##### 



Exhibit 10.1


MEMORANDUM OF UNDERSTANDING


October 29, 2005




Affordability






| |                                                                                                 
| | ------------------------------------------------------------------------------------------------
| | (a) Annual GM pension benefit income of $8,000 or less
    (excluding the lump-sum payment), and
|
| | (b) Monthly benefit rate of $33.33 or less.                                                     

Amended Plan


Eligibility and Coverage




Opting In and/or Out






Amended Plan Structure






| |                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Monthly Contributions(Current and Future Retired
    Participants and Surviving Spouses only)                                                                   
|
| | $50 (single); $105 (multiple party)                                                                                                                             
|
| | Initially reduced to $10 (single); $21 (multiple party) by DC
    VEBA.                                                                                         
|
| | Traditional Care Network (TCN) and Preferred Provider
    Organization (PPO) Deductibles(Current and Future Retired
    Participants and Surviving Spouses only)
|
| | $300/$600                                                                                                                                                       
|
| | Initially reduced to $150 (single); $300 (multiple party) by DC
    VEBA.                                                                                       



---



##### 





| |                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | TCN and PPO Co-insurance(Current and Future Retired
    Participants and Surviving Spouses only)                                                                                                                                                                                                                                                                         
|
| | 10% In Network                                                                                                                                                                                                                                                                                                                                                           
|
| | 30% Out of Network                                                                                                                                                                                                                                                                                                                                                       
|
| | TCN and PPO Out of Pocket Maximum(Current and Future
    Retired Participants and Surviving Spouses only)                                                                                                                                                                                                                                                                
|
| | $500/$1000 In Network (including deductibles, excluding monthly
    contributions, prescription co-payments, Durable Medical
    Equipment (DME)/ Prosthetics & Orthotics (P&O),
    Mental Health/ Substance Abuse (MHSA), dental and vision cost
    sharing and other Amended Plan sanctions or exclusions, such as
    MHSA care beyond limits or outside of network)
|
| | Initially reduced to $250 (single); $500 (multiple party) by DC
    VEBA.                                                                                                                                                                                                                                                                                                
|
| | $1000/$2000 Out of Network (including deductibles, excluding
    monthly contributions, prescription co-payments, DME/ P&O,
    MHSA, dental and vision cost sharing and other Amended Plan
    sanctions or exclusions, such as MHSA care beyond limits or
    outside of network)                                                                                      
|
| | Initially reduced to $500 (single); $1000 (multiple party) by DC
    VEBA.                                                                                                                                                                                                                                                                                               
|
| | Emergency Room(Current and Future Retired Participants
    and Surviving Spouses only)                                                                                                                                                                                                                                                                                   
|
| | $50 co-payment per
    visit unless admitted. The co-payments do not apply to meeting
    Amended Plan deductible amounts and do not apply to meeting
    Amended Plan
    out-of-pocket maximum
    amounts. The co-payments apply regardless of whether the Amended
    Plan out of pocket maximum has been met.                                                       
|
| | Prescription Drugs(Active, Current and Future Retired
    Participants and Surviving Spouses)                                                                                                                                                                                                                                                                            
|
| | The co-payments do not
    apply to meeting Amended Plan deductible amounts and do not
    apply to meeting Amended Plan
    out-of-pocket maximum
    amounts. The co-payments apply regardless of whether the Amended
    Plan out of pocket maximum has been met.                                                                                                     
|
| | $5 generic/$10 brand retail co-payment                                                                                                                                                                                                                                                                                                                                   
|
| | $10 generic/$15 brand mail order co-payment per 90 day
    supply                                                                                                                                                                                                                                                                                                        
|
| | $15 retail co-payment for ED Drugs                                                                                                                                                                                                                                                                                                                                       
|
| | $18 mail order co-payment for ED Drugs                                                                                                                                                                                                                                                                                                                                   
|
| | Plan Design Escalation                                                                                                                                                                                                                                                                                                                                                   
|
| | All dollar-denominated plan design items such as drug
    co-payments, TCN and PPO deductibles,
    out-of-pocket maximums,
    and contributions will increase annually at a rate not to exceed
    3% as specified in Attachment B.                                                                                                                                    
|
| | Dental Plan(Current and Future Retired Participants and
    Surviving Spouses only including those covered by Affordability
    provision)                                                                                                                                                                                                                               
|
| | Coverage will be provided for retirees, surviving spouses and
    dependents from the DC VEBA. The assets of the DC VEBA will be
    used to provide the benefit and will initially pay 100% of
    claims and administrative costs that would have been paid by the
    dental plan.                                                                                    
|
| | Health Care Program Modifications(Active, Current and
    Future Retired Participants, Surviving Spouses, and Dependents,
    unless otherwise specified in Attachment C)                                                                                                                                                                                                
|
| | See Attachment C.                                                                                                                                                                                                                                                                                                                                                        



