SUMMARY PLAN DESCRIPTION NORTHWEST PERMANENTE, P.C. CASH BALANCE PLAN. Retirement Plans Committee Northwest Permanente, P.C. As of January 1, 2014

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1 SUMMARY PLAN DESCRIPTION OF NORTHWEST PERMANENTE, P.C. CASH BALANCE PLAN Retirement Plans Committee Northwest Permanente, P.C. As of January 1, 2014

2 TABLE OF CONTENTS Page Introduction 1 1. Eligibility and Service Eligibility Years of Service Hours of Service Special Rules for Employees Transferred from Certain Kaiser Permanente Affiliated Organizations Service Equivalencies and Special Adjustments for Certain Company Employees 4 2. Cash Balance Account General Characteristics of Cash Balance Account Compensation Code Section 415 Limits Benefits for Periods of Covered Military Leave 8 3. Benefit Statements, Vesting and Forfeitures Benefit Statements Vesting Forfeitures of Nonvested Benefits 9 4. Withdrawals During Employment Withdrawals of Vested Benefits On or After Reaching Age Withdrawal Procedures Impact of Withdrawals on Benefits Distribution of Retirement Benefits Retirement Benefits Forms of Retirement Benefit for Cash Balance Accounts In Excess of $5, Cash Balance Accounts That Do Not Exceed $5, Application for Retirement Benefits; Time of Payment Eligible Rollover Distributions; Mandatory Withholding Taxability of Benefits Death Benefits Death Benefits After Your Benefit Starting Date Death Benefits Before Your Benefit Starting Date Designation of Beneficiary Assignment of Benefits; QDROs Plan Administration Employer Funding and Investment of Trust Funds (h) Accounts i

3 11. Rollovers Into Plan Are Not Allowed Claims Procedure Circumstances Causing Ineligibility or Loss of Benefits Amendment and Termination Internal Revenue Service Approval Formal Information 24 Page 17. Statement of ERISA Rights Receive Information About Your Plan and Benefits Prudent Action by Plan Fiduciaries Enforce Your Rights Assistance With Your Questions 26 APPENDIX A CLAIMS PROCEDURES A ii

4 Introduction The following summary describes briefly the principal provisions of the Northwest Permanente, P.C. Cash Balance Plan (Plan) as currently in effect, and the related policies of the Plan s Retirement Plans Committee. It is prepared as a convenience to you. Northwest Permanente, P.C. (the Company) has adopted the Plan, and any affiliate of the Company can adopt the Plan for its employees, with the approval of the Company. Employer means the Company and any adopting affiliate. The Company is currently the only employer that has adopted the Plan. The Plan is administered by the Retirement Plans Committee (the Committee or Administrative Committee) appointed by the Company under the Northwest Permanente, P.C. Retirement Plan and Trust. The Plan is designed to provide retirement benefits for the Company s Employees who are eligible to participate in the Plan and other benefits to qualifying Beneficiaries of Plan Participants. Every effort has been made to describe the provisions of the Plan with accuracy and clarity. This summary will give you a good overview of how the Plan works and your rights and obligations under the Plan. Because it is only a summary, however, it omits much of the detail found in the Plan document itself. Should any discrepancy exist between the Plan and this summary, the official Plan is the controlling document and is binding upon all parties. The Plan is available to any Plan Participant for review at the office of the Company during regular business hours. This summary is an important document. You should keep it in a safe place for future reference. If the Plan is changed in any material way that affects your eligibility or benefits, you will be given an explanation of the changes

5 1. Eligibility and Service 1.1 Eligibility You become eligible to start participation on the day you become a Qualified Employee of the Employer. Unless excluded (as described below), you are a Qualified Employee if you are an Employee of an Employer who meets either of the following requirements: You are an Employee who is first hired by the Employer on or after April 1, You are an Employee who was hired before April 1, 2014 and are not a qualified employee under the terms of the Northwest Permanente, P.C. Permanente Physicians Retirement Plan on or after April 1, In amplification of the foregoing, no Employee is Qualified Employee under this Plan for any period during which the Employee is a qualified employee under the terms of the Northwest Permanente, P.C. Permanente Physicians Retirement Plan on or after April 1, You are excluded (i.e. you are not a Qualified Employee) if you are any of the following: An Employee covered by a collective bargaining agreement that does not provide for participation in this Plan. A leased employee on the payroll of an outside firm. A Special Contract Employee, which means an Employee whose terms of employment do not provide for participation in this Plan. A worker classified by Employer as an independent contractor or as an employee of a nonaffiliated entity. An irregular-service or on-call Certified Registered Nurse Anesthetist (CRNA) and any CRNA who is covered by an employment agreement that does not provide for participation in this Plan. Generally, you are an Employee for a year if you receive an IRS Form W-2 from the Company. If you are a worker previously classified by Employer as an independent contractor or as an employee of a nonaffiliated entity and then are reclassified as an Employee of Employer, your exclusion from the definition of Qualified Employee applies to all periods affected by the reclassification. As a result, if you are reclassified, you would be entitled to Years of Service for the reclassification period, but not be eligible to participate in the Plan and not be entitled to Pay Credits or Interest Credits for such period

