Bertelsmann 2018 Summary Plan Descriptions

2 018 Summary Plan Descriptions TABLE OF CONTENTS

...... CHAPTER

General and Administrative Information...... Introduction

Medical Plans...... 1

Medical Coverage During Retirement...... 1A

Dental Plans...... 2

Vision Plan...... 3

Disability Plan...... 4

Life and Accident Insurance Plans...... 5

Health Care Flexible Spending Account Plan...... 6

Dependent Care Flexible Spending Account Plan...... 7

Long Term Care...... 8

General Information Retirement Income Program...... 9

401(k) Savings Plan...... 10

Pension Account Plan...... 11

Bertelsmann, Inc. Severance Pay Plan...... 12

BMG Rights Management (US) LLC Severance Pay Plan...... 13

This Summary Plan Description (SPD) is merely a summary of the terms of the Plan. In the event of a conflict between the actual terms of the Plan and this summary, the terms of the Plan shall control. The Company reserves the right to unilaterally amend, modify or terminate the Plan in its sole discretion at any time for any reason. Signature Select Benefits General and Administrative Information

As of January 1, 2018 CONTENTS

...... Page

Introduction...... Intro-1

Eligibility...... Intro-2

• Eligible Dependents...... Intro-2

Enrolling in Signature Select...... Intro-3

• Default...... Intro-3

• Annual Enrollment...... Intro-3

Changing Your Coverage...... Intro-4

• Changes in Status...... Intro-4

Paying for Your Benefits...... Intro-7

When There Is Other Coverage...... Intro-8

• Coordination of Benefits...... Intro-8

When Coverage Ends...... Intro-10

COBRA Continuation of Coverage...... Intro-11

Additional Health Plan Considerations...... Intro-15

Plan Identification...... Intro-18

Plan Insurers/Claim Administrators...... Intro-19

Plan Documents...... Intro-20

Plan Administration...... Intro-20

Claims Denial and Appeal...... Intro-23

Changing or Terminating the Plan...... Intro-27

Your Rights...... Intro-28

• Your Rights Under ERISA...... Intro-28

• HIPAA Privacy Notice...... Intro-28

Independent Contractors...... Intro-33

Employment at Will...... Intro-33

GENERAL & ADMINISTRATIVE INFORMATION INTRODUCTION

The Company participates in the Bertelsmann Employee Protection Plan, sponsored by Bertelsmann, Inc. and generally known as the Signature Select Benefits Program (“Signature Select” or the “Plan”). Signature Select is a comprehensive and flexible benefits program that provides choice and protection for eligible employees of the Company (often referred to in this document as “Employees” or, simply, “you”) and their eligible dependents.

Signature Select gives you the opportunity to choose from a variety of options in the following coverages: • Medical and Prescription Drug • Dental • Vision Care • Disability Income • Employee Life and Accidental Death & Dismemberment Insurance (Basic, Supplemental) • Business Travel Accident • Dependent Life Insurance • Health Care Flexible Spending Account (FSA) • Long Term Care • Dependent Care Flexible Spending Account (FSA)1 • Health Savings Account (HSA)1

You choose the level of coverage you need under each option, or in some cases, you can decline coverage entirely. Your cost of coverage depends on the types and levels of coverage that you select, and for certain coverages, your salary. Unless stated differently, this Summary Plan Description (SPD) describes the available coverages and benefits under the Plan as of January 1, 2018.

1 The Dependent Care Flexible Spending Account and Health Savings Account are included only for convenience. They are not subject to ERISA and do not receive its protections.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-1 ELIGIBILITY Special Eligibility Rules for the Affordable Care Act You are generally eligible to participate in Signature Select if you are a regular full-time or part-time employee of the Company An employee who is not a regular full-time employee or part- who is regularly scheduled to work at least 20 hours per week. time employee working 20 or more hours per week, temporary However, you cannot participate if: employee, seasonal employee, or a leased employee may become eligible for the Plan’s medical coverage if he or she averages at • You are subject to an employment agreement with the least 30 hours per week or 130 hours per month following the Company that specifically excludes your participation; completion of a Waiting Period of no greater than 90 days. If you • You are eligible for similar coverage under another benefits plan are determined eligible and elect coverage, your medical coverage sponsored by other Bertelsmann companies; can begin the first day of the month that begins 60 days after you • A temporary or staffing firm employee; were hired and can continue through the end of the Plan Year. • In a position covered by a collective bargaining agreement Your eligibility will then be reviewed each month to determine if you between the Company or a participating employer and a union, average at least 30 hour per week or 130 hours during the month unless you are in such a position and your collective bargaining based on the methods specified in applicable Internal Revenue agreement provides for your participation in Signature Select Service (“IRS”) guidance. Benefits; The Plan Administrator has the sole discretion to adopt such • An employee who is not on U.S. payroll; or additional rules and methods as it deems desirable or appropriate • A leased employee or independent contractor. to administer the Plan to avoid excise taxes under the Affordable The Company’s classification of a person as an employee or Care Act (ACA). non-employee is conclusive and binding for purposes of This special eligibility rule under the Affordable Care Act cannot determining eligibility for Plan participation. If, for any reasons, apply if the Company could not be liable for excise taxes under the a person is reclassified from a non-employee to an employee, “employer mandate” of Code Section 4980H. For example, these that person will not be retroactively eligible for benefits. Instead, eligibility provisions cannot and will not apply if Congress rescinds benefits eligibility, if any, will begin prospectively on the date of the excise taxes of Code 4980H. re-classification. If you meet the eligibility as required by ACA, you will be eligible If you are otherwise eligible, your benefits underSignature for the lowest cost Medical option only. You not be eligible for any Select Benefits generally are effective from your first day at work. additional benefits underSignature Select Benefits. However, some benefits might not begin immediately (please see the description of the specific benefit). If you are not in “active Eligible Dependents – employment” status (e.g., if you are disabled or on an approved leave of absence) when your coverage would otherwise become Dependent Care Flexible Spending Account effective, your coverage will be postponed until the first day you commence (or return to) active employment. Eligible dependents for purposes of the Dependent Care Flexible Spending Account are those who live with you at least half of the If you are eligible to participate in the Medical, Dental, Vision year and who are: Care or Dependent Life Insurance options, you may also choose • Your children under the age of 13 (natural, legally adopted, to cover your eligible dependents, including your spouse and foster or stepchildren), or children. Your spouse is the person to whom you are legally married under the Internal Revenue Code (“Code”). The eligibility • Your spouse or other dependent (e.g., a parent or spouse’s rules for children for Medical, Dental, Vision and Dependent Child parent) who spends at least half the year at your home and is Life Insurance are: mentally or physically incapable of caring for himself or herself. • Children under age 26, regardless of residence, marital status, Domestic Partner Coverage student status or financial dependency. For the purposes of the The Company does not provide coverage to domestic partners, medical plan, children with whom you have legal guardianship regardless of gender. Eligible employees may cover their as defined by your state of residence may be covered under the significant other only if they are legally married. plan until age 26. • Unmarried children over age 26 who are unable to support Dependent Verification Audits themselves due to a serious mental or physical disability, The Plan conducts verification audits and may require employees as determined for the purposes of Social Security Disability to provide written documentation of proof of dependent and Insurance. To qualify, a disabled dependent must have been spouse eligibility. You also may be required to provide satisfactory disabled before age 26 and covered under Signature Select proof of a dependent’s or spouse’s eligibility for Signature Select Benefits or another medical plan as your child dependent coverage at initial enrollment. continuously since their 26th birthday. Any dependent that cannot be adequately verified will be removed Your children may include your natural children, legally adopted from Plan coverage (retroactively in some cases, including, children, your stepchildren, your eligible foster children, and for example, if the Plan determines that there was an attempt children for whom you are a legal guardian. to mislead as to material facts). Typically, any dependent or spouse removed during a verification audit will not be eligible for continuation of coverage under the Consolidated Omnibus Budget GENERAL & ADMINISTRATIVE INFORMATION | Intro-2 Reconciliation Act of 1985 (COBRA). ENROLLING IN SIGNATURE SELECT

To enroll in Signature Select for the first time, you must submit Annual Enrollment your elections via UltiPro, as directed by your Human Resources Once your initial enrollment is made (whether by your election or or Benefits Department. The Human Resources Department or by default), you have the opportunity to change and/or re-enroll Benefits Department will provide you with instructions on how to in most Signature Select Benefits each year during the annual access an enrollment guide that provides a summary of the Plans enrollment period (subject to any restrictions and/or eligibility and coverage options available to you. You can also access this requirements described in this SPD or in enrollment materials). information at www.your-ebenefits.com. This allows you to reconsider your elections each year, and change your coverage as your needs change. You should actively Initial Enrollment Period review your benefit elections during the annual enrollment period You must enroll in the Plan within 31 days of your date of hire or and make an informed decision about your choices for the coming within 31 days of you first become a benefits-eligible employee year. The annual enrollment period occurs before January 1 of as described in Eligibility above. Make sure that you complete each year. all applicable areas for enrollment and submit your elections as Your Human Resources or Benefits Department will announce the instructed. Coverage will be prospective from your election date annual enrollment dates in advance, provide you with information except when you elect coverage within 31 days of your date of hire on plan changes, and let you know what you need to do to make (if eligible). changes. Enrollment changes generally become effective on the following January 1 (Exceptions may apply, such as when Default Elections evidence of insurability is required, as explained in the Disability If you do not enroll in the Plan within 31 days of the date on which Income Chapter 4 and the Life Insurance Chapter 5.) you first become eligible, you will automatically be enrolled in the following default elections: If You Do Not Enroll at Annual Enrollment • Medical: No coverage If you do not enroll by the annual enrollment deadline, you will not • Dental: No coverage be able to make any pre-tax contributions to the Health Care or • Vision Care: No coverage Dependent Care Flexible Spending Accounts during the following • Disability Income: Basic Short-Term and Long-Term Disability year (whether or not you have previously participated in either for all employees except Bertelsmann Accounting Services, Inc. FSA). Your HSA contributions will continue in the new year at employees; Premium Short-Term Disability and Basic Long-Term your current election, unless indicated otherwise in the annual Disability for Bertelsmann Accounting Services, Inc. employees enrollment materials, but you can change your HSA election at (see Chapter 4) least every month. Your other benefit elections (to the extent the • Employee Life Insurance: Two times your annual earnings, as specific coverage(s) continue to be offered in the new year) will described in Chapter 5 remain in effect with rates and Plan modifications that apply for • Dependent Life Insurance: No coverage the next year, unless you are otherwise notified by your Human Resources or Benefits Department. • Long-Term Care Insurance: No coverage • Health Care FSA: No contribution Termination of Employment and Re-hire within 30 Days • Dependent Care FSA: No contribution You cannot make new elections if you are rehired within 30 days or You will not be able to change these default elections until the less during the same Plan Year unless you had an election change next annual enrollment period for the following Plan year event described beginning on page Intro-4 and your elections will (i.e., calendar year), unless you experience a qualified change in be reinstated. status (see page Intro-4).

GENERAL & ADMINISTRATIVE INFORMATION | Intro-3 CHANGING YOUR COVERAGE

You may change your elections during the year (other than during Change in Status the annual enrollment period) only as permitted under the following In the event of a “Change in Status” as described below, you may rules. revoke your old election under Signature Select and make a new election for the remainder of the year, provided that both the HIPAA Special Enrollment Period revocation and new election are on account of and correspond If you initially declined enrollment in Signature Select medical with the Change in Status (as further described below). Events that coverage (for yourself and/or your eligible dependents) because qualify as a Change in Status include the following, as well as any of enrollment in other coverage, but you now wish to enroll in other events that the Plan Administrator determines are permitted Signature Select medical coverage (for yourself or with your under IRS regulations: eligible dependents) because that other coverage has been lost • A change in your legal marital status (such as marriage, legal (i) on account of losing eligibility for that coverage or having separation, annulment, or divorce); refused or exhausted COBRA continuation coverage or • A change in the number of your tax dependents (such as (ii) because employer contributions for that other non-COBRA the birth of a child, adoption or placement for adoption of a coverage have ceased, then you and any of your otherwise eligible dependent, or death of a dependent); dependents not already enrolled may enroll within 31 days after the date of loss of the other coverage. • Any employment status change for you, your spouse, or your dependent that affects benefit eligibility under thisSignature In addition, if you are enrolled in Signature Select medical Select Program or another employee benefit plan of yours, coverage (or are not enrolled but otherwise eligible for such your spouse, or your dependents, including: termination coverage) and you have a new eligible dependent as a result or commencement of employment; a strike or lockout; of marriage, birth, adoption or placement for adoption, your commencement of or return from an unpaid leave of absence; newly acquired dependent may be enrolled for coverage (as well a change in worksite; switching from salaried to hourly-paid, as yourself, if not already enrolled), provided that you request or part-time to full-time; a reduction or increase in hours of and complete your enrollment within 31 days after the date employment; or any other similar change which makes the of marriage, birth, adoption or placement for adoption. Upon individual become (or cease to be) eligible for a particular enrollment, the effective date of coverage will be: employee benefit; • In the case of a dependent’s birth, the date of birth; • An event that causes your dependent to satisfy or cease to • In the case of a dependent’s adoption or placement for satisfy an eligibility requirement for a particular benefit (such as adoption, the date of adoption or placement for adoption; and attaining a specified age); • In the case of marriage, not later than the first day of the first • A change in your, your spouse’s or your dependent’s place of month following the date the completed request for enrollment residence. is received. Additionally, you can request within 60 days to enroll or to enroll your eligible dependents prospectively in a group health plan that is subject to HIPAA’s portability provisions due to: • Loss of coverage of Medicaid or Children’s Health Insurance Program (CHIP) due to a loss of eligibility; or • Becoming eligible for a state’s premium assistance program under Medicaid or CHIP.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-4 The following restrictions apply to elections made based on a Change in Status: Thirty One (31) Day Notice and Election Requirement. If a Change in Status occurs and you want to make a corresponding election change, you must inform Human Resources or the Benefits Department and complete a new election within 31 days following the date of the event. Consistency Rule. The election change must be on account of and correspond with the Change in Status event as determined by the Plan Administrator. Election changes based on a Change in Status are effective only prospectively (but note that Special Enrollment resulting from birth, placement for adoption or adoption allows for a retroactive effective date). As a general rule, a desired election change will be found to be consistent with a Change in Status event if the event affects eligibility for coverage. A Change in Status affects eligibility for coverage if it results in an increase or decrease in the number of Dependents who may benefit under the Plan. In addition, the following specific requirements apply: • Loss of Dependent Eligibility. For a Change in Status involving • Dependent Care Spending Account Benefits. You may a loss of dependent eligibility (i.e., your divorce, annulment or change or terminate your Signature Select Dependent Care legal separation from your spouse; the death of your spouse Flexible Spending Account election only if your election change or your dependent; or your dependent ceasing to satisfy the is on account of and corresponds with a Change in Status eligibility requirements for coverage), you may not change any that affects the eligibility of dependent care expenses for the non-affected dependent’s existing coverage. available tax exclusion (under Section 129 of the Code), such as your child attaining age 13 or a change in your spouse’s • Gain of Coverage Eligibility Under Another Employer's employment from part-time to full-time (or vice versa). Plan. For a Change in Status in which you, your spouse, or your dependent gain eligibility for coverage under another employer’s • Disability Income, Group Term Life and AD&D Insurance. “cafeteria plan” (within the meaning of Section 125 of the Code) The only permitted mid-year election change on account of as a result of a change in your marital status or a change in a Change in Status is the election of dependent life coverage your, your spouse’s, or your dependent’s employment status, for newly eligible dependents (e.g., as a result of marriage, you may cease or decrease Signature Select coverage for that child birth, or adoption), subject to any restrictions as may individual only if coverage for that individual becomes effective be imposed under the insurance policy or by the Plan or is increased under the other employer’s plan. Administrator.

If your change is due to you first becoming eligible for benefits or the birth or adoption of a dependent child, your change will become effective on the date of that event as long as you notify Human Resources or the Benefits Department and submit your elections within 31 days of the change in status event. All other qualified changes will become effective on the date your election paperwork is received by the Human Resources or Benefits Department as long as it is submitted within 31 days of the life event.

Change in Cost Judgments, Decrees and Orders If the cost of your Signature Select coverage significantly To the extent required by a judgment, decree or order (an “Order”) increases in the middle of the year, you can, by contacting Human resulting from a divorce, legal separation, annulment or change Resources or the Benefits Department and completing change in legal custody, you may prospectively change your Signature procedures within 31 days following the event, (i) continue your Select Medical, Dental, Vision or Health Care Flexible Spending coverage and elect an increase in your contributions, (ii) revoke account elections to provide or revoke coverage (as applicable) for your election and receive coverage under another Signature your child. Select option that provides similar coverage (i.e., same type of To elect coverage pursuant to an Order, your child must be an benefits for the same individuals) or (iii) revoke your election and eligible dependent and the Order must contain sufficient details drop coverage if no other Signature Select option providing to qualify as a Qualified Medical Child Support Order (QMCSO). similar coverage is available. If the cost of a Signature Select Upon receipt of an Order requiring coverage of your child, you will coverage significantly decreases in the middle of the year and you be notified if the order constitutes a QMCSO as required under are not currently enrolled in such coverage, you can, by contacting federal law. If you have any questions or would like to receive a your Human Resources or Benefits Department and completing copy of the QMCSO procedures at no charge, please contact change procedures within 31 days following the event, revoke your Human Resources or the Benefits Department. current election and enroll in such coverage. To revoke coverage pursuant to an Order, the Order must require For insignificant increases or decreases in the cost of benefits, that another individual (such as your current or former spouse) however, your election will automatically be adjusted to reflect the provide coverage for the child and such coverage must actually be minor change in cost. The Plan Administrator (in its sole discretion) provided. will decide, on a uniform and consistent basis, whether increases or decreases in costs are “significant” or “insignificant” based upon all the surrounding facts and circumstances. This Change in Cost provision does not apply to the Health Care Flexible Spending Account, the Dependent Care Flexible Spending Account, Disability Income, or Life and AD&D Insurance.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-5 Change in Coverage Under This Plan Medicare, Medicaid, Children’s Health Insurance Program (CHIP) and Other Plans If your Signature Select coverage is significantly curtailed mid-year (such as a significant mid-year increase in deductibles), You may prospectively reduce or cancel your or your dependent’s you can, by contacting Human Resources or the Benefits existing Signature Select Medical, Dental, Vision Care or Health Department and completing change procedures within 31 days Care Flexible Spending Account coverage if you (or your dependent, following the event, prospectively revoke your election and as applicable) become entitled to Medicare or Medicaid (other than elect coverage under another Signature Select option that Medicaid coverage only for pediatric vaccines) and you contact provides similar coverage (i.e., same type of benefits for the same Human Resources or the Benefits Department and complete individuals), if available. necessary change procedures within 31 days following the event. In the event a Signature Select coverage option is added You may prospectively elect to enroll yourself and your eligible or eliminated during the year, you may, by contacting Human dependents in Signature Select Medical, Dental, Vision Care Resources the Benefits Department and completing change or Health Care Flexible Spending Account coverage upon the procedures within 31 days following the event, elect the newly- occurrence of any of the following events by contacting Human added option or, if an option has been eliminated, either elect Resources the Benefits Department and completing necessary another Signature Select option which provides similar coverage change procedures within 60 days of the event: or drop coverage altogether if similar coverage is not available. • You or your eligible dependent become eligible for premium This Change in Coverage provision does not apply to the Health assistance under Medicaid or Medicaid’s Children’s Health Care Flexible Spending Account, Disability Income, or Life and Insurance Program (CHIP); AD&D Insurance. • You or your eligible dependent lose coverage under Medicare, Medicaid or CHIP and as a result of loss of eligibility for such Change in Coverage Under Other Employer Plan coverage; or You may make a prospective election change that is on account • You or your eligible dependent lose coverage under any other of and corresponds with a change made under the plan of your group health coverage sponsored by a government or education spouse’s, former spouse’s or eligible dependent’s employer, so institution, including a medical care program of an Indian Tribal long as: (i) his or her employer’s plan permits its participants to government, the Indian Health Service, or a tribal organization; make an election change permitted under the IRS regulations; or a state health benefits risk pool; or a foreign government group (ii) Signature Select has a period of coverage which is different health plan, in each case subject to the terms and limitations of from the period of coverage under his or her employer’s plan the applicable Signature Select Benefit coverage. (e.g., calendar year vs. non-calendar year coverage periods). This Change in Coverage provision does not apply to the Health Care The Plans reserves the right to request additional documentation Flexible Spending Account, Disability Income, or Life and AD&D necessary to verify a qualified change in status has occurred. Insurance.

Tax Law Requirements Special Rule Dependent Life Insurance Your elections relating to Signature Select coverage may You may decrease or cancel your Dependent Life Insurance be modified by the Plan Administrator or the participating coverage at any time on a prospective basis. employers to the extent necessary to ensure compliance with the requirements of Code Section 125, its regulations, and ACA Marketplace Enrollment IRS guidance. You may prospectively revoke your election for Signature Select medical coverage if you are eligible for and intend to enroll in health coverage through the Affordable Care Act Marketplace (during its special enrollment period or annual open enrollment period) that is effective beginning no later than the day immediately following the last day of the Signature Select coverage that is revoked. This ACA Marketplace Enrollment exception only applies to the medical options.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-6 PAYING FOR YOUR BENEFITS

The Company contributes toward the total cost of coverage Tax Treatment of Employee Contributions (“Company contribution”) for most of your benefits elections. If you Employee contributions for the following Plan coverages are paid choose to cover your eligible dependent(s) under the Medical and/ on a before-tax basis: or Dental coverage under the Plan, the Company may contribute • Medical and Prescription Drug an amount to apply toward the increased cost of coverage associated with adding dependent coverage. The Company can • Dental increase, reduce or eliminate its contribution toward the costs of • Vision Care any benefit at any time. • Disability Income2 Each year, you will receive an annual enrollment packet that • Health Care Flexible Spending Account (FSA) provides information about the options available, your required • Dependent Care Flexible Spending Account (FSA)3 contribution for each coverage option, and ways to easily calculate • Health Savings Account (HSA)3 your required contribution. Once your required contribution is paid, When you pay for benefits with “before-tax” dollars, the cost the Company contribution is made in the amount necessary to is set aside from your paycheck before federal, Social Security pay the total cost of coverage. Your required contribution will be and, in most cases, state and local income taxes are deducted, deducted from each paycheck for the year. which results in a tax savings for you. Since you do not pay Social Security taxes on your before-tax employee contributions, your future Social Security benefits could be slightly reduced. Although this reduction is usually minimal, it could be more significant if your taxable pay is below the Social Security wage base.

Tax Savings for Medical Coverage Example Let’s assume that you are taxed at a rate of 25% of your pay and that your required employee contribution for Medical coverage under the Plan for the year is $800. Annual Employee Contribution $800.00 Total cost if paid with after-tax dollars: $1,066.67 (including $266.67 in taxes) Total cost if paid with pre-tax dollars: $800.00 (tax-free)

Your Annual Tax Savings $266.67

If you elect the Premium Disability options (see Chapter 4 for or dependent care expense, you may not take a corresponding additional information), you will be required to contribute toward deduction on your income tax return because these expenses the cost of your disability coverage. Please check with Human have been paid through the FSAs with tax-free dollars. Resources to determine if your contributions are deducted from your pay on a before-tax or after-tax basis.2 No Guarantee of Tax Consequences If you pay on a before-tax basis, disability income you may receive Neither the Plan Administrator nor the Company or any other in the future will be treated as taxable income. On the other hand, party make any commitment or guarantee that any amounts paid if you pay on an after-tax basis, the Premium portion of your to or for the benefit of a participant will be excludable from the disability income which you pay for and may receive in the future participant’s gross income for federal, state, or local income tax will not be taxable. In either case, disability income received from purposes. It will be your obligation to determine whether each the Company-paid Basic option will be treated as taxable income. payment under this plan is excludable from your gross income The tax rules at the state and local level may vary. Please consult for federal, state, and local income tax purposes and to notify your tax advisor for an assessment of the tax impact in your the Plan Administrator if you have any reason to believe that such specific situation. payment is not so excludable.

Employee contributions to Employee Life Insurance and Indemnification of Company Dependent Life Insurance are withheld on an after-tax basis. In If you or any other individual receives one or more payments or addition, a portion of Company contributions toward the cost of reimbursements under this plan on a tax-free basis and if such your Employee Life Insurance may be treated as taxable income payments do not qualify for such treatment under the Code, then (see Chapter 5 for additional information). you indemnify and may be required to reimburse the Company Employee contributions to Health Care and Dependent Care FSAs and/or Plan Sponsor for any liability incurred for failure to withhold are not taxed and reimbursements provided under the FSAs are federal income taxes, Social Security taxes, or other taxes from also tax-free. Once you are reimbursed for an eligible health care such payments or reimbursements.

2 If you elect to purchase the Premium disability option on a pre-tax basis. Please see the disability section for more information. 3 The Dependent Care Flexible Spending Account and Health Savings Account are included only for convenience. They are not subject to ERISA and do not receive its protections.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-7 WHEN THERE IS OTHER COVERAGE

Coordination of Benefits

Since it’s possible for you or your covered dependents to be covered by more than one group or coverage plan, Signature Select, like many employer-sponsored plans, has a non-duplication feature to prevent duplication of payments. This is often referred to as “Coordination of Benefits” (COB). For purposes of COB relating to Signature Select’s health coverage, group or coverage plans include, but are not limited to: • An employer-sponsored or group-sponsored insurance or prepayment medical or dental plan • Coverage under Medicare or other governmental benefits, as permitted or required by law • Medical care components of group long-term care contracts, such as skilled nursing care • Medical coverage under group or individual automobile insurance policy, including “no-fault” automobile insurance coverage required by law The plan that pays first is called the primary plan. Other plans are secondary, and take over payments after the primary plan. When a claim is made for an employee or dependent that has coverage under more than one plan, the primary plan pays its usual benefits for the expenses and the secondary plan reduces its benefits in accordance with its COB provision. Neither plan pays more than it would ordinarily pay. A plan without a COB provision is always the primary plan. Except as provided otherwise in the Plan Documents, this is the order of payment for Coordination of Benefits: • The plan that covers the person who is an employee pays first. This means yourSignature Select coverage will always be primary for you if you’re covered as an employee. • If your spouse has coverage from his or her employer, that plan will be primary for your spouse even if you’ve enrolled your spouse as a dependent under Signature Select. Signature Select is primary only if your spouse participates in this plan, but does not participate in his or her employer-sponsored coverage. However, in some cases Signature Select always pays secondary. For example: • Signature Select will always be secondary to medical payment coverage or Personal Injury Protection (PIP) coverage under any auto liability or no-fault insurance policy. • Signature Select will always be secondary for former employees. • Signature Select will always be secondary if you are receiving coverage under COBRA. Generally, if you are receiving COBRA continuation coverage, Signature Select will pay secondary to the amount Medicare pays or would pay even if you have not enrolled in Medicare. Look below for more information on coordination with Medicare. • Signature Select will always be secondary to any coverage provided by any government unless prohibited by laws applicable to the Plan. For example, Signature Select is primary to Medicare and TRICARE except when the law allows Signature Select to pay secondary. When Signature Select is the primary plan, it pays the usual benefits, as described throughout this SPD. WhenSignature Select is the secondary plan, its usual benefits are reduced by the benefit amount that is payable under the primary plan. The combined benefit amount from this plan and the primary plan will never be more than the amount of benefit that would have been paid underSignature Select if there were no other coverage.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-8 Coordinating Benefits for Covered Children Except as provided otherwise in the Plan Documents, if your children are covered by both parents’ employer-sponsored plans, the “birthday rule” determines which plan is primary. When you submit bills for children covered by both your and your spouse’s plans:

If Then

Your birth date (month and day) occurs first in the calendar The Signature Select coverage is primary and pays first. year After your plan has paid, you should submit any unpaid bills to your spouse’s plan.

Your spouse’s birth date is first Your spouse’s plan is primary; submit your children’s bills to your spouse’s plan first. Expenses not covered under your spouse’s plan may be covered by the Signature Select Plan.

You and your spouse have the same birth date The plan covering you or your spouse for the longer period of time will pay first.

The other parent’s plan does not use the birthday rule to The other plan’s rule will determine the order of payment. determine priority and the plans do not agree on the order of benefits

You are divorced or separated The primary plan will be determined in the following order if the child is covered under more than one plan and all such plans contain a Coordination of Benefits provisionn: • The plan of the parent with financial responsibility for the health care expenses of the child • The plan of the parent with custody of the child • The plan of the stepparent married to the parent with custody of the child • The plan of the parent not having custody of the child • The plan of the spouse of the parent not having custody of the child

When the primary plan cannot be determined by application of these rules, the plan covering the child longest is primary.