---



##### 





| |                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Mitigation                                                                                                                                                                                                                                                                                                                                 
|
| | The reductions for monthly contributions, deductibles, and
    out-of-pocket maximums,
    as well as the percentage of retiree dental to be provided by
    the assets of the DC VEBA are initially planned to be as set
    forth above. Any subsequent change will be determined by the
    Committee as limited by the trust agreement.
|
| | Administration                                                                                                                                                                                                                                                                                                                             
|
| | The administration of the Amended Plan shall be as defined in
    the Plan as well as the supplements, letters and memoranda
    attached thereto. This includes the joint committee identified
    in Exhibit C. Section 4. (d) and the
    miscellaneous letter for the Corporation-Union Committee on
    Health Care Benefits.         

Defined Contribution VEBA Administration




Purpose


out-of


DC VEBA Funding






| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) GM will cause the transfer of $1.0 billion of
    assets from a trust or otherwise to the DC VEBA (the First
    Contribution). Such transfer will be made as soon as
    practicable after the entry of Judgment approving this agreement
    and in no event later than the date on which retirees are
    required to make a monthly contribution under this agreement.
    One year following the First Contribution GM will cause the
    transfer of $1.0 billion of assets from a trust or
    otherwise to the DC VEBA (the Second Contribution).
    In 2011, on the anniversary date of the First Contribution GM
    will cause the transfer of $1.0 billion of assets from a
    trust or otherwise to the DC VEBA (the Third
    Contribution). If after the Second Contribution and prior
    to 2011 the value of the assets in the DC VEBA drops below
    $600 million as of the last day of any month, the Third
    Contribution will be pulled forward and paid within 15 days
    thereafter. In the event the Judgment approving this agreement
    is reversed or materially altered in whole or in part, there
    will be no obligation to make any transfer under this paragraph.
|
| | (b) Profit Sharing Payments as defined below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (c) Wage Deferral Payments as defined below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (d) Stock Appreciation Rights as defined below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (e) Stock Dividend Payments as defined below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

DC VEBA Profit Sharing Payments






---



##### 





DC VEBA Wage Deferral Payments






| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Effective with the first quarterly COLA adjustment following
    entry of Judgment approving this agreement, a cumulative total
    of seventeen cents ($0.17) will be diverted from future
    quarterly COLA increases, in additional increments of no more
    than six cents ($.06) in any quarter. Effective with the COLA
    adjustment immediately following the three month period in which
    the full seventeen cent ($0.17 cent) diversion has been reached,
    that amount shall be subtracted from the Cost of Living
    Allowance table, and the table shall be adjusted so that the
    actual three-month Average Consumer Price Index equates to the
    allowance then payable.
|
| | In addition, the September 18, 2006 three percent (3%)
    general increase to the hourly wage rate will not be payable.
    Instead an equivalent amount, equating to an average of $0.83
    (eighty-three cents) per hour, will be contributed to the DC
    VEBA.                                                                                                                                                                                                                                                                                                                                                                                                                                







DC VEBA Stock Appreciation Rights (SAR)






---



##### 





DC VEBA Stock Dividend Payments




Terms of DC VEBA




Plan Administration Costs




Effect of Legislative Changes




Fees






---



##### 



Indemnification




Effective Date




Legal Judgment




Duration and Termination








| |                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. If the declaratory judgment action is enjoined or
    stayed, or withdrawn, dismissed, or otherwise terminated prior
    to judgment, or if the Judgment is denied in whole or in
    material part, either GM or the UAW may terminate this agreement
    by 30 days written notice to the other party.
|
| | 2. If the Judgment is granted by the District Court, but
    overturned in whole or in part on appeal or otherwise, either GM
    or the UAW may terminate this agreement by 30 days written
    notice to the other party.                                                                                