6 Every person entitled to participate in this Plan or having a vested Cash Balance Account is known as a Participant. 1.2 Years of Service You will complete a Year of Service if you complete a Service Year in which you have 1,000 or more Hours of Service. A Service Year is the calendar year. Years of Service are taken into account for two main purposes under the Plan. First, generally in order to be entitled to a Pay Credit for a Plan Year, you must be credited with a Year of Service for that Plan Year (see 2.1(a)). Second, you must be credited with a certain number of Years of Service in order to be vested in your Cash Balance Account (see 3.2). The Plan Year is the calendar year. A fractional Year of Service is credited for a Service Year in which you complete less than 1,000 Hours of Service as an Employee, equal to Hours of Service less than 1,000 divided by 1,000 in that Service Year. Fractional Years of Service are aggregated to determine your number of whole Years of Service for vesting purposes. In determining your Years of Service for vesting purposes, your service in any Service Year ending before January 1, 2014 (which Service Year is also the calendar year for this purpose) is also taken into account even though the Plan was not maintained by the Employer until January 1, Hours of Service The Plan generally counts as Hours of Service all of the hours for which you are paid or entitled to payment as an Employee of Employer, regularly scheduled hours for periods during which you are on a qualifying leave of absence, hours covered by a back pay award unless already counted, certain hours paid for at or after termination of employment, and hours as a leased employee or in another non-qualified employment capacity. Leaves of absence for which Hours of Service may be credited include leaves of absence authorized by the Employer, leaves of absence in accordance with Employer policies because of accident or illness, leaves of absence for periods of military service, and FMLA leaves. FMLA leaves are certain family or medical leaves, pursuant to the Family and Medical Leave Act of If you are credited with Hours of Service while on a leave of absence and you fail to meet the conditions of the leave of absence or do not return to work when required, you will retroactively lose the Hours of Service for the leave period except if the leave is FMLA leave or the leave is nonmilitary and the failure is because of death, disability or retirement

7 1.4 Special Rules for Employees Transferred from Certain Kaiser Permanente Affiliated Organizations If you transfer from employment with certain affiliates to employment with the Company, special service credits are provided for your work with the affiliates and are taken into account in determining your Hours of Service and Years of Service under the Plan. The affiliates for which special service credits are granted include Kaiser Foundation Health Plan, Inc. (Kaiser), certain other Permanente medical groups, and certain other Kaiser Permanente affiliated organizations. Contact the Pension and Benefits Department immediately in connection with your transfer of employment to make sure you understand whether your prior service is for a qualifying affiliate and, if so, how it affects your Hours of Service and Years of Service under the Plan. 1.5 Service Equivalencies and Special Adjustments for Certain Company Employees If your work schedule with the Company includes a virtual work unit, you will generally be credited with the number of hours included in that virtual work unit. If you actually work more hours than are included in that virtual work unit, you need to contact the Pension and Benefits Department to be credited with the higher number of hours actually worked. Also, if the full-time work schedule for your department is less than 40 hours per week, your actual Hours of Service will be multiplied by a factor which is 40 hours divided by the number of hours included in the full-time work schedule for your department. If the Company offers more than one optional full-time work schedule for your department, the number of hours included in the full-time work schedule for your department for purposes of the factor described above is the number of hours included in the lowest optional full-time work schedule for your department. If this special adjustment applies to you, it will result in you being credited with more than your number of actual Hours of Service under the Plan s general rules described in 1.3 above. 2. Cash Balance Account 2.1 General Characteristics of Cash Balance Account A Cash Balance Account is established and maintained for you once you start participation in the Plan. Upon commencement of participation in the Plan, your Cash Balance Account is initially zero ($0). A Cash Balance Account is a hypothetical account maintained for bookkeeping purposes and does not provide you with any right to specific assets of the Plan. Unlike a defined contribution plan (such as a 401(k) plan), you do not direct the investment of your Cash Balance Account under the Plan. Your Cash Balance Account as of any date means the amount in your Cash Balance Account on that date as determined under applicable Plan terms. Your Cash Balance Account is generally increased for Pay Credits and Interest Credits and reduced to reflect the amount of the Cash Balance Account that is taken into account in determining benefits paid or being paid to you

