the other, or the filing of a petition in bankruptcy by or against the other,
the appointment of a receiver for the other or its property, execution of an
assignment by the other for the benefit of creditors, or conviction of the other
or any principal officer or manager

     
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      of the other for any crime tending to adversely affect the ownership or
operation of the business.     ii.   Either party may elect to terminate the
Agreement as of the last day of an Arrangement Quarter by giving written notice
to the other party at least 180 calendar days prior to the date of termination.
    iii.   The Agreement shall automatically terminate upon the date as of which
all Policies are terminated.     iv.   Either party may elect to terminate the
Agreement due to a material breach of the Agreement (other than non-payment) by
the other party, if notice of the breach is provided by the non-breaching party
and the breach is not cured within 90 calendar days of such notice. In such
event, the termination shall be effective on the date designated by the
non-breaching party, which date is no earlier than the date that the
non-breaching party provided notice of the breach to the breaching party.     v.
  Except as provided in subparagraph vii, the Company may elect to terminate the
Agreement effective on or after the first day of an Arrangement Month in which
the Employer fails to (A) pay any fee, tax, premium or other amount owed under
the Agreement or the MP Administrative Services Agreement, (B) pay any amounts
due under the Policies (as modified by the Agreement) or under any Non-MP
Policy, (C) fund the Claims Account described in section 2(d) of the Agreement,
or (D) deposit any portion of the Security Deposit required by the Security
Deposit Agreement.     vi.   The Company may elect to terminate the Agreement as
of the date of the Employer’s failure to comply with any duty described in
section 6 of the MP Administrative Services Agreement, if the Company provides
notice of the failure and the Employer does not cure it within *** calendar days
of the notice.     vii.   Any grace period otherwise applicable under a Policy
shall not apply to the MP Premium. However, the Company shall not terminate the
Agreement for the Employer’s failure to pay the MP Premium on the first day of
the

     
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      Arrangement Month if the Employer pays (a) an amount equal to *** of the
total MP Premium for the previous Arrangement Month on or before the ***
calendar day of the applicable Arrangement Month; and (b) the remaining balance
of the MP Premium for the Arrangement Month on or before the *** calendar day of
such Arrangement Month.     viii.   The Company may elect to terminate the
Agreement upon written notice to the Employer immediately upon the closing of a
sale to a single buyer (“Buyer”) of more than 50% of voting equity securities of
the Employer or of the ultimate publicly traded corporation of the Employer or a
sale of all or substantially all of the assets of the Employer if:

  (A)   the Buyer is (I) CIGNA, AETNA, PacificCare, Anthem, Coventry, First
Health, HealthNet, Humana, Oxford, Wellpoint, or any other Blue Cross or Blue
Shield plan, (II) any affiliate (as defined in clause E below) of or successor
of an entity identified in (I), or (III) any other entity that has, at the time
of the sale, a competitive position relative to the Company as a health insurer
substantially similar to that of any of the entities named in clause (I) above
as of the date the Agreement is executed;     (B)   the debt rating on Buyer’s
public debt, if any, is below Investment Grade as of the day preceding the
closing of the sale;     (C)   the ultimate parent of the Buyer, if any, has
not, at the time of the closing of the sale, executed a guaranty of the
Employer’s obligations under the Agreement substantially in the same form as
section 7 of the Agreement;     (D)   the amount deposited in the Security
Deposit as of the date of closing of the sale is less than the amount then
required under the Security Deposit Agreement; or     (E)   As used in clause
(A) above, an “affiliate” of an entity is an organization or entity which
controls, is controlled by or is under common control with the

     
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      entity to which it is an affiliate. “Control” for this purpose refers to
the ownership of more than 50% of the voting power of an entity.

  ix.   Except as provided in paragraph (B) below, the Employer may terminate
this Agreement by giving the Company notice thereof not more than *** business
days following receipt from the Company of notice of an *** of more than ***
percentage points in the percentage of the *** used to calculate the MP Premium.
(For example, if the percentage of the *** used to calculate the MP Premium
equals ***, the Company may *** such percentage by *** percentage points to ***
without triggering the Employer’s termination right under this clause ix.)

  (A)   Any such termination shall be effective on the date set forth in the
Employer’s notice to the Company, but in any event not sooner than the date the
applicable *** would otherwise be effective.     (B)   The Employer shall not
have the right to terminate the Agreement pursuant to this section 4(b)(ix) if
the increase in the percentage of the Quoted Premium used to calculate the MP
Premium is pursuant to section 4(c) or due to the imposition of any premium tax
not included in the Quoted Premium at the time that the imposition was effected.

  (c)   The Policies shall terminate upon termination of the Agreement. If one
or more of the Policies may not, by its terms, be terminated as of the date that
the Agreement would otherwise terminate, the Agreement shall be terminated
notwithstanding the inability to terminate a Policy as of the same date, and the
terms of the Policy shall remain in force, unmodified by the Agreement, until
such Policy can be terminated. However, effective as of the date of the
termination of the Agreement, the monthly premium due under each such Policy and
Non-MP Policy shall automatically be increased (“Increased Premium”) such that
the sum of (i) the aggregate Increased Premiums due under such Policies and
Non-MP Policies through their termination dates and (ii) the Accumulated Surplus
as of the Initial Termination Review equals *** of the aggregate monthly
premiums that would be

     
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      payable under such policies through their termination dates in the absence
of an increase.     (d)   In the event of termination of the Agreement, the
Employer shall pay an Additional Quarterly Premium attributable to the
Arrangement Quarter in which the Agreement terminates but only for the portion
of the Arrangement Quarter during which the Agreement was in effect. Such
Additional Quarterly Premium generally shall be determined and due in the manner
set forth in section 3(b) of the Agreement; provided however, that the
Additional Quarterly Premium attributable to any partial Arrangement Month shall
be calculated based on the proration formula set forth in section 4(e) below.  
  (e)   If the Agreement is terminated other than at the end of an Arrangement
Month, unless the Quoted Premium is itself prorated under the terms of the
Policy, the Maximum Monthly Employer Benefit Obligation and the MP Premium for
the month in which termination occurs shall be prorated based upon the ratio of
the number of calendar days in the Arrangement Month before termination to the
total number of calendar days in the Arrangement Month.     (f)   If the
Agreement is terminated retroactively and any Policy remains in effect after
such retroactive termination date, amounts due and paid by the parties under the
Agreement after the effective date of termination shall be credited against
their respective obligations under the Policy after such date.     (g)   If the
Agreement is terminated, the MP Premium and the Maximum Monthly Employer Benefit
Obligation for the last Arrangement Month prior to the termination date shall be
adjusted as authorized in Exhibit E of the MP Administrative Services Agreement
to include the effect of any additions, terminations or changes in coverage not
reflected at the time of termination in respect of Arrangement Months prior to
termination.     (h)   In the event that either party reasonably believes that
any state or other jurisdiction may impose a penalty on it for proceeding with
its performance under the Agreement, such party will promptly advise the other
party of such belief and the basis therefor. In such event, the parties agree to
cooperate in good faith to resolve such matter to the satisfaction of both
parties.

     
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      After a good faith effort by the parties to eliminate the risk of a
material penalty being imposed, if the matter is not resolved to the
satisfaction of both parties, the party upon which such penalty may be imposed
may immediately discontinue the Agreement’s application in such state or
jurisdiction by providing notice to that effect to the other party. In that
event, the Agreement will continue to apply in all other states or
jurisdictions.

     5. Changes in Maximum Monthly Employer Benefit Obligation and Premium.

  (a)   The Company may change the percentage of the *** used to calculate the
Maximum Monthly Employer Benefit Obligation described in section 1(m) of the
Agreement and/or the MP Premium described in section 3(a) of the Agreement
effective on any January 1st after the Effective Date, provided that the Company
provides *** calendar days notice of the change.     (b)   Upon the notice
provided in section 5(c), the Company also may change one or more of the
following rates as provided below:

  (i)   the percentage of the *** used to calculate the Maximum Monthly Employer
Benefit Obligation, as described in section 1(m) of the Agreement,     (ii)  
the percentage of the *** used to calculate the MP Premium, as described in
section 3(a) of the Agreement,     (iii)   the Quoted Premium rate under a
Policy, or     (iv)   the monthly premium rate under a Non-MP Policy.