No Prejudice






---



##### 







Final Documents




Health Care Reform




Capital Spending







|                         |  |                           
|------------------------ |  | --------------------------
|International Union, UAW |  | General Motors Corporation
|                        
|                         |  |                           
|                        
|                         |  |                           
|                        
|                         |  |                           
|                        
|                         |  |                           



---



##### 



Attachment A


Group Catastrophic Plan






| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Eligibility: All Hourly retirees are eligible to enroll
    in this catastrophic plan, except for active employees and
    retired and surviving spouse enrollees with annual GM pension
    benefit income of $8,000 or less and a monthly benefit rate of
    $33.33 or less.                                                                                                                                                                                                    
|
| | Initial and Ongoing Enrollment: Eligible Participants
    electing not to make monthly contributions for program coverage
    or who fail to authorize monthly contributions from their
    pension payments will be defaulted into this catastrophic
    plan option. As well, eligible Participants may
    voluntarily elect to enroll in this plan. Eligible Participants
    who are enrolled in this catastrophic TCN Plan will be subject
    to Rolling Enrollment rules.
|
| | Plan Design:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



| |                                                                                 
| | --------------------------------------------------------------------------------
| | Monthly Contribution: $0                                                        
|
| | Deductible: $1,250 (single) and $2,500 (family)                                 
|
| | Co-insurance: after deductible is met, 10% in-network and
    30% out of network



| |                         |                                                                                                              
| | ----------------------- | -------------------------------------------------------------------------------------------------------------
| | Out-of-Pocket Maximums: | $2,500 (single) and $5,000 (family) in-network; 
     $5,000 (single) and $10,000
    (family) out-of-network



| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | ER Co-Payment: $100 per visit, waived if admitted                                            
|
| | Rx Co-payment Retail: $15 Generic, $35 Brand; $50
    (Erectile Dysfunction medications)     
|
| | Rx Co-Payment Mail Order: $30 Generic, $70 Brand; $100
    (Erectile Dysfunction medications)



| |                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Deductibles, co-insurance, and
    out-of-pocket maximums
    noted above are not subject to mitigation. All
    dollar-denominated plan design items such as drug co-payments,
    deductibles and
    out-of-pocket maximums
    will increase annually at a rate not to exceed 3% as specified
    in Attachment B.



---



##### 



Attachment B


Plan Design Escalation


|           |  |  |     |   |  |  |     |   |  |  |     |   |  |  |     |   |  |  |     |   |  |  |     |  
|---------- |  |  | --- | - |  |  | --- | - |  |  | --- | - |  |  | --- | - |  |  | --- | - |  |  | --- | -
|Escalation |  |  | 3.0 | % |  |  | 3.0 | % |  |  | 3.0 | % |  |  | 3.0 | % |  |  | 3.0 | % |  |  | 3.0 | %