8 (a) Pay Credits. For each Plan Year when you are employed as a Participant, your Cash Balance Account will generally be increased by a Pay Credit as of the last day of each Plan Year (i.e. December 31st). A Pay Credit means an amount equal 10 percent of your Compensation (see 2.2 below) paid for employment as a Qualified Employee for the Plan Year. The following bullet points describe some additional requirements and special rules relating to Pay Credits. Except as described below, to be entitled to a Pay Credit for a Plan Year, you must be credited with a Year of Service for the Plan Year. For the Plan Year in which you start participating in the Plan, the Plan Year in which you resume participation as a result of a rehire after termination of employment, and the Plan Year in which you terminate employment, to be entitled to a Pay Credit for the Plan Year, the Year of Service minimum requirement is pro rated. You must be credited with a number of Hours of Service equal to or in excess of 1,000 Hours of Service multiplied by the following fraction - (the number of days you are employed by the Employer during the Plan Year/365). If you receive or start a distribution of benefits before the last day of a Plan Year and are otherwise entitled to a Pay Credit for that Plan Year, special rules may be applied in certain circumstances. The special rules, if applied, increase your Cash Balance Account as of the Benefit Starting Date for a Pay Credit for that Plan Year (rather than at the end of the Plan Year) taking into account your Compensation as of the Benefit Starting Date so that Pay Credit is included in determining your distributable amount. If the special rules are applied to credit you with a Pay Credit as of your Benefit Starting Date, the Plan includes a non-duplication rule so that such Pay Credit is not credited again at the end of the Plan Year. For any Plan Year after the Plan Year in which you have a Benefit Starting Date for a distribution, you will be eligible to participate in and receive a Pay Credit for such later Plan Year to the extent you have Compensation for such later Plan Year and meet the otherwise generally applicable rules for Pay Credits for such later Plan Year. (b) Interest Credits. Your Cash Balance Account will generally be increased by an Interest Credit as of the last day of each Plan Year (i.e. December 31st). An Interest Credit means the amount determined by

9 multiplying your Cash Balance Account as of the first day of the Plan Year by the Interest Crediting Rate for the Plan Year. The Interest Crediting Rate currently means an annual interest rate equal to 4 percent. The following bullet points describe some additional requirements and special rules relating to Interest Credits. If you receive or start a distribution of benefits during a Plan Year before the last day of the Plan Year, Interest Credits are provided with respect to the distribution on a pro rated basis. The Interest Crediting Rate is pro rated on a monthly basis to determine a monthly rate. Interest Credits (without compounding) are provided through the last day of the month before the month that includes your Benefit Starting Date for the distribution. The pro rated Interest Credit is credited with respect to the amount of your Cash Balance Account credited to you as of the first day of the Plan Year that is included in the amount distributed on your Benefit Starting Date. Your Cash Balance Account is increased as of the Benefit Starting Date by such pro rated Interest Credits, which are included with the amount distributed to you. If you receive or start a distribution of benefits during a Plan Year before the last day of the Plan Year and the amount distributed does not include the entire amount of your Cash Balance Account credited to you as of the first day of the Plan Year, a special rule is used to calculate the Interest Credit for the Plan Year on your undistributed remaining Cash Balance Account. If you have additions to your Cash Balance Account for Pay Credits after a Benefit Starting Date for a distribution to you, your Cash Balance Account will share in Interest Credits on such additions to the extent of the period of time from the crediting of such amounts to the Cash Balance Account to the time the benefits being paid to you are adjusted to reflect the additions to the Cash Balance Account. (c) Reductions to Cash Balance Account. As of your Benefit Starting Date, your Cash Balance Account is reduced to reflect the amount of the Cash Balance Account taken into account in determining the benefits paid or being paid to you. If at any subsequent time such benefits are adjusted for additions to the Cash Balance Account since such benefits were paid or commenced to be paid, your Cash Balance Account will be reduced again to reflect the amount taken into account in determining the adjustment to such benefits

10 2.2 Compensation Subject to legal limits (described below), Compensation means taxable wages reportable by Employer to you on IRS Form W-2, adjusted as follows: To include the following items: Pre-tax elective contributions to a 401(k) feature of any taxqualified retirement plan sponsored by the Employer. Amounts set aside on a pre-tax basis under the Company s Internal Revenue Code (Code) Section 125 cafeteria plan (e.g. any amounts set aside under flexible spending account(s) under the Company s Flexible Benefits Plan). Elective amounts that are not includible in your taxable income by reason of Code Section 132(f)(4), which generally relates to certain qualified transportation fringe benefits. The amount the Employer deducts from your pay for your share of any premiums required under the Employer s group health plan and which is excludable from your income under Code Section 106 because the amount is not available to you in cash in lieu of such group health plan coverage. To exclude the following items: Any reimbursements or other expense allowances, fringe benefits, moving expenses, and other deferred compensation (including, but not limited to, any amounts includible in wages because the amounts are distributions from a non-qualified deferred compensation plan or includible in your gross income under Code Section 409A or other similar items) and welfare benefits. The fair market value of any long-term disability insurance coverage which is imputed in your gross income. Severance pay paid after your severance from employment with the Employer. Any amounts the Employer pays you the purpose of which is to provide you benefits in excess of the limits provided by Code Section 401(a)(17) or Code Section 415 applicable to any taxqualified retirement plan of the Employer. Any amounts the Employer pays you as a signing bonus, a bonus that is an incentive for providing early notification that you intend to terminate employment or retire, or any type of stipend

