OR
SUPPLIER EMPLOYEES) OF (I) COMMUNICATING WITH THE INSURANCE COMPANIES, HMOS AND
ALL OTHER PROVIDERS OR THIRD-PARTY ADMINISTRATORS WITH RESPECT TO THE BENEFITS
PROVIDED UNDER THE WELFARE PLANS, AND (II) COMMUNICATING WITH WELFARE PLAN
PARTICIPANTS, INCLUDING PROVIDING ANY SUMMARY OF MATERIAL MODIFICATIONS
NECESSARY UNDER ERISA.
SPINCO AND SUPPLIER ACKNOWLEDGE AND UNDERSTAND THAT THE
SUPPLIER WELFARE PLANS WILL BE "MULTIPLE EMPLOYER WELFARE ARRANGEMENTS" WITHIN
THE MEANING OF SECTION 3 (40) ERISA.
(B)
SUPPLIER, AS THE PRIMARY EMPLOYER UNDER THE WELFARE PLAN, HEREBY
AGREES TO RETAIN SOLE RESPONSIBILITY FOR (I) AMENDING THE PLAN FOR PURPOSES OF
MAINTAINING COMPLIANCE WITH THE PROVISIONS OF ERISA AND (II) CORRECTING ANY
FIDUCIARY VIOLATIONS WITH THE DOL.
SUPPLIER AND SPINCO SHALL SHARE A PRO RATA
PORTION (DETERMINED BY NUMBER OF PARTICIPANTS IN THE RELEVANT WELFARE PLAN WHO
ARE ACTIVE OR FORMER SPINCO OR SUPPLIER EMPLOYEES) OF THE COSTS AND EXPENSES
ASSOCIATED WITH EACH OF THE FOREGOING PROVISIONS (RELATING TO THE PERIOD AFTER
ADOPTION BY SUPPLIER WITH RESPECT TO SUPPLIER'S EMPLOYEES AND FORMER EMPLOYEES
WHO PARTICIPATE OR PARTICIPATED IN THE PLANS DUE TO THEIR EMPLOYMENT WITH
SUPPLIER), EXCEPT PARAGRAPH (II). THE COSTS OF PARAGRAPH (II) SHALL BE BORNE BY
SUPPLIER.
(C)
SPINCO HEREBY AGREES TO (I) WITHHOLD ALL EMPLOYEE CONTRIBUTIONS
AND MAKE ALL EMPLOYER CONTRIBUTIONS AS REQUIRED BY ANY APPLICABLE SUPPLIER
WELFARE PLAN, AND PAY SUCH CONTRIBUTIONS AS DIRECTED BY THE SUPPLIER AND (II)
NOTIFY THE SUPPLIER REGARDING ANY CHANGES OF STATUS OR TERMINATION OF EMPLOYMENT
BY ANY SPINCO EMPLOYEES, SPINCO FORMER EMPLOYEES OR BENEFICIARIES WHO ARE
PARTICIPANTS IN THE WELFARE PLANS, WITHIN THE MEANING OF SECTION 125 OF THE CODE
AND THE REGULATIONS THEREUNDER.
(D)
VENDOR CONTRACTS.
(I)
BEFORE THE DISTRIBUTION DATE, SUPPLIER SHALL TAKE SUCH STEPS AS
ARE NECESSARY UNDER EACH ASO CONTRACT, GROUP INSURANCE POLICY AND HMO AGREEMENT
IN EXISTENCE AS OF THE DATE OF THIS AGREEMENT TO PERMIT SPINCO TO PARTICIPATE IN
THE TERMS AND CONDITIONS OF SUCH ASO CONTRACT, GROUP INSURANCE POLICY OR HMO
AGREEMENT BEGINNING IMMEDIATELY AFTER THE DISTRIBUTION DATE.
7
(II)
SUPPLIER SHALL DETERMINE, AND SHALL PROMPTLY NOTIFY SPINCO OF,
THE MANNER IN WHICH SPINCO'S PARTICIPATION IN THE TERMS AND CONDITIONS OF ASO
CONTRACTS, GROUP INSURANCE POLICIES AND HMO AGREEMENTS, AS SET FORTH ABOVE IS TO
BE EFFECTUATED.
SPINCO HEREBY AUTHORIZES SUPPLIER TO ACT ON ITS BEHALF TO
EXTEND TO SPINCO THE TERMS AND CONDITIONS OF THE ASO CONTRACTS, GROUP INSURANCE
POLICIES AND HMO AGREEMENTS DURING THE TRANSITION PERIOD.
SPINCO SHALL FULLY
COOPERATE WITH SUPPLIER IN SUCH EFFORTS.
(III)
SUPPLIER AND SPINCO SHALL USE THEIR REASONABLE BEST EFFORTS TO
CAUSE EACH OF THE INSURANCE COMPANIES, HMOS, PAID PROVIDER ORGANIZATIONS AND
THIRD-PARTY ADMINISTRATORS PROVIDING SERVICES AND BENEFITS UNDER THE SUPPLIER
WELFARE PLANS AND THE SPINCO WELFARE PLANS TO MAINTAIN THE PREMIUM AND/OR
ADMINISTRATIVE RATES, BASED ON THE AGGREGATE NUMBER OF PARTICIPANTS IN BOTH THE
SUPPLIER WELFARE PLANS, DURING THE TRANSITION PERIOD, AND THE SPINCO WELFARE
PLANS.
(IV)
FOR THE TRANSITION PERIOD, SPINCO SHALL BE RESPONSIBLE, SUBJECT TO
THE DIRECTION AND CONTROL OF SUPPLIER, FOR THE MANAGEMENT OF THE EXISTING
CONTRACTUAL AND