Example: Coordination of Benefits David is enrolled in dental coverage under Signature Select. His wife, Laura, is employed by another company and has dental coverage through her employer’s plan (not an HMO) as well as through David’s plan. When Laura has a root canal costing $500, her plan is primary and pays first. Her plan covers 50% of the charges, or $250. Then, Signature Select pays the difference between what Laura’s plan paid and the benefitsSignature Select would have paid if it were primary. Signature Select would have paid 80%, or $400, so Laura is reimbursed the difference of $150. This way, her total reimbursement equals $400 minus the amount Signature Select would pay if it were her primary plan.

Coordination of Benefits may work differently for insured benefits underSignature Select, in accordance with the terms of the insurance certificate(s) governing such matters.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-9 Medicare • The services are provided in any facility that is not eligible for Medicare reimbursements, including a Veterans Administration Signature Select reduces its benefits as described below for facility, facility of the Uniformed Services, or other facility of covered persons who are eligible for Medicare when Medicare the federal government. Medicare Benefits are determined would be the primary plan (for example, when a person is not an as if the services were provided by a facility that is eligible for active employee and/or is covered under COBRA). reimbursement under Medicare. To the full extent permitted by law, Medicare Benefits are • The person is enrolled under a plan with a Medicare Medical determined as if the full amount that would have been payable Savings Account. Medicare Benefits are determined as if the under Medicare was actually paid under Medicare, even if: person were covered under Medicare Parts A and B. • The person is entitled to but not enrolled for Medicare. Medicare One exception to this rule is that Signature Selectis the primary Benefits are determined as if the person were covered under plan, to the extent required under Medicare law, for the first Medicare Parts A and B. 30 months of Medicare coverage for certain individuals whose • The person is enrolled in a Medicare + Choice (Medicare Medicare coverage is on the basis of having end-stage renal Part C) plan and receives non-covered services because the disease (ESRD). person did not follow all rules of that plan. Medicare Benefits are determined as if the services were covered under Medicare Parts A and B. Payments that would otherwise be waived • The person receives services from a provider who has elected Signature Select will not pay any benefits for services or goods to opt out of Medicare. Medicare Benefits are determined as that a health care provider or its representative indicated that if the services were covered under Medicare Parts A and B it would not charge you and/or the recipient in the absence of and the provider had agreed to limit charges to the amount of insurance and/or coverage under this Plan. Additionally, Signature charges allowed under Medicare rules. Select does not pay any amounts that a provider: (a) would not otherwise bill or charge; and/or (b) could reasonably be expected to waive in the absence of this Plan.

WHEN COVERAGE ENDS

Except as specifically provided otherwise in this document or in the applicable insurance certificates, events that will result in termination of Signature Select coverage include: • Termination of Signature Select, i.e., the Bertelsmann Employee Protection Plan (or termination of the portion of the Plan that provides the relevant coverage); • Termination or cancellation of the underlying insurance policy for any reason; • Ceasing to be eligible for Signature Select coverage for any reason (including losses as a result of a status change or a Plan amendment); • Loss of dependent status or failure to complete dependent eligibility verification requirements; • For spouses, divorce or legal separation; • Except as otherwise required by law (for example, USERRA), the date of commencement of military leave; • Failure to make contributions for any coverage that requires contributions; • Fraud, intentional misrepresentation or misconduct attempted with regard to any Signature Select coverage or benefits;* • Termination of the Employee’s employment; or • The Employee’s death.

* Before retroactively rescinding medical coverage that is subject to the ACA, the Company will provide 30 days advance written notice of the rescission if the ACA requires. However, the Company can terminate medical coverage subject to the ACA without providing 30 days’ advance written notice under certain circumstances permitted by the U.S. Department of Labor, including non-payment of premiums or failure to report a dependent’s loss of eligibility.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-10 If your employment terminates for any reason, your coverages ends as follows:

Coverage When Coverage Ends

Medical, Dental and Vision coverage for you and your • The last day of the month in which your employment ends, covered dependents Flexible Spending Account and unless eligible for COBRA or Disability continuation of Dependent Care Account coverage, as described below. • Coverage for your dependents stops at the end of the month in which they no longer qualify as eligible dependents, unless eligible for COBRA as described below.

Life, Accidental Death and Dismemberment Insurance, • Coverage ends upon your termination date. Dependent Life and Business Travel Accident Insurance • Unless otherwise provided in the policy, if you die within 31 days following your termination of active employment or transfer to an ineligible classification of employees, your Employee Life Insurance will be paid to your designated beneficiary as though it was still in effect at the time of your death.

Short- and Long-Term Disability Coverage • Coverage generally ends upon your termination date. • Please see the Disability chapter for additional information on when coverage ends.

Long Term Care Coverage • Please see the Long Term Care chapter for more information

The actual date on which coverage terminates for other reasons may vary depending on factors such as the event causing the coverage termination and applicable insurer or legal requirements. For example, medical coverage for an enrolled child who loses eligibility due to attaining age 26 will terminate at the end of the month in which the 26th birthday occurs. Please refer to the additional provisions below, as well as provisions in the benefits-specific chapters and applicable insurer coverage documents.

COBRA CONTINUATION OF COVERAGE

The right to continuation of health coverage was created by a You May Have Other Options When You Lose Group Health federal law, the Consolidated Omnibus Budget Reconciliation Act Coverage of 1985 (COBRA). COBRA continuation coverage can become Instead of enrolling in COBRA continuation coverage, there may available to you or members of your family when you would be other more affordable coverage options for you and your family otherwise lose your coverage under Signature Select because through the Health Insurance Marketplace, Medicaid, or other of a life event known as a “qualifying event.” COBRA continuation group health plan coverage options (such as a spouse’s plan) applies to Medical, Dental, Vision Care, Healthcare FSA and through what is called a “special enrollment period.” Some of Employee Assistance Program only. COBRA continuation does these options may cost less than COBRA continuation coverage. not apply to any other benefits, such as Life Insurance, AD&D Insurance, Disability Insurance or a Dependent Care Flexible You should compare your other coverage options with COBRA Spending Account. continuation coverage and choose the coverage that is best for you. For example, if you move to other coverage you may pay After a qualifying event, COBRA continuation coverage must be more out of pocket than you would under COBRA because the offered to each person who is a “qualified beneficiary.” You, your new coverage may impose a new deductible. spouse and your dependent children could become qualified beneficiaries if health coverage under the Plan is lost because When you lose job-based health coverage, it’s important that you of the qualifying event. Qualified beneficiaries who elect COBRA choose carefully between COBRA continuation coverage and continuation coverage must pay for COBRA continuation coverage other coverage options, because once you’ve made your choice, it except as otherwise provided under a severance agreement or can be difficult or impossible to switch to another coverage option. other separate agreement with the Company. For more information about health insurance options available through the Health Insurance Marketplace, and to locate an assister in your area who you can talk to about the different options, visit www.HealthCare.gov or call 1-800-318-2596.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-11 If you enroll in COBRA, you can only enroll in the Marketplace For the other qualifying events (divorce or legal separation of the at specific times employee and spouse or a dependent child’s losing eligibility for coverage as a dependent child), you must notify the COBRA If you sign up for COBRA continuation coverage, you can switch administrator (at the time of publication, WageWorks) within 60 to a Marketplace plan during a Marketplace open enrollment days after the later of (i) the date of the qualifying event and (ii) period. You can also end your COBRA continuation coverage early the date on which coverage is (or would be) lost as a result of the and switch to a Marketplace plan if you have another qualifying qualifying event. Failure to timely provide required notice will event such as marriage or birth of a child through something result in the loss of COBRA continuation coverage rights. called a “special enrollment period.” But be careful though - if you terminate your COBRA continuation coverage early without Upon providing notice of a qualifying event, you may be requested another qualifying event, you’ll have to wait to enroll in Marketplace to provide additional information and required documentation to coverage until the next open enrollment period, and could end up the COBRA administrator (at the time of publication, WageWorks). without any health coverage in the interim. Once you’ve exhausted your COBRA continuation coverage and Electing and Paying for COBRA Coverage the coverage expires, you’ll be eligible to enroll in Marketplace Once the COBRA administrator (at the time of publication, coverage through a special enrollment period, even if Marketplace WageWorks) receives notice that a qualifying event has occurred, open enrollment has ended. COBRA continuation coverage will be offered to each of the If you sign up for Marketplace coverage instead of COBRA qualified beneficiaries. Each qualified beneficiary will have an continuation coverage, you cannot switch to COBRA continuation independent right to elect COBRA continuation coverage. coverage under any circumstances. Covered employees may elect COBRA continuation coverage on behalf of their spouses, and parents may elect COBRA continuation coverage on behalf of their children. Any qualified COBRA Qualifying Events beneficiary for whom COBRA is not elected within the 60-day If you are an employee, you will become a qualified beneficiary if election period specified in the Plan’s COBRA election notice you lose your health coverage under the Plan because either one will lose their rights to elect COBRA. of the following qualifying events happens: The full cost of COBRA continuation coverage, plus an • Your hours of employment are reduced, or administrative fee of up to 2% of the cost of coverage, is the • Your employment ends for any reason other than your gross responsibility of the qualified beneficiary. The initial premium misconduct. payment for COBRA continuation coverage must be postmarked The spouse of an employee will become a qualified beneficiary if within 45 days of the COBRA continuation coverage election, and the spouse loses health coverage under the Plan because any of each subsequent monthly premium payment for coverage must the following qualifying events happens: be postmarked within the 30-day grace period for payment. • The employee dies; • The employee’s hours of employment are reduced; Length of Coverage • The employees’ employment ends for any reason other than his COBRA continuation coverage is a temporary continuation of or her gross misconduct; or coverage. When the qualifying event is the end of employment • The spouse becomes divorced or legally separated from the or reduction of the employee’s hours of employment, COBRA employee. continuation coverage generally lasts for up to a total of 18 months. When the qualifying event is the end of employment Your dependent children will become qualified beneficiaries if they or reduction of the employee’s hours of employment, and the lose health coverage under the Plan because any of the following employee became entitled to Medicare Benefits less than 18 qualifying events happenss: months before the qualifying event, COBRA continuation coverage • The parent-employee dies; for qualified beneficiaries other than the employee lasts until 36 • The parent-employee’s hours of employment are reduced; months after the date of Medicare entitlement. For example, if • The parent-employee’s employment ends for any reason other a covered employee becomes entitled to Medicare 8 months than his or her gross misconduct; before the date on which his employment terminates, COBRA • The parents become divorced or legally separated; or continuation coverage for his spouse and children can last up to • The child stops being eligible for coverage under the plan as a 36 months after the date of Medicare entitlement, which is equal “dependent child” (e.g., due to attaining age 26). to 28 months after the date of the qualifying event (36 months minus 8 months). When the qualifying event is the death of the employee, your divorce or legal separation, or a dependent Notify the Plan Administrator child’s losing eligibility as a dependent child, COBRA continuation The Plan will offer COBRA continuation coverage to qualified coverage lasts for up to a total of 36 months. beneficiaries only after the Plan Administrator has been notified There are two ways in which the 18-month period of COBRA that a qualifying event has occurred. When the qualifying event continuation coverage can be extended: is the end of employment or reduction of hours of employment, death of the employee, or commencement of a proceeding in • Disability Extension: : If you or anyone in your family bankruptcy with respect to the employer, the employer notifies the covered under the Plan is determined by the Social Security COBRA administrator (at the time of publication, WageWorks) of Administration to be disabled and you notify the COBRA the qualifying event. administrator (at the time of publication, WageWorks) in a timely

GENERAL & ADMINISTRATIVE INFORMATION | Intro-12 fashion, you and your entire family may be entitled to receive up of the qualifying event). Unless otherwise elected, all qualified to an additional 11 months of COBRA continuation coverage beneficiaries who were covered under the Health Care FSA will be (but not for the Health Care Flexible Spending Account), for covered together for Health Care FSA COBRA coverage. However, a total maximum of 29 months. The disability would have to each qualified beneficiary could alternatively elect separate have started at some time before the 61st day of COBRA COBRA coverage to cover that beneficiary only, with a separate continuation coverage and must last at least until the end of the Health Care FSA annual limit and a separate premium. initial 18-month period of COBRA continuation coverage. The disability extension is available only if you notify the COBRA When COBRA Coverage Ends administrator (at the time of publication, WageWorks), in writing, COBRA continuation coverage ends when: of the Social Security Administration’s determination of disability within 60 days after the latest of: (i) the date of the Social • The covered person becomes covered under another group Security Administration’s disability determination; (ii) the date of medical plan; the covered employee’s termination of employment or reduction • The covered person become entitled to Medicare Benefits; of hours; and (iii) the date on which the qualified beneficiary • The period during which COBRA coverage was applied ends; loses (or would lose) coverage under the terms of the Plan as a • The cost of the continued coverage is not paid on or before the result of the covered employee’s termination of employment or due date; reduction of hours. You must also provide this notice within 18 • The Social Security Administration determines, during the months after the covered employee’s termination of employment 11-month disability extension (see above), that the covered or reduction of hours in order to be entitled to a disability person is no longer disabled; or extension. Upon providing notice of a qualifying event, you may • The Signature Select Plan is terminated (or no longer provides be requested to provide additional information and required health coverage) and neither the Company nor any of its documentation to the COBRA administrator (at the time of affiliates sponsor any other employee group health plans. publication, WageWorks). Any qualified beneficiary for whom this procedure is not followed will lose their rights to a For More Information About COBRA disability extension of COBRA continuation coverage. • For additional information about your rights and obligations • Second Qualifying Event Extension: If your family experiences regarding COBRA continuation coverage under the Plan, you another qualifying event while receiving up to 18 months of should contact Human Resources or the COBRA Administrator, COBRA continuation coverage, the spouse and dependent which is Wage Works: children in your family can get up to 18 additional months of WageWorks, Inc. COBRA continuation coverage, for a maximum of 36 months, P.O. Box 14055 if notice of the second qualifying event is properly given to Lexington, KY 40512 the Plan. This extension may be available to the spouse and 1-877-502-6272 any dependent children receiving continuation coverage if the www.wageworks.com employee or former employee dies, or gets divorced or legally separated, or if the dependent child stops being eligible under • For more information about your rights under ERISA, including the Plan as a dependent child, but only if the event would COBRA, the Health Insurance Portability and Accountability Act have caused the spouse or dependent child to lose coverage (HIPAA), and other laws affecting group health plans, contact under the Plan had the first qualifying event not occurred. This the nearest Regional or District Office of the U.S. Department extension due to a second qualifying event is available only of Labor’s Employee Benefits Security Administration (EBSA) if you the COBRA administrator (at the time of publication, in your area or visit the EBSA website at www.dol.gov/ebsa. WageWorks) in writing of the second qualifying event with 60 (Addresses and phone numbers of Regional and District EBSA days of the second qualifying event. Any qualified beneficiary Offices are available through EBSA’s website.) for whom this procedure is not followed will lose their rights • In order to protect your family’s rights, you should keep the to an extension of COBRA continuation coverage due to a Plan Administrator informed of any changes in the addresses of second qualifying event. family members. You should also keep a copy, for your records, of any notices you send to the Plan Administrator. Special Rule – COBRA Coverage for Health Care FSA COBRA coverage under the Health Care Flexible Spending In the Event of Your Death Account (Health Care FSA) will be offered only to qualified If you die while you are covered under a group health plan benefit beneficiaries losing coverage who have underspent accounts. A subject to COBRA, your eligible dependents may elect to continue qualified beneficiary has an underspent account if the annual limit their health coverage under the Plan for up to 36 months, as elected by the covered employee, reduced by the reimbursable explained above. However, if you were age 55 or over and had claims submitted up to the time of the qualifying event, is equal met the eligibility requirements described in Chapter 1A, “Medical to or more than the amount of the premiums for Health Care FSA Coverage During Retirement”: COBRA coverage that will be charged for the remainder of the • Your surviving spouse will be eligible to continue coverage for plan year. the rest of his or her life, and COBRA coverage will consist of the Health Care FSA coverage • Your surviving dependent children will be eligible to continue in force at the time of the qualifying event (i.e., the elected annual coverage for as long as they qualify as eligible dependents. limit reduced by reimbursable claims submitted up to the time

GENERAL & ADMINISTRATIVE INFORMATION | Intro-13 If your dependent spouse is: (a) covered when you retired; (b) of the month in which you are certified for TAA benefits. Note, continues to work after your retirement; and (c) has coverage however, that election for COBRA continuation coverage must be through their employer, then you may add them to the Retiree made no later than six months after the date of the TAA-related Medical coverage under Signature Select within 31 days of their loss of coverage. If you elect COBRA continuation coverage during retirement date if they are otherwise eligible. If you die during this this second-chance election period, your continuation coverage deferral period, your spouse may be eligible for Retiree Medical will begin on the first day of the 60-day “second-chance” election coverage under Signature Select provided your spouse enrolls period and your maximum period of continuation coverage will be within 31 days of the date of your death. based on the date of your original qualifying event. Contributions for coverage under this special provision are If you have questions about continuation coverage, please explained in Chapter 1A, “Medical Coverage During Retirement,” contact your Benefits Department or local Human Resources of this SPD. Representative.

Your Rights Under USERRA Your Rights Under the Family and Medical Leave Act (FMLA) This is a general summary of the Uniformed Services Employment If you are eligible for unpaid leave and benefits under the terms of and Reemployment Rights Act of 1994 (“USERRA”) and how it the Family and Medical Leave Act of 1993, as amended (FMLA), affects the Plan. USERRA requires that if your coverage would you have the right to continue your group health plan benefits, otherwise end because of your absence to perform military including Medical, Dental, Vision Care, and/or the Health Care service, you may elect to continue coverage (including dependent Flexible Spending Account coverage, for up to 12 weeks during a coverage) in accordance with the provisions of USERRA. 12-month period (26 weeks in the case of FMLA leave to care for a covered servicemember). If active employment ends because of your absence to perform military service, coverage may be continued until the earliest of: Paid FMLA Leaves. If you take a qualifying paid leave under the • The date the Plan is terminated FMLA, you will continue to participate in benefit options and your • The end of the period for which contributions have been made if contributions will continue to be made as if you were not on a you fail to make timely payment of the required contribution leave of absence. • The date 24 months after the date you begin your absence to Unpaid FMLA Leaves. If you take an unpaid leave under the perform military service FMLA and you are covered under a benefit option that is a group • The date after the day in which you fail to return to active health plan, you are entitled to either revoke your election for employment or apply for reemployment with the employer within coverage for the remainder of the Plan Year or elect to continue the time periods required by USERRA your coverage during the leave. If you continue your election, you must make payments during the leave with after tax contributions The continuation provision will be in addition to any other in accordance with your Employer’s FMLA policy. You are continuation provisions described in the Plan for sickness, injury, responsible for making payments on or before the due date; layoff, or approved leave of absence, if any. otherwise your coverage will terminate. The reinstatement time period may be extended for an approved If you revoke your contribution election or stop making leave of absence taken in accordance with the provisions of the contributions during an FMLA leave, and you timely return to work federal law regarding USERRA. as required by FMLA during the same Plan Year that your leave For more information on this continuation provision, please started, you will be reinstated in group health plan benefits on contact your Benefits Department or local Human Resources the same basis as you were participating before your leave or as Representative. otherwise required by the FMLA. If you return to work in a different Plan Year, you must make a new election for coverage if you are The Trade Act of 2002 eligible and did not make an election at open enrollment. The Trade Act of 2002 created a special second COBRA election If you fail to return from an FMLA leave, you may be required to period for certain displaced workers receiving Trade Adjustment repay any contributions paid by the Company on your behalf Assistance (TAA) under the Trade Act of 1974, as amended. If during an unpaid leave. This repayment will be required only if your you are certified for TAA benefits and you did not elect COBRA failure to return from such leave is not related to a serious health continuation coverage during the initial 60-day election period condition, as defined in FMLA, or events beyond your control. following your employment termination, your second-chance Contact Human Resources for more information. COBRA election period of up to 60 days begins on the first day

GENERAL & ADMINISTRATIVE INFORMATION | Intro-14 ADDITIONAL HEALTH PLAN CONSIDERATIONS

Cost Sharing substance use disorders are covered the same way as illnesses typically treated as physical illness. This means that copays, In addition to premiums you must pay, Signature Select benefits, deductibles, and coinsurance for doctor visits and hospital stays including Medical, Dental and Vision, may require you to meet are comparable for both kinds of care. deductibles before benefits will be paid, pay coinsurance until reaching an out-of-pocket maximum, and/or make copayments The Mental Health Parity and Addiction Equity Act also requires when receiving goods or services. See the Plan Documents the Plan to provide out-of-network coverage for mental health and applicable to the option for more information on cost sharing. substance use disorder benefits if the option provides out-of- network coverage for medical and surgical benefits. Lifetime and Annual Limits The Plan will make available to participants, beneficiaries, and To the extent required under the Affordable Care Act (“ACA”), providers, upon request and free of charge, the criteria for Signature Select medical options do not impose lifetime limit medical necessity determinations and the reasons for any denial or annual dollar limits on essential health benefits (as defined in of reimbursement or payment of mental health or substance use guidance and regulations issued by the Department of Health disorder benefits. and Human Services). Note that the ACA does not prohibit non- monetary annual or lifetime limits. Thus, even if the ACA applies, Designation of Primary Care Providers and/or OB/GYN the Plan may impose other limits, such as visit limits. Other The medical benefit options provide primary care coverage (see benefits that are not subject to the ACA, including dental and the applicable option for more details). Some of the medical vision benefits, may have annual and lifetime maximum dollar and benefit options may require or permit the designation of a primary other limits. See the Plan Documents applicable to the option for care provider. You have the right to designate any primary care more details. provider who participates in your insurer’s network and who is available to accept you or your family members. For children, you Prescription Drugs may designate a pediatrician as the primary care provider. For The Plan’s Medical options may cover existing and new information on how to select a primary care provider, and for a prescription drugs. Please see the applicable Plan Documents list of the participating primary care providers, contact Human for information on the prescription drugs that the Plan’s Medical Resources or Benefits Department at the phone number in this options coverage provide (the “formulary”). You can also visit SPD, or the third-party administrator for medical benefits listed the website for the prescription drug coverage listed under Plan under Plan Insurers/Claim Administrators. Insurers/Claim Administrators or contact Human Resources or You do not need prior authorization from the Plan, the Benefits Department to obtain the Plan’s formulary. administrator, or from any other person (including a primary care provider) in order to obtain access to obstetrical or Medical Tests, Devices, and Procedures gynecological care from a health care professional in the network The Plan’s medical options may cover medical tests, devices, who specializes in obstetrics or gynecology. The health care and procedures. Please see the applicable Plan Documents for professional, however, may be required to comply with certain information on what Signature Select medical options coverage procedures, including obtaining prior authorization for certain provide (the “formulary”). services, following a pre-approved treatment plan, or following for making referrals. For a list of participating health care professionals who specialize in obstetrics or gynecology, contact Preventive Care the Plan Administrator at the phone number in this SPD or the To the extent the required under the Affordable Care Act (“ACA”), third-party administrator for your medical benefit listed under Plan the Signature Select medical options provide in-network Insurers/Claim Administrators coverage of preventive services at no cost. No cost preventive care is not available out-of-network unless required by the ACA, Network Providers such as when the option does not provide the required preventive care service in-network. You can find out more about the The Signature Select health options, including medical, dental preventive care the ACA requires at https://www.healthcare.gov/ and vision, may use a provider network. Generally, you will coverage/preventive-care-benefits/. pay less out-of-pocket when you use a provider that is part of the network. In some cases, the Plan will not provide any coverage for goods or services you receive from a provider who Mental Health/Substance Use Disorder Benefits is not in the provider network (an “out-of-network” provider). Certain options, such as the medical options, provide in-patient The current network providers are listed on the website of the and outpatient mental health and substance use disorder benefits. applicable insurer or administrator listed under Plan Insurers/ The applicable Plan Documents specify the mental health and Claim Administrators. You can also obtain a list of current network substances use disorder benefits, if any, that the option provides. providers at no cost by contacting Human Resources, the Benefits The Plan will provide these benefits consistent with the Mental Department, or the insurer or administrator in Plan Insurers/Claim Health Parity and Addiction Equity Act, which generally requires Administrators. The applicable Plan Documents provide additional that any services received for mental health care and treatment of provisions governing the use of network providers and what coverage, if any, the Plan will pay for goods and services received GENERAL & ADMINISTRATIVE INFORMATION | Intro-15 from out-of-network providers. Coverage for Emergency Medical Services Women’s Health and Cancer Rights Act The Signature Select medical options cover certain emergency Group health plans offered under the Plan may cover medical services. To the extent required by the ACA, the Plan will mastectomies and related procedures (subject to any applicable cover out-of-network emergency services as if they were received deductibles coinsurance, or copays). Under federal law, all group within the option’s network. In some cases, your benefits may be health plans that provide coverage for medical and surgical reduced if you do not receive the Plan’s authorization benefits with respect to a mastectomy must also provide for admission to the hospital from the emergency department. coverage for reconstructive surgery in a manner determined See the applicable medical Plan Documents for more information in consultation with the attending physician and the patient. on the coverage of emergency services, pre-authorization Coverage includes reconstruction of the breast on which the requirements, and payment of out-of-network emergency mastectomy was performed, surgery and reconstruction of services. the other breast to produce a symmetrical appearance, and prostheses and treatment of physical complications at all stages Preauthorization or Utilization Review May Be Required of the mastectomy, including lymphedemas. Group health plans may impose copayment, deductible or coinsurance requirements The Plan’s health options, including medical, dental and vision, for reconstructive surgery in connection with a mastectomy, but may require you to obtain authorization before receiving a service only if the copayment, deductible and coinsurance are consistent or good. If you are not pre-authorized, the Plan may not provide with those established for other benefits under the benefit option. coverage or may pay less than if you had obtained authorization. See the applicable Plan Document for copayment, deductible and For more information on whether pre-authorization is required, coinsurance requirements. please see the applicable Plan Documents.