11 Compensation counted for any Participant is limited to $200,000 plus any legally authorized cost-of-living adjustment. For 2014, the annual compensation limit is $260,000. Generally to be taken into account as Compensation, amounts must be paid or treated as paid to you prior to your severance from employment with the Employer. In some cases, certain types of amounts paid to you within a short period of time after your severance from employment can be taken as Compensation. Contact the Pension and Benefits Department if you have any questions about your Plan eligible Compensation. 2.3 Code Section 415 Limits Federal law limits the amount of benefits under defined benefit plans, including this Plan. Under law required rules, your Cash Balance Account is converted to or expressed as an actuarially equivalent single life annual annuity benefit and may not exceed an annual limit. The annual dollar benefit limit is $160,000, adjusted for changes in cost of living. For 2014, the annual dollar benefit limit is $210,000. In the very unlikely event the Code Section 415 limits affect you, the Pension and Benefits Department will contact you. 2.4 Benefits for Periods of Covered Military Leave If you return to work after a period of military service with reemployment rights protected by the Uniformed Services Employment and Reemployment Rights Act (USERRA), you will participate in Plan benefits (including Pay Credits and Interest Credits) to the extent required by Section 414(u) of the Code with respect to the covered leave time (USERRA leave). You will receive a Pay Credit with respect to imputed pay during USERRA leave for a Plan Year if you satisfy the applicable requirements (see 2.1(a) above) to be entitled to a Pay Credit for the Plan Year, either before your leave started or during your period of leave, taking into account your USERRA leave. Hours of Service for your USERRA leave will count to determine if you have a Year of Service for entitlement to a Pay Credit for a Plan Year. Hours of Service for your USERRA leave will also count to determine your vesting in your Cash Balance Account (see 3.2 below). For any such USERRA leave, Compensation will be imputed at the rate you would have been paid if not absent. If this amount is not reasonably certain, Compensation will be based on your average compensation during the 12 months immediately before the leave began, or all such months if fewer than 12. Reemployment after military service under the terms provided in USERRA is a precondition of eligibility for the protections offered by USERRA. If you do not return to work after a military leave, either because you choose not to or because you are not eligible for the rehire protection offered by USERRA, you will not qualify for Plan benefits with respect the period of military leave or the protections described above

12 3. Benefit Statements, Vesting and Forfeitures 3.1 Benefit Statements You will be provided a pension benefit statement at least as frequently as required by the Employee Retirement Income Security Act of 1974 (ERISA). 3.2 Vesting You generally become vested in your Cash Balance Account based on your Years of Service, as follows: Years of Service Vesting Percentage Less than 3 0% 3 or more 100% If you die while performing qualified military service (as defined in Section 414(u) of the Code), you will be provided service credits for vesting for your period of qualified military leave for purposes of determining your Years of Service under the vesting schedule above. This service credit relates to vesting only; your Cash Balance Account is not increased for any benefit accruals (i.e. Pay Credits) relating to your period of qualified military service if you die while performing military service. If one of the following circumstances applies to you, your Cash Balance Account will be 100% vested regardless of your Years of Service: You reach Normal Retirement Date while employed by Employer. You are first hired by Employer after having reached Normal Retirement Date. 3.3 Forfeitures of Nonvested Benefits If you have a termination of employment with the Employer (and its affiliates) before you become 100% vested in your Cash Balance Account, the following rules will apply: You will be deemed to have received a full distribution of a zero vested benefit as of the date of your termination of employment. Your Cash Balance Account will be forfeited as of the date you terminate employment. No benefit amounts will actually be paid to you from the Plan, unless your benefit is later restored as described in the next bullet. If your benefit is forfeited, your forfeited Cash Balance Account will be restored upon the date of rehire as a Qualified Employee. In such case, you will need to earn at least 3 Years of Service in order to become vested in your Cash Balance Account. All service accrued by you will be

13 4. Withdrawals During Employment counted under the regular rules of the Plan, regardless of any breaks in service or employment with the Employer. 4.1 Withdrawals of Vested Benefits On or After Reaching Age 62 If you are 100% vested in your Cash Balance Account (see 3.2 above), you are entitled to benefits during ongoing employment only on or after you have attained age 62. Otherwise, distributions are not allowed during ongoing employment with the Employer and its affiliates. 4.2 Withdrawal Procedures A request for withdrawal must be submitted in writing under procedures fixed by the Committee and must meet the following requirements: If you are age 62 or older, you must include proof of age in the application and any other information required by the Committee. If you are married at the time the withdrawal is requested, the Spouse consent requirements described in 5.2 below will apply. Any amount you withdraw will be taxed as ordinary income. 4.3 Impact of Withdrawals on Benefits If your withdrawal is after your Normal Retirement Date (see below), your time and form of benefit will be fixed as of the Benefit Starting Date for your in-service withdrawal. At your later termination of employment, your form of payment will not be redetermined. Additional accruals you may earn will be calculated at each year end (or earlier termination of employment) after the Benefit Starting Date. Added benefits will be paid in the form originally elected at your Benefit Starting Date and will increase your benefit payment in the year following the year of the additional accrual. No preretirement death benefit will be paid for your Spouse. If your withdrawal is before your Normal Retirement Date, all provisions with respect to the time and form of benefit for the distributed benefit at your in-service withdrawal Benefit Starting Date will be final and not be redetermined at later termination of employment, and no preretirement death benefit will be paid to your Spouse for such distributed benefit if you die after such Benefit Starting Date. Any additional accruals you earn after your original Benefit Starting Date will not be paid until you actually later terminate employment. The preretirement death benefit will apply to such additional accruals if you die before your Benefit Starting Date for your later termination of employment, and you will be entitled to elect a single later Benefit Starting Date for such additional accruals

