TIME OCCURS IN 2006, THEN SPINCO AND THE COMPANY SHALL CAUSE EACH
CONTINUING SPINCO EMPLOYEE TO RECEIVE VACATION BENEFITS FOR THE PERIOD BEGINNING
ON THE EFFECTIVE TIME AND ENDING ON DECEMBER 31, 2006, THAT ARE EQUAL TO (I)
SUCH EMPLOYEE'S ACCRUED AND UNUSED VACATION UNDER FOREST'S VACATION POLICY AS OF
THE EFFECTIVE TIME PLUS (II) IF THE COMPANY'S VACATION POLICY IS MORE GENEROUS
THAN FOREST'S VACATION POLICY WITH RESPECT TO SUCH CONTINUING SPINCO EMPLOYEE
BASED ON HIS YEARS OF SERVICE RECOGNIZED BY FOREST AS OF THE EFFECTIVE TIME FOR
PURPOSES OF SUCH POLICY, ANY ADDITIONAL VACATION ENTITLEMENT EARNED BY SUCH
EMPLOYEE UNDER THE TERMS OF THE COMPANY'S VACATION POLICY.
IN THE EVENT THE
EMPLOYMENT OF A SPINCO EMPLOYEE IS TERMINATED BY FOREST WITH THE COMPANY'S
CONSENT PRIOR TO THE EFFECTIVE TIME (OTHER THAN PURSUANT TO A TERMINATION FOR
CAUSE), (I) SUCH EMPLOYEE SHALL NOT RECEIVE A RETENTION BENEFIT, (II) FOREST
SHALL PROVIDE SUCH EMPLOYEE WITH THE SEVERANCE BENEFITS DESCRIBED ON EXHIBIT E,
PART B (PROVIDED SUCH EMPLOYEE EXECUTES A RELEASE OF CLAIMS IN FAVOR OF FOREST,
SPINCO, THE COMPANY AND THEIR RESPECTIVE AFFILIATES (WHICH RELEASE SHALL BE IN A
FORM AGREED TO BY FOREST, SPINCO AND THE COMPANY)), AND (III) AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE TIME, THE COMPANY SHALL REIMBURSE FOREST FOR
SUCH SEVERANCE BENEFITS ACTUALLY PAID BY FOREST TO SUCH EMPLOYEE; PROVIDED THAT
THE COMPANY SHALL NOT BE RESPONSIBLE FOR ANY REIMBURSEMENT OF SEVERANCE AMOUNTS
PAID TO ANY SUCH SPINCO EMPLOYEE WHO IS SUBSEQUENTLY RE-HIRED BY FOREST OR ANY
FOREST SUBSIDIARY DURING THE SIX-MONTH PERIOD FOLLOWING THE EFFECTIVE TIME (IN
WHICH CASE FOREST SHALL REFUND ANY REIMBURSEMENT SO MADE BY THE COMPANY).
(B)
NEITHER SPINCO NOR THE COMPANY SHALL ESTABLISH OR MAINTAIN
EFFECTIVE AS OF THE EFFECTIVE TIME (I) ANY PLAN PROVIDING SUPPLEMENTAL EXECUTIVE
RETIREMENT BENEFITS THAT IS NOT AN INDIVIDUAL ACCOUNT PLAN, (II) ANY PLAN
PROVIDING RETIREE MEDICAL BENEFITS OR (III) ANY DEFINED BENEFIT PENSION PLAN.
(C)
SPINCO AND THE COMPANY SHALL CAUSE EACH CONTINUING SPINCO EMPLOYEE
TO BE GIVEN FULL CREDIT FOR ALL SERVICE WITH FOREST, SPINCO AND THEIR AFFILIATES
BEFORE THE EFFECTIVE TIME FOR ALL PURPOSES UNDER EACH COMPANY BENEFIT PLAN
(EXCEPT TO THE EXTENT NECESSARY TO AVOID THE DUPLICATION OF BENEFITS).
SUCH
SERVICE CREDIT FOR EACH SUCH PURPOSE SHALL BE IN AN AMOUNT EQUAL TO THE SERVICE
CREDIT RECOGNIZED UNDER THE CORRESPONDING SPINCO BENEFIT PLAN AS OF THE
EFFECTIVE TIME FOR SUCH PURPOSE.
FOR PURPOSES OF DETERMINING THE TERMS AND
CONDITIONS OF A CONTINUING SPINCO EMPLOYEE'S PARTICIPATION IN ANY COMPANY
BENEFIT PLAN THAT IS AN EMPLOYEE WELFARE BENEFIT PLAN (THE "COMPANY WELFARE
PLANS"), THE COMPANY SHALL, AND SHALL CAUSE ITS AFFILIATES TO, (I) WAIVE ALL
LIMITATIONS AS TO PRE-EXISTING CONDITION EXCLUSIONS AND WAITING PERIODS WITH
RESPECT TO THE CONTINUING SPINCO EMPLOYEE OR HIS OR HER DEPENDENTS UNDER THE
COMPANY WELFARE PLANS,
56
OTHER THAN TO THE EXTENT LIMITATIONS OR WAITING PERIODS THAT ARE ALREADY IN
EFFECT WITH RESPECT TO THE CONTINUING SPINCO EMPLOYEE OR HIS OR HER DEPENDENTS
HAVE NOT BEEN SATISFIED