The Signature Select health options may also conduct utilization Genetic Information Nondiscrimination Act review to determine if ongoing services or treatments are The Genetic Information Nondiscrimination Act of 2008 prohibits appropriate, including ongoing services. Please see the applicable the Company and Plan Administrator from using employees’ Plan Documents for more information on utilization review. and family members’ genetic information in deciding eligibility and contributions for group health plan benefits. In addition, the Note: Preauthorization and utilization review relate to whether Company and Plan Administrator cannot use genetic information the Plan will pay benefits. It is not a determination about whether for underwriting purposes. or not you should seek or receive any particular treatment, or when you should do so. You are responsible for making your own IRS Information Reporting and Medicare Secondary Payer decisions in consultation with your health care provider about the Compliance proper timing and course of treatment of any disease, injury or condition. You may get a letter from the Company, insurer, or third-party administrator asking you to confirm or provide Social Security number information for your enrolled dependents. Generally, Newborns’ Act Medicare requires insurers or the Plan’s third-party administrators Under federal law, the group health plans offering maternity or to provide this information electronically. newborn infant coverage under this Plan cannot restrict benefits In addition, the Company must obtain Social Security numbers for for any hospital length of stay in connection with childbirth for all enrolled dependents to comply with new IRS reporting required the mother or newborn child to less than 48 hours following a by the ACA. normal vaginal delivery, or less than 96 hours following a Cesarean section, or require that a provider obtain authorization from the Your failure to provide this information may result in your Plan or an insurer for prescribing a length of stay not in excess dependent’s termination of coverage. of the above periods. This requirement does not prevent an attending physician or other provider, in consultation with the Enrollment/Disenrollment Information mother, from discharging the mother or newborn child prior to the Enrollment and disenrollment functions performed by the expiration of the applicable minimum period. Company, Participating Employers, and/or their delegate(s) are performed on behalf of Plan participants, dependents, and beneficiaries, and are not group health plan administration functions. Enrollment and disenrollment information held by the Company, Participating Employers, and/or their delegate(s) is held in their capacity as an employer and is not HIPAA protected health information.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-16 Wellness Program Notice In addition, all medical information obtained through the wellness program will be maintained separate from your personnel The Plan’s wellness program, which is described in the Annual records, information stored electronically will be encrypted, and Enrollment materials, is administered according to federal rules no information you provide as part of the wellness program permitting employer-sponsored wellness programs that seek will be used in making any employment decision. Appropriate to improve employee health or prevent disease, including the precautions will be taken to avoid any data breach, and in the Americans with Disabilities Act of 1990, the Genetic Information event a data breach occurs involving information you provide Nondiscrimination Act of 2008, and the Health Insurance in connection with the wellness program, we will notify you Portability and Accountability Act, as applicable, among others. immediately. Your participation in the program is voluntary; however, incentives may be provided in exchange for your participation as described You may not be discriminated against in employment because of above. the medical information you provide as part of participating in the wellness program, nor may you be subjected to retaliation if you The information from the program will be used to provide you choose not to participate. with information to help you understand your current health and potential risks, and may also be used to offer you services If you have questions or concerns regarding this notice, or about through the wellness program, such as health coaching. You also protections against discrimination and retaliation, please contact are encouraged to share your results or concerns with your own Human Resources or Benefits Department. You will find additional doctor. information regarding your rights under HIPAA’s privacy rules in the Health Plan’s Notice of Privacy Practices, which you can find at Protections from Disclosure of Medical Information the Company’s benefits website. We are required by law to maintain the privacy and security of your Your health plan is committed to helping you achieve your best personally identifiable health information. Although the wellness health. The Plan’s wellness rewards are available to all employees. program and the Company may use aggregate information it If you think you might be unable to meet the standards for this collects to design a program based on identified health risks in the discount, you might qualify for an opportunity to earn the same workplace, we will never disclose any of your personal medical discount by different means. Contact Human Resources or information either publicly or to the Company except as necessary Benefits Department and we will work with you (and, if you wish, to respond to a request from you for a reasonable accommodation with your doctor) to find a tobacco cessation program to achieve needed to participate in the wellness program, or as expressly the same discount that is right for you in light of your health status. permitted by law. Medical information that personally identifies you that is provided in connection with the wellness program will not be provided to your supervisors or managers and may never be used to make decisions regarding your employment. Your health information will not be sold, exchanged, transferred, or otherwise disclosed except to the extent permitted by law to carry out specific activities related to the wellness program, and you will not be asked or required to waive the confidentiality of your health information as a condition of participating in the wellness program or receiving an incentive. Anyone who receives your information for purposes of providing you services as part of the wellness program will abide by the same confidentiality requirements. The only individual(s) who will receive your personally identifiable health information is your wellness program administrator in order to provide you with services under the wellness program.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-17 PLAN IDENTIFICATION

Name of Plan: Bertelsmann Employee Protection Plan (“Signature Select”) Plan Number: 503 Type of Plan: Welfare Plan, as defined in ERISA Section 3(1). For convenience, the plan also includes an IRS Section 125 pre-tax premium arrangement, health savings account (“HSA”), and dependent care flexible spending account. However, the Section 125 arrangement, HSA< and dependent care flexible spending account are not subject to ERISA. Type of Administration: Insurer or Third-Party Administrator (based on funding arrangement) Plan Sponsor: Bertelsmann, Inc. c/o Corporate Benefits Department 1745 Broadway, 20th Floor New York, NY 10019 Employer Identification Number: 95-2949493 Plan Year: January 1 through December 31 Plan Administrator: Welfare Benefit Plan Committee The Plan Administrator will make determinations that may be required c/o Corporate Benefits Department from time to time in the administration of the benefit option. The Plan Bertelsmann, Inc. Administrator will have the sole authority, discretion and responsibility 1745 Broadway, 20th Floor to interpret and apply the terms of the Plan and to determine all New York, NY 10019 factual and legal questions under the Plan except as otherwise specifically delegated to a third party, such as an insurance carrier or third-party administrator (see below for the insurance carrier’s authority under a fully insured plan). The Plan Administrator or its designee may adopt such rules as it deems necessary, desirable, or appropriate. All determinations, interpretations, rules, and decisions of the Plan Administrator or its designee shall be made in its sole discretion and shall be conclusive and binding upon all persons having or claiming to have any interest or right under the benefit option. If a benefit option is fully insured, the insurance carrier will have the sole authority and discretion to interpret and construe the benefit option and to determine all factual and legal questions under the benefit option with respect to all initial claims and appeals for benefits. This delegated authority includes, but is not limited to, determinations of entitlement to benefits and the amounts of the benefits to be paid. Neither the Plan Sponsor nor the Company assume any liability or responsibility whatsoever for any insured benefit option that is provided under the Plan. COBRA Administrator WageWorks, Inc. P.O. Box 14055 Lexington, KY 40512 1-877-502-6272 www.wageworks.com

Agent for Service of Legal Process: Chief Legal Counsel c/o Bertelsmann, Inc. 1745 Broadway, 20th Floor New York, NY 10019 Service of legal process may also be made upon the Plan Administrator. Plan Funding: Insurance Policies, Company General Assets, and Employee Contributions. There is no trust from which benefits are paid. For insured benefits, the insurance carrier is responsible for paying benefits, while the Plan Sponsor and Company are only responsible for remitting premiums to the insurance carrier. The Plan, the Plan Sponsor, and the Company do not pay any claims under the insured benefit options.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-18 PLAN INSURERS/CLAIM ADMINISTRATORS

Medical Disability Income

Anthem BlueCross BlueShield CIGNA Life Insurance Company of New York (third-party administrator of self-funded benefit) (third-party administrator of self-funded short-term disability P.O. Box 105187 benefit and insurer of insured long-term disability benefit) Atlanta, GA 30348-5187 Cigna Claim Operations 1-855-702-1127 2000 Park Lane Group # 3330119 Pittsburgh, PA 15275 www.anthem.com 1-800-362-4462 Policy # STD – SHY800501 / LTD – NYK980002 Kaiser Foundation Health Plan, Inc. Note: Mailing addresses for Evidence of Insurability (EOI) forms vary. (insurer of insured benefit) www.CIGNA.com 3100 Thornton Ave. Burbank, CA 91504 1-800-464-4000 Life Insurance and Accidental Death & Northern California Policy # 605741 Southern California Policy # 233723 Dismemberment (Employee and Dependent) www.kaiserpermanente.org CIGNA Life Insurance Company of New York Express Scripts (insurer of insured benefit) (Prescription Drug Coverage for Anthem plans – 2000 Park Lane third-party administrator of self-funded benefit) Pittsburgh, PA 15275 1 Express Way 1-800-362-4462 St. Louis, MO 63121 Policy # Life – FLY980015 / AD&D – YOK980015 1-855-778-1424 www.CIGNA.com Group # BERTRX1 www.express-scripts.com Business Travel Accident

Health Advocate, Inc. CIGNA Life Insurance Company of New York (Not responsible for administration of any ERISA benefits) (insurer of insured benefit) 3043 Walton Road 2000 Park Lane Suite 150 Pittsburgh, PA 15275 Plymouth Meeting, PA 19462 1-800-362-4462 1-866-695-8622 Policy # ABL 651709 www.healthadvocate.net www.CIGNA.com Dental Health Care and Dependent Care Flexible Delta Dental of New York Spending Accounts (third-party administrator of self-funded PPO benefit and insurer of insured DHMO benefit) PayFlex Systems USA, Inc. One Delta Drive (third-party administrator of self-funded benefit) Mechanicsburg, PA 17055 Flex Dept. PPO Plans: 1-800-932-0783 P.O. Box 3039 DHMO Plan: 1-800-422-4234 Omaha, NE 68103-3039 PPO Plans Group # 01524 1-800-284-4885 DHMO Group # NY76408 Group # 116076 www.deltadentalins.com www.payflex.com Vision Care Long Term Care Insurance

United Healthcare Vision Genworth Life Insurance Company (insurer of insured benefit) (insurer of insured benefit) P.O. Box 30978 Group Processing Center – Bertelsmann Salt Lake City, UT 84130 P.O. Box 64010 1-800-638-3120 St. Paul, MN 55164-0010 Policy # 704082 1-800-416-3624 www.myuhcvision.com Policy #: 18645 www.genworth.com

GENERAL & ADMINISTRATIVE INFORMATION | Intro-19 PLAN DOCUMENTS

This SPD describes the key features of Signature Select (as is consistent with any provisions of the applicable Plan Document, part of the Bertelsmann Employee Protection Plan) as applicable the provisions of the applicable Plan Document (including any to employees of the Company. Separate SPDs are distributed incorporated insurance policy(ies)) are controlling and will govern. to employees of other Bertelsmann companies that participate In the event of any conflict with the insurance policy(ies) with in Signature Select, describing the specific provisions that are regard to insured benefits, the applicable insurance policy(ies) (or applicable to them. portions thereof) will control, except with regard to eligibility where the Plan’s eligibility requirements supersede any less restrictive This SPD does not cover all Plan details. The full terms and eligibility requirements in the insurance policy(ies). conditions of the Plan are provided in the Plan Document, which includes relevant insurance policies and supplemental documents. Copies of the Plan Document, as well as the Summary Annual The Plan Document legally governs the operations of the Plan. Reports of plan operations filed with the Internal Revenue Service, are available for review during normal business hours at your In the event that the content of this SPD, or any oral or written Benefits Department or local Human Resources Office. representation made by any person regarding the Plan, conflicts or

PLAN ADMINISTRATION

The Plan is administered by the Welfare Benefit Plan Committee benefits under the Plan, to enforce rights due under the Plan, or to (the “Committee”), which is referred to in this document as any other causes of action which you may have against the Plan the Plan Administrator. The Plan Administrator may allocate or or its fiduciaries, including but not limited to a provider from whom delegate certain functions as it deems appropriate, but the Plan you receive medical services. Administrator retains the sole and final discretion and authority to determine eligibility for participation and to interpret the provisions IRS Information Reporting and Medicare Secondary Payer of the Plan and this SPD. The decisions of the Plan Administrator Compliance or its delegate are final and binding. References in this SPD to You may get a letter from the Company, insurer, or third-party “Plan Administrator” include any person(s) or entity(ies) to whom administrator asking you to confirm or provide Social Security the Plan Administrator has delegated its authority. number information for your enrolled dependents. Generally, See the Plan Insurers/Claims Administrators section of this Medicare requires insurers or the Plan’s third-party administrators chapter for the names and addresses of the insurers and to provide this information electronically. claims administrators, which are entities authorized to make In addition, the Company must obtain Social Security numbers for certain discretionary determinations on whether a participant or all enrolled dependents to comply with new IRS reporting required beneficiary is entitled to a benefit. by the ACA. Requirement for Proper Forms Your failure to provide this information may result in your All communications in connection with the Plan made by a dependent’s termination of coverage. participant shall become effective only when duly executed on any forms as may be required and furnished by, and filed with, the Plan Right of Recovery Administrator. This section describes the Plan’s right to seek reimbursement of expenses that are paid by the Plan on behalf of you or your Assignment of Health Care Benefits covered dependents (referred to in this section as a “Covered The claims administrator may elect to make payments directly to Individual”) if those expenses are related to the acts of a third providers for covered services. However, the claims administrator party (for example, if you are involved in an automobile accident). reserves the right to make payments directly to you. Payments The Program may seek reimbursement of these expenses from may also be made to an alternate recipient or that person’s any recovery the Covered Individual may receive from the third custodial parent or designated representative. Any payments party or another source, including from any insurance proceeds, made by the administrator fulfill all obligations of the Plan and/or settlement amounts or amounts recovered in a lawsuit. The terms the Plan Sponsor to pay for covered benefits. of the Plan’s reimbursement rights are described below: You cannot assign your right to receive payment to anyone else, If a Covered Individual incurs expenses covered by the Plan as a including but not limited to a health care provider without written result of the act or omission of a third party (person or entity) you consent of the Plan, except as may be required by a qualified may receive benefits pursuant to the terms of the Plan. However, medical child support order (QMCSO). the Covered Individual shall be required to refund to the Plan all benefits paid if the Covered Individual recovers from any other You cannot at any time, either during the time in which you are a party (such as proceeds from a settlement, judgment, lawsuit or Plan participant, or after you are no longer a Plan participant, in otherwise as a result of the act). The Covered Individual may be any manner, assign to any other party your right to sue to recover required to, among other things:

GENERAL & ADMINISTRATIVE INFORMATION | Intro-20 a) Execute an agreement provided by the Claims Administrator acquired, by assignment or subrogation, a portion of the Covered acknowledging the Plan’s right of recovery, agreeing to repay Individual’s claim equal to the amounts the Plan has paid on the any claims paid by the Plan, pledging amounts recovered by the Covered Individual’s behalf. The Plan may thereafter commence Covered Individual from the third party as security for repayment proceedings directly against any responsible third party. The of any claims paid by the Plan, and to the extent provided Plan shall not be deemed to waive its rights to commence action below, assigning the Covered Individual’s cause of action or against a third party if it fails to act after the expiration of one year other right of recovery to the Plan. If the Covered Individual nor shall the Plan’s failure to act be deemed a waiver or discharge fails to execute such an agreement, by filing claims (assigning of the lien described above. benefits or having claims filed on your behalf) related to such act The Covered Individual shall cooperate fully with the Plan in of a third party, the Covered Individual shall be deemed to agree asserting claims against a responsible third party and such to the terms of this reim¬bursement provision; cooperation shall include, where requested, the filing of suit by the b) Provide such information as the Claims Administrator may Covered Individual against a responsible third party and the giving request; of testimony in any action filed by the Plan. If a Covered Individual c) Notify the Claims Administrator in writing by copy of the fails or refuses to cooperate in connection with the assertion of complaint or other pleading of the commencement of any action claims against a responsible third party, the Plan Administrator by the Covered Individual to recover damages from a third may deny payment of claims and treat prior claims paid as party; overpayments recoverable by offset against future Plan benefits or d) Agree to notify the Claims Administrator of any recovery. by other action of the Plan Administrator. The covered person acknowledges that the Plan has the right to By accepting benefits (whether the payment of such benefits is conduct an investigation regarding the injury, illness, or condition made to the Covered Individual or made on behalf of the Covered to identify any responsible party. The Plan reserves the right to Individual to any provider) the Covered Individual agrees to pay notify the responsible party and his or her agents of its lien. Agents amounts to the Plan as required by these provisions regarding include, but are not limited to, insurance companies and attorneys. subrogation, and agrees not to spend, give or waste any funds The Plan’s right to recover the benefits it has paid is first priority that should be paid to the Plan. In the event the Covered Individual over all claims and it is not subject to reduction for attorney’s does spend, give or waste any funds that should have been paid fees and other expenses of recovery. The Plan’s right to recover to the Plan, the Covered Individual, by accepting benefits, agrees benefits shall apply to the entire proceeds of any recovery by that the Plan may assert a contractual obligation against the the Covered Individual. This includes any recovery by judgment, Covered Individual to pay such amount to the Plan from his other settlement, arbitration award or otherwise. The Plan’s right to funds or assets, and agrees not to assert a defense that such a recover shall not be limited by application of any statutory or remedy is unavailable to the Plan because it is not equitable in common law “make whole” doctrine (i.e., the Plan has a right nature. of first reimbursement out of any recovery, even if the Covered In addition, the Plan has a right to recover benefits that were paid Individual is not fully compensated) or the characterization of the in error (e.g., benefits paid to an ineligible person), or benefits that nature or purpose of the amounts recovered or by the identity of were obtained through fraudulence, as determined by the Plan the party from which recovery is obtained. The Plan is entitled to Administrator. Benefits may be recovered by either direct payment recovery from any and all settlements or judgments, even those to the Plan by the person for whom the payments were made designated as pain and suffering, non-economic damages and/ (you or a beneficiary) or from any other insurance company or or general damages only. The Plan is not required to participate in organization through voluntary payments, legal action, or by an or pay costs or attorney fees to any attorney hired by the covered offset of future benefits equal to the amount of the overpayment. person to pursue the covered person’s damage claim. The Plan Administrator has discretion to enforce these provisions The Plan shall have a lien against the proceeds of any recovery by any necessary or appropriate means, which might include: (a) by the Covered Individual and against future benefits due under making payment under the Plan but relying on this provision of the Plan in the amount of any claims paid. The lien shall attach as the Plan to establish your obligation to repay; (b) intervening in soon as any person or entity agrees to pay any money to or on your action against the third party in order to protect the rights behalf of any Covered Individual that could be subject to the Plan’s of the Plan; (c) taking legal action against you for repayment; (d) right of recovery if and when received by the Covered Individual. offsetting your obligation to repay against future benefits otherwise If any monies are actually received, then the Covered Individual due under the Plan; and (e) terminating your benefits coverage agrees to hold such funds to which the Plan’s lien applies in until repayment has been made. Additionally, failure to provide constructive trust for the Plan. In addition to any other remedies requested information, assist the Plan in pursuit of its subrogation that might be available, if the Covered Individual fails to repay the rights, or reimburse the Plan from any settlement or recovery Plan from the proceeds of any recovery, the Plan Administrator obtained by the Covered Individual may result in the termination may satisfy the lien by deducting the amount from future claims of benefits for the covered person or the institution of court otherwise payable under the Plan. proceedings against the covered person. The covered person If the Covered Individual fails to take action against a responsible shall do nothing to prejudice the Plan’s subrogation or recovery third party to recover damages within one year or within 30 days interest or to prejudice the Plan’s ability to enforce the terms of the after the Plan requests, the Plan shall be deemed to have Plan. This includes, but is not limited to, refraining from making any settlement or recovery that attempts to reduce or exclude the full cost of all benefits provided by the Plan. The Plan Administrator may delegate these functions to a third GENERAL & ADMINISTRATIVE INFORMATION | Intro-21 party. Plan Costs Misrepresentation or Fraud Participants pay the share of any Plan’s premiums and expenses To the extent permitted by law, the Plan Administrator, third- as specified in the enrollment materials. The Company or Plan party administrators, and insurers reserve the right to terminate a Sponsor pays the balance of any premiums and administrative Covered Employee’s or dependent’s benefits, deny future benefits, expenses out of its general assets. Where applicable, employee take legal action against a Covered Employee or dependent, and/ premiums are paid on a pre-tax basis through the cafeteria plan. or set off from any future benefits the value of benefits the Plan Neither the Plan nor any of the component benefit options offered has paid relating to inaccurate information or misrepresentations through it have a trust. provided to the Plan, in the case of any participant who obtains benefits wrongfully due to intentional misrepresentation or fraud. Overpayments To the extent permitted by law, if, for any reason, any benefit under Disaggregation for Certain Discrimination Testing any Plan is erroneously paid or exceeds the amount appropriately To the extent that the Plan provides different benefits (or levels payable under the Plan to you, your spouse, dependent, or any of benefits) or imposes different contribution rates to different other person or entity, then you or that person or entity shall classifications of employees (for example, hourly and salaried be responsible for refunding the overpayment to the Plan. In employees) or as otherwise described in the enrollment materials addition, if the Plan makes any payment that, according to the and Plan Documents, then for discrimination testing purposes terms of the Plan, should not have been made, the insurance under Code Sections 79, 125, 129 and 105(h) and pursuant companies, the Plan Administrator or the Company (or designee) to the authority of Treasury Regulation Section 1.105-11(c)(4), may recover that incorrect payment, whether or not it was made the Plan may be designated as separate plans, one for each due to the insurance company’s or Plan Administrator’s (or its separate classification of Employees described in the applicable designee’s) own error, from the person to whom it was made or Appendix, provided that each such classification constitutes a from any other appropriate party. As may be permitted in the sole nondiscriminatory classification of employees as required by discretion of the Plan Administrator, the refund or repayment may applicable regulations (including Treasury Regulation Section be made in one or a combination of the following methods: (a) in 1.410(b)-4). the form of a single lump-sum payment, (b) as a reduction of the amount of future benefits otherwise payable under the Plan, (c) as Limitation of Action automatic deductions from pay (to the extent permitted by law), or (d) any other method as may be required or permitted in the sole You must follow the claim and appeal procedure carefully and discretion of the Plan Administrator or the insurance companies. completely and you must file your claim before the deadlines The Plan may also seek recovery of the erroneous payment or explained above. If you do not do so, you will give up important benefit overpayment from any other appropriate party. legal rights. You must submit your claim for benefits within one (1) year after Rebates, Refunds, and Dividends the earlier of the date on which you were denied benefits or received benefits at a different level than you believed the Plan Any funds received by the Plan, including but not limited to provides. After you file your claim, you must complete the entire insurance company refunds, dividends, or rebates attributable claim and review process before you can sue over your claim. It to any benefit option, including but not limited to Medical Loss is important that you include all the facts and arguments that you Ratio rebates under the ACA and provider refunds, rebates or want considered during the claim and appeal process. settlements, shall be the property of the Plan Sponsor and will be retained by the Plan Sponsor even if such rebates relate to Any legal action to receive benefits must be filed within the earlier insurance policies or other amounts paid in whole or in part by you of: and/or other Plan participant contributions. • Twelve (12) months from the date a determination is made under the Plan or should have been made in accordance with the Plan’s claims review procedures, or • Twelve (12) from the date the service or treatment was provided or the date the claim arose, whichever is earlier. Your failure to file suit within this time limit results in the loss/waiver of your right to file suit. Any legal action must be filed in the United States District Court for the Southern District of New York, or for the district that includes your primary residence (except that a class action or putative class action can be filed only in the United States District Court for the Southern District of New York).

GENERAL & ADMINISTRATIVE INFORMATION | Intro-22 CLAIMS DENIAL AND APPEAL

The following is a general description of the benefit claim the end of the first 30-day period as to why the extension is review and appeal procedures for Signature Select health necessary and when the Plan expects to make a decision. If you and welfare benefits, including associated health and welfare failed to submit necessary information, the notice will specify benefits for retirees. To the extent it is inconsistent with the what information is necessary, and you’ll have at least 45 days to procedures described in a benefit-specific chapter of this SPD provide it. If provided within the 45 days, the Claims Administrator (or in an insurance company document), the procedures in the will notify you of its decision within 15 days after the information is benefit-specific chapter (or the insurance coverage document, if received. If not received within 45 days, the claim is denied. applicable) will govern. The benefit-specific chapters of this SPD also contain additional information, such as instructions for filing Health Care Flexible Spending Account benefit claims. Notice of Claim Decision: Within a reasonable time, but not later than 30 days after the Plan receives your claim. Benefit Claims Extension: Initial notification may be extended by up to 15 days A “benefit claim” is a claim for a particular benefit. It will typically if additional information is needed or an extension is necessary include your initial request for benefits. An example of a benefit due to matters beyond the control of the Plan. You’ll be notified claim is a claim to receive coverage for a particular type of before the end of the first 30-day period as to why the extension surgery. For each type of Signature Select benefit, benefit claims is necessary and when the Plan expects to make a decision. If are handled by the entity serving as the Claims Administrator, you failed to submit necessary information, the notice will specify which may be the insurer (for insured benefits) or a third-party what information is necessary, and you’ll have at least 45 days to administrator (for non-insured benefits). This section is only provide it. If provided within the 45 days, the Claims Administrator intended as an overview. The applicable Plan Documents typically will notify you of its decision within 15 days after the information is provide more details on the applicable claims procedures for the received. If not received within 45 days, the claim is denied. benefit. When you file a benefit claim, the Claims Administrator reviews the Disability Income (Short-Term and Long-Term) claim and makes a decision to either approve or deny the claim. See the Disability Plan chapter. In this process, the Claims Administrator has the full discretionary authority to: Life Insurance, Accidental Death and Dismemberment • Interpret relevant provisions of the Plan; (AD&D) and Business Travel Accident (BTA) Insurance • Determine whether claimed benefits are covered; Notice of Claim Decision: Within a reasonable time, but not later • Approve or deny reimbursement requests and authorize the than 90 days after the Claims Administrator receives your claim. payment of approved benefits; and • Provide participants with reasonable notification of their benefits Extension: Initial notification may be extended up to 90 days if an as may be approved or denied. extension is necessary due to matters beyond the control of the Plan. You’ll be notified before the end of the first 90-day period Unless otherwise stated in subsequent chapters, you must submit why the extension is necessary and when the Plan expects to all initial claims to the Claims Administrator within 12 months of make a decision. incurring the claim.

If your benefit claim results in an adverse benefit determination, in Long Term Care whole or in part, you’ll receive written notification from the Claims Administrator within the time frames noted below. The following See the Long Term Care chapter. situations each constitute an “adverse benefit determination”: (1) denial, reduction, or termination of a benefit; (2) failure to provide If Your Benefit Claim Is Denied or make payment (in whole or in part) for a benefit; or (3) rescission If your claim for benefits is denied (or if your health coverage has of medical or disability coverage, whether or not the rescission has been rescinded), in whole or in part, you’ll receive a written notice an adverse impact on any particular benefit at this time. that contains all of the following: • The specific reason(s) for the denial. For medical benefit claims, Timing of Benefit Claim Decisions the reason(s) will include any applicable denial code and its Medical & Dental corresponding meaning, as well as a description of the Plan’s (or the insurer’s) standard, if any, that was used in denying the See the Medical Plans and Dental Plans chapters. claim. Vision Care • Reference to the specific Plan provision(s) on which the denial is Notice of Claim Decision: Within a reasonable time, but not later based. than 30 days after the Claims Administrator receives your claim. • For a health claim, if an internal rule, guideline, protocol or other Extension: Initial notification may be extended by up to 15 days if similar criterion was relied on to determine the claim, you’ll additional information is needed or an extension is necessary due receive either a copy of the actual rule, guideline, protocol or to matters beyond the control of the Plan. You’ll be notified before other criterion, or a statement that the rule, guideline, protocol or other criterion was used and how you can request a copy GENERAL & ADMINISTRATIVE INFORMATION | Intro-23 free of charge. • A description of any additional material or information needed to benefits that are not subject to the Affordable Care Act): (i) perfect the claim and an explanation of why it’s necessary. information sufficient to identify the claim involved, including the date of service, the health care provider, the claim amount • An explanation of the Plan’s claim appeal procedures, (if applicable), (ii) a statement describing the availability, upon applicable time limits and your rights to bring a civil action under request, of the diagnosis code, the treatment code, and their ERISA section 502(a) following a final denial on your second corresponding meanings and (iii) a statement describing the level appeal. availability of, and contact information for, any applicable office • For health claims, if the denial is based on a provision such as of health insurance consumer assistance or ombudsman medical necessity, experimental treatment or a similar exclusion established under the Affordable Care Act to assist individuals or limit, you’ll receive either an explanation of the scientific or with the internal claims and appeals and external review clinical judgment for the determination based on the Plan terms processes. and your medical circumstances, or a statement that you can • For health benefit claims involving an urgent care claim, an receive the explanation free of charge upon request. explanation of the expedited claim review procedure. The Plan • For disability claims, such additional information specified in the may notify you by phone or fax and follow up with a written Disability Plan chapter. notice no later than three days after the notification. • For medical benefit claims (not applicable to Dental, Vision, Health Care Flexible Spending Accounts, or other health

Filing an Appeal You, your beneficiary or your authorized representative may appeal a benefit claim decision by writing to your Claims Administrator. You must make your request for appeal in writing within the time limits shown below:

Type of Appeal Deadline for Filing an Appeal Request

Medical and Dental See Medical Plans and Dental Plans Chapters

Vision Care and Health Care Flexible Spending Account 180 days of receipt of an adverse benefit determination

Disability Income 180 days of receipt of an adverse benefit determination

Life Insurance, AD&D and BTA 60 days of receipt of an adverse benefit determination

Dependent Care Flexible Spending Account 60 days of receipt of an adverse benefit determination

Long Term Care 180 days of receipt of an adverse benefit determination

During the applicable time period, you or your authorized For Medical, Dental, Vision, Life insurance/AD&D, Long-Term Care, representative will be given reasonable access to all documents, and Disability claims, the Claims Administrators are responsible records and information relevant to the claim for benefits, and for the appeals review and determination. The Plan Administrator you may receive a copy free of charge upon request. You can (or its designee) is only responsible for the appeals review and also submit to your Claims Administrator written comments, determination for Health Care Flexible Spending Account and documents, records and other information relating to the claim for Dependent Day Care Flexible Spending Account claims. benefits. Review of your claim will take into account all comments, documents, records and other information, without regard to Appeal Decision whether such information was submitted or considered in the The claim (and for any second level appeal of a medical claim, initial benefit determination. the first level appeal) will be reviewed again and a decision If the appeal relates to a health care benefit (including Health Care made based on all comments, documents, records and other Flexible Spending Account), your request for appeal must include information you’ve submitted. For a health benefit claim appeal: the following: • The appeal review (i) will not afford deference to the initial • The patient’s name and the identifying Employee information adverse benefit determination, and (ii) will be conducted by a • The date of the medical service person who is neither the original reviewer nor a subordinate of the original reviewer. • The doctor’s name • If the denial was based, in whole or in part, on a medical • The reason you believe the claim should be paid judgment, the person will consult with a health care professional • Any documentation or other written information to support your who has appropriate training and experience in the field request for claim payment involving the medical judgment. This health care professional cannot be the same person who made the initial decision of denial, nor a subordinate of the person. Medical or vocational GENERAL & ADMINISTRATIVE INFORMATION | Intro-24 experts who are consulted in the appeal process are identified • You will receive, free of charge, any new or additional evidence in the final decision without regard to whether the advice was considered, relied upon, or generated by the Plan (or the insurer) relied upon in making the appeal determination. in connection with the claim. Such evidence will be provided as soon as possible and sufficiently in advance of the date on • For an urgent care appeal, there will be an expedited review which the notice of final internal adverse benefit determination process where you can submit, orally or in writing, a request for is provided in order to give you a reasonable opportunity to review. Necessary information may be transmitted between you respond prior to that date. and the Plan by phone, fax or any other similarly expeditious method. • Before the Plan (or the insurer) issues a final internal adverse benefit determination based on a new or additional rationale, See the Disability Plan chapter for additional information related to you will receive the rationale, free of charge, as soon as possible appeals involving a determination of disability. and sufficiently in advance of the date on which the notice of In addition, for an appeal of a medical benefit claim (not applicable internal adverse benefit determination is provided in order to to Health Care Flexible Spending Accounts): give you a reasonable opportunity to respond prior to that date.