14 5. Distribution of Retirement Benefits 5.1 Retirement Benefits (a) Retirement Ages and Benefit. Your vested Cash Balance Account is distributable to you after your retirement. Retirement will occur on your termination of all employment with the Employer and its affiliates after reaching one of the following dates: Normal Retirement Date age 65. Early Retirement Date any day before age 65 on which you have 3 or more Years of Service. Postponed Retirement Date any day after Normal Retirement Date. (b) Rehire. As noted above, withdrawals from the Plan are generally not permitted during your ongoing employment. If you are rehired before any payment is distributed to you from the Plan, a distribution generally will not be made to you after you return to work and during your ongoing employment. Contact the Pension and Benefits Department if you have questions about how your potential or actual rehire could affect your distribution rights under the Plan. 5.2 Forms of Retirement Benefit for Cash Balance Accounts In Excess of $5,000 If your vested Cash Balance Account exceeds $5,000, your retirement benefits will be paid as follows, unless you validly elect another form of benefit: (a) Unmarried Participants. If you are unmarried on your Benefit Starting Date, your retirement benefits will be paid in a single life annuity, with equal monthly payments at the end of each month. The monthly payment amount under the single life annuity will be determined as the Actuarial Equivalent of your Cash Balance Account as of your Benefit Starting Date. (b) Married Participants. If you are married at your Benefit Starting Date, your retirement benefits will be paid in a contingent annuity for you and your Spouse, with monthly payments continued in full (at 100%) after the first death, a life only increase pop-up feature if your Spouse dies before you, and a 15 year term certain feature if both you and your Spouse die before the end of the 15 year term certain period. In some very rare cases, the 15 year term certain feature may not be available to you (depending on your age and the age of your Spouse). The monthly payment amount under this annuity will be determined as the Actuarial Equivalent of your Cash Balance Account as of your Benefit Starting Date

15 Instead of the standard annuities described above, you may elect to have your benefits paid in one of the following optional forms: A single lump sum payment in an amount equal to your Cash Balance Account. A single life annuity. Single life annuity with 5, 10, 15 or 20 years certain. Contingent annuity with payments continued at 50%, 67%, 75% or 100% after the first death of you or the contingent annuitant. Contingent annuity with payments continued at 100% after the first death of you or the contingent annuitant, with a life only increase pop-up feature if the contingent annuitant dies before you and with a 15 year term certain feature if both you and your contingent annuitant die before the end of the 15 year term certain period. Contingent annuity with payments continued at 100% after the first death of you or the contingent annuitant, with a life only increase pop-up feature if the contingent annuitant dies before you. The annuity options described above are subject to legal limits under the Code and related IRS regulations. Depending on your circumstances (such as your age and the identity and age of the person you would like to designate as your contingent annuitant or Beneficiary), one or more of the annuity options may not be actually available to you. Each of the annuity options is determined as the Actuarial Equivalent of your Cash Balance Account as of your Benefit Starting Date. Whether a form of benefit is the Actuarial Equivalent of another form of benefit is determined by the enrolled actuary retained for the Plan based upon Plan specified actuarial assumptions. If you are married, your Spouse must consent to the election of any optional form of payment other than the standard annuity described in 5.2(b) above with the Spouse as the contingent annuitant. The consent must be in writing and be witnessed by a Plan representative or notary public. Generally, your election and your Spouse s consent to your election must be made shortly before your Benefit Starting Date. More details about the annuity benefit and your election will be given to you near the time of your distribution. For purposes of determining your marital status and identifying your Spouse under the Plan, the term Spouse means an individual married to you if you are lawfully married under state law, provided that the term Spouse and your marital status shall be interpreted in a manner consistent with applicable regulations or other guidance of general applicability issued by the Secretary of Treasury or the IRS for Federal tax purposes