      Each rate described in items (i) through (iv) above is referred to in this
section as “Rate” (or collectively as “Rates”).         If the total number of
Employees covered by all of the Policies and Non-MP Policies changes by *** or
more compared to the total number of Employees covered by all of the Policies
and Non-MP Policies on the later of (x) the Effective Date of the Agreement or
(y) ***, then that Rate may be changed by the Company.

     
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  (c)   The change in Rate described in subsection (b) shall be effective upon
the first of the month following *** calendar days notice to the Employer in the
case of a *** increase in the number of Employees covered. In the case of a ***
decrease in such coverage, the change in Rate shall be effective on the date
established by the Company in a notice to the Employer, but no earlier than the
*** day of the next Arrangement Month following the date of the notice.

     6. Representations of the Parties

  (a)   The Employer represents and warrants to Company as follows:

  (i)   The Employer has full authority to execute and deliver the Agreement,
the Security Deposit Agreement and the MP Administrative Services Agreement and
to perform its obligations hereunder and thereunder.     (ii)   The Employer is
subject to no restriction, agreement, law, judgment or decree which would
prohibit or be violated by the execution and delivery hereof or the consummation
of the transactions contemplated hereby. The Agreement has been duly executed
and delivered by the Employer and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.     (iii)   No consent,
approval or other action by, or notice to, or registration or filing with, any
governmental or administrative agency or authority, or any other person (other
than any registration or filing made in the ordinary course of business), is
required or necessary in connection with the execution, delivery and performance
of the Agreement by the Employer, or the consummation by the Employer of the
transactions contemplated hereby.

  (b)   The Company hereby represents and warrants to the Employer as follows:

  (i)   The Company has full authority to execute and deliver the Agreement, the
Security Deposit Agreement and the MP

     
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      Administrative Services Agreement and to perform its obligations hereunder
and thereunder.     (ii)   The Company is subject to no restriction, agreement,
law, judgment or decree which would prohibit or be violated by the execution and
delivery hereof or the consummation of the transactions contemplated hereby. The
Agreement has been duly executed and delivered by the Company and constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms.     (iii)   No consent, approval or other action by, or notice to, or
registration or filing with, any governmental or administrative agency or
authority, or any other person (other than any registration or filing made in
the ordinary course of business), is required or necessary in connection with
the execution, delivery and performance of the Agreement by the Company, or the
consummation by the Company of the transactions contemplated hereby.

     7. Guaranty of Administaff Inc.
To induce the Company to enter into the Agreement, the Policies, the Non-MP
Policies and the MP Administrative Services Agreement, Administaff, Inc.
guarantees that the Employer’s obligations under the Agreement, the Policies,
the MP Administrative Services Agreement and the Security Deposit Agreement will
be punctually paid and performed. Upon default by the Employer and notice from
the Company, Administaff, Inc. will immediately make each payment or perform or
cause the Employer to perform, each unpaid or unperformed obligation under the
Agreement, the Policies, the Non-MP Policies, the MP Administrative Services
Agreement or the Security Deposit Agreement.
     8. Notices

  (a)   Any notice required to be given under the Agreement shall be given in
writing by sending or delivering such notice to the receiving party (i) by
prepaid registered or certified first class U.S. mail, return receipt requested,
(ii) by overnight express courier with recipient’s signature required, (iii) by
hand delivery with recipient’s signature required, (iv) by facsimile, provided
that the other party has specifically requested that a specifically

     
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      designated notice be made by facsimile, or (v) by any other method by
which the date of receipt by the party entitled to such notice may be
determined. Notice shall be effective when sent.     (b)   Notices to a party
shall be sent or delivered:         To the Company at:         United Healthcare
Small Business Group
5901 Lincoln Drive
Edina, MN 55436
Fax: (952) 992-7155
Attention: President, Small Business Group         With a Copy to:        
United Healthcare
Legal Department
5901 Lincoln Drive
Edina, MN 55436
Fax: (952) 992-5180
Attention: General Counsel         And:         United Healthcare
Small Business Group
5901 Lincoln Drive
Edina, MN 55436
Fax: (952) 992-7155
Attention: Vice President, Underwriting         And to the Employer at:        
Administaff of Texas, Inc.
19001 Crescent Springs Drive
Kingwood, Texas 77339-3802
Fax: (281) 312-3350
Attention: President

     
MP Financial Agreement
  18

 

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      With a Copy to:         Administaff of Texas, Inc.
19001 Crescent Springs Drive
Kingwood, Texas 77339-3802
Fax: (281) 358-6492
Attention: General Counsel     (c)   Each party may change the person(s)
designated to receive notice on behalf of such party, or the address or
facsimile to which the notice shall be sent, upon written notice to the other
party.

     9. Choice of Law
     The Agreement shall be governed by applicable federal law and, to the
extent not governed by federal law, the laws of the State of Texas.
     10. Entire Agreement, Amendment and Waiver

  (a)   Upon execution of the Agreement, all prior or contemporaneous letters of
understanding, agreements, requests for proposal, proposals, representations,
statements, negotiations and understanding, whether oral or written, are hereby
terminated and superseded by the Agreement, the MP Administrative Services
Agreement, the Security Deposit Agreement, the Policies and Non-MP Policies and
all riders thereto.     (b)   Any amendments or modifications to the Agreement
must be in writing, and must be signed by the duly authorized representatives of
each party. Each party shall provide to the other a written certification of the
names of those person(s) duly authorized to execute amendments or modifications
on behalf of the party. Each party shall be entitled to rely on the other’s
certification of authority unless and until it is modified.     (c)   No term or
provision of the Agreement shall be deemed waived and no breach excused unless
the party claimed to have waived the term or provision or to have excused the
breach does so in a signed writing.

     
MP Financial Agreement
  19

 

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  (d)   In the event of any conflict between the terms and conditions of the
Agreement, the MP Administrative Services Agreement, the Security Deposit
Agreement or the Policies or Non-MP Policies, the following order of precedence
shall be followed in resolving the conflict. The terms of the Security Deposit
Agreement shall first control, then the Agreement, then the MP Administrative
Services Agreement and lastly the Policies or Non-MP Policies, as applicable.  
  (e)   Termination of the Agreement shall not extinguish the rights or
liabilities of either party arising prior to termination. The parties’
respective rights and obligations under sections 2(d)(ii)-(iii), 4(c) through
(g), 7 and Exhibit A of the Agreement shall survive termination of the
Agreement.     (f)   Absent extraordinary and unforeseen circumstances, neither
party shall seek, with respect to the 2005, 2006 or 2007 Arrangement Years, an
amendment or modification to ***; and provided, further, that the Company’s
rights under section 5(a) of the Agreement shall be suspended with respect to
changes for the 2006 and 2007 Arrangement Years (except with regard to a
modification consistent with a change in actual premium tax expense).

     
MP Financial Agreement
  20

 

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In witness whereof, the undersigned have executed the Agreement.

                  ADMINISTAFF OF TEXAS, INC.       UNITED HEALTHCARE            
INSURANCE COMPANY  
By
  /s/ Richard G. Rawson
 
      By   /s/ Simeon A. Schindelman
 
          Authorized Signature                 Authorized Signature
 
                Name Richard G. Rawson       Name Simeon A. Schindelman
 
                Title President       Title President, Small Business
 
                Date 5/27/2005       Date 6/1/2005

ADMINISTAFF, INC.