Notification of Appeal Decision In most cases, you’ll receive the Claims Administrator’s written notification of the decision within the following time frames after the Claims Administrator receives your request for review:

Type of Benefit Claim Appeal Timing of Notification

Medical and Dental See Medical Plans and Dental Plans Chapters.

Vision Care A reasonable time, but not later than 60 days after the Plan receives the request for review provided.

Health Care Flexible Spending Account A reasonable time, but not later than 60 days after the Plan receives the request for review. If necessary, the period may be extended for an additional 60 days.

Disability Income A reasonable time, but not later than 45 days after the Plan receives the request for review. If necessary, the period may be extended for an additional 45 days. See the Disability Plan Chapter for more details.

Life Insurance, AD&D, BTA and Dependent Care Flexible A reasonable time, but not later than 60 days after the Plan Spending Account receives the request for review. If necessary, the period may be extended for an additional 60 days.

Long Term Care A reasonable time, but not later than 45 days after the Plan receives the request for review. If necessary, the period may be extended for an additional 45 days.

If your appeal is denied, in whole or in part, you’ll receive a written corresponding meaning, (ii) a description of the Plan’s (or the notice that contains all of the following: insurer’s) standard, if any, that was used in denying the claim, (iii) a discussion of the denial decision, and (iv) a statement • The specific reasons for the denial. For medical benefit appeals describing the availability of, and contact information for, any (not applicable to Health Care Flexible Spending Accounts), applicable office of health insurance consumer assistance or the reason(s) will include: (i) any applicable denial code and its ombudsman established under the Affordable Care Act to assist corresponding meaning, (ii) a description of the Plan’s (or the individuals with the internal claims and appeals and external insurer’s) standard, if any, that was used in denying the claim, review processes. (iii) a discussion of the denial decision, and (iv) a statement describing the availability of, and contact information for, any • For medical benefit appeals (not applicable to Health Care applicable office of health insurance consumer assistance or Flexible Spending Accounts), information sufficient to identify ombudsman established under the Affordable Care Act to assist the claim involved, including the date of service, the health care individuals with the internal claims and appeals and external provided, the claim amount (if applicable), and a statement review processes. describing the availability, upon request, of the diagnosis code, the treatment code, and their corresponding meanings. • The specific reasons for the denial. For medical benefit appeals (not applicable to Health Care Flexible Spending Accounts), • A reference to the specific Plan provisions on which the denial is the reason(s) will include: (i) any applicable denial code and its based.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-25 • A statement that you are entitled to receive, upon request and Benefit Claims vs. Eligibility Claims free of charge, access to and copies of all documents, records Questions or claims solely regarding eligibility to participate in the and other information relevant to the claim. Plan (referred to here as “eligibility claims”) are not subject to the • A statement describing any additional appeal procedures above rules regarding claims and appeals. For eligibility claims, under the Plan, your right to get information about such appeal the Plan Administrator (or such other person as designated by the procedures (if any), and your right to bring a civil action under Plan Administrator) is authorized to interpret the terms of the Plan ERISA 501(a) (if applicable). and make determinations. For appeal of an eligibility claim that has been denied, the Committee has reserved the authority to review • For disability appeals, such additional information provided in and make its determination, which will be final and binding on all the Disability Plan chapter. persons. • For health benefit appeals: o If an internal rule, guideline, protocol or other similar criterion Eligibility Claims was relied on to determine a claim, you’ll receive either a Any participant (employee) or beneficiary (dependent), or an au- copy of the actual rule, guideline, protocol or other criterion, thorized representative acting on behalf of a participant or benefi- or a statement that the rule, guideline, protocol or other ciary, may assert a claim for eligibility under the Plan. Throughout criterion was used and how you can request a copy free of this section, any of these individuals are referred to generically as charge. a “Claimant.” o If the denial is based on a provision such as medical necessity, experimental treatment, or a similar exclusion or The following procedures shall apply if a Claimant is inquiring limit, you’ll receive either an explanation of the scientific or about eligibility to participate in a Signature Select benefit clinical judgment for the determination based on the Plan program. These rules do not apply if a Claimant is also claiming terms and your medical circumstances, or a statement that the right to receive Signature Select benefits rather than just you can receive the explanation free of charge upon request. inquiring about eligibility. If a Claimant is also filing a claim for o A statement regarding how to look into other voluntary benefits, the Claimant shall use the benefits claims procedures alternative dispute resolution options that may be that apply to the Signature Select benefit program under which available, such as mediation (e.g., by contacting the local the claim is being brought, as described elsewhere in this SPD. U.S. Department of Labor office and the state insurance regulatory agency). A. Determination of Eligibility Decisions by the Claims Administrators (including insurers) are A claim for eligibility must be submitted to Corporate Benefits conclusive and binding. With limited exceptions, you must exhaust Department in writing. Corporate Benefits Department will these internal claims and appeal procedures before filing a civil generally notify the Claimant of the decision within 90 days after action for benefits under Section 502(a) of ERISA. receiving the claim. Written claims can be submitted to the Corporate Benefits Department at: Questions About Benefit Determinations Bertelsmann, Inc. If you have questions or concerns about a benefit determination, Corporate Benefits Department you may informally contact the appropriate claims administrator 1745 Broadway before requesting a formal appeal. If the claims administrator New York, NY 10019 representative cannot resolve the issue to your satisfaction over However, if the Corporate Benefits Department determines that the phone, you may submit your questions in writing. Remember, special circumstances require an extension of time to decide the however, that if you are not satisfied with a benefit determination, claim, the Corporate Benefits Department may take an addition- you may appeal it immediately without first informally contacting al 90 days to decide the claim. If an extension is needed, the the claims administrator. Corporate Benefits Department will notify the Claimant, in writing and before the end of the initial 90-day period, of the special External Review of Denial of Medical Benefit Appeal circumstances requiring the extension and the date by which the Corporate Benefits Department expects to render a decision. If, after exhausting the appeal(s) available for a medical claim you are not satisfied with the final determination, you may choose to participate in an external review program. The program only B. Notification of Adverse Claim Determination applies if the adverse benefit determination is based on (i) clinical If the claim is denied in whole or in part, the Corporate Benefits reasons or (ii) exclusions for experimental or investigational Department will provide the Claimant, within the time period services or unproved services. The external review program is not described above, with written notice of the denial. The notice available if the adverse benefit determination is based on explicit will be written in a manner calculated to be understood by the benefit exclusions or defined benefit limits. External review is only Claimant and will include: available when required under the Affordable Care Act. Please • The specific reason(s) for the denial; contact your claims administrator for more information. • References to the specific Plan provisions upon which the benefit determination is based; • A description of any additional material or information necessary for the Claimant to perfect a claim and an explanation of why such information is necessary; and

GENERAL & ADMINISTRATIVE INFORMATION | Intro-26 • A description of the Plan’s appeals procedures and applicable The Committee will generally decide an appeal within 60 days. If time limits, including the right to bring a civil legal action under special circumstances require an extension of time for reviewing ERISA (if applicable) if the claim continues to be denied on the claim, the Claimant will be notified in writing. The notice will be review. provided prior to the commencement of the extension, describe the special circumstances requiring the extension and set forth the C. Appeal of Adverse Claim Determination date the Committee will decide the appeal, which date will be no later than 60 days from the end of the first 60-day period. If the claim for eligibility is denied by the Corporate Benefits Department, the Claimant may submit a written appeal to the D. Notification of Decision on Appeal Bertelsmann, Inc. Employee Protection Plan Welfare Benefit Plan Committee (the “Committee”) requesting a review of the decision. If the claim on appeal is denied in whole or in part, the Claimant The written appeal must be submitted within 60 days of the will receive a written notification of the denial. The notice will be Claimant receiving the initial adverse decision. Written appeals can written in a manner calculated to be understood by the Claimant be submitted to the Committee at: and will include: Bertelsmann, Inc. • The specific reason(s) for the adverse determination; Employee Protection Plan Welfare Benefit Plan Committee • References to the specific Plan provisions on which the c/o Bertelsmann, Inc. Corporate Benefits Department determination was based; 1745 Broadway • A statement that the Claimant is entitled to receive upon New York, NY 10019 request and free of charge reasonable access to, and make The written appeal should clearly state the reason or reasons why copies of, all records, documents and other information relevant the Claimant disagrees with the Committee’s decision. The to the Claimant’s benefit claim upon request; and Claimant may submit written comments, documents, records and • A statement describing the voluntary alternative dispute other information relating to the claim even if such information was resolution options that may be available by contacting the U.S. not submitted in connection with the initial claim for benefits. Department of Labor, and the right to bring a civil legal action Additionally, upon request and free of charge, the Claimant may under ERISA (if applicable). have reasonable access to and copies of all Plan documents, records and other information relevant to the claim.

CHANGING OR TERMINATING THE PLANS

The Plan has been established with the expectation that it will The decision to amend or terminate the Plans may be due to be continued indefinitely. Nevertheless, Bertelsmann, Inc., as the changes in federal or state laws, the requirements of the Internal sponsor of the Plan, reserves the right to amend or terminate the Revenue Code (Code) or the Employee Retirement Income Plan, in whole or in part, at any time in any manner. Moreover, Security Act (ERISA) of 1974 or any other reason. A Plan change the Plan has discretion to amend the cost-sharing between may involve current employees (whether active or inactive), former participants and the Plan. The right to amend or terminate the employees (including retirees), and/or their dependents. If the Plan Plan applies to all coverage and benefits under this Plan for any is amended or terminated, coverage may be discontinued with individual. or without the availability of any other arrangement or substitute coverage. The Plan can change an insured policy with an insurance company only with the consent of the insurance company. Insurance companies can generally change their policies and contracts from time to time and may eliminate or reduce future coverage of certain benefits or change their procedures.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-27 YOUR RIGHTS

Your rights under Signature Select are protected by laws such as suit in a state or federal court. In addition, if you disagree with the the Employee Retirement Income Security Act of 1974 (ERISA) and Plan’s decision or lack thereof concerning the qualified status of a the Health Insurance Portability and Accountability Act of 1996 domestic relations order or a medical child support order, you may (HIPAA). file suit in federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Your Rights Under ERISA Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you The Plan is an employee welfare benefit plan covered by the are successful, the court may order the person you have sued Employee Retirement Income Security Act of 1974 (ERISA). As to pay these costs and fees. If you lose, the court may order you a participant in the Plan, you have certain rights and protection to pay these costs and fees, for example, if it finds your claim is under ERISA. ERISA provides that, as a Plan participant, you are frivolous. entitled to … Assistance with your questions. If you have any questions about Receive information about your Plan and benefits. You may the Plan, you should contact the Plan Administrator. If you have examine, without charge, at the Plan Administrator’s office and any questions about this statement or about your rights under at other specified locations such as worksites, all documents ERISA, or if you need assistance obtaining documents from governing the Plan, including insurance contracts and a copy the Plan Administrator, you should contact the nearest office of of the latest annual report (Form 5500 series) filed by the Plan the Employee Benefit Security Administration, U.S. Department with the U.S. Department of Labor and available at the Public of Labor, listed in your telephone directory, or Division of Disclosure Room of the Employee Benefit Security Administration. Technical Assistance and Inquiries, Employee Benefits Security You may obtain, upon written request to the Plan Administrator, Administration, U.S. Department of Labor, 200 Constitution copies of all documents governing the operation of the Plan, Ave., NW, Washington, D.C. 20210. You may also obtain certain including insurance contracts and copies of the latest annual publications about your rights and responsibilities under ERISA by report (Form 5500 series) and updated Summary Plan Description. calling the publications hotline of the Employee Benefits Security The Plan Administrator may make a reasonable charge for the Administration. copies. You may receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report. HIPAA Notice of Privacy Practices Continue Group Health Plan coverage. You may continue health care coverage for yourself, your spouse or dependents if there THIS NOTICE DESCRIBES HOW MEDICAL INFORMATION is a loss of coverage under the Plan as a result of a qualifying ABOUT YOU MAY BE USED AND DISCLOSED AND HOW YOU event. You or your dependents will have to pay for such coverage. CAN GET ACCESS TO THIS INFORMATION. PLEASE REVIEW IT You should review this Summary Plan Description for information CAREFULLY. concerning your COBRA continuation coverage rights. This Notice of Privacy Practices describes how the self-insured Prudent actions by Plan fiduciaries. In addition to creating rights Medical, Dental, Employee Assistance Program, and Health Care for plan participants, ERISA imposes duties upon the people who Flexible Spending Account components of Signature Selectmay are responsible for the operation of the employee benefit plan. use and disclose your protected health information, and describes The people who operate your Plan, called “fiduciaries” of the your rights with respect to such information. It does not apply Plan, have a duty to do so prudently and in the interest of the Plan to any insured health benefits, nor does it apply to any disability participants and beneficiaries. No one, including your employer or or life and dismemberment benefit. If you participate in a fully- any other person, may fire you or otherwise discriminate against insured group health coverage (e.g. UHC Vision), you will receive a you in any way to prevent you from obtaining a welfare benefit separate notice directly from the insurer. from the Plan, or from exercising your rights under ERISA. Your “protected health information” includes your individually Enforce your rights. If your claim for a welfare benefit is denied identifiable information that is created or received by the Plan in whole or in part, you have a right to know why this was done, and relates to: (i) your past, present or future physical or mental to obtain copies of documents relating to the decision without health or condition; (ii) the provision of health care to you; or (iii) charge, and to appeal any denial, all within certain time schedules. the past, present or future payment for the provision of health Under ERISA, there are steps you can take to enforce the above care to you. Health information about you that the plan sponsor rights. For instance, if you request a copy of Plan documents (or a participating affiliate) creates or receives in its role as your or the latest annual reports from the Plan and do not receive employer, however, is not protected health information. Thus, them within 30 days, you may file suit in a federal court. In such information such as your sick leave records, Family and Medical a case, the court may require the Plan Administrator to provide Leave Act (FMLA) leave information, employment-related drug the materials and pay you up to $110 a day until you receive the testing results, Workers Compensation files and OSHA records are materials, unless the materials were not sent because of reasons not protected health information and not covered by this Notice. beyond the control of the Administrator. If you have a claim for benefits which is denied or ignored in whole or in part, you may file

GENERAL & ADMINISTRATIVE INFORMATION | Intro-28 The Plan is required by law to maintain the privacy of your Health Care Operations. The Plan will use or disclose your protected health information and is required to provide you protected health information to support the Plan’s related with a copy of this notice under regulations implementing functions. These functions include, but are not limited to: quality the Health Insurance Portability and Accountability Act assessment and improvement, underwriting, reviewing provider (“HIPAA“). This Notice sets forth the Plan’s legal duties and performance, case management, obtaining legal services, its privacy practices with respect to your protected health and auditing. For example, the Plan may use or disclose your information, and describes your rights to access and control your protected health information: (i) to provide you with information protected health information. The Plan must abide by the terms about a disease management program; (ii) to respond to a of this Notice. This Notice has been drafted in accordance with customer service inquiry from you; (iii) in connection with the HIPAA Privacy Rule, which is contained in the Code of Federal fraud and abuse detection and compliance programs, or (iv) Regulations at 45 CFR Parts 160 and 164. Any terms that are to survey you concerning how effectively the Plan is providing not defined in this Notice have the same meaning as they have in services, among other issues. HIPAA, however, prohibits any the HIPAA Privacy Rule. The HIPAA Privacy Rule supersedes any use or disclosure of protected health information that is genetic discrepancy between the information in this notice and the HIPAA information for underwriting purposes. Genetic information means Privacy Rule. The privacy laws of a particular state or other federal information about (1) your or your family members’ genetic tests, laws might impose a stricter privacy standard. If these stricter laws (2) manifestation of a disease or disorder in your family members, apply and are not superseded by federal ERISA pre-emption, the or (3) your or your family members’ requests for, or receipt of, a Plan will comply with such laws. genetic test, counseling or education, or participation in clinical research which includes such test, counseling or education. Uses and Disclosures of Protected Health Information Business Associates. The Plan has various service providers The Plan will not disclose your protected health information unless –called business associates– who perform various functions on it is permitted or required to do so. The Plan may use and disclose its behalf. For example, the Plan may have one or more service protected health information for the Plan’s purpose of providing providers who perform the administrative functions necessary to you with coverage under the health care components of the pay your medical claims. To perform these functions or to provide Plan. The main reason that the Plan will use and disclose your the services, business associates will receive, create, maintain, protected health information will be to evaluate and process any use, or disclose protected health information, but only after the request for coverage and claims for benefits under the Plan. The Plan and the business associate agree in writing to contract terms Plan will not, however, disclose your protected health information requiring the business associate to appropriately safeguard your to any other entity for their use in marketing products to you. This information. section describes these and other uses of your protected health Other Covered Entities. The Plan may use or disclose your information, together with some examples. The Plan may disclose protected health information to assist health care providers in your protected health information without your authorization connection with their treatment or payment activities, or to assist for the purposes described in this section, except that: (i) your other covered entities in connection with certain health care authorization to disclose your protected health information may operations. For example, the Plan may disclose your protected be required as described under the last two items in this section; health information to a health care provider when needed by the and (ii) you may request a restriction on the disclosure of your provider to render treatment to you, and the Plan may disclose protected health information as described in the third-to-last item protected health information to another covered entity to conduct described in this section. health care operations in the areas of quality assurance and Payment, Treatment and Health Care Operations. The Plan has improvement activities, or accreditation, certification, licensing, the right to use and disclose your protected health information for or credentialing. This also means that the Plan may disclose or all activities that are included within the definitions of “payment,” share your protected health information with other health care “treatment” and “health care operations” in the HIPAA Privacy programs or insurance carriers (such as Medicare) in order to Rule. coordinate benefits, if you or your family members have other health insurance or coverage. Payment. The Plan will use or disclose your protected health information to fulfill its responsibilities for providing coverage and Required by Law. The Plan may use or disclose your protected processing benefit claims under the Plan. For example, the Plan health information to the extent required by federal, state, or local law. may disclose your protected health information when a provider Public Health Activities. The Plan may use or disclose your requests information regarding your eligibility for benefits under the protected health information for public health activities that Plan, or it may use your information to determine if a treatment that are permitted or required by law. For example, it may use or you received was medically necessary. disclose information for the purpose of preventing or controlling a Treatment. The Plan may use and disclose your protected communicable disease. health information to assist your health care providers (doctors, Health Oversight Activities. The Plan may disclose your pharmacies, hospitals and others) in your diagnosis and protected health information to a health oversight agency for treatment. For example, we may disclose information about your activities authorized by law. For example, these oversight activities prior prescriptions to a pharmacist to help determine if a new may include audits; investigations; inspections; licensure or prescription could cause health problems because it conflicts with disciplinary actions; or civil, administrative, or criminal proceedings prior prescriptions. or actions. Oversight agencies seeking this information include government agencies that oversee the health care system,

GENERAL & ADMINISTRATIVE INFORMATION | Intro-29 government benefit programs, other government regulatory National Security and Protective Services. The Plan may programs, and government agencies that ensure compliance with disclose your protected health information to authorized federal civil rights laws. officials for conducting national security and intelligence activities, and for the protection of the President, other authorized persons, Lawsuits and Other Legal Proceedings. The Plan may disclose or heads of state. your protected health information in the course of any judicial or administrative proceeding or in response to an order of a court or Inmates. If you are an inmate of a correctional institution or under administrative tribunal (to the extent such disclosure is expressly the custody of a law enforcement official, the Plan may disclose authorized by such order). If certain conditions are met, the Plan your protected health information to the correctional institution or may also disclose your protected health information in response to to a law enforcement official for: (1) the institution to provide health a subpoena, a discovery request, or other lawful process. care to you; (2) your health and safety, and the health and safety of others; or (3) the safety and security of the correctional institution. Abuse or Neglect. The Plan may disclose your protected health information to a government authority that is authorized by Workers’ Compensation. The Plan may disclose your protected law to receive reports of abuse, neglect, or domestic violence. health information to comply with workers’ compensation laws Additionally, as required by law, if the Plan believes you have and other similar programs that provide benefits for work-related been a victim of abuse, neglect, or domestic violence, it may injuries or illnesses. disclose your protected health information to a governmental entity Schools. The Plan may disclose proof of immunization to a authorized to receive such information. school where the school is legally required to obtain proof of an Law Enforcement. Under certain conditions, the Plan also may individual’s immunizations before admitting the individual as a disclose your protected health information to law enforcement student, but only with the parent’s consent (or, if the student is old officials for law enforcement purposes. These law enforcement enough, the student’s consent). purposes include, for example: (1) responding to a court order Disclosures to the Secretary of the U.S. Department of or similar process; (2) locating or identifying a suspect, fugitive, Health and Human Services. The Plan is required to disclose material witness, or missing person; or (3) providing information your protected health information to the Secretary of the U.S. relating to the victim of a crime. Department of Health and Human Services when the Secretary is Coroners, Medical Examiners, and Funeral Directors. The investigating or determining the Plan’s compliance with the HIPAA Plan may disclose protected health information to a coroner or Privacy Rule. medical examiner when necessary for identifying a deceased Disclosures to Others Involved in Your Health Care. The person or determining a cause of death, or for such other duties Plan may disclose your protected health information to a friend as authorized by law. The Plan also may disclose protected health or family member that is involved in your health care, unless you information to funeral directors as necessary to carry out their request a restriction in accordance with the process described duties with respect to the decedent. below under “Right to Request Restrictions.” The Plan also may Organ and Tissue Donation. The Plan may disclose protected disclose your information to an entity assisting in a disaster relief health information to organizations that handle organ, eye, or effort so that your family can be notified about your condition, tissue donation and transplantation. status, and location. If you are not present or able to agree to these disclosures of your protected health information, then the Research. The Plan may disclose your protected health Plan may determine whether the disclosure is in your best interest. information to researchers when (1) their research has been Unless you inform the Plan otherwise before your death, the Plan approved by an institutional review board that has reviewed may disclose protected health information about you to your the research proposal and established protocols to ensure the family members, other relatives or close personal friends to the privacy of your protected health information, or (2) the research extent relevant to such person’s involvement, prior to your death, involves a limited data set which includes no unique identifiers (i.e., in your care or payment for health care. To protect those who information such as name, address, Social Security Number, etc., depend on others to exercise their rights under the HIPAA Privacy that can identify you). Rules, the Plan may, in certain circumstances, deny a friend or To Prevent a Serious Threat to Health or Safety. Consistent family member that is involved in your health care access to your with applicable laws, the Plan may disclose your protected health protected health information. information if disclosure is necessary to prevent or lessen a Disclosures to You. The Plan is required to disclose to you serious and imminent threat to the health or safety of a person or or your personal representative most of your protected health the public. It also may disclose protected health information if it is information when you request access to this information. The Plan necessary for law enforcement authorities to identify or apprehend will disclose your protected health information to an individual an individual. who has been designated by you as your personal representative Military. Under certain conditions, the Plan may disclose your and who has qualified for such designation in accordance with protected health information for activities deemed necessary by relevant law. Your personal representative will be required to appropriate military command authorities if you are or were in the produce evidence of his or her authority to act on your behalf Armed Forces. If you are a member of a foreign military service, before that person will be given access to your protected health the Plan may, in certain circumstances, disclose your information information or allowed to take any action for you. Proof of such to the foreign military authority. authority may take any of the following forms, or such other form as the Plan determines is appropriate under the circumstances: (1) the person provides a power of attorney for health care purposes

GENERAL & ADMINISTRATIVE INFORMATION | Intro-30 that is notarized by a notary public; or (2) the person provides a the performance of such services, or (3) for any other purpose court order appointing himself or herself as your conservator or permitted by the HIPAA privacy rule where the only remuneration guardian. A person who is the parent or legal guardian of a minor the Plan (or its business associates) receives is a reasonable child or legally-incompetent child will be deemed to have authority cost-based fee for preparing and transmitting the protected health to access the child’s protected health information and to take any information or such other fee expressly permitted by law. action for such child. The Plan may elect not to treat the person Any other uses and disclosures of your protected health as your personal representative if it has a reasonable belief that information that are not described in this Notice will be made you have been, or may be, subjected to domestic violence, abuse, only with your written authorization. For example, if you ask or neglect by such person; treating such person as your personal your local Human Resources Representative and/or advocacy representative could endanger you; or the Plan determines that service to assist you in obtaining benefits under the Plan, you it is not in your best interest to treat the person as your personal must complete and sign an authorization and give it to your local representative. Human Resources Representative and/or advocacy service before the Plan will disclose your protected health information to the Disclosures to the Plan Sponsor Human Resources Representative and/or advocacy service; if you The Plan may disclose your protected health information to the do not sign an authorization in this situation, the Plan will not be plan sponsor. For example, the Plan may inform the plan sponsor able to disclose any of your protected health information to the that you are enrolled in the Plan because the plan sponsor Human Resources Representative and/or advocacy service and, performs some of the administrative functions necessary for the therefore, the Human Resources Representative and/or advocacy management and operation of the Plan, such as withholding the service may not be able to provide you with effective assistance. employee’s share of premiums from an employee’s paycheck If you provide the Plan with an authorization, you may revoke for any employee enrolled in the Plan. In addition, the Plan may the authorization in writing, and this revocation will be effective disclose summary health information in the form of a limited data for future uses and disclosures of protected health information. set (that is, a list of information that summarizes claims history, However, the revocation will not be effective for information that claims expenses or types of claims without identifying you) to the Plan has used or disclosed in reliance on the authorization. the plan sponsor for purposes of health care operations, such as To the extent the authorization was obtained as a condition of for the purpose of conducting cost-management and planning- obtaining insurance coverage, other law may provide the insurer related analyses related to managing and operating the Plan. with the right to contest a claim under the policy or the policy itself.