16 In certain circumstances, the Code and related IRS regulations may prohibit the Plan from paying a single lump sum payment to you or your Beneficiary. The Code s restrictions apply if the Plan s law measured funding percentage is below certain thresholds. The Pension and Benefits Department will notify you or your Beneficiary if these restrictions affect you or your Beneficiary. 5.3 Cash Balance Accounts That Do Not Exceed $5,000 If your vested Cash Balance Account is not more than $5,000, your retirement benefit will be paid in a single lump sum. If your vested Cash Balance Account does not exceed $1,000, it will be paid as soon as reasonably practical following your termination of employment. If your vested Cash Balance Account exceeds $1,000 and does not exceed $5,000, you will have the right to defer payment until your Normal Retirement Date. In either case, you do not need your Spouse s consent to the distribution at any time that your vested Cash Balance Account does not exceed $5, Application for Retirement Benefits; Time of Payment Generally, to receive benefits, you must apply to the Committee (or its delegate) within 180 days before your Benefit Starting Date, on application materials made available by the Committee after receiving the explanations in 5.4(f) and (g) below that are applicable to you. Your election of the time and form of payment must be included in the application. Contact the Pension and Benefits Department for information on how to initiate the application process. Your retirement benefit will start at the time you specify in your application for benefits, subject to the following rules: (a) The Committee will pay benefits in a single lump sum without an application being filed or before any date specified in an application if your vested Cash Balance Account is not over $1,000 and you have terminated employment. (b) Your Benefit Starting Date means the last day of your first Benefit Month. A Benefit Month means a calendar month for which you are entitled to receive a monthly benefit. (c) If your vested Cash Balance Account is over $1,000, your first Benefit Month is the earliest of the following: The first month following the month your service ceases for Normal or Postponed Retirement Date. The month selected for the start of benefits after an Early Retirement Date. Your Mandatory Benefit Starting Date (see (e) below)

17 (d) Payment will begin or be made as soon as practicable after a valid application for a particular Benefit Starting Date is received. If you have terminated service on or before your Normal Retirement Date, you may consent to delay the start of your retirement benefits beyond the Benefit Starting Date for Normal Retirement Date, but in no event beyond 60 days after the end of the Plan Year in which you reach Normal Retirement Date. (e) Your benefit must start by the Mandatory Benefit Starting Date, which is the April 1 following the year in which you reach age 70½, regardless of whether you have terminated employment. (f) In connection with your distribution if your vested Cash Balance Account exceeds $5,000, the Committee will provide you, between 30 and 180 days before your Benefit Starting Date, with explanations of the following: The benefit options and their financial effect and relative value. The option to elect to waive the standard annuity form and the effect of a failure to waive that form of payment. If you are married, the requirement that your Spouse execute a consent in writing within 180 days before the Benefit Starting Date that acknowledges the effect of an election waiving the standard annuity form, specifies the particular form of benefit you elected, and is witnessed by a Plan representative or notary public. The right to defer any benefit election for at least 30 days. The right to defer payment until your Normal Retirement Date and the consequences of failing to defer. Your right to elect a direct rollover of your distribution from this Plan to another eligible retirement plan. The applicability of mandatory withholding rules and applicable rules on rollover and taxation of distributions. Your right to revoke a benefit election before benefits start but not afterwards. (g) If your vested Cash Balance Account does not exceed $5,000, you will receive the explanation of direct rollover rights, mandatory federal tax withholding and applicable rules on rollover and taxation of distributions described in (f) above. Additionally, if your vested Cash Balance Account exceeds $1,000 but does not exceed $5,000, you will receive the explanation of

18 the right to defer a benefit election for 30 days and to defer payment to your Normal Retirement Date. As noted above, your retirement benefit will be paid in a single lump sum and no Spousal consent will be required. (h) Generally, your Benefit Starting Date cannot be less than 30 days after any required explanations have been given to you, unless you waive the waiting period in your application. The application materials will explain other technical rules that apply to waiving the 30 day waiting period. 5.5 Eligible Rollover Distributions; Mandatory Withholding (a) Eligible Rollover Distributions. Payments from this Plan to a Participant, the surviving Spouse, or an alternate payee who is the Spouse or former Spouse of the Participant are eligible rollover distributions and can be rolled over to an eligible retirement plan selected by the recipient (provided that the eligible retirement plan will accept them), except the following: Payments that are part of a series of equal (or almost equal) payments that will last for your life or the lives of you and any Beneficiary, or that will be paid over a period of 10 years or more. The amount of distributions required by law to be made after a Participant reaches age 70½. As a practical matter, because these exceptions apply to all of the annuity options, the single lump sum payment is the only optional form of payment which can in fact be rolled over to an eligible retirement plan. (b) Eligible Retirement Plans. The following are eligible retirement plans that may receive eligible rollover distributions, but the sponsor may elect not to receive some types or any rollovers. You should confirm the eligible retirement plan you select will accept the rollover before you elect a rollover to any of the following: IRA. Roth IRA. Qualified plan under Code Section 401(a) or 403(a). Annuity contract described in section 403(b) of the Code (commonly called a tax-sheltered or tax-deferred annuity or a 403(b) plan). An eligible plan under section 457(b) of the Code (generally, a 457 plan of a governmental entity) if certain special rules are satisfied