         
By
  /s/ Richard G. Rawson
 
              Authorized Signature    
 
        Name Richard G. Rawson    
 
        Title President    
 
        Date 5/27/2005    

     
MP Financial Agreement
  21

 

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Exhibit A – Reviews and Establishment of Monthly Payable Rates
and Premiums

1.   The Policies. The Employer has entered into a Minimum Premium Arrangement
covering certain of the Company’s insurance policies or HMOs. The Arrangement
covers those Policies identified in section 1(s) of the Agreement. The Company
has also issued Non-MP Policies (identified in section 1(p)) to the Employer
which policies are not subject to the Minimum Premium Arrangement.   2.  
Procedure for Establishing Premiums. A monthly *** rate for the Policies and the
Non-MP Policies collectively (“Monthly Payable Rate”) is established for each
Arrangement Quarter as provided in this Exhibit A, and as further provided in
Appendix II to this Exhibit. Each Arrangement Quarter, the Company sets the
monthly premium for Employees covered under each Policy and Non-MP Policy based
on the *** of Employees among the Policies and the Non-MP Policies in order to
produce a *** rate that *** the Monthly Payable Rate for the Arrangement
Quarter. (The monthly premium for each Policy corresponds to the “Quoted
Premium” referenced in the Agreement.) The Monthly Payable Rate shall be
established as provided in section 4 of this Exhibit.   3.   Reviews of
Experience under Policies and Non-MP Policies

  a.   Within 90 calendar days following the end of each Arrangement Year, the
Company shall review the Employer’s aggregate experience under the Policies and
the Non-MP Policies for that Arrangement Year (“Annual Review”). As part of the
Annual Review, the Company shall determine whether an aggregate Deficit or
Surplus exists with respect to the Policies and the Non-MP Policies based on an
analysis of the Incurred Claims, expenses and Policy Revenue for the Arrangement
Year, which analysis shall be provided in a written report to the Employer
within 90 calendar days of the close of such Arrangement Year. That report shall
be in a form substantially similar to and contain the information described in
Appendix I attached to this Exhibit A.

     
MP Financial Agreement
  22

 

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  b.   Within 45 calendar days following the end of each Arrangement Quarter,
the Company shall provide to the Employer a report that reflects the Company’s
determination of whether an Accumulated Deficit or Accumulated Surplus exists as
of the end of such Arrangement Quarter with respect to the Policies and the
Non-MP Policies based on an analysis of the Incurred Claims, expenses and Policy
Revenue for the Arrangement Quarter (and prior Arrangement Quarters). Such
analysis shall be provided in a written report substantially similar to and
contain the information described in Appendix I attached to this Exhibit A
(“Quarterly Review”), and such report shall include a summary of adjudicated
claims under the Policies and Non-MP Policies by incurral month.     c.   As
part of the Quarterly Review, the Company shall provide to the Employer a
written list of Policies and Non-MP Policies that were effective at any time
during the Arrangement Quarter under review (“Current Policy List”).

4.   Prospective Adjustment of Monthly Payable Rate and Premiums

  a.   The Company shall, in its sole discretion, establish in advance the
Monthly Payable Rate for each Arrangement Quarter. In establishing the Monthly
Payable Rate for an Arrangement Quarter prior to the second Arrangement Quarter
of 2005, the Company shall take into account any Accumulated Deficit or
Accumulated Surplus, but shall not be required *** Accumulated Deficit or
Accumulated Surplus in the Monthly Payable Rate of a single Arrangement Quarter.
Beginning with the second Arrangement Quarter of 2005, the Company shall not
take into account any Accumulated Deficit or Surplus when establishing Monthly
Payable Rates.         The Company shall notify the Employer of the applicable
Monthly Payable Rate at least 90 calendar days in advance of the start of the
Arrangement Quarter.     b.   The Company is authorized, in its ***, to revise
the premium of any Policy or Non-MP Policy for each Arrangement Quarter so as to
result in a *** rate for all

     
MP Financial Agreement
  23

 

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      Policies and Non-MP Policies that *** the revised Monthly Payable Rate for
that Arrangement Quarter.

5.   Termination Review

  a.   Upon termination of the Agreement, the Company shall provide a two-step
termination review, substantially in the form of the Annual Review (“Termination
Review”). The two steps in the Termination Review shall be:

  i.   Within 10 calendar days after the termination of the Agreement, the
Company shall determine the Accumulated Deficit or Accumulated Surplus as of the
date of the termination of the Agreement (“Initial Termination Review”).     ii.
  Within 195 calendar days after the termination of the Agreement and all
Policies and Non-MP Policies (except those issued to a Client as well as, or
instead of, to the Employer), the Company shall determine the Accumulated
Deficit or Accumulated Surplus as of the end of the last Arrangement Quarter (or
Partial Arrangement Quarter) (“Final Termination Review”).

  b.   In calculating the Accumulated Deficit or Accumulated Surplus for
purposes of the Termination Review, “Non-MP Policies” shall include those
policies or group contracts issued by the Company that were but are no longer
covered by the Minimum Premium Arrangement.     c.   If the Final Termination
Review demonstrates an Accumulated Surplus, the Company shall pay to the
Employer an amount equal to the Accumulated Surplus within 10 calendar days
after the completion of the Final Termination Review.     d.   If the Initial
Termination Review and/or Final Termination Review demonstrates an Accumulated
Deficit, the Company shall have such rights to the balance in the Security
Deposit as described in the Security Deposit Agreement.

     
MP Financial Agreement
  24

 

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6.   Management of the Redetermined Accumulated Surplus/Deficit

Effective beginning with the Quarterly Review for the first Arrangement Quarter
of 2005, the Company and the Employer agree to manage any Accumulated Surplus or
Accumulated Deficit as follows:

  a.   Redetermined Accumulated Surplus/Deficit. As part of the Quarterly Review
relating to an Arrangement Quarter, the Company shall also redetermine the
Accumulated Surplus or Accumulated Deficit for the Arrangement Quarter preceding
the Arrangement Quarter that is the subject of the Quarterly Review (such
quarter being the “Preceding Quarter”). The redetermined Accumulated Surplus (or
redetermined Accumulated Deficit) for a Preceding Quarter (“Redetermined
Accumulated Surplus” or “Redetermined Accumulated Deficit,” respectively) shall
be calculated in the same manner that the Accumulated Surplus or Accumulated
Deficit is calculated in accordance with section 3 of this Exhibit A, except
that any amounts reserved for *** (as determined by the Company, in its sole
discretion) shall not be included within the definition of “IBNR Reserve” and,
therefore, will not be taken into consideration when calculating the
Redetermined Accumulated Surplus/Deficit.         The basis for the Company’s
calculation of the Redetermined Accumulated Surplus/Deficit for a Preceding
Quarter shall be described in a written report provided to the Employer at the
same time as the Quarterly Review for the Arrangement Quarter. The fourth
Arrangement Quarter of 2004 shall be the first Arrangement Quarter to be
redetermined under this section.     b.   If, as part of a Quarterly Review or
Annual Review, the Company determines that the Redetermined Accumulated Surplus
for the Preceding Quarter exceeds $11 million, then commencing 15 days after
such determination, the Company shall waive the Employer’s then current
obligation to fund the Claims Account, if any, in an amount equal to the
Redetermined Accumulated Surplus amount less $11 million. Any Claims Account
funding waived by the Company under this subparagraph 6.b. shall not be

     
MP Financial Agreement
  25

 

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      recognized as Policy Revenue (e.g., as Health Benefits Paid from the
Claims Account or otherwise) but the claims funded by such waiver shall be
included as Incurred Claims.         The parties acknowledge that (i) the
Company waived Additional Quarterly Premium due in 2005 with respect to the
fourth Arrangement Quarter of 2004 in the amount of $1,954,028.35 and (ii) such
amount shall not be recognized as Policy Revenue.     c.   If, as part of a
Quarterly Review or Annual Review, the Company determines that the Redetermined
Accumulated Surplus for a Preceding Quarter is less than $11 million or a
Redetermined Accumulated Deficit exists, then the Employer shall, within ***
days of the redetermination pay to the Company an amount equal to the difference
between $11 million and either (A) the Redetermined Accumulated Surplus amount
as of the redetermination date or (B) the Redetermined Accumulated Deficit
amount (expressed as a negative value) as of the redetermination date, as
applicable. Such payment shall be treated as additional Policy Revenue for
purposes of this Exhibit A.     d.   The Company may draw upon some or all of
the Redetermined Accumulated Surplus upon a failure by the Employer to pay
(i) any amount then currently payable under the Agreement, the Policies or the
Non-MP Policies, including but not limited to any amount described in section
4(b)(v) of the Agreement, or (ii) any amount due under any Policy or Non-MP
Policy in effect following termination of the Agreement; provided, however, that
any such draw upon the Redetermined Accumulated Surplus shall only be allowed
under this Section up to an amount not greater than the Aggregate Payable Rate
for the applicable Arrangement Quarter reduced by any amount related to such
Aggregate Payable Rate otherwise paid by the Employer within five (5) business
days of the final due date of such amount or any applicable incremental amount
thereof. For purposes of this section 6.d., “Aggregate Payable Rate” means an
amount equal to the product of (i) the applicable Monthly Payable Rate
multiplied by three and (ii) the number of employees covered under the

     
MP Financial Agreement
  26

 

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      Policies and Non-MP Policies in a given month determined as of the 15th
day of the applicable month.     e.   The Company’s right to apply the
Redetermined Accumulated Surplus described in subparagraph 6.d. shall be in
addition to, and not in lieu of, any other remedy available at law or in equity
to the Company, and any such draw by the Company shall not cure the Employer’s
failure to pay amounts due, without the Company’s express written consent;
provided, however, that any such amounts applied by the Company shall reduce any
damages recoverable from the Employer under such other remedies to the extent
such damages do not take into consideration the amounts previously applied by
the Company. Any amount applied pursuant to subparagraph 6.d. shall not be
recognized as Policy Revenue.

