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