|                          |  |      |       |   |      |  |       |      |  |  |       |   |  |      |       |   |      |  |       |   |  |  |       |  
|------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | - |  | ---- | ----- | - | ---- |  | ----- | - |  |  | ----- | -
|$ (Where Applicable)      |  | 2006 |       |   | 2007 |  |       | 2008 |  |  | 2009  |   |  | 2010 |       |   | 2011 | 
|                          |  |      |       |   |      |  |       |      |  |  |       |   |  |      |       |   |      | 
|Monthly Contributions     |  |      |       |   |      |  |       |      |  |  |       |   |  |      |       |   |      |  |       |   |  |  |       |  
|Single                    |  |      | 50    |   |      |  | 52    |      |  |  | 53    |   |  |      | 55    |   |      |  | 56    |   |  |  | 58    |  
|Family                    |  |      | 105   |   |      |  | 108   |      |  |  | 111   |   |  |      | 115   |   |      |  | 118   |   |  |  | 122   |  
|                         
|Medical Plan A            |  |      |       |   |      |  |       |      |  |  |       |   |  |      |       |   |      |  |       |   |  |  |       |  
|Deductible  Single       |  |      | 300   |   |      |  | 309   |      |  |  | 318   |   |  |      | 328   |   |      |  | 338   |   |  |  | 348   |  
|Deductible  Family       |  |      | 600   |   |      |  | 618   |      |  |  | 637   |   |  |      | 656   |   |      |  | 675   |   |  |  | 696   |  
|Co-insurance In Network   |  |      | 10.0  | % |      |  | 10.0  | %    |  |  | 10.0  | % |  |      | 10.0  | % |      |  | 10.0  | % |  |  | 10.0  | %
|Co-insurance Out Network  |  |      | 30.0  | % |      |  | 30.0  | %    |  |  | 30.0  | % |  |      | 30.0  | % |      |  | 30.0  | % |  |  | 30.0  | %
|MOOP Single (In Network)  |  |      | 500   |   |      |  | 515   |      |  |  | 530   |   |  |      | 546   |   |      |  | 563   |   |  |  | 580   |  
|MOOP Family (In Network)  |  |      | 1,000 |   |      |  | 1,030 |      |  |  | 1,061 |   |  |      | 1,093 |   |      |  | 1,126 |   |  |  | 1,159 |  
|MOOP Single (Out Network) |  |      | 1,000 |   |      |  | 1,030 |      |  |  | 1,061 |   |  |      | 1,093 |   |      |  | 1,126 |   |  |  | 1,159 |  
|MOOP Family (Out Network) |  |      | 2,000 |   |      |  | 2,060 |      |  |  | 2,122 |   |  |      | 2,185 |   |      |  | 2,251 |   |  |  | 2,319 |  
|                         
|E/ R Co-payment**         |  |      | 50    |   |      |  | 52    |      |  |  | 53    |   |  |      | 55    |   |      |  | 56    |   |  |  | 58    |  
|                         
|Rx Plan                   |  |      |       |   |      |  |       |      |  |  |       |   |  |      |       |   |      |  |       |   |  |  |       |  
|Generic  Retail          |  |      | 5     |   |      |  | 5     |      |  |  | 5     |   |  |      | 5     |   |      |  | 6     |   |  |  | 6     |  
|Brand  Retail            |  |      | 10    |   |      |  | 10    |      |  |  | 11    |   |  |      | 11    |   |      |  | 11    |   |  |  | 12    |  
|Select Drugs  Retail*    |  |      | 15    |   |      |  | 15    |      |  |  | 16    |   |  |      | 16    |   |      |  | 17    |   |  |  | 17    |  
|Generic  Mail            |  |      | 10    |   |      |  | 10    |      |  |  | 11    |   |  |      | 11    |   |      |  | 11    |   |  |  | 12    |  
|Brand  Mail              |  |      | 15    |   |      |  | 15    |      |  |  | 16    |   |  |      | 16    |   |      |  | 17    |   |  |  | 17    |  
|Select Drugs  Mail*      |  |      | 18    |   |      |  | 19    |      |  |  | 19    |   |  |      | 20    |   |      |  | 20    |   |  |  | 21    |  






| |   |         
| | - | --------
| | * | ED Drugs



|   |                                                       
|-- | ------------------------------------------------------
|** | Not subject to deductible or
    out-of-pocket maximum

out-of




---



##### 



Attachment C


Health Care Program Modifications


(Effective As Noted in Each Item Listed Below)


(Applicable to All Active Employees, Current and Future
Retirees,


Surviving Spouses, and Dependents, Unless Otherwise
Specified)


Coordination With Medicare




| |   |                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------
| |  | Coverage to Medicare B Benefit (regardless of Med B
    enrollment) and Medicare Part B Maximum Payment
    Provisions:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | For Medicare eligible enrollees (regardless of whether or not
    they are enrolled in Medicare Part B), Program benefits
    will be limited to an amount equal to the secondary balance
    payment that would have been made on the basis that, on the date
    of services, the enrollee was enrolled in Medicare Part B
    and received services from a provider that participates in
    Medicare. In the event an enrollee receives services from a
    provider that does not accept assignment, the enrollee will be
    responsible for all fees charged above the Medicare allowed
    amount, unless the enrollee is in a situation in which the
    enrollee does not have the ability or control to select a
    provider that accepts Medicare assignment to perform the
    service. No enrollee payment over the Medicare allowed amount
    will count towards enrollee cost sharing maximums.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | It is recognized that the above provisions will indirectly
    require Medicare eligible enrollees who delayed enrollment in
    Medicare B, to enroll upon the implementation date of this
    agreement. The parties agree to send educational pieces
    90-120days prior
    to implementation, to those enrollees identified as eligible for
    Medicare, but not yet enrolled. Such delayed enrollment into
    Medicare Part B will result in penalties being applied by
    Medicare to the Part B monthly premiums. GM has agreed to
    work with Medicare to identify a way to eliminate penalties
    incurred. This may involve GM making a lump sum payment to
    Medicare; however, these discussions are not complete at this
    time. In the event GM and Medicare cannot reach agreement on
    eliminating the penalty, GM will establish a single nationwide
    Traditional Care Network (TCN) plan in which Medicare eligible
    enrollees who have elected to delay enrollment in Medicare
    Part B will be enrolled and this plan will not be subject
    to the provisions outlined in the first bullet above. Any
    enrollee in this group who later decides to enroll in Medicare
    Part B will be placed in a regular TCN plan and will
    be fully responsible for any and all penalties incurred at that
    time.



| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | Coordination of Benefits for Medications covered under
    Medicare Part B:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The parties agree to encourage Medicare Part B enrollees to
    assign Medicare benefits to those pharmacies from which the
    enrollee receives medications that are covered under Medicare
    Part B. A program will be developed and implemented to
    educate enrollees about Medicare paying for certain medications
    and to encourage enrollees to use those pharmacies that have the
    capabilities to electronically bill Medicare and to assign
    Medicare benefits to such pharmacies in order for the Program to
    take advantage of Medicare paying primary on the claim. Further,
    the parties agree to monitor the improvement of electronic
    Medicare billing capabilities across the pharmacy network. Upon
    mutual agreement, the parties may at a later date implement a
    mandatory program. At that point, enrollees who utilize
    pharmacies which do not have electronic claim submission
    capabilities with Medicare will be required to pay for the
    secondary balance of the claim at the point of sale and seek
    reimbursement via submission of a paper claim from the
    prescription drug carrier.
|
| |  | The provisions outlined above will not apply to Active enrollees
    eligible for Medicare as their primary coverage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | This entire Program Coordination related to Medicare Eligible
    Enrollees will be implemented as soon as practicable after
    approval of the agreement by the Federal District Court.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



---



##### 



Hospital/Surgical/Medical Modifications  TCN
and PPO, Unless Otherwise Specified


1. Cosmetic Provisions x-rays, non-covered




| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | This entire Program Modification related to Modifying
    Cosmetic Provisions will be implemented as soon as
    practicable after approval of the agreement by the Federal
    District Court.

2. Referral Process for the Preferred Provider
Organization Option




| |   |                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Require prospective authorization of
    out-of-network
    referrals.                                                                                                                                                                                                                                                                                                                 
|
| |  | In the event a referral is not approved prior to a service being
    provided, the enrollee is responsible for the
    out-of-network
    co-insurance. Any amount charged over R&C does not count
    toward enrollee cost sharing maximums.                                                                                                                                          
|
| |  | The parties agree not to promote further reductions in PPO
    networks as outlined in the Miscellaneous Letter (Preferred
    Provider Organization), but to support ongoing network
    improvements by the carriers as quality and performance
    evaluation tools continue to develop and are utilized to drive
    members to high performing providers, as mutually agreed upon.
|
| |  | This entire Program Modification related to Improving the
    Referral Process for the Preferred Provider
    Organization Option will be implemented as soon as
    practicable after approval of the agreement by the Federal
    District Court.                                                                                                                                  

3. Integrated Care Management Program:




| |   |                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The current Health Care Program language allows the parties to
    initiate and implement these Program Modifications related to
    the Integrated Care Management Program. These modifications will
    be implemented as soon as practicable following the ratification
    of this agreement.

4. Hold Harmless




| |   |                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | This entire Program Modification Related to Modifying Hold
    Harmless will be implemented as soon as practicable after
    approval of the agreement by the Federal District Court.



---



##### 



Prescription Drug Tools and Other Modifications


In mid-year 2005, the parties jointly hired an independent
consultant with the goal of reviewing various Rx Tools and
with the intent the parties implement, as soon as practicable,
such Rx Tools following review and recommendation by the
consultant and as has been mutually agreed by the parties. These
Rx Tools will be implemented in TCN, PPO and the parties
will recommend that HMO plans implement the recommended
Rx Tools as agreed upon.