7.   Pooling Adjustment — Effect of Employer’s Election of Pooling Option on
Calculation and Redetermination of Surplus or Deficit

      If the Employer elects to pay a Pooling Charge with respect to an
Arrangement Year pursuant to section 3.c of the Agreement, the calculation of
the Accumulated Surplus or Accumulated Deficit and the calculation of the
Redetermined Accumulated Surplus or Redetermined Accumulated Deficit for that
Arrangement Year shall be modified such that claims incurred by an Employee or
an Employee’s dependent in excess of $1,000,000 within the Arrangement Year and
paid by December 31st of the subsequent Arrangement Year will be excluded from
Incurred Claims, but will be recognized as Health Benefits Paid and as “claims
paid” for purposes of section 2.a. of Appendix II of this Exhibit A for that
Arrangement Year. The Pooling Charge paid by the Employer will not be recognized
as Policy Revenue.

8.   Definitions       For the purpose of this Exhibit A and the Security
Deposit Agreement, terms with initial capitals have the meanings set forth in
the Agreement, except as set forth in this section as follows:

  a.   “Accumulated Deficit” means, as of the last day of an Arrangement Period
(i) the sum of the Deficits, if any, for

     
MP Financial Agreement
  27

 

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      such Arrangement Period and all preceding Arrangement Periods, reduced by
(ii) the sum of the Surpluses for all preceding Arrangement Periods, provided,
however, that a Deficit or Surplus shall not be counted twice in the case of
overlapping Arrangement Periods.     b.   “Accumulated Surplus” means, as of the
last day of an Arrangement Period (i) the sum of the Surpluses, if any, for such
Arrangement Period and all preceding Arrangement Periods, reduced by (ii) the
sum of the Deficits for all preceding Arrangement Periods, provided, however,
that a Deficit or Surplus shall not be counted twice in the case of overlapping
Arrangement Periods.     b.-1   “Actual Tax Rate” means, with respect to an
Arrangement Period, (i) the initial premium tax for that Arrangement Period
based on MP Premiums, premiums under the Non-MP Policies, and Additional
Quarterly Premiums paid with respect to the Arrangement Period divided by
(ii) the Policy Revenue for the Arrangement Period.         To illustrate, the
Actual Tax Rate will be calculated according to the following formula:        
Actual Tax Rate = ***     c.   “Annual Review” has the meaning set forth in
section 3(a) of this Exhibit A.     d.   “Arrangement Period” means, as the
context indicates, an Arrangement Year, Arrangement Quarter, or Partial
Arrangement Quarter.     e.   “Arrangement Year” means each calendar year during
the period that both a Policy and the Agreement are in effect.     f.   “Claims
Recognition Date” means the 180th day following the end of the last Arrangement
Quarter (or Partial Arrangement Quarter).     g.   “Deficit” means, with respect
to an Arrangement Period, the excess of *** for the Arrangement Period over
(ii) the Policy Revenue for the Arrangement Period.

     
MP Financial Agreement
  28

 

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      To illustrate, the Deficit will be calculated according to the following
formula:

Deficit = ***     h.   “Expense Percentage” means the percentage for the
Policies and the Non-MP Policies set forth in Exhibit D to the Agreement. The
Company shall adjust the Expense Percentage for any Arrangement Quarter for
which the percentage of the Quoted Premium used to calculate the MP Premium has
been changed pursuant to section 5 of the Agreement. The Company shall notify
the Employer of an adjustment to the Expense Percentage at the same time that it
provides the notice required under section 5 of the Agreement.     i.   “IBNR
Reserve” means the amount actuarially determined by the Company, *** as a
reserve for Incurred Health Benefits that are paid after the date of termination
of the Policies and incurred health benefits that are paid after termination of
the Non-MP Policies. For purposes of the Final Termination Review, the IBNR
Reserve shall be (A) reduced by *** Overpayments (as defined in section 2(d) of
the MP Administrative Services Agreement) recoveries under the Policies and
Non-MP Policies *** to be received after the Claims Recognition Date and
(B) calculated as of the Claims Recognition Date and shall not include Health
Benefits or Non-MP Policy health benefits that are included in the calculation
of Incurred Claims as Paid Health Benefits under the Policies and paid health
benefits under the Non-MP Policies.     j.   “Incurred Claims” means, with
respect to an Arrangement Period (or Partial Arrangement Quarter), the sum of
(i) Paid Health Benefits under the Policies and paid health benefits under the
Non-MP Policies and (ii) any actuarially appropriate adjustments made by the
Company, *** to the IBNR Reserve for such Arrangement Period (including
establishment of the IBNR Reserve in the first Arrangement Quarter). For
purposes of the Final Termination Review, item (i) of the preceding sentence
shall include Health Benefits Paid under the Policies and health benefits paid
under the Non-MP Policies through

     
MP Financial Agreement
  29

 

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      the Claims Recognition Date. Unless Overpayments recoveries have already
been credited to Health Benefits, Incurred Claims shall be reduced by
Overpayments (as defined in section 2(d) of the MP Administrative Services
Agreement) recoveries under the Policies and Non-MP Policies received during the
applicable Arrangement Period (and received prior to the Claims Recognition Date
in the case of termination of the Agreement).     k.   “Partial Arrangement
Quarter” means that period between the end of the last complete Arrangement
Quarter under the Agreement and the termination of the last Policy or Non-MP
Policy, whichever is later.     l.   “Policy Revenue” means, with respect to an
Arrangement Period, the sum of (i) the MP Premiums paid with respect to such
Arrangement Period for the Policies, (ii) the monthly premiums paid under the
Non-MP Policies, (iii) except as otherwise provided in this Exhibit A, ***
Maximum Monthly Employer Benefit Obligation amounts for the Arrangement Months
in the Arrangement Period before the *** of the Agreement) for an Arrangement
Quarter therein, (iv) the Additional Quarterly Premium paid by the Employer with
respect to the Policies for the Arrangement Period, and (v) such other amounts
that are described in this Exhibit A as included in Policy Revenue. Any
withdrawals made by the Company from the Security Deposit during such
Arrangement Period shall be credited as Policy Revenue.         Effective as of
the date this Agreement is fully executed, Policy Revenue in an Arrangement
Quarter shall include an accrued and compounded interest credit (“Interest
Credit”) equal to the product of (A) the “Average Surplus” (as defined below),
(B) an annual interest rate equal to the average of the rates for the three
months in the Preceding Quarter at the yields at auction (on a bank-discount
basis) for three month Treasury bills, plus 25 basis points, and (C) the number
of days in the Arrangement Quarter divided by 365. The Interest Credit for an
Arrangement Quarter shall be credited as the final step in the determination of
the Accumulated Surplus or Deficit during the Quarterly Review for that
Arrangement Quarter.

     
MP Financial Agreement
  30

 

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      “Average Surplus” shall mean the average of (i) the Accumulated Surplus as
of the close of the Arrangement Quarter under review (without giving effect to
the Interest Credit for that Arrangement Quarter) and (ii) the Accumulated
Surplus as of the close of the Preceding Quarter.         The Company may change
the method of crediting interest described above by giving ninety days written
notice of such change to the Employer. However, such change shall apply only as
of the first day of the calendar year immediately following the 90-day notice
period.     m.   “Quarterly Review” has the meaning set forth in section 3(b) of
this Exhibit A.     n.   “Surplus” means, with respect to an Arrangement Period,
the excess of *** with respect to the Policies and the Non-MP Policies for the
Arrangement Period.         To illustrate, the Surplus will be calculated
according to the following formula:         Surplus = ***     o.   “Termination
Review” has the meaning set forth in section 5(a) of this Exhibit A.

