Document:

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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT is made effective as of July 6, 2004 (the "Effective
Date"), by and between Flagstar Bank, FSB (the "Bank") and Joel Murray (the
"Employee").

      WHEREAS, the Bank wishes to assure retention of the services of the
Employee for the period provided in this Agreement; and

      WHEREAS, the Employee is willing to serve in the employ of the Bank for
said period.

      NOW, THEREFORE, it is AGREED as follow:

      1. Employment. The Employee is employed as a First Vice President of the
Bank. The Employee shall render such administrative and management services for
the Bank as are currently rendered and as are customarily performed by persons
situated in a similar executive capacity. The Employee's other duties shall be
such as the Board of Directors of the Bank ("Board") or the Employee's direct or
indirect supervisors may from time to time reasonably direct, including normal
duties as an officer of the Bank.

      2. Base Compensation. The Bank agrees to pay the Employee during the term
of this Agreement a salary at the rate of $200,000 for the first year and
$215,000 for the second year and $225,000 for the third year, payable in cash in
accordance with the Bank's payroll procedures. The Board shall review, not less
often than annually, the rate of the Employee's salary, and in its sole
discretion may decide to increase his salary.

      3. Discretionary Bonuses. The Employee may be entitled to annual bonuses
at the sole discretion of the Board. No other compensation provided for in this
Agreement shall be deemed a substitute for the Employee's right to participate
in such discretionary bonuses.

      4. (a) Participation in Retirement, Medical and Other Plans. The Employee
shall participate in any plan that the Bank maintains for the benefit of its
employees at Employee's level if the plan relates to (i) pension,
profit-sharing, or other retirement benefits, (ii) medical insurance or the
reimbursement of medical or dependent care expenses, or (iii) other group
benefits, including disability and life insurance plans.

         (b) Employee Benefits: Expenses. The Employee shall participate in any
fringe benefits, paid-time off policy and other employee benefits that are or
may become available to the Bank's senior management employees and which are
commensurate with the responsibilities and functions to be performed by the
Employee under this Agreement. The Employee shall be reimbursed for all
reasonable out-of-pocket business expenses that he shall incur in connection
with his services under this Agreement upon substantiation of such expenses in
accordance with the policies of the Bank.

      5. Term. The Bank hereby employs the Employee, and the Employee hereby
accepts such employment under this Agreement, for the period commencing on the
Effective Date and ending thirty-six (36) months thereafter (or such earlier
date as is determined in accordance with Section 8).

      6. Loyalty: Noncompetition

         (a) During the period of his employment hereunder and except for
illnesses, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all his full business time, attention, skill, and efforts
to the faithful performance of his duties to the Bank hereunder and/or to its
affiliates; provided, however, that from time to time, the Employee may serve on
the boards of directors of, and hold any other offices or positions in,
companies or organizations which will not present, in the reasonable opinion of
the Board, any conflict of interest with the Bank or any of its subsidiaries or
affiliates, or unfavorably affect the performance of the Employee's duties
pursuant to this Agreement, or will not violate any applicable statute or
regulation. "Full business time" is hereby defined as that amount of time
usually devoted to like companies by similarly situated executive officers.
During the
<PAGE>
term of his employment under this Agreement, the Employee shall not engage in
any business or activity contrary to the business affairs or interests of the
Bank and/or its affiliates, or be gainfully employed in any other position or
job other than as provided above.

         (b) Nothing contained in this Paragraph 6 shall be deemed to prevent or
limit the Employee's right to invest in the capital stock or other securities of
any business dissimilar from that of the Bank, or, solely as a passive or
minority investor, in any business.

      7. Standards. The Employee shall perform his duties under this Agreement
in accordance with such reasonable standards as the Board may establish from
time to time. The Bank will provide the Employee with the working facilities and
staff customary for similar executives and necessary for him to perform his
duties.

      8. Termination and Termination Pay. The Employee's employment hereunder
may be terminated under the following circumstances:

      (a) Death. The Employee's employment under this Agreement shall terminate
upon his death during the term of this Agreement, in which event the Employee's
estate shall be entitled to receive the compensation due the Employee for the
remaining term of the contract, payable in a lump sum if election is made by the
spouse within 30 days of Employee's death or otherwise on a monthly basis, plus
any accrued and unpaid discretionary bonus due Employee at the time of his
death, payable in a lump sum amount within 30 days of the Employee's death. In
addition, the Bank shall maintain the existing medical insurance for the
Employee's spouse for six months after the Employee's death.