Other Uses and Disclosures of Your Protected Health Contacting You Information The Plan (or its health insurance issuers or third-party Psychotherapy Notes. The Plan must obtain your authorization administrators) may contact you about treatment alternatives or for any use or disclosure of psychotherapy notes, except in other health benefits or services that might be of interest to you. cases of (1) use by the originator of the psychotherapy notes for treatment, (2) use or disclosure by the Plan to defend itself Enrollment/Disenrollment Information in a legal action or other proceeding brought by you, (3) use or Enrollment and disenrollment functions performed by the disclosure when required for government audits or when required Company, Participating Employers, and/or their delegate(s) are by law, (4) use or disclosure for health oversight activities regarding performed on behalf of Plan participants, dependents, and the originator of the psychotherapy notes, (5) disclosure to beneficiaries, and are not group health plan administration coroners or medical examiners, or (6) use or disclosure to avert a functions. Enrollment and disenrollment information held by the serious threat to health or safety. Company, Participating Employers, and/or their delegate(s) is held Marketing. The Plan must obtain your authorization for any in their capacity as an employer and is not HIPAA protected health use or disclosure of your protected health information to make information. a communication promoting a product or service, except for communications in the form of (1) any face-to-face communication Your Rights the Plan has with you or (2) a promotional gift of nominal value The following is a description of each individual’s rights with that the Plan provides. If marketing involves the Plan’s receipt of respect to his or her protected health information. Each and any payment from or on behalf of a third party whose product or every employee, retiree, spouse, and child who is over the age of service is being described, the authorization will state that such majority and who is covered by the Plan has an independent right payment is involved. to exercise the rights described in this section. Sale of PHI. The Plan must obtain your authorization before any Right to Request a Restriction. You have the right to request sale of protected health information, and such an authorization a restriction on the protected health information the Plan uses will state that the disclosure will result in the Plan’s receipt of or discloses about you for payment or health care operations. remuneration. It is not considered a sale of protected health You also have a right to request a limit on disclosures of your information, however, if the disclosure is required by law or is for protected health information to family members or friends who purposes of (1) a sale, transfer, merger or consolidation of all or are involved in your care or the payment for your care. If you want part of the Plan with or into another HIPAA-covered entity, (2) to request such a restriction, your request must be submitted in the Plan’s subcontractors (or others on their behalf) performing writing using the Contact Information at the end of this Notice. legitimate services and receiving payment from the Plan only for While the Plan will consider your request, the Plan is not required

GENERAL & ADMINISTRATIVE INFORMATION | Intro-31 to agree to any restriction that you request, except for requests If you request access to protected health information and that relating to protected health information that pertains solely to access is denied, in some, but not all, circumstances, you may a health care item or service that you (or others, other than the have a right to have the decision to deny access reviewed. Plan, on your behalf) paid for in full out-of-pocket. In addition, The review will be conducted by an individual chosen by a the Plan will not agree to restrictions on the use or disclosure of representative of the Plan who was not involved in the decision to protected health information if such use or disclosure is legally deny your request to access the information. required, or is necessary to administer the Plan. If the Plan agrees Right to Request an Amendment. You have the right to request to the restriction on the use or disclosure of your protected an amendment of your protected health information held by the health information, it can stop complying with the restriction Plan in a Designated Record Set. If you request an amendment upon providing notice to you. Your request must describe (i) the of your protected health information, your request must be protected health information you wish to limit, (ii) whether you want submitted in writing using the Contact Information at the end of to limit the Plan’s use, disclosure, or both, and (iii) if applicable, to this Notice, and must set forth one or more reasons in support of whom you want the limitations to apply (for example, restricting the proposed amendment. disclosures to your spouse). The Plan has 60 days after your request to amend your protected Right to Request Confidential Communications. If you believe health information to act on the request, except that an additional that a disclosure of all or part of your protected health information 30-day period is allowed if the Plan is unable to comply with your may endanger you, you may request that the Plan communicate request within the initial 60-day period and the Plan gives you a with you in an alternative manner or at an alternative location. written statement of the reasons for the delay and the date by For example, you may ask that all communications be sent to which the Plan will make a decision on your request. your work address. If you request confidential communications, your request must be submitted in writing using the Contact In certain cases, the Plan may deny your request for an Information at the end of this Notice. Your request must specify amendment. For example, the Plan may deny your request if the the alternative means or location for communication with you. It information you want to amend is accurate and complete or was also must state that the disclosure of all or part of the protected not created by the Plan. If the Plan denies your request, you have health information in a manner inconsistent with your instructions the right to file a statement of disagreement. Your statement of would put you in danger. The Plan will accommodate a request disagreement will be linked with the disputed information and all for confidential communications that is reasonable and that future disclosures of the disputed information will include your states that the disclosure of all or part of your protected health statement. information could endanger you. Right to Request an Accounting. You have the right to request Right to Request Access. You or your personal representative an accounting of certain disclosures the Plan has made of has the right to inspect and copy your protected health information your protected health information. The list of disclosures will in a “Designated Record Set” if you believe that information is not include, among other disclosures, disclosures made for incorrect or incomplete. A “Designated Record Set” includes treatment, payment, health care operations, for purposes of enrollment, payment, billing, claims adjudication and case or national security, to law enforcement or to corrections personnel, medical management record systems maintained by or for the pursuant to your authorization or directly to you. If you request an Plan. Information that is used for quality control or peer review accounting, your request must be submitted in writing using the analyses, that is not used to make decisions about an individual, Contact Information at the end of this Notice. You can request an is not included as part of the Designated Record Set. If you want accounting of disclosures made up to six years prior to the date of to inspect and/or copy this information, your request must be your request. Your request must state the time period from which submitted in writing using the Contact Information at the end of you want to receive a list of disclosures. You are entitled to one this Notice. accounting free of charge during a 12-month period. There will be a charge to cover the Plan’s costs for additional requests within Please note that, under federal law, you may not inspect or that 12-month period. The Plan will notify you of the cost involved copy the following records that are created or received by the and you may choose to withdraw or modify your request before Plan: psychotherapy notes; information compiled in reasonable any costs are incurred. The Plan has 60 days after your request anticipation of, or use in, a civil, criminal, or administrative action or for an accounting to act on the request, except that an additional proceeding; and protected health information that is subject to law 30-day period is allowed if the Plan is unable to comply with your that prohibits access to protected health information. request within the initial 60-day period and the Plan gives you a Your written request to inspect and copy your protected written statement of the reasons for the delay and the date by health information should be addressed to the person listed which the accounting will be provided. in the Contact Information at the end of this Notice. If you Right to Designate a Personal Representative. You have request copies, the Plan will charge you a reasonable fee to the right to request that the Plan disclose your protected copy your protected health information, as well as postage health information to your personal representative. “Personal if you request that copies be mailed to you or your personal representative” is an individual you designate to act on your representative. behalf and make decisions about your medical care. If you want You have a right to receive electronic copies of your protected the Plan to disclose your protected health information to your health information in a Designated Record Set, but only to the personal representative, submit a written statement giving the Plan extent it is electronically maintained. permission to release your protected health information to your personal representative and documentation that this individual

GENERAL & ADMINISTRATIVE INFORMATION | Intro-32 qualifies as your personal representative under state law, such as Changes to This Notice a power of attorney authorizing the individual to make health care The Plan has the right to change this Notice at any time. The Plan decisions for you. also has the right to make the revised or changed Notice effective Right to a Paper Copy of This Notice. If you have received this for medical information the Plan already has about you, as well as notice electronically, you have the right to a paper copy of this any information received in the future. The Plan will post a copy of Notice. The simplest way to obtain a paper copy of this Notice is the current Notice on the company’s benefits website if there are to print a copy of this Notice on your local or network printer. You material changes. All Notices will contain the effective date on the may also obtain a paper copy of this notice by calling the Privacy first page. Official at the contact address listed below. Effective Date Complaints This Notice of Privacy Practices is effective as of January 1, 2018. If you believe the Plan has violated your privacy rights, you may complain to the Plan or to the Secretary of the U.S. Department Contact Information of Health and Human Services. You may file a complaint with the If you (i) have any questions or want additional information about Plan using the Contact Information at the end of this Notice. The this Notice, the policies and procedures described in the Notice, Plan will not penalize you for filing a complaint. (ii) want to exercise any of the rights described in this Notice, or (iii) file a complaint, please contact: Privacy Official Bertelsmann Employee Protection Plan Attn: Corporate Benefits HIPAA Privacy Officer Address: 1745 Broadway 20th Floor New York, NY 10019

INDEPENDENT CONTRACTORS

Any person who is classified by the Company as an independent contractor shall not be eligible for coverage underSignature Select. In the event that any court or government agency judgment determines that such person is, in fact (or by common law), an employee of the Company (rather than an independent contractor), that person will become eligible for coverage under Signature Select prospectively if the other applicability requirements are met.

EMPLOYMENT AT WILL

Participation in Signature Select does not create or imply an employment contract with the Company or any participating affiliates, or as a right of any employee to be continued in the employment of the Company, or as a limitation of the right of the Company to discharge any of its employees, with or without cause.

The following sections contain summaries describing the key features of Signature Select. These summaries do not cover all details. The full terms and conditions of the Plan are provided in the Plan Document and insurance policies.

GENERAL & ADMINISTRATIVE INFORMATION | Intro-33 1 Medical Plans CONTENTS

...... Page

Highlights of the Signature Select Medical Plan Options...... 1-1

The Signature Select Medical Plan Options...... 1-3

• Introduction...... 1-3

• National Anthem CDHP, EPO or PPO Plan Options...... 1-3

• Local California Kaiser Permanente HMO Plan...... 1-3

How the Plans Work...... 1-3

• Deductible...... 1-3

• Out-of-Pocket Maximum...... 1-4

• Maximum Allowed Amount...... 1-4

• How the Anthem EPO Plan Works...... 1-6

• How the Anthem PPO Plan Works...... 1-6

• How the Anthem CDHP Plan Works...... 1-7

• How the Kaiser Permanente HMO Plan Works...... 1-8

• Finding a Network Provider...... 1-8

• Pre-Certification...... 1-8

What the Plans Cover...... 1-9

• Covered Services Under the Anthem EPO, PPO and CDHP Plans...... 1-9

• Covered Services Under the Kaiser Permanente HMO Plan...... 1-19

What the Plans Do Not Cover...... 1-32

• Exclusions Under the Anthem EPO, PPO and CDHP Plans...... 1-32

• Exclusions Under the Kaiser HMO Plan...... 1-35

Prescription Drug Coverage...... 1-37

• Prescription Drug Benefits for the EPO and PPO Plans...... 1-37

• Prescription Drug Benefits for the CDHP Plann...... 1-38

• How It Works...... 1-38

• Mail-Order Service...... 1-39

• Prescription Drug Coverage for the Kaiser Permanente HMO Plan...... 1-40

• What Is Not Covered Under Prescription Drug Coverage...... 1-40

Health Advocate...... 1-41

Appealing Claims...... 1-41

• Anthem Appeals...... 1-41

• Kaiser Appeals...... 1-43

Other Important Information...... 1-51

• Patient Protection Notices...... 1-51

Appendix - The CDHP and Health Savings Account...... 1-52

MEDICAL PLANS HIGHLIGHTS OF THE SIGNATURE SELECT MEDICAL PLAN OPTIONS

KAISER CDHP PLAN EPO PLAN PPO PLAN+ HMO BENEFIT COVERAGE In- Out-of- In-Network In- Out-of- In-Network Network Network Only Network Network Only

Annual Deductible* • Employee only $1,500 $3,000 $200 $500 $900 None • Employee + 1 dependent $3,000 $6,000 $400 $1,000 $1,800 None • Employee + 2 or more dependents $3,000 $6,000 $600 $1,500 $2,700 None

Office Visits • Preventive (wellness) 100% 60% after 100% 100% 70% after 100% deductible deductible • PCP, including outpatient mental health care, 80% after 60% after 80%, 80%, 70% after 100% after convenience care clinics, non-preventive lab deductible deductible deductible deductible deductible $25 co-pay waived waived

• Specialist 80% after 60% after 80%, 80%, 70% after 100% after deductible deductible deductible deductible deductible $25 co-pay waived waived

Hospital Stays 80% after 60% after 80% after 80% after 70% after 100% (including inpatient mental health care) deductible deductible deductible deductible deductible after $500 co-pay per admission

Emergency Room 80% after 80% after 100% 100% 100% 100% deductible deductible after $200 after $200 after $200 after $150 co-pay per co-pay per co-pay per co-pay** visit** visit** visit**

Urgent Care 80% after 60% after 100% after 100% after 100% after 100% deductible deductible $40 co-pay $40 co-pay $40 co-pay after $25 per visit per visit per visit co-pay**

Telemedicine*** 80% after Not 100% after 100% after Not Not deductible covered $10 co-pay $10 co-pay covered covered

Gender Reassignment Surgery 80% after Not 80% after 80% after Not Limited deductible covered deductible deductible covered benefits

Infertility Treatments Limited $25,000 lifetime maximum**** benefits

Annual Chiropractic Care 80% after 60% after 80% after 80% after 70% after Not (up to 30 visits per year) deductible deductible deductible deductible deductible covered

Out-of-Pocket Maximum* (includes co-pays, deductible and coinsurance) • Employee only $3,000 $6,000 $1,000 $1,500 $2,700 $1,500 • Employee + 1 dependent $6,000 $12,000 $2,000 $3,000 $5,400 $3,000 • Employee + 2 or more dependents $6,000 $12,000 $3,000 $3,000 $8,100 $3,000

Chart continued on next page

MEDICAL PLANS | 1-1 KAISER CDHP PLAN EPO PLAN PPO PLAN+ HMO BENEFIT COVERAGE In- Out-of- In-Network In- Out-of- In-Network Network Network Only Network Network Only

Prescription Drugs Provided through Express Scripts. See page 1-37. RETAIL: Generic: $10 co-pay Brand name: $30 co-pay

MAIL ORDER: Generic: $20 co-pay Brand name: $60 co-pay

* In the CDHP the deductible and out-of-pocket maximum include both medical and prescription drug costs. ** Co-pay waived if admitted within 24 hours. *** Co-pay/coinsurance only applies if treatment can be provided during telemedicine session. ****In addition to the $25,000 lifetime medical maximum on infertility treatments, there is a separate $25,000 lifetime maximum on infertility treatments for prescription drugs. Infertility benefits will include coverage for voluntary cryopreservation services, which are subject to the $25,000 lifetime maximum. + Employees of 495 Production Holdings (“495”), Original Productions, OP Services, or Amygdala Music (together “OP”) or Max Post are not eligible to enroll in this plan.

MEDICAL PLANS | 1-2 THE SIGNATURE SELECT MEDICAL PLAN OPTIONS

Introduction National Anthem CDHP, EPO or PPO

When it comes to benefits, everyone has different needs. The Plan Options Signature Select benefits program gives you the opportunity to Three medical plan options are available nationally: a Consumer- select medical coverage that best meets your needs and those of Directed Health plan (CDHP), an Exclusive Provider Organization your family. (EPO) plan and a Preferred Provider Organization plan Your Plan choices vary by: (PPO). Anthem BlueCross BlueShield (Anthem) is the Claims • Benefit levels Administrator for these options. • Degree of freedom you have in choosing medical providers The EPO plan option covers in-network care only, and when you • Premium cost and your contribution toward the cost (both use in-network providers, you pay less in out-of-pocket costs deductions from your paycheck and out-of-pocket costs) since the rates the providers charge are pre-negotiated with the Regardless of which medical plan option you choose, preventive insurance carrier. services with in-network providers are covered at 100%. The CDHP and PPO options provide both in- and out-of- You also have the choice to decline medical coverage. If you network care, but you will pay a higher deductible and a higher decline medical coverage, you will not be able to make coinsurance rate when you see out-of-network providers. This is changes to this election until the next annual enrollment because your costs are based on actual charges, instead of lower, period unless you have a qualified change in status during negotiated rates. the year. Qualified changes in status are described in the General This Summary Plan Description (SPD) provides a general summary and Administrative Information chapter. of the benefits provided under each medical plan option. For additional information, you may call Anthem BlueCross BlueShield at 1-855-702-1127 or visit www.anthem.com.

Local California Kaiser Permanente HMO Plan

The Company also offers a Health Maintenance Organization (HMO) option to employees in California (insured by Kaiser Permanente). HMOs provide comprehensive health care to enrolled individuals and families in a particular geographic area. Those eligible for an HMO must see member physicians within the HMO network.

HOW THE ANTHEM PLANS WORK

When you have a medical care expense, your Plan pays a percentage of the total cost. The percentage is based on the type of service you or your covered dependents receive, the Medical Plan option you are enrolled in, whether the provider is in- or out-of-network and whether or not Maximum Allowed Amount charges apply (see page 1-4 for more detail on Maximum Allowed Amount). Certain procedures must be followed in order to obtain benefits for your care, such as pre-certification and obtaining emergency or urgent care services, depending on the Plan.

Deductible amount. The Medical Plan then pays the applicable percentage of eligible expenses (in excess of the deductible) incurred by that A deductible will apply for most services. individual during the remainder of the calendar year. Deductible for the EPO and PPO Plans Family Deductible - When you or your covered family members incur eligible expenses (other than when a co-pay applies) Individual Deductible - When medical services (other than when performed by in-network or out-of-network providers and your a co-pay applies) are performed by in-network or out-of-network combined deductible expenses equal or exceed the applicable providers*, you and your dependent(s) are required to meet an family deductible amount, the deductible will be met for all individual deductible before the Medical Plan pays any benefits. covered family members for the remainder of the calendar year. To meet the individual deductible, you or your dependent must No participant will pay more than the individual deductible. In incur eligible expenses in a calendar year (January 1 through determining if the family deductible has been satisfied, only December 31), which are at least equal to the individual deductible eligible expenses that have been applied toward the individual deductible(s) can be counted. * Out-of-network coverage is available in the PPO Plan only.

MEDICAL PLANS | 1-3 Deductible for the CDHP only eligible expenses that have been applied toward the individual out-of-pocket limit can be counted. Individual Deductible - When medical and prescription drug services are performed by in-network or out-of-network providers, The out-of-pocket limit does not apply to any expenses that are you are required to meet an individual deductible before the not covered medical services under the Medical Plan (such as Medical Plan pays any benefits. Medical and prescription drug expenses that exceed Maximum Allowed Amount Charges). expenses apply toward the deductible. You must meet the deductible before coinsurance begins for medical services and Out-of-Pocket Maximum for the CDHP prescription drugs. Individual Out-of-Pocket Limit – Under the CDHP prescription To meet the individual deductible, you must incur eligible expenses drug expenses count towards the out-of-pocket limit. Once you in a calendar year (January 1 through December 31), which are meet your combined medical-prescription drug out-of-pocket limit, at least equal to the individual deductible amount. The Medical the Plan pays all remaining expenses for the rest of the calendar Plan then pays the applicable percentage of eligible expenses (in year at 100%, except for out-of-network claims. excess of the deductible) incurred by that individual during the Family Out-of-Pocket Limit – If you also cover dependents (other remainder of the calendar year. family members) under this Plan, the “family” amounts apply. Family Deductible - When you or your covered family members The “family” out-of-pocket amounts can be satisfied by a family incur eligible medical and prescription drug expenses performed member or a combination of family members. Once the family out- by in-network or out-of-network providers, medical and of-pocket is met, it is considered met for all family members. prescription drug expenses apply toward the deductible. You In determining if the family out-of-pocket limit has been satisfied, must meet the deductible before coinsurance begins for medical only eligible expenses that have been applied toward the individual services and prescription drugs. If you also cover dependents out-of-pocket limit can be counted. The out-of-pocket limit does (other family members) under this Plan, only the “family” amounts not apply to any expenses that are not covered medical services apply. The “family” deductible amounts can be satisfied by a family under the Medical Plan (such as expenses that exceed Maximum member or a combination of family members that incur eligible Allowed Amount Charges). expenses in a calendar year (January 1 through December 31), which are at least equal to the individual deductible amount. Once the family deductible is met, it is considered met for all family Maximum Allowed Amount members, then the Medical Plan pays the applicable percentage of eligible expenses (in excess of the deductible) incurred by that The Medical Plan options base payment on what is considered individual during the remainder of the calendar year. to be a reasonable and customary charge for an expense, known as the Maximum Allowed Amount. Reimbursement for services In determining if the family deductible has been satisfied, only rendered by in-network and out-of-network providers is based on eligible expenses that have been applied toward the family the Maximum Allowed Amount for the covered service that you deductible can be counted. Expenses incurred by any covered receive. The Maximum Allowed Amount is the maximum amount family member may be used to meet the deductible before the of reimbursement Anthem will allow for services and supplies: Plan pays for the cost of services. • That meet our definition of covered services, to the extent such services and supplies are covered under your Plan and are not Out-Of-Pocket Maximum excluded;

The Plans limit the amount you’ll pay each year. This is called • That are medically necessary; and your out-of-pocket maximum, which prevents you from incurring • That are provided in accordance with all applicable excessive costs in any year when your medical expenses are preauthorization, utilization management or other requirements high. The out-of-pocket maximum is based on the Plan and the set forth in your Plan. coverage level you choose. Your out-of-pocket maximum includes You will be required to pay a portion of the Maximum Allowed your coinsurance, deductibles and any co-pays. Once you reach Amount to the extent you have not met your deductible or have a this limit, the Plan pays all remaining expenses for the rest of the co-payment or coinsurance. In addition, when you receive covered calendar year at 100%, except for out-of-network claims under the services from an out-of-network provider, you may be responsible CDHP and PPO options, which are subject to Maximum Allowed for paying any difference between the Maximum Allowed Amount Amount fees (the amounts that the Plan determines are the normal and the provider’s actual charges. This amount can be significant. range of payment for a specific health-related service or medical procedure in a given area). When you receive covered services from a provider, the Claims Administrator will, to the extent applicable, apply claim processing Out-of-Pocket Maximum for the EPO and PPO Plans rules to the claim submitted for those covered services. These rules evaluate the claim information and, among other things, Family Out-of-Pocket Limit – If two or more covered family determine the accuracy and appropriateness of the procedure and members incur out-of-pocket expenses in the same calendar diagnosis codes included in the claim. Applying these rules may year and such out-of-pocket expenses equal or exceed the affect the Claims Administrator’s determination of the Maximum family out-of-pocket limit, the out-of-pocket limit will be met for all Allowed Amount. The Claims Administrator’s application of these covered family members for the remainder of the calendar year. rules does not mean that the covered services you received In determining if the family out-of-pocket limit has been satisfied, were not medically necessary. It means the Claims Administrator

MEDICAL PLANS | 1-4 has determined that the claim was submitted inconsistent with 2. An amount based on reimbursement or cost information from procedure coding rules and/or reimbursement policies. For the Centers for Medicare and Medicaid Services (CMS). When example, your provider may have submitted the claim using basing the Maximum Allowed amount upon the level or method several procedure codes when there is a single procedure code of reimbursement used by CMS, the Administrator will update that includes all of the procedures that were performed. When this such information, which is unadjusted for geographic locality, no occurs, the Maximum Allowed Amount will be based on the single less than annually; or procedure code rather than a separate Maximum Allowed Amount 3. An amount based on information provided by a third-party for each billed code. vendor, which may reflect one or more of the following factors: Likewise, when multiple procedures are performed on the same (1) the complexity or severity of treatment; (2) level of skill day by the same physician or other health care professional, and experience required for the treatment; or (3) comparable the Plan may reduce the Maximum Allowed Amounts for those providers’ fees and costs to deliver care; or secondary and subsequent procedures because reimbursement 4. An amount negotiated by the Claims Administrator or a at 100% of the Maximum Allowed Amount for those procedures third-party vendor which has been agreed to by the provider. would represent duplicative payment for components of the This may include rates for services coordinated through case primary procedure that may be considered incidental or inclusive. management; or 5. An amount based on or derived from the total charges billed by Provider Network Status the out-of-network provider. The Maximum Allowed Amount may vary depending upon Providers who are not contracted for this product, but contracted whether the provider is an in-network provider or an out-of- for other products with the Claims Administrator, are also network provider. considered out-of-network. For this Plan, the Maximum Allowed An in-network provider is a provider who is in the managed Amount for services from these providers will be one of the five network for this specific product or in a special Center of methods shown above unless the contract between the Claims Excellence or other closely managed specialty network, or who Administrator and that provider specifies a different amount. has a participation contract with the Claims Administrator. For Unlike in-network providers, out-of-network providers may send covered services performed by a network provider, the Maximum you a bill and collect for the amount of the provider’s charge Allowed Amount for this Plan is the rate the provider has agreed that exceeds the Plan’s Maximum Allowed Amount. You are with the Claims Administrator to accept as reimbursement for responsible for paying the difference between the Maximum the covered services. Because network providers have agreed to Allowed Amount and the amount the provider charges. This accept the Maximum Allowed Amount as payment in full for those amount can be significant. Choosing a network provider will likely covered services, they should not send you a bill or collect for result in lower out of pocket costs to you. Please call customer amounts above the Maximum Allowed Amount. However, you may service for help in finding an in-network provider or visit the Claims receive a bill or be asked to pay all or a portion of the Maximum Administrator’s website at www.anthem.com. Allowed Amount to the extent you have not met your deductible or have a co-payment or coinsurance. Please call customer Customer service is also available to assist you in determining this service for help in finding an in-network provider or visit Plan’s Maximum Allowed Amount for a particular service from an www.anthem.com. out-of-network provider. In order for the Claims Administrator to assist you, you will need to obtain from your provider the specific Providers who have not signed any contract with the Claims procedure code(s) and diagnosis code(s) for the services the Administrator and are not in any of the Claims Administrator’s provider will render. You will also need to know the provider’s networks are out-of-network providers, subject to BlueCross charges to calculate your out-of-pocket responsibility. Although BlueShield Association rules governing claims filed by certain customer service can assist you with this pre-service information, ancillary providers. the final Maximum Allowed Amount for your claim will be based on For covered services you receive from an out-of-network provider, the actual claim submitted by the provider. the Maximum Allowed Amount for this Plan will be one of the following as determined by the Claims Administrator: 1. An amount based on the Claims Administrator’s out-of-network provider fee schedule/rate, which the Claims Administrator has established in its discretion, and which the Claims Administrator reserves the right to modify from time to time, after considering one or more of the following: reimbursement amounts accepted by like/similar providers contracted with the Claims Administrator, reimbursement amounts paid by the Centers for Medicare and Medicaid Services for the same services or supplies, and other industry cost, reimbursement and utilization data; or

MEDICAL PLANS | 1-5 HOW THE ANTHEM EPO PLAN WORKS

The Anthem BlueCross BlueShield EPO Plan offers in-network • In-network preventive care is covered at 100%. Urgent care benefits only. You do not need to select a Primary Care Physician centers and emergency room visits are covered subject to (PCP), and you do not need a referral from your PCP to see the Maximum Allowed Amount. Urgent care centers provide another provider or specialist in the EPO network. However, medical care for urgent but not emergency care. If you need your provider is responsible for coordinating all covered medical to use an emergency room there is a $200 co-pay, and a $40 services. Except for emergency care, the EPO does not cover co-pay for an urgent care center. Telemedicine services are services received outside of the EPO network. available for $10. • The EPO Plan covers in-network PCP and specialist office • Co-pays, deductibles and coinsurance are included in the visits at 80%, even if you have not met your deductible. out-of-pocket maximum. Prescription drug benefits have a In-network inpatient hospital expenses and most other covered separate out-of-pocket maximum and are provided through medical services are covered at 80%, after you meet an annual Express Scripts which is described in more detail under deductible of $200 for employee-only coverage, $400 for an Prescription Drug Coverage. employee covering one dependent, or $600 for an employee • To view an Anthem provider directory, visit www.anthem.com, covering two or more dependents. or contact Anthem at 1-855-702-1127. (See page 1-8 for how • Your total out-of-pocket expenses are limited to $1,000 for to find a network provider.) employee-only coverage, $2,000 for an employee covering one dependent, or $3,000 for an employee covering two or more dependents.

HOW THE ANTHEM PPO PLAN WORKS

The Anthem BlueCross BlueShield PPO Plan offers a choice In-network preventive care is covered at 100%. Urgent care in providers you can visit. The PPO has a higher premium cost centers and emergency room visits are covered subject to the than the other Medical Plan options, but features a lower Maximum Allowed Amount. Urgent care centers provide medical deductible and out-of-pocket maximum than the CDHP and care for urgent but not emergency care. If you need to use an more out-of-network coverage. emergency room there is a $200 copay, and a $40 co-pay for an urgent care center. Telemedicine services are available for $10. You can choose whether to go in-network or out-of-network each time you need care. When you stay in-network, you save Co-pays, deductibles and coinsurance are included in the money by using network providers who provide their services at out-of-pocket maximum. Prescription drug benefits have a negotiated rates. When you go out-of-network, you can visit any separate out-of-pocket maximum and are provided through doctor or hospital you want, but you’ll pay a greater share of the Express Scripts which is described in more detail under cost. You do not need to select a PCP, and you do not need a Prescription Drug Coverage. referral from your PCP to see another provider or specialist in the PPO network. Out-of-Network Benefits Under the Anthem PPO, you can visit providers who do not In-Network Benefits participate in the network and still receive some level of coverage. To receive in-network benefits, you must visit a provider in the However, you will pay more for covered medical services. Anthem PPO network. You do not have to select a PCP. You can When you receive care from an out-of-network provider, you visit any network provider without a referral. When you use an must first meet an annual deductible of $900 for employee-only in-network provider, you lower your overall costs and avoid filing coverage, $1,800 for an employee covering one dependent, or claims. $2,700 for an employee covering one or more dependents. The PPO Plan covers in-network PCP and specialist office visits Then, the Medical Plan pays 70% towards the cost of covered at 80%, even if you have not met your deductible. In-network medical services (subject to Maximum Allowed Amount), and you inpatient hospital expenses and most other covered medical pay the rest. services are covered at 80%, after you meet an annual deductible Out-of-network doctors can choose to directly bill you the amount of $500 for employee-only coverage, $1,000 for an employee over the Maximum Allowable Amount charges discussed in the covering one dependent, or $1,500 for an employee covering two previous section. or more dependents. If you need to use an emergency room, emergency room and Your total out-of-pocket expenses are limited to $1,500 for physician services are covered at the in-network benefit level employee-only coverage, $3,000 for an employee covering one subject to the Maximum Allowable Amount. dependent, or $4,500 for an employee covering two or more dependents. Your total out-of-pocket expenses are limited to $2,700 for employee-only coverage, $5,400 for an employee covering one dependent, or $8,100 for an employee covering two or more dependents. MEDICAL PLANS | 1-6 HOW THE ANTHEM CDHP PLAN WORKS

The Anthem BlueCross BlueShield CDHP Plan offers a choice in Out-of-Network Benefits providers you can visit. The CDHP has a lower premium cost than Under the Anthem CDHP, you can visit providers who do not the other medical plan options, but features a higher deductible participate in the network and still receive some level of coverage. and out-of-pocket maximum. However, you will pay more for covered medical services. You can choose whether to go in-network or out-of-network • When you receive care from an out-of-network provider, you each time you need care. When you stay in-network, you save must first meet an annual deductible of $3,000 for employee- money by using network providers who provide their services at only coverage or a deductible of $6,000 for employee covering negotiated rates. When you go out-of-network, you can visit any one or more dependents. Then, the Medical Plan pays 60% doctor or hospital you want, but you’ll pay a greater share of the towards the cost of covered medical services (subject to cost. You do not need to select a PCP, and you do not need a Maximum Allowed Amount), and you pay the rest. In the referral from your PCP to see another provider or specialist in the CDHP, prescription drug costs are combined with the medical CDHP network. deductible. • Out-of-network doctors can choose to directly bill you the In-Network Benefits amount over the Maximum Allowable Amount charges To receive in-network benefits, you must visit a provider in the discussed in the previous section. Anthem CDHP network. You do not have to select a PCP. You • If you need to use an emergency room, emergency room and can visit any network provider without a referral. When you use an physician services are covered at the in-network benefit level in-network provider, you lower your overall costs and avoid filing subject to the Maximum Allowable Amount. claims. • Your total out-of-pocket expenses are limited to $6,000 for • The CDHP covers in-network PCP, specialist office visits, employee-only coverage or $12,000 for an employee covering inpatient hospital expenses, emergency room, urgent care and one or more dependents. Deductibles and coinsurance are most other covered medical services at 80% after you meet included in the out-of-pocket maximum. Prescription drug an annual deductible of $1,500 for employee-only coverage benefits are combined with the medical out-of-pocket maximum and a $3,000 deductible for employee covering one or more and are provided through Express Scripts which is described in dependents. In the CDHP, prescription drug costs are combined more detail under Prescription Drug Coverage. with the medical deductible. • Your total out-of-pocket expenses are limited to $3,000 for employee-only coverage or $6,000 for an employee covering When You Receive Out-of-Network Services in one or more dependents. the PPO or CDHP Plans: • In-network preventive care is covered at 100%. Deductibles and coinsurance are included in the out-of-pocket maximum. • You are responsible for filing claim forms for reimbursement Prescription drug benefits are combined with the medical and for contacting Anthem to notify them of hospital stays and out-of-pocket maximum and are provided through Express certain outpatient procedures. Please note that penalties and Scripts which is described in more detail under Prescription fees may apply for not contacting Anthem in advance of a out- Drug Coverage. of-network hospital stay or outpatient procedure. • Call Anthem at the phone number shown on your ID card to notify them of these services.