     
MP Financial Agreement
  31

 

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Appendix 1: Administaff Annual Medical Accounting
24-Jun-02
1st Quarter 2002 Estimate

                                              HMO   PPO   Total (A)  
Quoted Premium
        * **     * **     * **                                   (B)  
Monthly Premium
        * **     * **                                              
Employee Lives            Jan
        * **     * **     * **    
                     Feb
        * **     * **     * **    
                     Mar
        * **     * **     * **                                   (C)  
1st Quarter Total
        * **     * **     * **                                   (D)  
Quarterly Total of Monthly Premium
  (BxC)     * **     * **     * **                                   (E)  
Maximum Monthly Employer Benefit Obligation/Employee
                * **                                           (F)  
Maximum Quarterly Employer Benefit Obligation
  (ExC)             * **                                           (G)  
Claims Presented Through Bank Account During Quarter
                * **                                           (H)  
Additional Quarterly Premium
  ***             * **                                           (I)  
Total Quarterly Premiums
  (D+H)     * **     * **     * **    
(Note that all four quarters will be presented to arrive at)
                                                              (I.1)  
Total Annual Premiums
                                                              (J)  
Total Quarterly Administaff Costs
  (G+I)     * **     * **     * **    
(Note that all four quarters will be presented to arrive at)
                              (J.1)  
Total Annual Administaff Costs
                                                              (K)  
Total Quarterly Administaff Costs/Employee
  (J/C)     * **     * **     * **    
(Note that all four quarters will be presented to arrive at)
                              (K.1)  
Total Annual Administaff Costs/Employee
                                                                (L)  
Claims Processed or Presented During Year
        * **     * **     * **                                   (M)  
Prior Year IBNR
        * **     * **     * **                                   (N)  
Current Year IBNR
        * **     * **     * **                                   (O)  
Change in IBNR
  (N-M)     * **     * **     * **                                   (P)  
Total Annual Incurred Claims
  (L+O)     * **     * **     * **                                   (Q)  
Administration @ *** of Annual Administaff Costs
  ***     * **     * **     * **                                   (R)  
Premium Tax (Est. HMO=1.0%, PPO 1.75%)
  (I.1x1.0% or 1.75%)     * **     * **     * **                                
  (S)  
Total Annual Medical Program Costs
  (P+Q+R)     * **     * **     * **                                   (T)  
Annual Surplus or Deficit
  (S-J.1)     * **     * **     * **

Note: Reference to Quarterly is for illustrative purposes only as are the
amounts reflected. Annual Appendix will reflect 12 months/4 quarters activity.
 

- *** The Additional Quarterly Premiums collected for PPO enrollees are subject
to premium tax.   - ***

 

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Exhibit A
Appendix II
Methodology for Establishing Monthly Payable Rates

1.   Paragraph 2 of Exhibit A of the MP Financial Agreement provides that the
Company will establish for each Arrangement Quarter the Monthly Payable Rate, a
monthly *** rate for the Policies and the Non-MP Policies collectively (for
purposes of this Appendix II, the “MPR”), which rate will then be used to
establish the monthly premiums for the Policies and Non-MP Policies. Certain
components of the Company’s methodology for determining the MPR for an
Arrangement Quarter are reflected in a rate calculation worksheet that is
provided by the Company to the Employer when the Company communicates the new
MPR to the Employer pursuant to section 4.a of Exhibit A (“Rate Calculation
Worksheet”),

2.   The methodology used by the Company for establishing the MPR shall include
the following components:

  a.   In estimating future PEPM claims, the Company shall utilize (i) the
claims paid in the *** months preceding the month in which the MPR is
established, and (ii) the covered Employee headcount for the *** month period
beginning two months before the *** month period used in item (i) (such
two-month earlier period hereinafter referred to as the “Base Period”). For
example, assuming the MPR for the second Arrangement Quarter of 2004 is
established by the Company in December 2003, the Company would use the paid
claims experience from *** through ***, and the covered Employee headcount for
the period *** through ***. For purposes of this subparagraph 2.a., “claims
paid” shall include (A) the total amount of the Employer’s Claims Account
funding obligation waived by the Company in the relevant period, and (B) claims
Incurred by an Employee or an Employee’s dependent in excess of $1,000,000
within a ***-month calendar year period and paid within *** months to the extent
excluded from Incurred Claims as a result of Employer’s election of the pooling
option described in section 7 of Exhibit A.

     
MP Financial Agreement
  32

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  b.   Any adjustment to the MPR due to changes in health cost risk factors
shall be actuarially justifiable (i.e., using credible database and tools agreed
upon by Employer and Company). The Company’s tabular data used to make the
adjustments shall be documented and discussed in the Rate Calculation Worksheet,
and the Company shall not change such tabular data more frequently than
annually.     c.   The Company shall apply rate adjustments to reflect changes
in the following health cost risk factors between the Base Period and the
Arrangement Quarter for which the MPR is being developed. (Continuing the
example from subparagraph (a), the base period is *** through *** and
Arrangement Quarter for which the MPR is being developed is the second
Arrangement Quarter of 2004.)

  i.   Age     ii.   Gender distribution     iii.   Family size distribution    
iv.   Geographic distribution     v.   Enrollment distribution by plan type
(HMO, PPO, etc)     vi.   Plan design changes

  d.   In estimating future PEPM claims, the Company shall apply cost change
trend factors for medical claims and prescription drug claims separately. In
addition, the trend period will be the period between the mid-point of the Base
Period and the mid-point of the Arrangement Quarter for which the MPR is being
developed.     e.   The Company shall establish trend factors based on a
reasonable assessment of risk and cost changes in projecting future medical and
prescription drug claims. The Company shall limit the change in trend factors
used to project medical and prescription drug claims to an increase of *** above
the trend factors used to establish

     
MP Financial Agreement
  33

--------------------------------------------------------------------------------

 

      the Monthly Payable Rate for the prior Arrangement Quarter. This change in
trend factor limitation will not be applicable if:

  (i)   the Employer modifies its management practices such that, as of the
Arrangement Month that the trend factor is established, there has been (a) more
than a *** increase in the number of Clients (as defined in the MP Services
Agreement) with less than *** enrollees over the immediately preceding
Arrangement Quarter, or (b) more than a *** increase in the number of COBRA
enrollees covered in the three months of the immediately preceding Arrangement
Quarter , or     (ii)   as of the Arrangement Month that the trend factor is
established, the age/gender factor has increased more than *** over the average
factor for the three months of the immediately preceding Arrangement Quarter.

      In the event the threshold in any of the conditions listed in (i) or
(ii) above is exceeded, the trend factors used to project medical and
prescription drug claims may be increased up to *** above the trend factors used
in the immediately preceding Rate Calculation Worksheet.     f.   The Company
shall reflect administration, profit/risk charge, and premium tax as separate
items in the Rate Calculation Worksheet.

3.   The Company may change the rate setting methodology described in this
Appendix II upon 180 days notice to the Employer.   4.   The Company shall
report to the Employer in detail on the establishment of the MPR in the Rate
Calculation Worksheet.

     
MP Financial Agreement
  34

--------------------------------------------------------------------------------

 

Exhibit B — Non-MP Policies
The insurance policies, HMO contracts and similar arrangements on the following
list are considered “Non-MP Policies” for purposes of the Agreement. Such list
shall be deemed modified by the Current Policy List provided by the Company as
part of the Quarterly Review, unless the Employer objects within 30 calendar
days of receipt.