      (b) Disability. (1) The Bank may terminate the Employee's employment after
having established the Employee's Disability. For purposes of this Agreement,
"Disability" means a physical or mental infirmity which impairs the Employee's
ability to substantially perform his duties under this Agreement and which
results in the Employee becoming eligible for long-term disability benefits
under the Banks long-term disability plan (or, if the Bank has no such plan in
effect, which impairs, or which can be expected to impair, the Employee's
ability to substantially perform his duties under this Agreement for a period of
180 consecutive days). The Employee shall be entitled to the compensation and
benefits provided for under this Agreement for a period equal to the lesser of
(i) twelve (12) months or (ii) the remaining term of this Agreement, in each
case, as measured from the date that Employee's ability to perform his duties
under this Agreement was first impaired.

         (2) During any period that the Employee shall receive disability
benefits and to the extent that the Employee shall be physically and mentally
able to do so, he shall furnish such information, assistance and documents so as
to assist in the continued ongoing business of the Bank and, if able, shall make
himself available to the Bank to undertake reasonable assignments consistent
with his prior position and his physical and mental health. The Bank shall pay
all reasonable expenses incident to the performance of any assignment given to
the Employee during the disability period.

      (c) Just Cause. The Board may, by written notice to the Employee,
immediately terminate his employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause. Termination for "Just Cause" shall mean
termination because of, in good faith determination of the Board, the Employee's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order, or material breach of any provision
of this Agreement. No act, or failure to act, on the Employee's part shall be
considered "willful" unless he has acted, or failed to act, with an absence of
good faith and without a reasonable belief that his action or failure to act was
in the best interest of the Bank. Notwithstanding the foregoing, the Employee
shall not be deemed to have been terminated for Just Cause unless there shall
have been delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the
Board at a meeting of the Board called and held for that purpose (after
reasonable notice to the Employee and an opportunity for the Employee to be
heard before the Board), finding that in the good faith opinion of the Board the
Employee was guilty of conduct set forth above in the third sentence of this
Subsection (c) and specifying the particulars thereof in detail. If following
such meeting the Employee is reinstated, he shall be entitled to receive back
pay for the period following termination and continuing through reinstatement.
<PAGE>
      (d) Without Just Cause; Constructive Discharge. (1) The Board may, by
written notice to the Employee, immediately terminate his employment at any time
for a reason other than Just Cause, in which event the Employee shall be
entitled to receive the following compensation and benefits: (i) the salary
provided pursuant to Section 2 hereof, up to the date of termination of the term
as provided in Section 5 hereof of this Agreement (the "Expiration Date"), and
(ii) cash in an amount equal to the cost to the Employee of obtaining all
health, life, disability and other benefits which the Employee would have been
eligible to participate in through the Expiration Date based upon the benefit
levels substantially equal to those that the Bank benefit plans through the
Expiration Date, but only to the extent the Employee continues to quality for
participation therein. All amounts payable to the Employee shall be paid, at the
option of the Employee, either (I) in periodic payments through the Expiration
Date, or (II) in one lump sum within 10 days of such termination.

         (2) Notwithstanding the foregoing, but only to the extent required
under federal banking law, the amount payable under clause (d)(1)(i) hereof
shall be reduced to the extent that on the date of the Employee's termination of
employment, the present value of the benefits payable under clauses (d)(1)(i)and
(ii) hereof exceeds the limitation on severance benefits that is set forth in
Regulation Bulletin 27a of the Office of Thrift Supervision ("OTS"), as in
effect on the Effective Date.

      (e) Termination or Suspension Under Federal Law. (1) if the Employee is
removed and/or permanently prohibited from participating in the conduct of the
Bank's affairs by an order issued under Sections 8(eX4) or 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA")(12 U.S.C. 1818(e)(4) and (g)(1)), all
obligations of the Bank under this Agreement shall terminate, as of the
effective date of the order, but vested rights of the parties shall not be
affected.

         (2) If the Bank is in default (as defined in Section 3(x)(1) of FDIA),
all obligations under this Agreement shall terminate as of the date of default;
however, this Paragraph shall not affect the vested rights of the parties.

         (3) All obligations under this Agreement shall terminate, except to the
extent that continuation of this Agreement is necessary for the continued
operation of the Bank: (i) by the Director of the OTS, or his or her designee,
at the time that the Federal Deposit Insurance Corporation ("FDlC") or the
Resolution Trust Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of the
FDIA; or (ii) by the Director of the OTS, or his or her designee approves a
supervisory merger to resolve problems related to operation of the Bank or when
the Bank is determined by the Director of the OTS to be in an unsafe or unsound
condition. Such action shall not affect any vested rights of the parties.