1. Those tools specifically reviewed by the consultant
and agreed upon by the parties include:




| |   |                          
| | - | -------------------------
| |  | Select Drugs/Drug Classes



| |   |                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------
| |  | Proton Pump Inhibitors (PPIs): Restrict coverage to generic
    omeprazole only. Brand dispensing will be permitted only for the
    following:



| |   |                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------
| |  | Barretts esophagitis and Zoellinger-Ellison syndrome
    patients (prior authorization required).                 
|
| |  | Patients demonstrating intolerance to omeprazole or who have
    failed prior prescription drug omeprazole therapy.



| |   |                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Selective Serotonin Reuptake Inhibitors (SSRIs): Restrict
    coverage to generic citalopram for patients who have not
    previously used either citalopram or escitalopram (Lexapro). For
    patients who have previously used citalopram prescriptions and
    then present a prescription for escitalopram, prior
    authorization is appropriate.
|
| |  | Statins: Preferred coverage review for Pravachol and Crestor.                                                                                                                                                                                                                                                                                           



| |   |                         
| | - | ------------------------
| |  | Specific Rx Tools Edits:



| |   |                                                        
| | - | -------------------------------------------------------
| |  | Dose Duration for PPIs                                 
|
| |  | Dose Optimization for Statins                          
|
| |  | Step Therapy for Enbrel                                
|
| |  | Step Therapy for Rheumatoid Arthritis medications      
|
| |  | Prior Authorization for Erythroid Stimulants           
|
| |  | Prior Authorization for Alzheimers disease medications
|
| |  | Prior Authorization for Anti-Emetics                   

2. The Rx Tools Consultant will continue to
evaluate specific medications, tools and other opportunities to
improve the performance of the National Managed Pharmacy
Program, as directed by the parties. Implementation will only be
by mutual agreement. Such tools will include, but not be limited
to, the following:




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Step Therapy Edits  These edits ensure
    treatment is closer to evidence-based or commonly accepted
    guidelines by having patients use acceptable first line
    therapies initially for treatment. For example, use of first
    line treatments could be required prior to dispensing
    COX II Inhibitors used to manage pain.                                                                                
|
| |  | Prior Authorization Edits  These edits are
    designed to confirm diagnosis and other clinical information
    before medications are dispensed. They also act as a safeguard
    to ensure FDA-approved uses (or common medically acceptable
    uses) of certain medications. For example, injectable drugs used
    to treat hepatitis and growth hormones, are examples of
    medications covered by these edits.
|
| |  | Dose and Quantity Edits  These edits promote
    medication dosing or length of therapy consistent with FDA
    recommended or commonly acceptable medical practice. These edits
    also could limit quantity per prescription fill to FDA
    recommended or common dosing guidelines. Examples of dose and
    quantity edits include:                                                                              



| |   |                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------
| |  | Length of Therapy: limiting treatment of finger/toe nail fungus
    to 3 months as approved in FDA labeling



---



##### 





| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |  | Dose Duration: limiting availability of high dose medication to
    the period medical guidelines recommend                      
|
| |  | Appropriate Quantity: allowing 8 estrogen patches per
    retail script and 24 per mail order script (dosing is twice
    a week)



| |   |                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Dose Optimization Edits  These edits promote
    once a day dosing versus multiple dosing per day for drugs where
    no clinical reason exists to divide dosing.                                                                                                                                                 
|
| |  | 34 day and 90 day
    Provisions  These edits are designed to identify
    quantities that appear to be in excess of the amount considered
    usual for a 34 or 90 day supply which then requires a
    conversation between the dispensing pharmacy and physician prior
    to the quantity being dispensed.

3. RationalMed on a Nationwide Basis


4. Maintenance Drug List (MDL)


5. Quarterly Mailing of Prescription Drug Explanation of
Benefits (EOBs)


6. Edits for Select Drugs in TCN, PPO and
HMOs


7. Pharmacy Benefit Manager




| |   |                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The current Health Care Program language allows the parties to
    initiate and implement these Program Modifications,
    items 1-7. These
    modifications will be implemented as soon as practicable
    following the ratification of this agreement.

Health Maintenance Organization (HMO) Benefit Design and
Administration 




| |   |                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Monthly Contributions: $50 single; $105 multiple party
    (Current and Future Retired Participants and Surviving Spouses
    only, excludes those covered by the Affordability provision).
    