Comparison of In-Network and Out-of-Network Benefits for Anthem PPO or CDHP

In-network Out-of-network Benefits A higher level of benefits means less cost to you. A lower level of benefits means a greater cost to you. Who should notify In general, network providers handle notification. You should notify the insurance company for certain the insurance However, there are exceptions when you should notify covered medical services. (See Pre-Certification.) company the insurance company for certain covered medical services. (See Pre-Certification.) Who should file Your network provider will file claims. The Medical Plan You must file claims for reimbursement from the claims pays the network provider directly. Medical Plan.

MEDICAL PLANS | 1-7 HOW THE KAISER PERMANENTE HMO WORKS

The Kaiser Permanente HMO only pays benefits when you see a Kaiser Permanente provider. You must select a Primary Care Physician (PCP) for you and each of your dependents. You must first contact your PCP when you need medical care and get a referral to receive services from other providers or specialists. The Kaiser Permanente HMO covers office visits and most other covered medical services at 100% after a $25 co-payment to your PCP or specialist. There is a $500 co-payment for each hospital admission. If you need to use an emergency room, a $150 co-payment applies. The emergency room co-payment does not apply if you are admitted to the hospital. Prescription drug coverage is provided directly through Kaiser Permanente. You pay a $10 co-payment for generic drugs and a $30 co-payment for brand drugs at retail. You pay a $20 co-payment for generic drugs and a $60 co-payment for brand drugs at mail order. For more information about the Kaiser Permanente HMO Plans, visit www.kaiserpermanente.org, or contact Kaiser at 1-800-464-4000.

FINDING A NETWORK PROVIDER

It is wise to choose network providers that meet the medical needs of you and your family. By choosing a network provider you will lower your out-of-pocket costs. If you enroll in an EPO or HMO plan, you must use in-network providers, except for an emergency room visit. You can contact Anthem or Kaiser Permanente to find a network provider by phone or via the Internet.

Anthem Kaiser Permanente Call: Call: 1-855-702-1127 1-800-464-4000 Go Online: Go Online: Go to www.anthem.com and click “Find a Doctor.” Enter your Go to www.kaiserpermanente.org and provider’s name, specialty and zip code. Then search by plan click “Doctors & Locations”, by entering your state, Plan type/network (PPO) and Plan name then “Find doctors & locations.” (National PPO - BlueCard PPO). There is one network of doctors for both the EPO, PPO and CDHP plan options.

PRE-CERTIFICATION

Prior Authorization: Members are required to obtain prior Pre-Determination – An optional, voluntary prospective or authorization in order for you to receive benefits for certain concurrent request for a benefit coverage determination for services. Prior authorization criteria will be based on multiple a service or treatment. The Claims Administrator will review sources including medical policy, clinical guidelines, and your Plan to determine if there is an exclusion for the service or pharmacy and therapeutics guidelines. The Claims Administrator treatment. If there is a related clinical coverage guideline, the may determine that a service that was initially prescribed or benefit coverage review will include a review to determine requested is not medically necessary if you have not previously whether the service meets the definition of medical necessity tried alternative treatments which are more cost effective. If Prior under this Plan or is experimental/investigative as that term is Authorization is not obtained, penalties or fees may apply. defined in this Plan. For a list of all services that require prior authorization or Post-Service Clinical Claims Review – A retrospective review pre-certification, call the customer service telephone number on for a benefit coverage determination to determine the medical your Identification Card or visitwww.anthem.com . necessity or experimental/investigative nature of a service, treatment or admission that did not require pre-certification and Types of Requests did not have a pre-determination review performed. Medical reviews occur for a service, treatment or admission in which the Pre-Certification – A required review of a service, treatment or Claims Administrator has a related clinical coverage guideline and admission for a benefit coverage determination which must be are typically initiated by the Claims Administrator. obtained prior to the service, treatment or admission start date. For emergency admissions, you, your authorized representative or physician must notify the Claims Administrator within two calendar days after the admission. For childbirth admissions, pre-certification is needed for childbirth if inpatient stay exceeds 48 hours for normal delivery and 96 hours after a cesarean delivery.

MEDICAL PLANS | 1-8 WHAT THE PLANS COVER

Many preventive and routine medical expenses as well as expenses incurred for a serious illness or injury are covered. Only expenses incurred for the services and supplies shown in this section are covered expenses. Limitations and exclusions may apply.

Covered Services Under the Anthem EPO, PPO and CDHP Plans

Ambulance Service Hospital-to-Hospital Transport Medically necessary ambulance services are a covered service If you are moving from one hospital to another, air ambulance will when one or more of the following criteria are met: only be covered if using a ground ambulance would endanger your health and if the hospital that first treats you cannot give • You are transported by a state-licensed vehicle that is designed, you the medical services you need. Certain specialized services equipped, and used only to transport the sick and injured and are not available at all hospitals. For example, burn care, cardiac staffed by Emergency Medical Technicians (EMT), paramedics, care, trauma care, and critical care are only available at certain or other certified medical professionals. This includes ground, hospitals. To be covered, you must be taken to the closest water, fixed wing, and rotary wing air transportation. hospital that can treat you. Coverage is not available for air • For ground ambulance, you are taken: ambulance transfers simply because you, your family, or your o From your home, the scene of an accident or medical provider prefers a specific hospital or physician. emergency to a hospital; o Between hospitals, including when the Claims Administrator Assistant Surgery requires you to move from an out-of-network hospital to a Services rendered by an assistant surgeon are covered based on network hospital; medical necessity. o Between a hospital and a Skilled Nursing Facility or other approved facility. Behavioral Health Care and Substance Abuse Treatment • For air or water ambulance, you are taken: Coverage for the diagnosis and treatment of Behavioral Health o From the scene of an accident or medical emergency to a Care and Substance Abuse Treatment on an inpatient or hospital; outpatient basis will not be subject to deductibles or co-payment/ o Between hospitals, including when the Claims Administrator coinsurance provisions that are less favorable than the deductibles requires you to move from an out-of-network hospital to a or co-payment/coinsurance provisions that apply to a physical network hospital; illness as covered under this Plan. o Between a hospital and an approved facility. Hospital Inpatient Care Ambulance services are subject to medical necessity reviews by the Claims Administrator. When using an air ambulance, the Benefits for inpatient hospital and physician charges are covered Claims Administrator reserves the right to select the air ambulance services. provider. If you do not use the air ambulance provider the Claims Administrator selects, the out-of-network provider may bill you for Professional Outpatient Care any charges that exceed the Plan’s Maximum Allowed Amount. Covered services include: You must be taken to the nearest facility that can give care for your • Professional care in the outpatient department of a hospital; condition. In certain cases the Claims Administrator may approve benefits for transportation to a facility that is not the nearest facility. • Physician’s office visits; and Benefits also include medically necessary treatment of a sickness • Services within the lawful scope of practice of a licensed, or injury by medical professionals from an ambulance service, approved provider. even if you are not taken to a facility. Residential Treatment Important Notes on Air Ambulance Benefits Benefits also include services for Substance Abuse Residential Benefits are only available for air ambulance when it is not Treatment which is specialized 24-hour care that occurs in a appropriate to use a ground or water ambulance. For example, if licensed Residential Treatment Center (RTC) or intermediate using a ground ambulance would endanger your health and your care facility. It offers individualized and intensive treatment in a medical condition requires a more rapid transport to a facility residential setting and includes: than the ground ambulance can provide, the Plan will cover the • Observation and assessment by a psychiatrist weekly or more air ambulance. Air ambulance will also be covered if you are in an frequently area that a ground or water ambulance cannot reach. • An individualized program of rehabilitation, therapy, Air ambulance will not be covered if you are taken to a hospital education, and recreational or social activities in compliance that is not an acute care hospital (such as a Skilled Nursing with existing law Facility), or if you are taken to a physician’s office or your home.

MEDICAL PLANS | 1-9 Residential treatment provides an intermediate-term approach to g. Any of the following in i-iii below if the study or investigation treatment that attempts to return the patient to the community. has been reviewed and approved through a system of peer review that the Secretary determines 1) to be comparable to Note: To be reimbursable, care must be given by a psychiatrist, the system of peer review of studies and investigations used psychologist, neuropsychologist, or a mid-level provider such by the National Institutes of Health, and 2) assures unbiased as a licensed clinical social worker, mental health clinical review of the highest scientific standards by qualified nurse specialist, a marriage and family therapist, or a licensed individuals who have no interest in the outcome of the review: professional counselor. i. The Department of Veterans Affairs Breast Cancer Care ii. The Department of Defense iii. The Department of Energy Covered services are provided for inpatient care following a mastectomy or lymph node dissection until the completion of 2. Studies or investigations done as part of an investigational new an appropriate period of stay as determined by the attending drug application reviewed by the Food and Drug Administration; physician in consultation with the member. Follow-up visits are 3. Studies or investigations done for drug trials which are exempt also included and may be conducted at home or at the physician’s from the investigational new drug application. office as determined by the attending physician in consultation with the member. Your Plan may require you to use a network provider to maximize your benefits. Breast Reconstructive Surgery When a requested service is part of an approved clinical trial, it is a covered service even though it might otherwise be Investigational Covered services are provided following a mastectomy for as defined by this Plan. All other requests for clinical trials services reconstruction of the breast on which the mastectomy was that are not part of approved clinical trials will be reviewed performed, surgery and reconstruction of the other breast according to our Clinical Coverage Guidelines, related policies and to produce a symmetrical appearance, and prostheses and procedures. treatment of physical complications, including lymphedemas. Your Plan is not required to provide benefits for the following Cardiac Rehabilitation services. The Plan reserves its right to exclude any of the following services: Cardiac rehabilitation is a program of multidisciplinary interventions, designed to assist clinically suitable individuals i. The Experimental/Investigative item, device, or service, itself; or to attain and maintain their optimal level of functioning. Please ii. Items and services that are given only to satisfy data collection contact Anthem Member Services for detailed information and analysis needs and that are not used in the direct clinical regarding covered services. management of the patient; or iii. A service that is clearly inconsistent with widely accepted and Clinical Trials established standards of care for a particular diagnosis; or Benefits include coverage for services given to you as a participant iv. Any item or service that is paid for, or should have been paid in an approved clinical trial if the services are covered services for, by the sponsor of the trial. under this Plan. An “approved clinical trial” means a phase I, phase II, phase III, or phase IV clinical trial that studies the Consultation Services prevention, detection, or treatment of cancer or other life-threatening conditions. The term life-threatening condition Consultation services are covered when the special skill and means any disease or condition from which death is likely unless knowledge of a consulting physician is required for the diagnosis the disease or condition is treated. or treatment of an illness or injury. Second surgical opinion consultations are covered. Benefits are limited to the following trials: Staff consultations required by hospital rules are excluded. 1. Federally funded trials approved or funded by one of the Referrals (the transfer of a patient from one physician to another following: for treatment) are not consultations under this Plan. a. The National Institutes of Health Dental Services b. The Centers for Disease Control and Prevention Related to Accidental Injury c. The Agency for Health Care Research and Quality Your Plan includes benefits for dental work required for the initial d. The Centers for Medicare & Medicaid Services repair of an injury to the jaw, sound natural teeth, mouth or face e. Cooperative group or center of any of the entities described which are required as a result of an accident and are not excessive in (a) through (d) or the Department of Defense or the in scope, duration, or intensity to provide safe, adequate, and Department of Veterans Affairs appropriate treatment without adversely affecting the member’s f. A qualified non-governmental research entity identified in condition. Injury as a result of chewing or biting is not considered the guidelines issued by the National Institutes of Health for an accidental injury. Treatment must be completed within 12 center support grants months of the accident.

MEDICAL PLANS | 1-10 Other Dental Services emergency medical condition. Coverage is provided for care within the capabilities of staff and facilities available at the hospital, and Your Plan also includes benefits for hospital charges and such further medical examination and treatment as are required to anesthetics provided for dental care if the member meets any of stabilize the patient. Emergency service care does not require any the following conditions: prior authorization from the Plan. • The member is under the age of five (5); Stabilize means, with respect to an emergency medical condition: • The member has a severe disability that requires hospitalization to provide such medical treatment of the condition as may be or general anesthesia for dental care; or necessary to assure, within reasonable medical probability, that • The member has a medical condition that requires no material deterioration of the condition is likely to result from hospitalization or general anesthesia for dental care. or occur during the transfer of the individual from a facility. With respect to a pregnant woman who is having contractions, the term Diabetes “stabilize” also means to deliver (including the placenta), if there is inadequate time to effect a safe transfer to another hospital before Equipment and outpatient self-management training and delivery, or transfer may pose a threat to the health or safety of the education, including nutritional therapy for individuals with woman or the unborn child. insulin-dependent diabetes, insulin-using diabetes, gestational diabetes, and non-insulin using diabetes as prescribed by the The Maximum Allowed Amount for emergency care from an out- physician are covered. Covered services for outpatient of-network provider will be the greatest of the following: self-management training and education must be provided by • The amount negotiated with network providers for the a certified, registered or licensed health care professional with emergency service furnished; expertise in diabetes. Screenings for gestational diabetes are • The amount for the emergency service calculated using the covered under “Preventive Care.” same method the Claims Administrator generally uses to determine payments for out-of-network services but substituting Dialysis Treatment the network cost-sharing provisions for the out-of-network The Plan covers medically necessary services for dialysis cost-sharing provisions; or treatment. If applicable, the Plan will pay secondary to Medicare • The amount that would be paid under Medicare for the Part B, even if a member has not applied for eligible coverage emergency service. available through Medicare. The co-payment and/or coinsurance percentage may apply for both network and out-of-network services. Durable Medical Equipment

This Plan will pay the rental charge up to the purchase price of the General Anesthesia Services equipment. In addition to meeting criteria for medical necessity, and applicable pre-certification requirements, the equipment must General anesthesia services are covered when ordered by the also be used to improve the functions of a malformed part of the attending physician and administered by another physician who body or to prevent or slow further decline of the member’s medical customarily bills for such services, in connection with a covered condition. The equipment must be ordered and/or prescribed by a procedure. physician and be appropriate for in-home use. Such anesthesia service includes the following procedures which The equipment must meet the following criteria: are given to cause muscle relaxation, loss of feeling, or loss of consciousness: • It can stand repeated use; • Spinal or regional anesthesia • It is manufactured solely to serve a medical purpose; • Injection or inhalation of a drug or other agent (local infiltration is • It is not merely for comfort or convenience; excluded) • It is normally not useful to a person not ill or injured; Anesthesia services administered by a Certified Registered • It is ordered by a physician; Nurse Anesthetist (CRNA) are only covered when billed by the supervising anesthesiologist. • The physician certifies in writing the medical necessity for the equipment. The physician also states the length of time the equipment will be required. The Plan may require proof at any Gender or Sex Reassignment Surgery time of the continuing medical necessity of any item; Gender or sex reassignment surgery is only available if the • It is related to the member’s physical disorder. Claims Administrator considers the surgery medically necessary, in accordance with its clinical policies. In addition to medical necessity, pre-certification is required. Emergency Services – Life-Threatening Medical Emergency or Serious Accidental Injury Medically Necessary Coverage is provided for hospital emergency room care including a medical screening examination that is within the capability of the For individuals undergoing gender or sex reassignment surgery emergency department of a hospital, including ancillary services consisting of any combination of the following treatments, (1) routinely available to the emergency department to evaluate an hysterectomy, (2) salpingo-oophorectomy, (3) ovariectomy, or

MEDICAL PLANS | 1-11 (4) orchiectomy, coverage for the reassignment surgery is only o The transgender identity has been present persistently for at considered medically necessary when all of the following criteria least two years; and are met: o The gender dysphoria is not a symptom of another condition; • The individual is at least 18 years of age. and • The individual has capacity to make fully informed decisions and o The gender dysphoria causes clinically significant distress or consent for treatment. impairment in social, occupational, or other important areas of functioning. • The individual has been diagnosed with gender dysphoria, and exhibits all of the following: • For individuals without a medical contraindication, the individual has undergone a minimum of 12 months of continuous o The desire to live and be accepted as a member of the hormonal therapy when recommended by a mental health opposite gender or sex, usually accompanied by the wish professional and provided under the supervision of a physician. to make his or her body as congruent as possible with the preferred gender or sex through surgery and hormone • Documentation** is provided that the individual has completed treatment. a minimum of 12 months of successful continuous full-time o The transgender identity has been present persistently for at real-life experience in their new gender, across a wide range of least two years. life experiences and events that may occur throughout the o The gender dysphoria is not a symptom of another condition. year (for example, family events, holidays, vacations, and season-specific work or school experiences). This includes o The gender dysphoria causes clinically significant distress or coming out to partners, family, friends, and community impairment in social, occupational, or other important areas members (for example, at school, work, and other settings). of functioning. • The individual participates in regular psychotherapy throughout • For individuals without a medical contraindication, the individual the real-life experience when recommended by a treating has undergone a minimum of 12 months of continuous medical or behavioral health practitioner. hormonal therapy when recommended by a mental health professional and provided under the supervision of a physician. • If the individual has significant medical or mental health issues present, they must be reasonably well controlled. If the • If the individual has significant medical or mental health individual is diagnosed with severe psychiatric disorders and issues present, they must be reasonably well controlled. If the impaired reality testing (for example, psychotic episodes, bipolar individual is diagnosed with severe psychiatric disorders and disorder, dissociative identity disorder, borderline personality impaired reality testing (for example, psychotic episodes, bipolar disorder), an effort must be made to improve these conditions disorder, dissociative identity disorder, borderline personality with psychotropic medications and/or psychotherapy before disorder), an effort must be made to improve these conditions surgery is contemplated. with psychotropic medications and/or psychotherapy before surgery is contemplated. • Two referrals from qualified mental health professionals* who have independently assessed the individual must be provided. • Two referrals from qualified mental health professionals* who If the first referral is from the individual's psychotherapist, the have independently assessed the individual must be provided. second referral should be from a person who has only had an If the first referral is from the individual's psychotherapist, the evaluative role with the individual. Two separate letters, or one second referral should be from a person who has only had an letter signed by both (for example, if practicing within the same evaluative role with the individual. Two separate letters, or one clinic) are required. The letter(s) must have been signed within letter signed by both (for example, if practicing within the same 12 months of the request submission. clinic) are required. The letter(s) must have been signed within *At least one of the professionals submitting a letter must have a doctoral degree (for 12 months of the request submission. example, Ph.D., M.D., Ed.D., D.Sc., D.S.W., or Psy.D) or a master's level degree in a clinical behavioral science field (for example, M.S.W., L.C.S.W., Nurse Practitioner For individuals undergoing gender or sex reassignment surgery, [N.P.], Advanced Practice Nurse [A.P.R.N.], Licensed Professional Councilor [L.P.C.], consisting of any combination of the following, (1) metoidioplasty, and Marriage and Family Therapist [M.F.T.]) and be capable of adequately evaluating co-morbid psychiatric conditions. One letter is sufficient if signed by two providers, (2) phalloplasty, (3) vaginoplasty, (4) penectomy, (5) clitoroplasty, (6) one of whom has met the specifications set forth above. labiaplasty, (7) vaginectomy, (8) scrotoplasty, (9) urethroplasty, or **The medical documentation should include the start date of living full time in the (10) placement of testicular prostheses, it is considered medically new gender. Verification via communication with individuals who have related to the individual in an identity-congruent gender role, or requesting documentation of a necessary when all of the following criteria are met: legal name change, may be reasonable in some cases. • The individual is at least 18 years of age. For individuals undergoing gender or sex reassignment surgery, • The individual has capacity to make fully informed decisions and bilateral mastectomy is considered medically necessary when all consent for treatment. of the following criteria have been met: • The individual has been diagnosed with gender dysphoria and • The individual is at least 18 years of age. exhibits all of the following: • The individual has capacity to make fully informed decisions and o The desire to live and be accepted as a member of the consent for treatment. opposite gender or sex, usually accompanied by the wish • The individual has been diagnosed with gender dysphoria and to make his or her body as congruent as possible with exhibits all of the following: the preferred gender or sex through surgery and hormone treatment; and o The desire to live and be accepted as a member of the opposite gender or sex, usually accompanied by the wish

MEDICAL PLANS | 1-12 to make his or her body as congruent as possible with • Rhinoplasty the preferred gender or sex through surgery and hormone • Thyroid cartilage reduction (chondroplasty) treatment. • Voice modification surgery o The transgender identity has been present persistently for at least two years. • Voice therapy o The gender dysphoria is not a symptom of another condition. Home Health Care Services o The gender dysphoria causes clinically significant distress or impairment in social, occupational, or other important areas Home Health Care provides a program for the member’s care of functioning. and treatment in the home. The program consists of required intermittent skilled care, which may include observation, • If the individual has significant medical or mental health evaluation, teaching and nursing services consistent with the issues present, they must be reasonably well controlled. If the diagnosis, established and approved in writing by the member’s individual is diagnosed with severe psychiatric disorders and attending physician. Services may be performed by either network impaired reality testing (for example, psychotic episodes, bipolar or out-of-network providers. Home Health Care is limited to 60 disorder, dissociative identity disorder, borderline personality visits per calendar year. disorder), an effort must be made to improve these conditions with psychotropic medications and/or psychotherapy before Some special conditions apply surgery is contemplated. • The physician’s statement and recommended program must be • The individual is a female transitioning gender to become a pre-certified. male. • Claims will be reviewed to verify that services consist of skilled The use of hair removal procedures to treat tissue donor sites for care that is medically consistent with the diagnosis. Note: a planned phalloplasty or vaginoplasty procedure is considered Covered services available under Home Health Care do NOT medically necessary. reduce outpatient benefits available under the Physical Therapy section shown in this Plan. Not Medically Necessary • A member must be essentially confined at home. Gender or sex reassignment surgery is considered not medically necessary when one or more of the criteria above have not been met and are not eligible for coverage under the Plan. Covered Services: • Visits by an RN or LPN. Benefits cannot be provided for services Excluded Procedures if the nurse is related to the member. The following procedures are considered cosmetic and ineligible • Visits by a qualified physiotherapist or speech therapist and for coverage under the Plan when used to improve the gender by an inhalation therapist certified by the National Board of specific appearance of an individual who has undergone or Respiratory Therapy. is planning to undergo gender or sex reassignment surgery, including, but not limited to: • Visits to render services and/or supplies of a licensed Medical Social Services Worker when medically necessary to enable the • Abdominoplasty member to understand the emotional, social, and environmental • Blepharoplasty factors resulting from or affecting the member’s illness. • Breast augmentation • Visits by a Home Health Nursing Aide when rendered under the direct supervision of an RN. • Brow lift • Nutritional guidance when medically necessary. • Calf implants • Administration or infusion of prescribed drugs. • Electrolysis • Oxygen and its administration. • Face lift • Facial bone reconstruction Covered services for Home Health Care do not include: • Facial implants • Food, housing, homemaker services, sitters, home-delivered meals. • Gluteal augmentation • Home Health Care services which are not medically necessary • Hair removal/hairplasty, when the criteria above or of a non-skilled level of care. have not been met • Services and/or supplies which are not included in the Home • Jaw reduction (jaw contouring) Health Care plan as described. • Lip reduction/enhancement • Services of a person who ordinarily resides in the member’s • Lipofilling/collagen injections home or is a member of the family of either the member or • Liposuction member’s spouse. • Nose implants • Any services for any period during which the member is not under the continuing care of a physician. • Pectoral implants

MEDICAL PLANS | 1-13 • Convalescent or custodial care where the member has spent Benefits for covered services beyond those listed above, such a period of time for recovery from an illness or surgery and as chemotherapy and radiation therapy given as palliative care, where skilled care is not required or the services being rendered are available to a member in hospice. These additional covered are only for aid in daily living, i.e., for the convenience of the services will be covered under other parts of this Benefit Booklet. member. • Any services or supplies not specifically listed as covered Hospital Services services. You may receive treatment at a network or an out-of-network • Routine care and/or examination of a newborn child. hospital. However, payment is significantly reduced if services are received at an out-of-network hospital. Your Plan provides covered • Dietician services. services when the following services are medically necessary. • Maintenance therapy. Network Inpatient Services • Dialysis treatment. • Inpatient room charges. Covered services include semiprivate • Purchase or rental of dialysis equipment. room and board, general nursing care and intensive or cardiac • Private duty nursing care, unless it is delivered in the home. care. If you stay in a private room, the Maximum Allowed Visits count toward the Home Health Care maximum of 60 Amount is based on the hospital’s prevalent semiprivate rate. If visits. you are admitted to a hospital that has only private rooms, the Maximum Allowed Amount is based on the hospital’s prevalent Hospice Care Services room rate.