19 (c) Direct Rollovers. If you receive an eligible rollover distribution from the Plan, you can elect a direct rollover of all or any portion of it. In a direct rollover, the eligible rollover distribution is paid directly from the Plan to an eligible retirement plan described above that accepts rollovers. A direct rollover is generally not taxed until it is distributed from the eligible retirement plan to which it is rolled over. However, rollovers from the Plan to Roth IRAs are taxed when rolled over. If you choose a direct rollover, you must provide the Committee with sufficient information to identify the eligible retirement plan to which the rollover is to be made and that eligible retirement plan agrees to accept the rollover. (d) Payments Not Directly Rolled Over. If you do not elect a direct rollover of all or part of an eligible rollover distribution, the part not rolled over will be paid directly to you. The payment will be reportable as taxable income in the year you receive it and will be subject to taxation unless, within 60 days of receipt, you roll it over to an eligible retirement plan that accepts rollovers (sometimes referred to as an indirect rollover). You may roll over a portion of an eligible rollover distribution or the entire amount. You will have to replace any amount withheld (see (e) below) from other sources. (e) Mandatory Withholding. Absent a direct rollover, the Plan is required by law to withhold 20 percent of the taxable portion of any eligible rollover distribution and pay it to the Internal Revenue Service. You cannot reduce the 20 percent or elect not to have withholding apply to an eligible rollover distribution except by electing a direct rollover. If you receive a distribution that is not an eligible rollover distribution (e.g. one of the annuity options), other withholding rules apply and you may, in most cases, elect against withholding. (f) Rollovers By Qualifying NonSpouse Beneficiaries. If your death Beneficiary (see 6.2 below) is an individual or treated as an individual under applicable regulations and is not your surviving Spouse (Qualifying NonSpouse Beneficiary), your Qualifying NonSpouse Beneficiary may rollover a distribution that would otherwise qualify as an eligible rollover distribution by a direct rollover of the distribution to an inherited IRA or Roth IRA that is established on behalf of the Qualifying NonSpouse Beneficiary for the purpose of receiving the distribution. The mandatory withholding rules described above will apply. 5.6 Taxability of Benefits. Amounts credited to your Cash Balance Account are not taxed when credited under the Plan. Rather, you are taxed on distributions from your Cash Balance Account under the Plan. As noted above, Plan distributions that are not rolled over are includible

20 in your taxable income as ordinary income when distributed to you. In general, the law imposes a separate 10% tax (in addition to regular income taxes on the distribution) on the taxable portion of any benefits you receive before age 59½. The 10% additional tax does not apply to a distribution to the extent that it is rolled over to an eligible retirement plan. There are also some exceptions to the 10% additional tax that apply in certain special circumstances. The rules governing the taxation of distributions and withdrawals are complex, and you will receive additional information when you receive a distribution or withdrawal that could be taxable to you. If you have any questions, you should contact the Pension and Benefits Department. 6. Death Benefits 6.1 Death Benefits After Your Benefit Starting Date If you die after your Benefit Starting Date, the benefit on death (if any) will be controlled by the form of benefit in effect at death that you previously elected (see 5.2 above). For example, the single lump sum distribution option does not include any death benefit whereas some of the various annuity options do include death benefits. When you complete your application for a distribution of your retirement benefits, you will have the opportunity to designate your contingent annuitant or any other Beneficiary who will be entitled to receive benefits after your death under the optional form of distribution you are electing for that Benefit Starting Date. As noted above, for married Participants, election of a form of payment other than the standard annuity with your Spouse as the contingent annuitant requires the consent of your Spouse. However, if you are married and elect the standard annuity with your Spouse as the contingent annuitant, you may designate a non-spouse Beneficiary for the 15 year term certain feature of that standard annuity without Spousal consent. 6.2 Death Benefits Before Your Benefit Starting Date If you are vested in your Cash Balance Account and you die before you have a Benefit Starting Date for the distribution of your Cash Balance Account, your vested Cash Balance Account will be paid as a death benefit, as follows: (a) Married Participants. If you are married at death, your surviving Spouse s death benefit will be equal to your entire vested Cash Balance Account. If you are married at death, this surviving Spouse death benefit will automatically be paid to your surviving Spouse, unless your surviving Spouse disclaims after your death all or any portion of this surviving Spouse death benefit. Your surviving Spouse s death benefit will be paid at the time and in the form described below: If your vested Cash Balance Account is not over $5,000, it will be paid to your surviving Spouse in a single lump sum as soon as practical after your death