        (4) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) or (g)(1) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Bank's affairs, the Bank's obligations
under this Agreement shall be suspended as of the date of such service, unless
stayed by appropriate proceedings. If the charges in the notice are dismissed,
the Bank may in its discretion (i) pay the Employee all or part of the
compensation withheld while its contract obligations were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.

      (f) Voluntary Termination by Employee. The Employee may voluntarily
terminate employment with the Bank during the term of this Agreement, upon at
least 60 days' prior written notice to the Board of Directors, in which case the
Employee shall receive only his compensation, vested rights and employee
benefits up to the date of his termination

      9. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.

      10. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitration award in any court having jurisdiction;
provided, however, that until the Expiration Date the Employee shall be entitled
to seek specific performance of his right to be paid during the
<PAGE>
pendency of any dispute or controversy arising under or in connection with this
Agreement. Any arbitration proceeding shall be governed by and subject to
Michigan arbitration law.

      11. Federal income Tax Withholding. The Bank may withhold all Federal and
State income or other taxes from any benefit payable under this Agreement as
shall be required pursuant to any law or government regulation or ruling.

      12. Successors and Assigns

      (a) Bank. This Agreement shall not be assigned by the Bank, provided that
this Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Bank which shall acquire, directly or indirectly, by
merger, consolidation, purchase or otherwise, all or substantially all of the
assets or stock of the Bank.

      (b) Employee. Since the Bank is contracting for the unique and personal
skills of the Employee, the Employee shall be precluded from assigning or
delegating his rights or duties hereunder, provided, however, that nothing in
this paragraph shall preclude (i) the Employee from designating a beneficiary to
receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of the Employee or his estate
from assigning any rights hereunder to the person or persons entitled thereunto.

      (c) Attachment. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

      13. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.

      14. Applicable Law. Except to the extent preempted by Federal law, the
laws of the State of Michigan shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.

      15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

      16. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.

      IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.

FLAGSTAR BANK, FSB

/s/ Mark Hammond
------------------

By: Mark Hammond

Its:  Chief Executive Officer

/s/ Joel Murray
------------------

Joel Murrayexv10w1

 

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.

 

 

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

	 	 	 
	MP Financial Agreement

	 	2

 

 

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:

	 	 	 
	MP Financial Agreement

	 	3

 

 

     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

	 	 	 
	MP Financial Agreement

	 	4

 

 

	 	 	 	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

	 	 	 
	MP Financial Agreement

	 	5

 

 

	 	 	 	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.

	 	 	 
	MP Financial Agreement

	 	6

 

 

	 	 	 	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

	 	 	 
	MP Financial Agreement

	 	7

 

 

	 	 	 	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

	 	 	 
	MP Financial Agreement

	 	8

 

 

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

	 	 	 
	MP Financial Agreement

	 	9

 

 

	 	 	 	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

	 	 	 
	MP Financial Agreement

	 	10

 

 

	 	 	 	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

	 	 	 
	MP Financial Agreement

	 	11

 

 

	 	 	 	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

	 	 	 
	MP Financial Agreement

	 	12

 

 

	 	 	 	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

	 	 	 
	MP Financial Agreement

	 	13

 

 

	 	 	 	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.

	 	 	 
	MP Financial Agreement

	 	14

 

 

	 	 	 	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.

	 	 	 
	MP Financial Agreement

	 	15

 

 

	 	(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

	 	 	 
	MP Financial Agreement

	 	16

 

 

	 	 	 	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

	 	 	 
	MP Financial Agreement

	 	17

 

 

	 	 	 	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

 

 

	 	 	 	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

 

 

	 	(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

 

 

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

 

 

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

 

 

	 	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

 

 

	 	 	 	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

 

 

	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

 

 

	 	 	 	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

 

 

	 	 	 	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

 

 

	 	 	 	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

 

 

	 	 	 	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

 

 

	 	 	 	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

 

 

	 	 	 	“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

 

 

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.
	 
	- ***

 

 

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

 

	 	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

 

	 	 	 	 	 	 	 
	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

 

	 	 	 	 	 	 	 
	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

 

	 	 	 	 	 	 	 
	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

 

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

 

 

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

 

	 	 	 	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

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