     Initially reduced to $10 (single); $21 (multiple party) by
    DC VEBA.
|
| |  | Office Visit co-payments: $10                                                                                                                                                                                                                                                
|
| |  | ER co-payments:
    $50 (Current and Future Retired Participants and Surviving
    Spouses only, excludes those covered by the Affordability
    provision)                                                                                                                  
|
| |  | Prescription Drug
    co-payments: (Current
    and Future Retired Participants and Surviving Spouses only,
    excluding those covered by the Affordability provision)                                                                                                      



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Retail: $5 generic/$10 brand; $15 Erectile
    Dysfunction medications                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Mail Order (if offered): $10 generic/$15 brand;
    $18 Erectile Dysfunction medications                                                                                                                                                                                                                                                                                                                                    
|
| |  | It is recognized that some HMOs may not be able to or may be
    unwilling to administer the Rx design outlined above. In
    the event this should occur, the parties will jointly agree upon
    an Rx design that achieves comparable savings.
    Additionally, it is agreed that if an HMO has implemented a
    mandatory mail order feature, the mail order
    co-payments will not
    exceed those outlined above.



---



##### 





| |   |                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------
| |  | HMOs may implement all pharmacy management tools currently
    available within their books of business.



| |   |                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Each HMO will make available to the membership a listing of
    pharmacy management tools employed by the plan.                                                                                   
|
| |  | If an enrollee, as a result of dissatisfaction with the pharmacy
    tools used by the HMO, wants to enroll in a different plan
    offering, the enrollee will be permitted to do so at any time.



| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | This entire Program Modification related to Modifying
    HMO Benefit Design and Administration will be implemented
    as soon as practicable after approval of the agreement by the
    Federal District Court.

agreed-to co-payment; TCN-related




---



##### 





Exhibit 1 to Attachment C


Additions to MDL


|                |  |                                 |  |                                       
|--------------- |  | ------------------------------- |  | --------------------------------------
|Drug Brand Name |  | Drug Generic Name               |  | Therapeutic Class                     
|                |  |                                 |  |                                       
|ACCURETIC       |  | quinapril/hydrochlorothiazide   |  | Hypertension                          
|ACEON           |  | perindopril                     |  | Hypertension                          
|ACTIVELLA       |  | estradiol/norethindrone         |  | Estrogen Replacement                  
|ACTONEL         |  | risedronate                     |  | Osteoporosis                          
|ACTOS           |  | pioglitazone                    |  | Diabetes                              
|ADVICOR         |  | lovastatin/niacin               |  | High Cholesterol                      
|AGGRENOX        |  | dipyridamole/aspirin            |  | Antiplatelet Agent  Stroke prevention
|ALTOPREV        |  | lovastatin xl                   |  | High Cholesterol                      
|ATACAND         |  | candesartan                     |  | Hypertension                          
|ATACAND HCT     |  | candesartan/hydrochlorothiazide |  | Hypertension                          
|AVALIDE         |  | irbesartan/hydrochlorothiazide  |  | Hypertension                          
|AVANDAMET       |  | rosiglitazone/metformin         |  | Diabetes                              
|AVANDIA         |  | rosiglitazone                   |  | Diabetes                              
|AVAPRO          |  | irbesartan                      |  | Hypertension                          
|BENICAR         |  | olmesartan                      |  | Hypertension                          
|BENICAR HCT     |  | olmesartan/hydrochlorothiazide  |  | Hypertension                          
|CADUET          |  | amlodipine/atorvastatin         |  | Hypertension  Cholesterol            
|CLIMARA PRO     |  | estradiol/levonorgestrel        |  | Estrogen Replacement                  
|COMBIPATCH      |  | estradiol/norethindrone         |  | Estrogen Replacement                  
|COMTAN          |  | entacopone                      |  | Parkinsons Disease                   
|COREG           |  | carvedilol                      |  | Hypertension  CHF                    
|DIOVAN HCT      |  | valsartan/hydrochlorothiazide   |  | Hypertension                          
|EVISTA          |  | raloxifene                      |  | Osteoporosis                          
|FEMHRT          |  | ethinyl estradiol/norethindrone |  | Estrogen Replacement                  
|FOSAMAX         |  | alendronate                     |  | Osteoporosis                          
|GLUCOVANCE      |  | glyburide/metformin             |  | Diabetes                              
|GLYSET          |  | miglitol                        |  | Diabetes                              
|HYZAAR          |  | losartan/hydrochlorothiazide    |  | Hypertension                          
|LEXXEL          |  | enalapril/felodipine            |  | Hypertension                          
|LOTREL          |  | amlodipine/benazepril           |  | Hypertension                          
|MIACALCIN       |  | calcitonin                      |  | Osteoporosis                          
|MICARDIS        |  | telmisartan                     |  | Hypertension                          
|MICARDIS HCT    |  | telmisartan/hydrochlorothiazide |  | Hypertension                          
|MIRAPEX         |  | pramipexole                     |  | Parkinsons Disease                   
|MOBIC           |  | meloxicam                       |  | Pain Management  NSAID               
|ORTHO-PREFEST   |  | estradiol/norgestimate          |  | Estrogen Replacement                  
|PLAVIX          |  | clopidogrel                     |  | Antiplatelet Agent  Stroke prevention
|PLETAL          |  | cilostazol                      |  | Platelet Aggregation Inhibitor        
|PRANDIN         |  | repaglinide                     |  | Diabetes                              
|PRAVIGARD PAC   |  | pravastatin/aspirin             |  | Cholesterol  Stroke Prevention       
|PRECOSE         |  | acarbose                        |  | Diabetes                              
|REQUIP          |  | ropinarole                      |  | Parkinsons Disease                   
|STARLIX         |  | nateglinide                     |  | Diabetes                              
|TARKA           |  | trandolapril/verapamil          |  | Hypertension                          
|TEVETEN         |  | eprosartan                      |  | Hypertension                          
|TEVETEN HCT     |  | eprosartan/hydrochlorothiazide  |  | Hypertension                          
|TRICOR          |  | fenofibrate                     |  | Cholesterol  Triglycerides           
|ZETIA           |  | ezetimibe                       |  | High Cholesterol                      
|ZIAC            |  | bisoprolol/hydrochlorothiazide  |  | Hypertension                          
|ZYFLO           |  | zileuton                        |  | Asthma                                