21 If your vested Cash Balance Account is over $5,000, your surviving Spouse may apply for the benefit to start as early as the last day of the month after your death and not later than the later of the end of the calendar year following your year of death or the calendar year in which you would have reached age 70½. Subject to legal limits under the Code and related IRS regulations, your surviving Spouse can elect for benefits to be paid in any of the forms available to you (see 5.2 above), including a single lump sum. There are specific deadlines that apply in connection with electing the form and the time of payment of benefits, so your surviving Spouse should contact the Pension and Benefits Department as soon as practical after your death to learn more about the options and deadlines. In the absence of a timely election, the Plan implements legal requirements by paying your surviving Spouse the death benefit in the form of a life annuity with a 15 year term certain feature (or a single life annuity in very rare cases). (b) Unmarried Participants. If you are unmarried at death (and, therefore, no surviving Spouse death benefit is payable), your entire vested Cash Balance Account will be paid to your designated Beneficiary. The Plan pays this other death benefit to your designated Beneficiary in a single lump sum form only. Your Beneficiary should contact the Pension and Benefits Department as soon as practical after your death to obtain a distribution application. (c) Rollovers. If your death benefit is paid to your surviving Spouse or a Qualifying NonSpouse Beneficiary, the death benefit may be rolled over (see 5.5 above). 6.3 Designation of Beneficiary For death benefits that may be payable if you die before your Benefit Starting Date, you may designate a Beneficiary to receive those death benefits by completing a Committee approved form, subject to the following Plan rules: If you are married at death, your Beneficiary designation will be void and your surviving Spouse will receive the surviving Spouse death benefit described above in 6.2(a), unless your surviving Spouse disclaims after your death all or any portion of the surviving Spouse death benefit. If you are unmarried at death, your Beneficiary designation will generally be applied to determine to whom the other death benefit for unmarried Participants is payable, described above in 6.2(b). However, if you are unmarried at death but were married when your Beneficiary designation was made, the other death benefit will be paid as though the former Spouse had predeceased you

22 The following will apply to any part of your benefit as to which no valid designation of Beneficiary is in effect at your death: (a) Subject to (b) below, your benefit will be paid in the following order of priority: To your surviving children in equal shares. To persons actually dependent on you for a substantial portion of their support. To your surviving parents in equal shares. To your estate. (b) If a Beneficiary disclaims a benefit, the benefit will be paid as though that Beneficiary had predeceased you. Remember, it is your responsibility, not the Committee s, to make sure your Beneficiary designation form names the Beneficiary you want to name. Beneficiary includes any person validly designated by you to receive any benefit after your death and any other person entitled to receive any benefit after your death of under the terms of the Plan. 7. Assignment of Benefits; QDROs The Plan is for your personal protection. Your benefits generally may not be assigned, seized, transferred or claimed by creditors. Benefits may, however, be assigned to someone else by a qualified domestic relations order (QDRO). A domestic relations order is an order under state domestic relations law relating to child support, alimony or marital property. To be qualified, an order must meet standards imposed by federal law. The Committee has procedures for determining if a domestic relations order is qualified. It will notify you if it receives an order relating to your Cash Balance Account and also when it determines whether the order is qualified. Until it makes this determination, any of your Cash Balance Account affected by the order will not be distributed. A copy of the Committee s QDRO Procedures is available from the Committee without charge. 8. Plan Administration The Retirement Plans Committee is the Plan Administrator within the meaning of ERISA and is responsible for all aspects of the Plan, except holding and investing the trust funds. The Committee keeps records of the Cash Balance Accounts and provides information to you when required by law or upon your request. The Committee interprets the Plan

23 Under policies and rules established by the Committee, the Pension and Benefits Department handles certain day-to-day aspects of the operation of the Plan and is available to respond to general questions about the Plan and requests you may have with respect to the Plan. Also, you may request copies of the Plan document by contacting the Pension and Benefits Department. If you have any questions about the Plan or your interest under it, you can also ask a member of the Committee. 9. Employer Funding and Investment of Trust Funds The Employer makes contributions to a trust to fund the benefits under the Plan. Those contributions and related investment returns are held in trust exclusively for the benefit of Participants and Beneficiaries and to pay administrative expenses. There are no employee contributions. With advice from the Plan s actuaries, the Investment Committee which is a committee appointed by the Company s Board of Directors determines the amount and rate the Employer must contribute to the Plan. The Investment Committee also has general authority over how the Plan s assets are invested and managed (see below). The Trustee for the Plan is State Street Bank and Trust Company. The Trustee will receive all contributions from Employer and invest them in accordance with applicable Plan and trust terms. The Investment Committee may delegate the responsibility to invest part or all of the trust assets to the Trustee or one or more investment managers. The Trustee keeps records and gives periodic reports to the Investment Committee about the trust funds (h) Accounts The Employer has established a separate plan pursuant to which medical, dental (if applicable) and related health benefits (Retiree Health Benefits) are provided for employees who qualify for those Retiree Health Benefits under the terms of that plan. You can contact the Committee Secretary for additional details about the terms of that other plan. This Plan provides health benefits for each Participant under this Plan who is or becomes eligible to receive Retiree Health Benefits from Employer by paying the Employer s cost of providing those Retiree Health Benefits out of available funding held under a special account established under this Plan (401(h) Account). In connection with the 401(h) Account, two separate types of accounts are maintained: A pooled account with respect to all non-key employees. Individual key employee accounts. Benefits for key employees (as defined in Code Section 416(i)) are charged against the individual s key employee account until exhausted. A similar method is applied with respect to charging the pooled account for benefits for non-key employees. For each year, the Employer generally may make contributions to the Plan in the amount necessary, determined actuarially, to fund the projected Employer cost of Retiree Health Benefits on a level basis over Participants working lives