                  UNET                 Policy           Effective   Termination
Number   UNET Policy Number   Date   Date
 
  Select HMO –   Downstate New York        
701648AA
      ACTIVE   01/01/02   12-31-2004
701648AB
      COBRA   01/01/02   12-31-2004
701648B
      ACTIVE w/o Dental   01/01/04   12-31-2004
701648BQ
      COBRA w/o Dental   01/01/04   12-31-2004
 
               
 
  Select HMO -   New Jersey        
701648AC
      ACTIVE   01/01/02   12-31-2004
701648AD
      COBRA   01/01/02   12-31-2004
701648BR
      ACTIVE w/o Dental   01/01/04   12-31-2004
701648BS
      COBRA w/o Dental   01/01/04   12-31-2004
 
               
 
  Select HMO –   Texas        
701648AG
      ACTIVE   01/01/02   12/31/03
701648AH
      COBRA   01/01/02      
 
  Select HMO —   Upstate New York        
701648BJ
      ACTIVE   01/01/02   12-31-2004
701648BK
      COBRA   01/01/02   12-31-2004
701648DS
      ACTIVE w/o Dental   01/01/04   12-31-2004
701648DT
      COBRA w/o Dental   01/01/04   12-31-2004
 
               
 
  Choice HMO –   Florida        
701648AI
      ACTIVE   01/01/02    
701648AJ
      COBRA   01/01/04    
701648BZ
      ACTIVE w/o Dental   01/01/04    
701648C
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Arizona        
701648AP
      ACTIVE   01/01/02    
701648AT
      COBRA   01/01/02    

     
MP Financial Agreement
  35

--------------------------------------------------------------------------------

 

                  UNET                 Policy           Effective   Termination
Number   UNET Policy Number   Date   Date
701648CS
      ACTIVE w/o Dental   01/01/04    
701648CT
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Ohio        
701648AX
      ACTIVE   01/01/02    
701648BA
      COBRA   01/01/02    
701648CU
      ACTIVE w/o Dental   01/01/04    
701648CV
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Georgia        
701648BB
      ACTIVE   01/01/02    
701648BC
      COBRA   01/01/02    
701648CY
      ACTIVE w/o Dental   01/01/04    
701648CZ
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Kentucky        
701648BD
      ACTIVE   01/01/02    
701648BE
      COBRA   01/01/02    
701648D
      ACTIVE w/o Dental   01/01/04    
701648DL
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Texas        
701648BF
      ACTIVE   01/01/02    
701648BG
      COBRA   01/01/02    
701648DN
      ACTIVE w/o Dental   01/01/04    
701648DP
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Utah        
701648BL
      ACTIVE   01/01/02    
701648BN
      COBRA   01/01/02    
701648DU
      ACTIVE w/o Dental   01/01/04    
701648DV
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Missouri        
701648BP
      ACTIVE   01/01/02    
701648BX
      COBRA   01/01/02    
701648DX
      ACTIVE w/o Dental   01/01/04    
701648DY
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Arkansas        

     
MP Financial Agreement
  36

--------------------------------------------------------------------------------

 

                  UNET                 Policy           Effective   Termination
Number   UNET Policy Number   Date   Date
701648CA
      ACTIVE   01/01/02    
701648CB
      COBRA   01/01/02    
 
               
 
               
 
  Choice HMO –   Arkansas        
701648DZ
      ACTIVE w/o Dental   01/01/04    
701648E
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Mississippi        
701648CC
      ACTIVE   01/01/02    
701648CD
      COBRA   01/01/02    
701648EA
      ACTIVE w/o Dental   01/01/04    
701648EB
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO—   District of Columbia        
701648CG
      ACTIVE   01/01/02    
701648CH
      COBRA   01/01/02    
701648EE
      ACTIVE w/o Dental   01/01/04    
701648EF
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Virginia        
701648CI
      ACTIVE   01/01/02    
701648CJ
      COBRA   01/01/02    
701648EG
      ACTIVE w/o Dental   01/01/04    
701648EH
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Tennessee        
701648CE
      ACTIVE   01/01/02    
701648CF
      COBRA   01/01/02    
701648EC
      ACTIVE w/o Dental   01/01/04    
701648ED
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Louisiana        
701648BH
      ACTIVE   01/01/02    
701648BI
      COBRA   01/01/02    
701648DQ
      ACTIVE w/o Dental   01/01/04    
701648DR
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Colorado        
701648AK
      ACTIVE   01/01/02    
701648AN
      COBRA   01/01/02    
701648CQ
      ACTIVE w/o Dental   01/01/04    

     
MP Financial Agreement
  37

--------------------------------------------------------------------------------

 

                  UNET                 Policy           Effective   Termination
Number   UNET Policy Number   Date   Date
701648CR
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Alabama        
701648CN
      ACTIVE   01/01/02    
701648CP
      COBRA   01/01/02    
701648EK
      ACTIVE w/o Dental   01/01/04    
701648EL
      COBRA w/o Dental   01/01/04    
 
               
 
  Select EPO –   Wisconsin        
701648DI
      ACTIVE & COBRA   01/01/02   12-31-2004
701648DI
      ACTIVE & COBRA w/o Dental   01/01/04   12-31-2004
 
               
 
  Choice HMO –   Fairfax VA        
701648CK
      ACTIVE   01/01/02    
701648CL
      COBRA   01/01/02    
701648EI
      ACTIVE w/o Dental   01/01/04    
701648EJ
      COBRA w/o Dental   01/01/04    
 
               
 
  Select EPO –   South Carolina        
701648DH
      ACTIVE & COBRA   01/01/02   12-31-2004
701648DH
      ACTIVE & COBRA w/o Dental   01/01/04   12-31-2004
 
               
 
  Choice HMO –   Iowa        
701648AS
      ACTIVE   02/01/03    
701648AU
      COBRA   02/01/03    
701648EQ
      ACTIVE w/o Dental   01/01/04    
701648ER
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice HMO –   Rhode Island        
701648AV
      ACTIVE   05/01/03    
701648AY
      COBRA   05/01/03    
701648ES
      ACTIVE w/o Dental   01/01/04    
701648ET
      COBRA w/o Dental   01/01/04    
 
               
 
  Choice EPO –   Indiana        
701648AZ
      ACTIVE & COBRA   08/01/03   12-31-2004

     
MP Financial Agreement
  38

--------------------------------------------------------------------------------

 

                  UNET                 Policy           Effective   Termination
Number   UNET Policy Number   Date   Date
701648AZ
      ACTIVE & COBRA w/o Dental   01/01/04   12-31-2004
 
               
 
  Choice HMO –   Georgia Consumer        
701648EV
      ACTIVE   07/01/04    
701648EY
      COBRA   07/01/04    
701648EZ
      ACTIVE w/o Dental   07/01/04    
701648F
      COBRA w/o Dental   07/01/04    
 
               
 
  Choice HMO –   Illinois        
701648FE
      ACTIVE   01/01/05    
701648FB
      COBRA   01/01/05    
701648FC
      ACTIVE w/o Dental   01/01/05    
701648FD
      COBRA w/o Dental   01/01/05    
 
               
 
  Choice HMO -   Ohio (NK)        
701648FE
      ACTIVE   01/01/05    
701648FF
      COBRA   01/01/05    
701648FG
      ACTIVE w/o Dental   01/01/05    
701648FH
      COBRA w/o Dental   01/01/05    
 
               
 
  Choice HMO -   Indiana (IK)        
701648FI
      ACTIVE   01/01/05    
701648FJ
      COBRA   01/01/05    
701648FK
      ACTIVE w/o Dental   01/01/05    
701648FX
      COBRA w/o Dental   01/01/05    

              PRIME       Effective   Termination Policy #   Policyholder   Date
  Date
247936
  ***   1/1/2002    
247974
  ***   1/1/2002   5/28/2003
247977
  ***   1/1/2002   3/1/2002
247989
  ***   1/1/2002   5/27/2003
247996
  ***   1/1/2002   9/1/2002
248003
  ***   1/1/2002   3/1/2003
248006
  ***   1/1/2002   1/22/2002
248026
  ***   1/1/2002    
248030
  ***   1/1/2002    
248035
  ***   1/1/2002   1/1/2002

     
MP Financial Agreement
  39

--------------------------------------------------------------------------------

 

