Digital Equipment Corporation
111 Powder Mill Road
Maynard, Massachusetts USA
September 28, 1998
Dear Disabled Employee:
As a result of the acquisition of Digital by Compaq,
representatives from both companies have been reviewing our current
benefit programs for active, disabled, and retired employees. The
purpose of this letter is to inform you of decisions that have been
made regarding Digital's disabled population.
The income replacement benefit you are receiving
is based on the terms of an insurance contract between you and the
applicable insurance carrier. This disability benefit will continue
as long as you continue to meet the eligibility requirements of
that insurance contract.
At this time, Compaq will continue to provide medical,
dental, and life insurance benefits for you and your eligible dependents.
If Medicare is your primary coverage it will continue to be primary
unless you are enrolled in a Company sponsored HMO or HMO Elect
Plan. You will be receiving a copy of Benefits Today within the
next few days that will provide you with additional information
about changes to medical, dental, and life insurance benefits that
may affect you in 1999.
It is Compaq's practice to terminate the employment
of a disabled person after 18 months of disability. While the time
of the termination may vary, this is a common practice with many
companies. Your status as an employee of Digital (now Compaq) will
terminate effective December 31, 1998. While the termination of
your status as an employee will not impact your eligibility for
medical, dental, and life insurance benefits as noted above, you
will no longer accrue a benefit under Digital's Cash Account Pension
Plan after December 31, 1998. Your options are as follows:
- You can leave the balance in your account until
you reach age 65.
Although you will no longer accrue benefits, your
account will continue to earn interest. - You may take payment of
the balance of your account. Please note, however, that there will
be significant tax consequences if you do not roll the balance over
into another qualified plan or an IRA. In addition, you should contact
the insurance company that is paying your LTD benefit to find out
what their policy states regarding the status of your LTD benefit
should you elect to take a pension benefit prior to reaching age
You will be contacted closer to your employment termination
date regarding the termination process. If you have accrued vacation
time and have not requested a payout prior to the termination date,
it will be paid out to you following your termination.
If your disability ends and you are able to return
to work prior to December 31, 1998, you will return under the provisions
of the current return to work policy. If your disability ends after
termination of your employment, you can reapply for employment with
Compaq and you will be given the same consideration as other applicants.
Compaq adheres to the same practice as Digital and
reserves the right to terminate or amend benefits including such
provisions as eligibility criteria as well as existing plan provisions
If you have questions about your medical, dental,
life insurance, or retirement benefits please contact Benefits Express
at 1-800-890-3100. For any other questions, please contact the Human
Resource Administration Center at 1-800-544-9944.
Karen J. Nelson U.S. Disability Program Manager