Health+Care+Benefits+Reduction+Letter+to+Employees

Memorandum

Date: February 20, 2011 To: Employees of The Chip Factory From: Jack Black, CEO Subject: Health Care Benefits Reduction

Due to the current economic status our company is facing and with the additional rising costs of health care we had to make a very difficult business decision to change health care providers. Changing our health care provider has allowed the company to pay the same costs but resulted is fewer benefits. The Chip Factory values our employees and elected to provide fewer benefits versus personeel cuts.

Effective May 1, 2011 our new health insurance carrier is AllHealth. Employees will not see an increase in their health care premiums, however you will see slightly higher deductibles and co-pays. We realize this is a hardship. Human Resources will be compiling a list of local resources and state run program that you may eligible. This will be available by May 1st.

Please join us on April 1, 2011 at 2:00 p.m. for an informational session to discuss these changes. An overview of our new health insurance benefits will be presented. There will be time for questions and answers immediately following the presentation.

If you are unable to attend the meeting, please feel free to make an appointment with Mary in Human Resources so she can outline the new benefits and address any concerns you may have at that time.