              PRIME       Effective   Termination Policy #   Policyholder   Date
  Date
248041
  ***   1/1/2002   2/1/2004
248056
  ***   1/1/2002   1/11/2002
248063
  ***   1/1/2002   1/1/2004
248110
  ***   1/1/2002    
248128
  ***   1/1/2002    
248131
  ***   1/1/2002   10/1/2003
248133
  ***   1/1/2002    
248135
  ***   1/1/2002   2/22/2002
248144
  ***   1/1/2002   8/15/2003
248151
  ***   1/1/2002   8/1/2002
248163
  ***   1/1/2002   1/1/2002
248165
  ***   1/1/2002   7/1/2002
248180
  ***   1/1/2002   6/1/2002
248197
  ***   1/1/2002   11/1/2002
248208
  ***   1/1/2002   6/16/2002
248241
  ***   1/1/2002   1/1/2005
248263
  ***   1/1/2002   11/22/2002
248271
  ***   1/1/2002    
248291
  ***   1/1/2002   3/4/2003
248306
  ***   1/1/2002   5/1/2003
248314
  ***   1/1/2002   9/4/2002
248324
  ***   1/1/2002    
248325
  ***   1/1/2002   5/31/2002
248339
  ***   1/1/2002   9/8/2003
248346
  ***   1/1/2002    
248352
  ***   1/1/2002   3/30/2002
248370
  ***   1/1/2002   6/1/2002
248371
  ***   1/1/2002   4/28/2002
248372
  ***   1/1/2002    
248373
  ***   1/1/2002   2/25/2002
248374
  ***   1/1/2002    
248375
  ***   1/1/2002    
248376
  ***   1/1/2002   11/1/2002
248379
  ***   1/1/2002   5/31/2002
248382
  ***   1/1/2002    
248384
  ***   1/1/2002   1/1/2005
248388
  ***   1/1/2002    
248390
  ***   1/1/2002   6/26/2002
248396
  ***   1/1/2002   4/15/2003
248399
  ***   1/1/2002   1/1/2005
248404
  ***   1/1/2002   7/1/2002
248405
  ***   1/1/2002    

     
MP Financial Agreement
  40

--------------------------------------------------------------------------------

 

              PRIME       Effective   Termination Policy #   Policyholder   Date
  Date
248407
  ***   1/1/2002   12/2/2002
248408
  ***   1/1/2002    
248409
  ***   1/1/2002    
248410
  ***   1/1/2002   7/1/2002
248411
  ***   1/1/2002    
248412
  ***   1/1/2002   3/1/2002
248413
  ***   1/1/2002   6/1/2003
248414
  ***   1/1/2002    
248415
  ***   1/1/2002    
248416
  ***   1/1/2002   1/1/2005
248417
  ***   1/1/2002   6/12/2003
248418
  ***   1/1/2002    
248421
  ***   1/1/2002   6/1/2002
248429
  ***   1/1/2002    
248433
  ***   1/1/2002   1/1/2002
248442
  ***   1/1/2002    
248457
  ***   1/1/2002   1/1/2003
248463
  ***   1/1/2002   10/26/2002
248466
  ***   1/1/2002    
248473
  ***   1/1/2002    
248474
  ***   1/1/2002   6/15/2002
248478
  ***   1/1/2002   8/8/2002
248480
  ***   1/1/2002    
248486
  ***   1/1/2002    
248494
  ***   1/1/2002   4/1/2003
248495
  ***   1/1/2002   7/1/2002
248497
  ***   1/1/2002    
248501
  ***   1/1/2002    
248516
  ***   1/1/2002   1/1/2003
248519
  ***   1/1/2002    
248521
  ***   1/1/2002   1/1/2003
248524
  ***   1/1/2002   10/16/2002
248528
  ***   1/1/2002    
248532
  ***   1/1/2002   2/1/2003
250136
  ***   1/1/2002   7/1/2002
250197
  ***   1/7/2002   7/1/2003
250201
  ***   1/1/2002    
250656
  ***   1/1/2002   6/1/2003
250657
  ***   1/1/2002   1/1/2003
250658
  ***   2/1/2002    
250659
  ***   2/1/2002   2/1/2004
250660
  ***   1/1/2002   2/16/2005

     
MP Financial Agreement
  41

--------------------------------------------------------------------------------

 

              PRIME       Effective   Termination Policy #   Policyholder   Date
  Date
250669
  ***   2/15/2002   12/9/2002
252657
  ***   3/1/2002    
252926
  ***   3/1/2002   6/1/2002
253683
  ***   3/4/2002   3/18/2002
253774
  ***   3/1/2002   2/19/2003
253775
  ***   3/1/2002    
253778
  ***   2/27/2002   8/28/2002
254553
  ***   4/1/2002   5/21/2002
254678
  ***   4/1/2002   5/31/2002
254741
  ***   4/1/2002    
255675
  ***   4/1/2002   10/9/2002
255701
  ***   4/1/2002    
255709
  ***   4/1/2002   4/1/2002
256410
  ***   2/4/2002   2/4/2002
256498
  ***   2/4/2002   8/12/2002
256505
  ***   4/1/2002   1/2/2004
257668
  ***   4/15/2002   5/2/2003
261873
  ***   6/1/2002   10/1/2004
262606
  ***   7/1/2002   1/1/2003
262614
  ***   6/1/2002    
262616
  ***   6/1/2002   7/1/2004
262666
  ***   6/1/2002   3/6/2003
263961
  ***   6/7/2002   8/1/2002
264562
  ***   7/1/2002   10/22/2004
264565
  ***   7/1/2002    
266459
  ***   7/28/2002   5/2/2004
266473
  ***   7/28/2002    
267825
  ***   9/1/2002   3/3/2004
268747
  ***   9/1/2002   1/15/2004
271606
  ***   10/1/2002   1/1/2003
272924
  ***   11/1/2002   5/1/2003
273651
  ***   10/16/2002    
274488
  ***   11/20/2002   1/1/2003
277124
  ***   1/1/2003   1/1/2005
278257
  ***   12/1/2002   11/29/2004
279171
  ***   1/1/2003   7/1/2003
279197
  ***   1/6/2003   2/12/2004
279225
  ***   12/15/2002   4/15/2003
281742
  ***   1/1/2003    
282005
  ***   1/1/2003   12/1/2003
282007
  ***   1/1/2003    
282062
  ***   1/6/2003   3/1/2004

     
MP Financial Agreement
  42

--------------------------------------------------------------------------------

 

              PRIME       Effective   Termination Policy #   Policyholder   Date
  Date
286373
  ***   2/1/2003    
288802
  ***   3/1/2003   3/2/2004
303058
  ***   7/1/2003    
303075
  ***   5/1/2003    
303083
  ***   5/1/2003    
310924
  ***   5/22/2003    
311776
  ***   8/11/2003    
314764
  ***   7/1/2003   10/1/2004
314770
  ***   7/1/2003    
315038
  ***   7/1/2003   4/1/2004
326974
  ***   9/1/2003   8/16/2004
334639
  ***   9/14/2003    
338429
  ***   10/1/2003    
345349
  ***   9/1/2003    
348740
  ***   10/1/2003   3/1/2004
348746
  ***   10/1/2003   3/1/2004
353316
  ***   11/1/2003   11/1/2004
369064
  ***   1/1/2004    
378384
  ***   1/1/2004   1/1/2004
391528
  ***   3/1/2004    
395396
  ***   3/1/2004   10/1/2004
399283
  ***   2/16/2004   6/12/2004
400182
  ***   2/16/2004    
420189
  ***   5/3/2004    
421616
  ***   6/1/2004    
389529
  ***   1/1/2004    
400899
  ***   2/19/2004    
426244
  ***   2/1/2004    
428344
  ***   7/1/2004    
429009
  ***   5/12/2004   5/12/2004
429057
  ***   5/12/2004   5/12/2004
430384
  ***   7/1/2004    
433257
  ***   6/13/2004   10/15/2004
433886
  ***   6/21/2004   10/1/2004
4436305
  ***   7/15/2004   11/1/2004
445040
  ***   9/5/2004    
456752
  ***   10/1/2004    
461332
  ***   11/1/2004    
462865
  ***   11/2/2004    
464334
  ***   1/1/2005    
467310
  ***   1/1/2005    
468171
  ***   1/1/20005   3/1/2005