---



##### 



Attachment D


10-14-05 Framework Plan Change Effect on Hourly Expense


Projected at Valuation Trend Basis 2006-2011


Discount Rate = 5.75%






|                  |                                    |                 |     |      |  
|----------------- | ---------------------------------- | --------------- | --- | ---- | -
|                  |                                    | 06-11 Avg.    |    
|                  |                                    | Annual Net Sav. |    
|                  |                                    |                 |    
|($B)              |                                    |                 |     |     
|                 
|Hourly Expense(1) |                                    |                 |     |     
|                  | Service Cost                       |                 |     | 0.1  |  
|                  | Interest                           |                 |     | 0.8  |  
|                  | Amortization of Loss(3)            |                 |     | (0.2 | )
|                  | Prior Service Cost Amortization(2) |                 |     | 2.2  |  
|                  |                                    |                 |    
|                  | Total Gross Expense                |                 |     | 2.9  |  
|                  |                                    |                 |    
|                  | Expected Return On Assets          |                 |     |     |  
|                  |                                    |                 |    
|                  | Net Expense                        |                 |     | 2.9  |  
|                  |                                    |                 |    
|Cash              |                                    |                 | 1.0 |     






|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(1) | Value to be used for setting projected GM before tax
    profit impact             
|   
|(2) | Prior Service Cost Amortization Period = Average Remaining
    Service Life 7.1 Years
|   
|(3) | Loss Amortization Period = Average Remaining Working Life
    8.62 Years             



---



##### 



Attachment E


Health Care Reform Letter






issue-by






National Health Care Reform:


Reinsurance or Stop Loss Coverage:


Prescription Drug Initiatives:




| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | a. A standardized reporting system for adverse drug
    reactions;                                                         
|
| | b. Independent comparative evaluation of new drugs against
    existing drugs and broad-based distribution of the findings;
|
| | c. An end to the manipulation of patent expirations and
    extensions;                                                    
|
| | d. FDA approval for generic biopharmaceuticals.                                                                            

Technology Evaluation:


Universal Coverage:




---



#####