The services and supplies listed below are covered services Service and Supplies when given by a hospice for the palliative care of pain and other • Services and supplies provided and billed by the hospital while symptoms that are part of a terminal disease. Palliative care you’re an inpatient, including the use of operating, recovery means care that controls pain and relieves symptoms, but is not and delivery rooms are covered. Laboratory and diagnostic meant to cure a terminal illness. Covered services include: examinations, intravenous solutions, basal metabolism • Care from an interdisciplinary team with the development and studies, electrocardiograms, electroencephalograms, X-ray maintenance of an appropriate plan of care. examinations, and radiation and speech therapy are also • Short-term inpatient hospital care when needed in periods of covered. crisis or as respite care. • Convenience items (such as radios, TVs, record, tape or CD • Skilled nursing services, home health aide services, and players, telephones, visitors’ meals, etc.) will not be covered. homemaker services given by or under the supervision of a Length of Stay registered nurse. • Determined by medical necessity. • Social services and counseling services from a licensed social worker. Out-of-Network • Nutritional support such as intravenous feeding and feeding tubes. Hospital Benefits • Physical therapy, occupational therapy, speech therapy, and If you are confined in an out-of-network hospital, your benefits will respiratory therapy given by a licensed therapist. be significantly reduced. • Pharmaceuticals, medical equipment, and supplies needed Outpatient Hospital Services for the palliative care of your condition, including oxygen and related respiratory therapy supplies. The Plan provides covered services when the following outpatient services are medically necessary: pre-admission tests, surgery, • Bereavement (grief) services, including a review of the needs diagnostic X-rays and laboratory services. Certain procedures of the bereaved family and the development of a care plan to require pre-certification. meet those needs, both before and after the member’s death. Bereavement services are available to surviving Members of Hospital Visits the immediate family for one year after the member’s death. The physician’s visits to his or her patient in the hospital are Immediate family means your spouse, children, stepchildren, covered. Covered services are limited to one daily visit for each parents, brothers and sisters. attending physician specialty during the covered period of Your doctor and hospice medical director must certify that you confinement. are terminally ill and likely have less than 12 months to live. Your doctor must agree to care by the hospice and must be consulted Human Organ and Tissue Transplant Services Notification in the development of the care plan. The hospice must keep a written care plan on file and give it to the Claims Administrator To maximize your benefits, you need to call the Claims upon request. Administrator’s transplant department to discuss benefit coverage when it is determined a transplant may be needed. You must do With the EPO plan option, hospice care is limited to 180 days per this before you have an evaluation and/or work-up for a transplant. lifetime. The CDHP plan option limits hospice care to 210 days per Your evaluation and work-up services must be provided by a lifetime. network transplant provider to receive the maximum benefits. The MEDICAL PLANS | 1-14 maximum benefit allowance for the National Bone Marrow Donor Infertility Services Search is $25,000 per transplant. Your Plan also includes benefits for the diagnosis and treatment Contact the customer service telephone number on your of infertility, including procedures for correction of infertility, in-vitro identification card and ask for the transplant coordinator. The fertilization (IVF), artificial insemination, GIFT and ZIFT (subject to Claims Administrator will then assist you in maximizing your Medical Plan limitations). Covered services include diagnostic and benefits by providing coverage information including details exploratory procedures to determine whether a member suffers regarding what is covered and whether any medical policies, from infertility. This includes surgical procedures to correct any network requirements or benefit booklet exclusions are applicable. diagnosed disease or condition affecting the reproductive organs. Failure to obtain this information prior to receiving services could This includes, but is not limited to, endometriosis, (tissue lining result in increased financial responsibility for you. the uterus moves to other parts of the body), collapsed/clogged fallopian tubes or testicular failure. Benefit limitations, coinsurance Covered Transplant Benefit Period and co-payment amounts apply. For all Anthem Medical Plans, This period starts one day prior to a covered transplant procedure there is a $25,000 lifetime medical maximum on infertility and continues for the applicable case rate/global time period. treatments and a separate $25,000 lifetime maximum on infertility The number of days will vary depending on the type of transplant treatments for prescription drugs. received and the network transplant provider agreement. Contact the Claims Administrator for specific network transplant provider Medical Care information for services received at or coordinated by a network General diagnostic care and treatment of illness or injury are transplant provider facility. Coverage starts one day prior to covered. Some procedures require pre-certification. a covered transplant procedure and continues to the date of discharge at an out-of-network transplant provider facility. Nutritional Counseling Transportation and Lodging Nutritional counseling related to the medical management of a The Plan will provide assistance with reasonable and necessary disease state as stated under the terms of the Plan is covered. travel expenses as determined by the Claims Administrator when you obtain prior approval and are required to travel more than 75 Out-of-Network Freestanding Ambulatory Facility miles from your residence to reach the facility where your covered Any services rendered or supplies provided while you are a transplant procedure will be performed. The Plan’s assistance with patient, and any services received at or from an out-of-network travel expenses includes transportation to and from the facility and freestanding ambulatory facility will be payable at the Maximum lodging for the transplant recipient member and one companion Allowed Amount. for an adult member, or two companions for a child patient. The maximum benefit amount for travel and lodging is $10,000 per Out-of-Network Hospital Benefits transplant. If you are confined in an out-of-network hospital, your benefits will You must submit itemized receipts for transportation and lodging be significantly reduced. expenses in a form satisfactory to the Claims Administrator when claims are filed. The Plan’s lodging allowance is $125 per day for Obesity double occupancy. Contact the Claims Administrator for detailed information. The Claims Administrator will follow Internal Revenue Prescription drugs and any other services or supplies for the Service (IRS) guidelines in determining what expenses can be treatment of obesity are not covered. Surgical treatment of obesity paid. is only covered for patients meeting medical necessity criteria, as defined by the Plan. Pre-certification is required, and coverage is Licensed Speech Therapist Services only provided for gastric bypass, vertically banded gastroplasty Services must be ordered and supervised by a physician. Speech and adjustable gastric banding procedure (lap band). therapy is not covered when rendered for the treatment of developmental delay. Oral Surgery Covered services include only the following: Maternity Care & Infertility Services • Fracture of facial bones. Covered services are provided for network maternity care subject to the benefit limitations. If you choose an out-of-network provider, • Lesions of the mouth, lip, or tongue which require a pathological benefits are subject to the deductible and percentage payable exam. provisions. • Incision of accessory sinuses, mouth salivary glands or ducts.

Abortion (Therapeutic or Elective) • Dislocations of the jaw. Your Plan includes benefits for a therapeutic abortion, which is an • Treatment of temporomandibular joint syndrome (TMJ) or abortion recommended by a provider that is performed to save myofacial pain including only removable appliances for TMJ the life or health of the mother, or as a result of incest or rape. Your repositioning and related surgery and diagnostic services. Plan also provides benefits for an elective (voluntary) abortion, Covered services do not include fixed or removable appliances which is an abortion performed for reasons other than those which involve movement or repositioning of the teeth, or described above. operative restoration of teeth (fillings), or prosthetics (crowns, bridges, dentures). MEDICAL PLANS | 1-15 • Plastic repair of the mouth or lip necessary to correct traumatic Physician Services injuries or congenital defects that will lead to functional Depending on your Plan option, you may receive treatment impairments. from a network or out-of-network physician. However, payment • Initial services, supplies or appliances for dental care or is significantly reduced if services are received from an out-of- treatment required as a result of, and directly related to, network physician. Such services are subject to your deductible accidental bodily injury to sound natural teeth or structure and out-of-pocket requirements. occurring while a member is covered by this Plan and performed within approved timeframes after the accident. Preventive Care Although this Plan covers certain oral surgeries as listed above, Preventive care services include outpatient services and office many oral surgeries (e.g. removal of wisdom teeth) are not services. Screenings and other services are covered as preventive covered. Covered services also include the following: care for adults and children with no current symptoms or prior • Orthognathic surgery for a physical abnormality that prevents history of a medical condition associated with that screening or normal function of the upper and/or lower jaw and is medically service. necessary to attain functional capacity of the affected part. Members who have current symptoms or have been diagnosed • Oral/surgical correction of accidental injuries as indicated in the with a medical condition are not considered to require preventive Dental Services section. care for that condition but instead benefits will be considered under the diagnostic services benefit. • Treatment of non-dental lesions, such as removal of tumors and biopsies. Preventive care services in this section shall meet requirements as determined by federal and state law. Many preventive care • Incision and drainage of infection of soft tissue not including services are covered by this Plan with no deductible, co-payments odontogenic cysts or abscesses. or coinsurance from the member when provided by a network provider. That means the Plan pays 100% of the Maximum Other Covered Services Allowed Amount. These services fall under four broad categories Your Plan provides covered services when the following services as shown below: are medically necessary: 1. Services with an “A” or “B” rating from the United States • Chemotherapy and radioisotope, radiation and nuclear medicine Preventive Services Task Force. therapy Examples of these services are screenings for: • Diagnostic X-ray and laboratory procedures a. Breast cancer • Dressings, splints, casts when provided by a physician b. Cervical cancer • Oxygen, blood and components, and administration c. Colorectal cancer • Pacemakers and electrodes d. High blood pressure • Use of operating and treatment rooms and equipment e. Type 2 diabetes mellitus f. Cholesterol Outpatient CT Scans and MRIs g. Child and adult obesity These services are covered at regular Plan benefits. 2. Immunizations for children, adolescents and adults Outpatient Surgery recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention. Network hospital outpatient department or network freestanding ambulatory facility charges are covered at regular Plan benefits. 3. Preventive care and screenings for infants, children Benefits for treatment by an out-of-network hospital are explained and adolescents as provided for in the comprehensive under “Hospital Services.” guidelines supported by the Health Resources and Services Administration. Physical Therapy, Occupational Therapy, Chiropractic Care 4. Additional preventive care and screening for women provided for in the guidelines supported by the Health Resources and Services by a physician, a registered physical therapist (R.P.T.), Services Administration, including the following: a licensed occupational therapist (O.T.), or a licensed chiropractor (D.C.) are covered. All services rendered must be within the a. Breastfeeding support, supplies, and counseling. Benefits for lawful scope of practice of, and rendered personally by, the breast pumps are limited to one pump per benefit period. individual provider. No coverage is available when such services b. Gestational diabetes screening. are necessitated by developmental delay. Benefits are limited to 60 visits per calendar year of combined physical, occupational You may call Customer Service using the number on your ID card and speech therapy. Additional visits may be approved based for additional information about these services or view the federal on medical necessity. Chiropractic care is subject to a 30-visit government’s websites: maximum per calendar year (and includes office visits and http://www.healthcare.gov/center/regulations/prevention.html manipulations only). Once this maximum is met, services by a http://www.ahrq.gov/clinic/uspstfix.html chiropractor will no longer be covered. http://www.cdc.gov/vaccines/acip/index.html MEDICAL PLANS | 1-16 Prosthetic Appliances Skilled convalescent care during a period of recovery is characterized by: Prosthetic devices to improve or correct conditions resulting from accidental injury or illness are covered if medically necessary and • A favorable prognosis. ordered by a physician. • A reasonably predictable recovery time. Prosthetic devices include: • Services and/or facilities less intense than those of the acute • Artificial limbs and accessories general hospital, but greater than those normally available at the member’s residence. • Artificial eyes, one pair of glasses or contact lenses for eyes used after surgical removal of the lens(es) of the eye(s) Covered services include: • Arm braces, leg braces (and attached shoes) • Semiprivate or ward room charges including general nursing service, meals, and special diets. If a member stays in a private • External breast prostheses used after breast removal. room, this Plan pays the semiprivate room rate toward the The following items are excluded: charge for the private room. • Corrective shoes • Use of special care rooms. • Dentures • Pathology and radiology. • Replacing teeth or structures directly supporting teeth, except • Physical or speech therapy. to correct traumatic Injuries • Oxygen and other gas therapy. • Electrical or magnetic continence aids (either anal or urethral) • Drugs and solutions used while a patient. • Implants for cosmetic purposes except for reconstruction • Gauze, cotton, fabrics, solutions, plaster and other materials following a mastectomy. used in dressings, bandages, and casts. This benefit is available only if the patient requires a physician’s Reconstructive Surgery continuous care and 24-hour-a-day nursing care. Pre-certification is required. Reconstructive surgery does not Benefits will not be provided when: include any service otherwise excluded in this Summary Plan Description. (See “What the Plans Do Not Cover.”) • A member reaches the maximum level of recovery possible and no longer requires other than routine care. Reconstructive surgery is covered only to the extent medically necessary: • Care is primarily custodial care, not requiring definitive medical or 24-hour-a-day nursing service. • To correct significant anatomic deformities which are not within normal anatomic variation and which are caused by congenital • Care is for mental illness including drug addiction, chronic brain or developmental abnormalities, illness, or injury for the purpose syndromes and alcoholism, and no specific medical conditions of improving the significant anatomic deformity toward a normal exist that require care in a skilled nursing facility. appearance; or • A member is undergoing senile deterioration, mental deficiency • To correct medical complications or post-surgical deformity, or retardation, and has no medical condition requiring care. unless the previous surgery was not a covered service. • The care rendered is for other than skilled convalescent care. Note: Coverage for reconstructive services does not apply to orthognathic surgery. See the “Oral Surgery” section for that Surgical Care benefit. Surgical procedures including the usual pre- and post-operative care are covered. Some procedures require pre-certification. Retail Health Clinic Benefits are provided for covered services received at a retail Treatment of Accidental Injury in a Physician’s Office health clinic. All outpatient surgical procedures related to the treatment of an accidental injury, when provided in a physician’s office, will be Skilled Nursing Facility Care covered under the member’s physician’s office benefit if services This care must be ordered by the attending physician. All skilled are rendered by a network provider; services rendered by out- nursing facility admissions must be pre-certified. Claims will be of-network providers are subject to deductible and coinsurance reviewed to verify that services consist of skilled convalescent requirements, if applicable. care that is medically consistent with the diagnosis. Benefits are limited to 120 days per calendar year.

MEDICAL PLANS | 1-17 Telemedicine Important Note Regarding Specialty Drugs When available in your area, your coverage will include online Specialty medications are drugs that are used to treat complex visits from a LiveHealth Online provider. Covered services include conditions and illnesses, such as cancer, growth hormone a medical consultation using the internet via a webcam, chat or deficiency, hemophilia, hepatitis C, immune deficiency, multiple voice. See “Schedule of Benefits” for any applicable deductible, sclerosis, and rheumatoid arthritis. These drugs usually require coinsurance, co-payment and benefit limitation information. Online special handling, special administration, or intensive patient visits are not covered from providers other than those contracted monitoring. Medications used to treat diabetes are not considered with LiveHealth Online. Non-covered services include, but are not specialty medications. Whether they are administered by a health limited to, communications used for: care professional, self-injected, or taken by mouth, specialty medications require an enhanced level of service. • Reporting normal lab or other test results; Specialty pharmaceuticals are covered under your prescription • Office appointment requests; drug and/or medical benefit program. • Billing, insurance coverage or payment questions; The prescription drug plan requires that certain specialty • Requests for referrals to doctors outside the online care panel; medications be accessed through Accredo Health Group, Inc., • Benefit pre-certification; and an Express Scripts specialty pharmacy. You will not be covered for those specialty medications through the Medical Plan. The • Physician-to-physician consultation. list of medications subject to the program is available by calling the number on your prescription drug ID card. If you are currently Prescription Drugs Administered by a Medical Provider using specialty medications affected by this requirement and This Plan covers prescription drugs when they are administered as you do not obtain them through Accredo, you will be required part of a doctor’s visit, home care visit, or at an outpatient facility. to transfer those prescriptions to Accredo. If you continue to This includes drugs for infusion therapy, chemotherapy, specialty purchase your medications from your doctor or another pharmacy, drugs, blood products, and office-based injectables that must you will be responsible for their full cost. When you order a be administered by a provider. This section applies when your covered specialty medication through Accredo, your out-of-pocket provider orders the drug and administers it to you. Benefits for cost will be limited to the applicable mail-order co-payment. drugs that you inject or get at a pharmacy (i.e., self-administered In order to provide you with sufficient time to transfer your injectable drugs) are not covered under this section. Benefits for prescriptions from your medical coverage to your pharmacy those drugs are described in the “Prescription Drug Coverage” benefit, you may appeal through the appropriate appeals process section. for coverage for one additional prescription from your current Note: When prescription drugs are covered under this benefit, provider. In addition, if you have an extenuating medical condition they will not also be covered under your employer’s prescription that prevents you from transitioning to the pharmacy benefit, you drug plan. Also, if prescription drugs are covered under your may be granted an override and continue on your medical benefit employer’s prescription drug plan they will not be covered under as long as there is a reviewed medical reason not to transition. this benefit. The list of medications subject to this specialty drug program may change, and you should check the list before you fill a prescription for a specialty medication. To confirm whether a medication you take is part of the specialty program, you may call the number on your prescription drug ID card.

MEDICAL PLANS | 1-18 COVERED SERVICES UNDER THE KAISER PERMANENTE HMO PLAN

The Kaiser Permanente HMO only pays benefits when you see • Some types of outpatient consultations, evaluations and a Kaiser network physician. The Kaiser Plan covers a variety of treatments, which may be available as group appointments. services, all designed to encourage good health. These include: • Coverage for services related to “Outpatient Care” as described in other sections. Preventive Care The following types of outpatient services are covered only as The following types of preventive care services are covered at no described under these headings: charge: • Bariatric surgery. • Routine physical maintenance exams, including well-woman • Behavioral health treatment for pervasive developmental exams disorder or autism. • Scheduled routine prenatal exams • Chemical dependency services. • Well-child exams for children 0 – 23 months • Dental and orthodontic services. • Health education counseling programs • Dialysis care. • Immunizations • Durable medical equipment for home use. • Routine preventive imaging and laboratory services • Family planning services.

Outpatient Care • Health education. The following outpatient care is covered, subject to co-payments • Hearing services. as appropriate: • Home health care. • Primary and specialty care consultations, evaluations and • Hospice care. treatment (other than those described in this Outpatient Care • Infertility services. section). • Mental health services. • Allergy injections (including allergy serum). • Ostomy and urological upplies. • Outpatient surgery and other outpatient procedures. • Outpatient imaging, laboratory, and special procedures. • Urgent Care consultations and evaluations. • Outpatient prescription drugs, supplies, and supplements. • Emergency Department visits. The Emergency Department co-payment does not apply if you are admitted directly to • Prosthetic and orthotic devices. the hospital as an inpatient for covered services, or if you are • Reconstructive surgery. admitted for observation and are then admitted directly to the hospital as an inpatient for covered services. However, the • Rehabilitative and habilitative services. Emergency Department co-payment does apply if you are • Services in connection with a clinical trial. admitted for observation but are not admitted as an inpatient. • Transplant services. • House calls by a Plan physician (or a Plan provider who is a • Vision services. registered nurse) inside our service area when care can best be provided in your home as determined by a Plan physician. Hospital Inpatient Care • Acupuncture services (typically provided only for the treatment The following inpatient services in a Plan hospital, when the of nausea or as part of a comprehensive pain management services are generally and customarily provided by acute care program for the treatment of chronic pain). general hospitals inside our service area, are covered: • Blood, blood products, and their administration. • Room and board, including a private room if medically • Administered drugs (drugs, injectables, radioactive materials necessary. used for therapeutic purposes, and allergy test and treatment • Specialized care and critical care units. materials) prescribed in accord with our drug formulary guidelines, if administration or observation by medical personnel • General and special nursing care. is required and they are administered to you in a Plan medical • Operating and recovery rooms. office or during home visits. • Services of Plan physicians, including consultation and • Tuberculosis tests. treatment by specialists. • Administered chemotherapy drugs. • Anesthesia. • All other administered drugs.

MEDICAL PLANS | 1-19 • Drugs prescribed in accordance with our drug formulary • Your treating physician determines that you must be transported guidelines (for discharge drugs prescribed when you are to another facility because your emergency medical condition released from the hospital, please refer to “Outpatient is not stabilized and the care you need is not available at the Prescription Drugs, Supplies, and Supplements”. treating facility. If you receive emergency ambulance services that are not ordered by a Plan provider, you are not responsible • Radioactive materials used for therapeutic purposes. for any amounts beyond your cost share for covered emergency • Durable medical equipment and medical supplies. ambulance services. However, if the provider does not agree to • Imaging, laboratory, and special procedures. bill us, you may have to pay for the services and file a claim for reimbursement. • Blood, blood products, and their administration. • Obstetrical care and delivery (including cesarean section). Note: Non-Emergency If you are discharged within 48 hours after delivery (or within Inside our service area, we cover non-emergency ambulance and 96 hours if delivery is by cesarean section), your Plan physician psychiatric transport van services if a Plan physician determines may order a follow-up visit for you and your newborn to take that your condition requires the use of services that only a licensed place within 48 hours after discharge. For visits after you are ambulance (or psychiatric transport van) can provide and that the released from the hospital, please refer to “Outpatient Care”. use of other means of transportation would endanger your health. • Behavioral health treatment for pervasive developmental These services are covered only when the vehicle transports you disorder or autism. to or from covered services.

• Respiratory therapy. Ambulance Services Exclusion • Medical social services and discharge planning. Transportation by car, taxi, bus, gurney van, wheelchair van, and any other type of transportation (other than a licensed ambulance Coverage for Services Related to “Hospital Inpatient Care” or psychiatric transport van), even if it is the only way to travel to a Described in Other Sections Plan provider is not covered. The following types of inpatient services are covered only as described under the following headings: Bariatric Surgery • Bariatric surgery Hospital inpatient care related to bariatric surgical procedures (including room and board, imaging, laboratory, special • Chemical dependency services procedures, and Plan physician services) are covered when • Dental and orthodontic services performed to treat obesity by modification of the gastrointestinal • Dialysis care tract to reduce nutrient intake and absorption, if all of the following requirements are met: • Hospice care • You complete the Medical Group–approved pre-surgical • Infertility services educational preparatory program regarding lifestyle changes • Mental health services necessary for long-term bariatric surgery success. • Prosthetic and orthotic devices • A Plan physician who is a specialist in bariatric care determines that the surgery is medically necessary. For covered services • Reconstructive surgery related to bariatric surgical procedures that you receive, you • Rehabilitative and habilitative services will pay the cost share you would pay if the services were not • Services in connection with a clinical trial related to a bariatric surgical procedure. For example, see “Hospital Inpatient Care” for the cost share that applies for • Skilled nursing facility care hospital inpatient care. • Transplant services • If you live 50 miles or more from the facility to which you are referred for a covered bariatric surgery, we will reimburse you for Ambulance Services certain travel and lodging expenses if you receive prior written authorization from the Medical Group and send us adequate Emergency documentation including receipts. We will not, however, Services of a licensed ambulance anywhere in the world without reimburse you for any travel or lodging expenses if you were prior authorization (including transportation through the 911 offered a referral to a facility that is less than 50 miles from your emergency response system where available) are covered in the home. We will reimburse authorized and documented travel and following situations: lodging expenses as follows: • A reasonable person would have believed that the medical o Transportation for you to and from the facility up to $130 per condition was an emergency medical condition which required round trip for a maximum of three trips (one pre-surgical visit, ambulance services. the surgery, and one follow-up visit), including any trips for which we provided reimbursement under any other evidence of coverage offered by your Group.

MEDICAL PLANS | 1-20 o Transportation for one companion to and from the facility • Is employed and supervised by a Qualified Autism Service up to $130 per round trip for a maximum of two trips (the Provider. surgery and one follow-up visit), including any trips for which • Provides treatment pursuant to a treatment plan developed and we provided reimbursement under any other evidence of approved by the Qualified Autism Service Provider. coverage offered by your Group. “Qualified Autism Service Paraprofessional” means an unlicensed o One hotel room, double-occupancy, for you and one and uncertified individual who meets all of the following criteria: companion not to exceed $100 per day for the pre- surgical visit and the follow-up visit, up to two days per trip, • Is employed and supervised by a Qualified Autism Service including any hotel accommodations for which we provided Provider. reimbursement under any other evidence of coverage offered • Provides treatment and implements services pursuant to a by your Group. Hotel accommodations for one companion treatment plan developed and approved by the Qualified Autism not to exceed $100 per day for the duration of your surgery Service Provider. stay, up to four days, including any hotel accommodations for • Meets the criteria set forth in the regulations adopted pursuant which we provided reimbursement under any other evidence to Section 4686.3 of the Welfare and Institutions Code. of coverage offered by your Group. • Has adequate education, training, and experience, as certified Coverage for Services Related to “Bariatric Surgery” by a Qualified Autism Service Provider. Described in Other Sections Behavioral health treatments for pervasive developmental disorder Coverage for the following services is described under these or autism (including applied behavior analysis and evidence-based headings: behavior intervention programs) that develop or restore, to the maximum extent practicable, the functioning of a person with • Outpatient prescription drugs (refer to “Outpatient Prescription pervasive developmental disorder or autism and that meet all of Drugs, Supplies, and Supplements”) the following criteria, are covered: • Outpatient administered drugs (refer to “Outpatient Care”) • The treatment is prescribed by a Plan physician, or is developed by a Plan Provider who is a psychologist. Behavioral Health Treatment for Pervasive Developmental • The treatment is provided under a treatment plan prescribed by Disorder or Autism a Plan Provider who is a Qualified Autism Service Provider. The following terms have special meaning when capitalized The treatment is administered by a Plan Provider who is one of the and used in this Behavioral Health Treatment for Pervasive following: Developmental Disorder or Autism section. “Qualified Autism Service Provider” means a provider who has the experience and • A Qualified Autism Service Provider. competence to design, supervise, provide, or administer treatment • A Qualified Autism Service Professional supervised and for pervasive developmental disorder or autism and is either of the employed by the Qualified Autism Service Provider. following: • A Qualified Autism Service Paraprofessional supervised and • A person, entity, or group that is certified by a national entity employed by a Qualified Autism Service Provider. (such as the Behavior Analyst Certification Board) that is accredited by the National Commission for Certifying Agencies. • The treatment plan has measurable goals over a specific timeline that is developed and approved by the Qualified Autism • A person licensed in California as a physician, physical therapist, Service Provider for the member being treated. occupational therapist, psychologist, marriage and family therapist, educational psychologist, clinical social worker, • The treatment plan is reviewed no less than once every six professional clinical counselor, speech-language pathologist, or months by the Qualified Autism Service Provider and modified audiologist. whenever appropriate. • Is a behavioral health treatment provider approved as a The treatment plan requires the Qualified Autism Service Provider vendor by a California regional center to provide services as to do all of the following: an Associate Behavior Analyst, Behavior Analyst, Behavior • Describe the member’s behavioral health impairments to be Management Assistant, Behavior Management Consultant, or treated. Behavior Management Program as defined in Section 54342 of • Design an intervention plan that includes the service type, Title 17 of the California Code of Regulations. number of hours, and parent participation needed to achieve • Has training and experience in providing services for pervasive the plan’s goal and objectives, and the frequency at which the developmental disorder or autism pursuant to Division 4.5 member’s progress is evaluated and reported. (commencing with Section 4500) of the Welfare and Institutions • Provide intervention plans that utilize evidence-based practices, Code or Title 14 (commencing with Section 95000) of the with demonstrated clinical efficacy in treating pervasive Government Code. developmental disorder or autism. “Qualified Autism Service Professional” means a person who • Discontinue intensive behavioral intervention services when meets all of the following criteria: the treatment goals and objectives are achieved or no longer • Provides behavioral health treatment. appropriate.