     
MP Financial Agreement
  43

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              PRIME       Effective   Termination Policy #   Policyholder   Date
  Date
469055
  ***   12/20/2004    
469086
  ***   1/1/2005   1/1/2005
469115
  ***   1/1/2005    
469117
  ***   1/1/2005    
472227
  ***   1/1/2005    
473377
  ***   1/3/2005    
473385
  ***   1/28/2005    
474789
  ***   1/29/2005    
475654
  ***   1/30/2005    
475961
  ***   1/31/2005    
476007
  ***   2/1/2005    
476271
  ***   2/2/2005    
250579
  ***   1/16/2002   5/1/2002
250671
  ***   1/22/2002   3/4/2002
251016
  ***   1/13/2002   3/1/2005
256129
  ***   3/1/2002   7/1/2002
256904
  ***   1/1/2002   6/1/2002
256960
  ***   3/20/2002   6/1/2002
257422
  ***   3/26/2002   6/1/2002
257424
  ***   4/9/2002   4/9/2002
259230
  ***   4/2/2002   11/1/2002
259740
  ***   4/14/2002   7/9/2002
260298
  ***   4/2/2002   8/2/2002
260303
  ***   4/16/2002   7/16/2002
263976
  ***   4/3/2002   6/26/2002
265506
  ***   6/20/2002   3/24/2003
265510
  ***   6/1/2002   11/1/2002
265515
  ***   6/1/2002   9/21/2002
265560
  ***   6/1/2002   10/12/2002
268687
  ***   7/1/2002   7/1/2002
268689
  ***   8/8/2002   11/1/2002
268694
  ***   7/24/2002   11/24/2002
269888
  ***   8/1/2002   8/1/2002
269896
  ***   8/1/2002   8/1/2002
269898
  ***   8/1/2002   8/1/2002
269899
  ***   7/18/2002   11/17/2002
274864
  ***   10/15/2002   4/15/2003
274873
  ***   10/16/2002   1/13/2003
274875
  ***   10/16/2002   12/1/2002
274880
  ***   10/16/2002   11/16/2002
274914
  ***   10/16/2002   11/16/2002

     
MP Financial Agreement
  44

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              PRIME       Effective   Termination Policy #   Policyholder   Date
  Date
275044
  ***   9/12/2002   11/30/2002
280221
  ***   12/1/2002   3/1/2003
280224
  ***   11/1/2002   2/1/2003
280225
  ***   1/1/2003   7/1/2003
280327
  ***   12/4/2002   6/4/2004
281701
  ***   1/1/2003   10/3/2003
282549
  ***   12/10/2002   2/10/2004
283649
  ***   11/20/2002   2/20/2004
286556
  ***   12/27/2002   9/1/2003
288804
  ***   1/21/2003   6/4/2004
293814
  ***   2/1/2003   5/27/2003
293891
  ***   2/27/2003   12/1/2003
310933
  ***   5/1/2003   11/1/2003
315060
  ***   6/12/2003   7/1/2003
315099
  ***   6/12/2003   10/1/2003
315132
  ***   6/2/2003   10/1/2003
343286
  ***   8/21/2003   12/17/2003
355898
  ***   9/15/2003    
360528
  ***   9/1/2003   2/1/2004
373490
  ***   11/11/2003    
375159
  ***   12/3/2003   3/1/2005
386745
  ***   2/1/2004    
388711
  ***   11/26/2003   1/1/2004
390767
  ***   2/1/2004   3/1/2005
390903
  ***   2/6/2004   3/1/2005
390937
  ***   1/7/2004   3/1/2005
397824
  ***   3/3/2004    
397852
  ***   3/3/2004    
397859
  ***   3/3/2004   12/4/2004
397876
  ***   3/3/2004    
397881
  ***   3/3/2004   5/4/2004
398067
  ***   3/3/2004    
398089
  ***   3/15/2004    
398122
  ***   3/3/2004    
398159
  ***   3/3/2004   9/1/2004
406144
  ***   2/19/2004   6/6/2004
421429
  ***   4/16/2004   7/1/2004
421796
  ***   5/6/2004   3/1/2005
401392
  ***   3/1/2004   4/1/2004
428137
  ***   5/11/2004   6/1/2004
442733
  ***   7/13/2004   10/4/2004
452935
  ***   8/13/2004   3/1/2005

     
MP Financial Agreement
  45

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              PRIME       Effective   Termination Policy #   Policyholder   Date
  Date
454038
  ***   9/8/2004   3/1/2005
459689
  ***   10/2/2004   3/1/2005
462574
  ***   11/19/2004   3/1/2005
463573
  ***   11/24/2004   1/3/2005
464871
  ***   12/1/2004   3/1/2005
465323
  ***   9/2//2004    

     
MP Financial Agreement
  46

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(ADMINISTAFF LOGO) [h27479h2747900.gif]
December 11, 2001
UnitedHealth Group
Kevin Kerlejza, Director Treasury Operations
450 Columbus Boulevard
Hartford, CT 06115-0450
RE: Benefits Account Establishment
Dear Kevin Kerlejza:
UnitedHealthcare and Administaff of Texas, Inc. have entered into an Insured
Minimum Premium Arrangement whereby various affiliates of UnitedHealthcare will
administer benefits pursuant to the provisions of Administaff of Texas, Inc.
benefits plan. In connection with that arrangement, UnitedHealthcare’s standard
procedure is to have the customer establish a bank account from which
UnitedHealthcare affiliates draw to pay claims. We have requested that, as to
the Administaff of Texas, Inc.’s Benefit plan, UnitedHealthcare affiliates
instead make claims payments from a UnitedHealthcare account at J.P. Morgan
Chase Bank (Bank) into which Administaff of Texas, Inc. will deposit funds. This
is to advise you that UnitedHealthcare and its affiliates are indemnified and
held harmless by Administaff of Texas, Inc. for any and all federal, state,
local or other governmental demand, charge or tax (by whatever named called)
assessed against or imposed upon them arising out of UnitedHealthcare’s
establishing a bank account as requested by Administaff of Texas, Inc. and or
making such payments as aforesaid. This account will be known as:
UnitedHealthcare Administered Plan for Administaff of Texas, Inc. –
Medical/Dental Benefits Account.
The benefits account will be used to pay benefits covered under the Administaff
of Texas, Inc.’s health plan. Drafts in payment of these benefits will be drawn
by UnitedHealthcare. The benefits account will maintain a standing balance
determined by UnitedHealthcare to cover the one day assignment lag due to next
day presentments.
We will be funding the benefits account at J.P. Morgan Chase Daily via a Wire
Transfer initiated by UnitedHealthcare.

 

--------------------------------------------------------------------------------

 

UnitedHealth Group
Page 2
Funding for the account will be from the bank account shown below:

              Bank Name:   JPMorgan Chase
 
            Bank Address:   717 Travis Street, Houston, Texas 77002
 
            Bank ABA Routing #:   113000609
 
            Bank Account Name   Administaff Companies, Inc.
 
            Bank Account Number:   ***
 
            Bank Contact:   Valerie Luecke

Bank Statements should be mailed to:

Holly Jackson
19001 Crescent Springs Drive
Kingwood, Texas 77339
Notification of Amount of Request should be Faxes to:

Ellen Reason or Linda Trammel Fax: 281-348-3747
Phone: 281-348-3986
Monthly Banking Reports should be mailed to:

Holly Jackson
19001 Crescent Springs Drive
Kingwood, Texas 77339
Sincerely,
Douglas S. Sharp
VP Finance/Controller

CC:   UnitedHealthcare
JPMorgan Chase

 

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Exhibit D – Policies, Rates and Factors

I.   The definition of “Policy” for purposes of Section 1(s) of the Agreement
shall be as follows:

  •   Effective January 1, 2005:

  o   Policy No. 701648 (Medical FL, FN, FQ, FR, FS, FT, FU, FV, FY, FZ, G, GA,
GB, GC) (“Policy”)

II.   The “Maximum Monthly Employer Benefit Obligation” shall be the following:

  •   Effective January 1, 2005:

  o   *** of the Quoted Premium for each Policy

III.   The “MP Premium” shall be the following:

  •   Effective January 1, 2005:

  o   *** of the Quoted Premium for each Policy

IV.   The “Expense Percentage” shall be the following:

  •   Effective January 1, 2005:

  o   *** for the Policies and Non-MP Policies

V.    If the Pooling Option is elected by the Employer, the Pooling Charge shall
be based on Employees covered under a Policy or Non-MP Policy (“Covered
Employees”) and shall be as follows:

  •   with respect to the 2005 Arrangement Year,

  o   *** per Covered Employee per Arrangement Month.

      For example, assuming that the number of covered Employees for each month
of 2005 remains constant at 46,871, the annual Pool Charge for the 2005
Arrangement

     
MP Financial Agreement
  47

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      Year would be the product of (i) 46,871 multiplied by *** and
(ii) 12 months, which would equal approximately ***.     •   with respect to the
2006 Arrangement Year,

  o   an amount determined by the Company, but in no event greater than *** per
Covered Employee per Arrangement Month.

  •   with respect to the 2007 Arrangement Year,

  o   an amount determined by the Company, but in no event greater than *** per
Covered Employee per Arrangement Month.

     
MP Financial Agreement
  48