MEDICAL PLANS | 1-21 The treatment plan is not used for either of the following: Dental and Orthodontic Services • For purposes of providing (or for the reimbursement of) respite Most dental and orthodontic services are not covered, but we care, day care, or educational services do cover some dental and orthodontic services as described in this “Dental and Orthodontic Services” section as needed for • To reimburse a parent for participating in the treatment program treatment due to an accident, injury or disease. Effective as of the date that federal proposed final rulemaking for essential health benefits is issued, we will cover services under Dental Services for Radiation Treatment this “Behavioral Health Treatment for Pervasive Developmental Dental evaluation, X-rays, fluoride treatment, and extractions Disorder or Autism” section only if they are included in the necessary to prepare your jaw for radiation therapy of cancer essential health benefits that all health plans will be required by in your head or neck is covered if a Plan physician provides the federal regulations to provide under section 1302(b) of the federal services or if the Medical Group authorizes a referral to a dentist Patient Protection and Affordable Care Act, as amended by the (as described in “Medical Group Authorization Procedure for federal Health Care and Education Reconciliation Act. Certain Referrals” under “Getting a Referral” in the “How to Obtain Services” section). Chemical Dependency Services Dental Anesthesia Inpatient Detoxification For dental procedures at a Plan Facility, we provide general Hospitalization in a Plan hospital only for medical management of anesthesia and the facility services associated with the anesthesia withdrawal symptoms, including room and board, Plan physician if all of the following are true: services, drugs, dependency recovery services, education, and • You are under age seven (7), or you are developmentally counseling is covered. disabled, or your health is compromised; Outpatient Chemical Dependency Care • Your clinical status or underlying medical condition requires that We cover the following services for treatment of chemical the dental procedure be provided in a hospital or outpatient dependency: surgery center; and • Day-treatment programs • The dental procedure would not ordinarily require general anesthesia. We do not cover any other services related to the • Intensive outpatient programs dental procedure, such as the dentist’s services. • Individual and group chemical dependency counseling Dental and Orthodontic Services for Cleft Palate • Medical treatment for withdrawal symptoms We cover dental extractions, dental procedures necessary to • Individual chemical dependency evaluation and treatment prepare the mouth for an extraction, and orthodontic services, if • Group chemical dependency treatment they meet all of the following requirements:

Transitional Residential Recovery Services • The services are an integral part of a reconstructive surgery for cleft palate that we cover under “Reconstructive Surgery” in this Chemical dependency treatment in a non-medical transitional SPD; and residential recovery setting approved in writing by the Medical Group is covered. These settings provide counseling and support • A Plan provider provides the services or the Medical Group services in a structured environment. authorizes a referral to a Non-Plan provider who is a dentist or orthodontist (as described in “Medical Group Authorization Procedure for Certain Referrals” under “Getting a Referral” in the Coverage for Services Related to “Chemical Dependency “How to Obtain Services” section). Services” Described in Other Sections Coverage for the following services is described under these headings: Your Cost Share for Dental and Orthodontic Services • Outpatient self-administered drugs (refer to “Outpatient You pay the following for dental and orthodontic services covered Prescription Drugs, Supplies, and Supplements”) under this “Dental and Orthodontic Services” section: • Outpatient laboratory (refer to “Outpatient Imaging, Laboratory, • Hospital inpatient care: a $500 co-payment per admission and Special Procedures”) • Outpatient consultations, evaluations and treatment: a $25 co-payment per visit Chemical Dependency Services Exclusion • Outpatient surgery and other outpatient procedures: a $25 co- Services in a specialized facility for alcoholism, drug abuse, or payment per procedure drug addiction except as otherwise described in this “Chemical Dependency Services” section. • Coverage for the following services is described under these headings: o Outpatient imaging, laboratory, and special procedures (refer to “Outpatient Imaging, Laboratory, and Special Procedures”)

MEDICAL PLANS | 1-22 o Outpatient administered drugs (refer to “Outpatient Care”), a medical purpose, generally not useful to a person who is not except that we cover outpatient administered drugs under ill or injured, and appropriate for use in the home. Coverage is “Dental Anesthesia” in this “Dental and Orthodontic Services” limited to the standard item of equipment that adequately meets section your medical needs. We decide whether to rent or purchase o Outpatient prescription drugs (refer to “Outpatient Prescription the equipment, and we select the vendor. You must return the Drugs, Supplies, And Supplements”) equipment to us or pay us the fair market price of the equipment when we no longer cover it. Dialysis Care Durable Medical Equipment Items That Are Essential Health Acute and chronic dialysis services are covered if all of the Benefits following requirements are met: Inside our service area, the following durable medical equipment • The services are provided inside our service area. (including repair or replacement of covered equipment) is covered: • You satisfy all medical criteria developed by the Medical Group • For diabetes blood testing, blood glucose monitors and their and by the facility providing the dialysis. supplies (such as blood glucose monitor test strips, lancets and • A Plan physician provides a written referral for care at the lancet devices) facility. After you receive appropriate training at a dialysis facility • Infusion pumps (such as insulin pumps) and supplies to operate we designate, we also cover equipment and medical supplies the pump (but not including insulin or any other drugs) required for home hemodialysis and home peritoneal dialysis • Standard curved handle or quad cane and replacement inside our service area. Coverage is limited to the standard item supplies of equipment or supplies that adequately meets your medical needs. We decide whether to rent or purchase the equipment • Standard or forearm crutches and replacement supplies and supplies, and we select the vendor. You must return the • Dry pressure pad for a mattress equipment and any unused supplies to us or pay us the fair • Nebulizer and supplies market price of the equipment and any unused supplies when we no longer cover them. • Peak flow meters • You make one routine outpatient visit per month with the • IV pole multidisciplinary nephrology team for a consultation, evaluation • Tracheostomy tube and supplies or treatment. • Enteral pump and supplies • Hemodialysis treatment is performed at a Plan facility. • Bone stimulator • All other outpatient consultations, evaluations, and treatment. • Cervical traction (over door) Coverage for Services Related to “Dialysis Care” Described • Phototherapy blankets for treatment of jaundice in newborns in Other Sections Supplemental Durable Medical Equipment Coverage for the following services is described under these headings: You pay 50% coinsurance (including repair or replacement of covered equipment) for all other covered durable medical • Durable medical equipment for home use (refer to “Durable equipment, including: Medical Equipment for Home Use”) • External sexual dysfunction devices • Outpatient laboratory (refer to “Outpatient Imaging, Laboratory, and Special Procedures”) Coinsurance • Outpatient prescription drugs (refer to “Outpatient Prescription You pay 20% coinsurance on breast pumps and supplies. Refer Drugs, Supplies, and Supplements”) to “Breastfeeding Supplies” in this “Durable Medical Equipment” • Outpatient administered drugs (refer to “Outpatient Care”) section. Coinsurance Outside the Service Area Dialysis Care Exclusions We do not cover most durable medical equipment for home use • Comfort, convenience, or luxury equipment, supplies and outside our service area. However, if you live outside our service features area, we cover the following durable medical equipment (subject • Non-medical items, such as generators or accessories to make to the cost share and all other coverage requirements that apply to home dialysis equipment portable for travel durable medical equipment for home use inside our service area) when the item is dispensed at a Plan facility: Durable Medical Equipment for Home Use • Standard curved handle cane Inside our service area, durable medical equipment for use in • Standard crutches your home (or another location used as your home) is covered in • For diabetes blood testing, blood glucose monitors and their accord with our durable medical equipment formulary guidelines. supplies (such as blood glucose monitor test strips, lancets, and Durable medical equipment for home use is an item that is lancet devices) from a Plan pharmacy intended for repeated use, primarily and customarily used to serve

MEDICAL PLANS | 1-23 • Insulin pumps and supplies to operate the pump (but not Coverage for Services Related to “Durable Medical including insulin or any other drugs), after completion of training Equipment for Home Use” Described in Other Sections and education on the use of the pump Coverage for the following services is described under these • Nebulizers and their supplies for the treatment of pediatric headings: asthma • Dialysis equipment and supplies required for home hemodialysis • Peak flow meters from a Plan pharmacy and home peritoneal dialysis (refer to “Dialysis Care”) • Diabetes urine testing supplies and insulin administration About Our Durable Medical Equipment Formulary devices other than insulin pumps (refer to “Outpatient Our durable medical equipment formulary includes the list of Prescription Drugs, Supplies, and Supplements”) durable medical equipment that has been approved by our • Durable medical equipment related to the terminal illness for Durable Medical Equipment Formulary Executive Committee for members who are receiving covered hospice care (refer to our members. Our durable medical equipment formulary was “Hospice Care”) developed by a multidisciplinary clinical and operational work group with review and input from Plan physicians and medical • Durable medical equipment for home use exclusions professionals with durable medical equipment expertise (for • Comfort, convenience, or luxury equipment or features example: physical, respiratory, and enterostomal therapists and except for retail-grade breast pumps as described under home health). A multidisciplinary Durable Medical Equipment “Breastfeeding Supplies” in this “Durable Medical Equipment for Formulary Executive Committee is responsible for reviewing and Home Use” section revising the durable medical equipment formulary. • Exercise or hygiene equipment Our durable medical equipment formulary is periodically updated to keep pace with changes in medical technology and clinical • Non-medical items, such as sauna baths or elevators practice. To find out whether a particular item is included in our • Modifications to your home or car durable medical equipment formulary, please call our Member • Devices for testing blood or other body substances (except Service Contact Center. Our formulary guidelines allow you to diabetes blood glucose monitors and their supplies) obtain nonformulary durable medical equipment (equipment not listed on our durable medical equipment formulary for your • Electronic monitors of the heart or lungs except infant apnea condition) if the equipment would otherwise be covered and monitors the Medical Group determines that it is medically necessary as • Repair or replacement of equipment due to loss or misuse described in “Medical Group Authorization Procedure for Certain Referrals” under “Getting a Referral” in the “How to Obtain Family Planning Services Services” section. The following family planning services are covered subject to the cost share indicated: Breastfeeding Supplies • Family planning counseling One retail-grade breast pump per pregnancy and the necessary supplies to operate it, such as one set of bottles, is covered. We • Consultations for internally implanted time-release will decide whether to rent or purchase the item and we choose contraceptives or intrauterine devices (IUDs) the vendor. We cover this pump for convenience purposes. The • Female sterilization procedures pump is not subject to prior authorization requirements or the formulary guidelines. • Male sterilization procedures Inside our service area, if you or your baby has a medical condition • Medically necessary termination of pregnancy that requires the use of a breast pump, we cover a hospital-grade • Voluntary termination of pregnancy breast pump and the necessary supplies to operate it, in accord with our durable medical equipment formulary guidelines. We will Coverage for Services Related to “Family Planning Services” determine whether to rent or purchase the equipment and we Described in Other Sections choose the vendor. Hospital-grade breast pumps on our formulary Coverage for the following services is described under these are subject to the durable medical equipment prior authorization headings: requirements as described in “Medical Group Authorization Procedure for Certain Referrals” under “Getting a Referral” in the • Services to diagnose or treat infertility (refer to “Infertility “How to Obtain Services” section. For more information about our Services”) durable medical equipment formulary, see the “About Our Durable • Outpatient laboratory and imaging services associated Medical Equipment Formulary” in this “Durable Medical Equipment with family planning services (refer to “Outpatient Imaging, for Home Use” section. Laboratory, and Special Procedures”) • Outpatient contraceptive drugs and devices (refer to “Outpatient Prescription Drugs, Supplies, and Supplements”)

MEDICAL PLANS | 1-24 Family Planning Services Exclusion Home Health Care Reversal of voluntary sterilization is excluded. “Home health care” means services provided in the home by nurses, medical social workers, home health aides, and physical, Health Education occupational, and speech therapists. We cover home health care only if all of the following are true: A variety of health education counseling, programs, and materials that your personal Plan physician or other Plan providers provide • You are substantially confined to your home (or a friend’s or during a visit covered under another part of this SPD are covered. relative’s home). Kaiser also covers a variety of health education counseling, • Your condition requires the services of a nurse, physical programs, and materials to help you take an active role in therapist, occupational therapist, or speech therapist (home protecting and improving your health, including programs for health aide services are not covered unless you are also getting tobacco cessation, stress management, and chronic conditions covered home health care from a nurse, physical therapist, (such as diabetes and asthma). Kaiser Permanente also offers occupational therapist, or speech therapist that only a licensed health education counseling, programs, and materials that are not provider can provide). covered, and you may be required to pay a fee. • A Plan physician determines that it is feasible to maintain For more information about our health education counseling, effective supervision and control of your care in your home and programs, and materials, please contact a Health Education that the services can be safely and effectively provided in your Department or our Member Service Contact Center, refer to Your home. Guidebook, or go to our website at www.kaiserpermanente.org. • The services are provided inside our service area. We cover The following items and services are covered: only part-time or intermittent home health care, as follows: • Covered health education programs, which may include o Up to two hours per visit for visits by a nurse, medical social programs provided online and counseling over the phone worker, or physical, occupational, or speech therapist, and up to four hours per visit for visits by a home health aide • Individual counseling during an office visit related to smoking cessation o Up to three visits per day (counting all home health visits) • IIndividual counseling during an office visit related to diabetes o Up to 100 visits per calendar year (counting all home health management visits) • Other covered individual counseling when the office visit is Note: If a visit by a nurse, medical social worker, or physical, solely for health education occupational, or speech therapist lasts longer than two hours, then each additional increment of two hours counts as a separate • Health education provided during an outpatient consultation or visit. If a visit by a home health aide lasts longer than four hours, evaluation covered in another part of this SPD then each additional increment of four hours counts as a separate • Covered health education materials visit. For example, if a nurse comes to your home for three hours and then leaves, that counts as two visits. Also, each person Hearing Services providing services counts toward these visit limits. For example, if a home health aide and a nurse are both at your home during the Hearing aids (other than internally implanted devices as described same two hours, that counts as two visits. in the “Prosthetic and Orthotic Devices” section) are not covered. However, we do cover the following: Coverage for Services Related to “Home Health Care” • Routine hearing screenings that are preventive care services Described in Other Sections • Hearing exams to determine the need for hearing correction Coverage for the following services is described under these headings: Coverage for Services Related to “Hearing Services” • Behavioral health treatment for pervasive developmental Described in Other Sections disorder or autism (refer to “Behavioral Health Treatment for Coverage for the following services is described under these Pervasive Developmental Disorder or Autism”) headings: • Dialysis care (refer to “Dialysis Care”) • Services related to the ear or hearing other than those • Durable medical equipment (refer to “Durable Medical described in this section, such as outpatient care to treat an Equipment for Home Use”) ear infection and outpatient prescription drugs, supplies, and supplements (refer to the applicable heading in this SPD) • Ostomy and urological supplies (refer to “Ostomy and Urological Supplies”) • Cochlear implants and osseointegrated hearing devices (refer to “Prosthetic and Orthotic Devices”) • Outpatient Drugs, supplies, and supplements (refer to “Outpatient Prescription Drugs, Supplies, and Supplements”) Hearing Services Exclusion • Prosthetic and orthotic devices (refer to “Prosthetic and Orthotic Hearing aids and tests to determine their efficacy, and hearing Devices”) tests to determine an appropriate hearing aid are excluded.

MEDICAL PLANS | 1-25 Home Health Care Exclusions • Respite care when necessary to relieve your caregivers. Respite care is occasional short-term inpatient care limited to no more • Care of a type that an unlicensed family member or other than five consecutive days at a time layperson could provide safely and effectively in the home setting after receiving appropriate training. This care is excluded • Counseling and bereavement services even if we would cover the care if it were provided by a qualified • Dietary counseling medical professional in a hospital or a skilled nursing facility. • The following care during periods of crisis when you need • Care in the home if the home is not a safe and effective continuous care to achieve palliation or management of acute treatment setting. medical symptoms: o Nursing care on a continuous basis for as much as 24 hours a Hospice Care day as necessary to maintain you at home Hospice care is a specialized form of interdisciplinary health care o Short-term inpatient care required at a level that cannot be designed to provide palliative care and to alleviate the physical, provided at home emotional, and spiritual discomforts of a member experiencing the last phases of life due to a terminal illness. It also provides support to the primary caregiver and the member’s family. A member who Infertility Services chooses hospice care is choosing to receive palliative care for pain We cover the following services related to involuntary infertility at and other symptoms associated with the terminal illness, but not 50% coinsurance: to receive care to try to cure the terminal illness. You may change • Services for diagnosis and treatment of involuntary infertility your decision to receive hospice care benefits at any time. • Artificial insemination We cover the hospice services listed below only if all of the following requirements are met: Coverage for Services Related to “Infertility Services” • A Plan physician has diagnosed you with a terminal illness and Described in Other Sections determines that your life expectancy is 12 months or less. Coverage for the following services is described under these • The services are provided inside our service area or inside headings: California but within 15 miles or 30 minutes from our service • Outpatient drugs, supplies, and supplements (refer to area (including a friend’s or relative’s home even if you live there “Outpatient Prescription Drugs, Supplies, and Supplements”) temporarily). • Outpatient administered drugs (refer to “Outpatient Care”) • The services are provided by a licensed hospice agency that is a Plan provider. Infertility Services Exclusions • The services are necessary for the palliation and management • Services to reverse voluntary, surgically induced infertility of your terminal illness and related conditions. • Semen and eggs (and services related to their procurement and If all of the above requirements are met, we cover the following storage) hospice services, which are available on a 24-hour basis if necessary for your hospice care: Mental Health Services • Plan physician services. We cover services specified in this “Mental Health Services” • Skilled nursing care, including assessment, evaluation, and case section only when the services are for the diagnosis or treatment management of nursing needs, treatment for pain and symptom of mental disorders. A “mental disorder” is a mental health control, provision of emotional support to you and your family, condition identified as a “mental disorder” in the Diagnostic and instruction to caregivers. and Statistical Manual of Mental Disorders, Fourth Edition, Text Revision (DSM) that results in clinically significant distress or • Physical, occupational, or speech therapy for purposes of impairment of mental, emotional, or behavioral functioning. We symptom control or to enable you to maintain activities of daily do not cover services for conditions that the DSM identifies living. as something other than a “mental disorder.” For example, the • Respiratory therapy. DSM identifies relational problems as something other than a “mental disorder,” so we do not cover services (such as couples • Medical social services. counseling or family counseling) for relational problems. • Home health aide and homemaker services. “Mental disorders” include the following conditions: • Palliative drugs prescribed for pain control and symptom • Severe mental illness of a person of any age. “severe mental management of the terminal illness for up to a 100-day supply illness” means the following mental disorders: in accord with our drug formulary guidelines. You must obtain these drugs from Plan pharmacies. Certain drugs are limited o Schizophrenia, schizoaffective disorder, bipolar; to a maximum 30-day supply in any 30-day period (please call o Disorder (manic-depressive illness), major depressive; our Member Service Contact Center for the current list of these drugs). o Disorders, panic disorder, obsessive-compulsive; • Durable medical equipment o Disorder, pervasive developmental disorder or autism; and o Anorexia nervosa, or bulimia nervosa.

MEDICAL PLANS | 1-26 • A serious emotional disturbance of a child under age 18. A Coverage for Services Related to “Mental Health Services” “serious emotional disturbance” of a child under age 18 means Described in Other Sections a condition identified as a “mental disorder” in the DSM, other Coverage for the following services is described under these than a primary substance use disorder or developmental headings: disorder, that results in behavior inappropriate to the child’s age according to expected developmental norms, if the child also • Outpatient drugs, supplies, and supplements (refer to meets at least one of the following three criteria: “Outpatient Prescription Drugs, Supplies, and Supplements”) o As a result of the mental disorder, (1) the child has substantial • Outpatient laboratory (refer to “Outpatient Imaging, Laboratory, impairment in at least two of the following areas: self-care, and Special Procedures”) school functioning, family relationships, or ability to function in the community; and (2) either (a) the child is at risk of removal Ostomy and Urological Supplies from the home or has already been removed from the home, Inside our service area, we cover ostomy and urological supplies or (b) the mental disorder and impairments have been present prescribed in accord with our soft goods formulary guidelines. We for more than six months or are likely to continue for more select the vendor, and coverage is limited to the standard supply than one year without treatment. that adequately meets your medical needs. o The child displays psychotic features, or risk of suicide or violence due to a mental disorder. About Our Soft Goods Formulary o The child meets special education eligibility requirements Our soft goods formulary includes the list of ostomy and urological under chapter 26.5 (commencing with Section 7570) of supplies that have been approved by our Soft Goods Formulary Division 7 of Title 1 of the California Government Code. Executive Committee for our members. Our Soft Goods Formulary Executive Committee is responsible for reviewing and revising Outpatient Mental Health Services the soft goods formulary. Our soft goods formulary is periodically We cover the following services, subject to coinsurance or updated to keep pace with changes in medical technology co-payments, when provided by Plan physicians or other Plan and clinical practice. To find out whether a particular ostomy or providers who are licensed health care professionals acting within urological supply is included in our soft goods formulary, please the scope of their license: call our Member Service Contact Center. • Individual and group mental health evaluation and treatment Our formulary guidelines allow you to obtain nonformulary • Psychological testing when necessary to evaluate a mental ostomy and urological supplies (those not listed on our soft disorder goods formulary for your condition) if they would otherwise be covered and the Medical Group determines that they are • Outpatient services for the purpose of monitoring drug therapy medically necessary as described in “Medical Group Authorization • Individual mental health evaluation and treatment Procedure for Certain Referrals” under “Getting a Referral” in the • Group mental health treatment “How to Obtain Services” section. Note: Outpatient intensive psychiatric treatment programs are Ostomy and Urological Supplies Exclusion not covered under this “Outpatient Mental Health Services” Comfort, convenience, or luxury equipment or features are section (refer to “Intensive Psychiatric Treatment Programs” under excluded. “Inpatient Psychiatric Hospitalization and Intensive Psychiatric Treatment Programs” in this “Mental Health Services” section). Outpatient Imaging, Laboratory, and Special Procedures Inpatient Psychiatric Hospitalization and Intensive We cover the following services at the cost share indicated only Pshychiatric Treatment Programs when prescribed as part of care covered under other headings in this SPD: Inpatient Psychiatric Hospitalization We cover inpatient psychiatric hospitalization in a Plan hospital. Imaging Services That Are Preventative Care Services Coverage includes room and board, drugs, and services of Plan • Preventive mammograms physicians and other Plan providers who are licensed health care • Preventive abdominal aortic aneurysm ultrasound screenings professionals acting within the scope of their license. • Bone density CT scans We cover the following intensive psychiatric treatment programs at a Plan facility: • Bone density dexa scans • Short-term hospital-based intensive outpatient care (partial • All other CT scans, and all MRIs and PET scans hospitalization) • All other imaging services, such as diagnostic and therapeutic • Short-term multidisciplinary treatment in an intensive outpatient X-rays, mammograms, and ultrasounds: certain imaging psychiatric treatment program procedures are covered at a co-payment per procedure if they are provided in an outpatient or ambulatory surgery center or in • Short-term treatment in a crisis residential program in a licensed a hospital operating room, or if they are provided in any setting psychiatric treatment facility with 24-hour-a-day monitoring by and a licensed staff member monitors your vital signs as you clinical staff for stabilization of an acute psychiatric crisis regain sensation after receiving drugs to reduce sensation or to • Psychiatric observation for an acute psychiatric crisis minimize discomfort MEDICAL PLANS | 1-27 • Nuclear medicine External Devices • Laboratory tests We cover the following external prosthetic and orthotic devices: • Laboratory tests to monitor the effectiveness of dialysis • Prosthetic devices and installation accessories to restore a method of speaking following the removal of all or part • Fecal occult blood tests of the larynx (this coverage does not include electronic • Routine laboratory tests and screenings that are preventive care voice-producing machines, which are not prosthetic devices). services, such as cervical cancer screenings, prostate-specific • Prostheses needed after a medically necessary mastectomy, antigen tests, cholesterol tests (lipid panel and profile), fasting including custom made prostheses when medically necessary blood glucose tests, glucose tolerance tests, certain sexually and up to three brassieres required to hold a prosthesis every transmitted disease (STD) tests, genetic testing for breast 12 months. cancer susceptibility, and HIV tests • Podiatric devices (including footwear) to prevent or treat • All other laboratory tests (including tests for specific genetic diabetes-related complications when prescribed by a Plan disorders for which genetic counseling is available) physician or by a Plan provider who is a podiatrist. Routine Preventive Retinal Photography Screenings • Compression burn garments and lymphedema wraps and • All other diagnostic procedures provided by Plan providers garments. who are not physicians (such as EKGs and EEGs), although • Enteral formula for members who require tube feeding in accord certain diagnostic procedures require a co-payment if they are with Medicare guidelines. provided in an outpatient or ambulatory surgery center or in a • Prostheses to replace all or part of an external facial body part hospital operating room, or if they are provided in any setting that has been removed or impaired as a result of disease, injury, and a licensed staff member monitors your vital signs as you or congenital defect. regain sensation after receiving drugs to reduce sensation or to minimize discomfort Other covered prosthetic and orthotic devices: • Radiation therapy • Prosthetic devices required to replace all or part of an organ or extremity, but only if they also replace the function of the organ • Ultraviolet light treatments or extremity.

Coverage for Services Related to “Outpatient Imaging, • Rigid and semi-rigid orthotic devices required to support or Laboratory, and Special Procedures” Described in Other correct a defective body part. Sections • Covered special footwear when custom made for foot Services related to diagnosis and treatment of infertility are disfigurement due to disease, injury, or developmental disability. described in the “Infertility Services” section. Coverage for Services Related to “Prosthetic and Orthotic Prosthetic and Orthotic Devices Devices” Described in Other Sections We cover the prosthetic and orthotic devices specified in this Coverage for contact lenses to treat aniridia or aphakia are “Prosthetic and Orthotic Devices” section if all of the following described in the “Vision Services” section. requirements are met: Prosthetic and Orthotic Devices Exclusions • The device is in general use, intended for repeated use, and primarily and customarily used for medical purposes. • Multifocal intraocular lenses and intraocular lenses to correct astigmatism. • The device is the standard device that adequately meets your medical needs. • Nonrigid supplies, such as elastic stockings and wigs, except as otherwise described above in this “Prosthetic and Orthotic • You receive the device from the provider or vendor that we Devices” section. select. Coverage includes fitting and adjustment of these devices, their repair or replacement, and services to determine • Comfort, convenience, or luxury equipment or features. whether you need a prosthetic or orthotic device. If we cover a • Shoes or arch supports, even if custom-made, except replacement device, then you pay the cost share that you would footwear described above in this “Prosthetic and Orthotic pay for obtaining that device. Devices” section for diabetes-related complications and foot disfigurement. Internally Implanted Devices • Repair or replacement of device due to loss or misuse. We cover prosthetic and orthotic devices, such as pacemakers, intraocular lenses, cochlear implants, osseointegrated hearing devices, and hip joints, if they are implanted during a surgery that we cover under another section of this SPD.

MEDICAL PLANS | 1-28 Reconstructive Surgery • All other individual outpatient physical, occupational, and speech therapy. We cover the following reconstructive surgery services: • All other group outpatient physical, occupational, and speech • Reconstructive surgery to correct or repair abnormal structures therapy. of the body caused by congenital defects, developmental abnormalities, trauma, infection, tumors, or disease, if a Plan • Physical, occupational, and speech therapy provided in physician determines that it is necessary to improve function, or an organized, multidisciplinary rehabilitation day-treatment create a normal appearance, to the extent possible; program. • Following medically necessary removal of all or part of a • Physical, occupational, and speech therapy provided in a skilled breast, we cover reconstruction of the breast, surgery and nursing facility (subject to the day limits described in the “Skilled reconstruction of the other breast to produce a symmetrical Nursing Facility Care” section). You pay the cost share for skilled appearance, and treatment of physical complications, including nursing facility care as described under “Skilled Nursing Facility lymphedemas; Care” in this SPD. • Outpatient consultations, evaluations, and treatment; • Physical, occupational, and speech therapy provided in an inpatient hospital (including treatment in an organized • Outpatient surgery; and multidisciplinary rehabilitation program). • Hospital inpatient care (including room and board, drugs, and • You pay the cost share for inpatient care as described Plan physician services). under “Hospital Inpatient Care”.

Coverage for Services Related to “Reconstructive Surgery” Coverage for Services Related to “Rehabilitative and Described in Other Sections Habilitative Services” Described in Other Sections Coverage for the following services is described under these • Behavioral health treatment for pervasive developmental headings: disorder or autism (refer to “Behavioral Health Treatment for • Dental and orthodontic services that are an integral part of Pervasive Developmental Disorder or Autism”) reconstructive surgery for cleft palate (refer to “Dental and • Home health care (refer to “Home Health Care”) Orthodontic Services”) • Durable medical equipment (refer to “Durable Medical • Outpatient imaging and laboratory (refer to “Outpatient Imaging, Equipment for Home Use”) Laboratory, and Special Procedures”) • Ostomy and urological supplies (refer to “Ostomy and Urological • Outpatient prescription drugs (refer to “Outpatient Prescription Supplies”) drugs, Supplies, and Supplements”) • Prosthetic and orthotic devices (refer to “Prosthetic and Orthotic • Outpatient administered drugs (refer to “Outpatient Care”) Devices”) • Prosthetics and orthotics (refer to “Prosthetic and Orthotic Devices”) Rehabilitative and Habilitative Services Exclusions Items and services that are not health care items and services Reconstructive Surgery Exclusions (for example, respite care, day care, recreational care, residential • Surgery that, in the judgment of a Plan physician specializing treatment, social services, custodial care, or education services of in reconstructive surgery, offers only a minimal improvement in any kind, including vocational training are not covered.) appearance • Surgery that is performed to alter or reshape normal structures Services in Connection with a Clinical Trial of the body in order to improve appearance We cover services you receive in connection with a clinical trial if all of the following requirements are met: Rehabilitative and Habilitative Services • We would have covered the services if they were not related to a We cover the services described in this “Rehabilitative and clinical trial. Habilitative Services” section if all of the following requirements are • You are eligible to participate in the clinical trial according to met: the trial protocol with respect to treatment of cancer or other • The services are to address a health condition life-threatening condition (a condition from which the likelihood • The services are to help you partially or fully acquire or improve of death is probable unless the course of the condition is skills and functioning needed to perform activities of daily living, interrupted), as determined in one of the following ways: to the maximum extent practical. o A Plan provider makes this determination. We cover the following services at the cost share indicated: o You provide us with medical and scientific information • Individual outpatient physical, occupational, and speech therapy establishing this determination. related to pervasive developmental disorder or autism. o If any Plan providers participate in the clinical trial and will • Group outpatient physical, occupational, and speech therapy accept you as a participant in the clinical trial, you must related to pervasive developmental disorder or autism. participate in the clinical trial through a Plan provider unless the clinical trial is outside the state where you live. MEDICAL PLANS | 1-29 • The clinical trial is an approved clinical trial. “Approved clinical existing benefit period ends. A prior three-day stay in an acute trial” means a phase I, phase II, phase III, or phase IV clinical trial care hospital is not required. related to the prevention, detection, or treatment of cancer or We cover the following services: other life-threatening condition that meets one of the following requirements: • Physician and nursing services; o The study or investigation is conducted under an • Room and board; investigational new drug application reviewed by the U.S. • Drugs prescribed by a Plan physician as part of your plan of Food and Drug Administration. care in the Plan skilled nursing facility in accord with our drug o The study or investigation is a drug trial that is exempt from formulary guidelines if they are administered to you in the Plan having an investigational new drug application. skilled nursing facility by medical personnel; • The study or investigation is approved or funded by at least one • Durable medical equipment in accord with our durable medical of the following: equipment formulary if skilled nursing facilities ordinarily furnish the equipment; o The National Institutes of Health • Imaging and laboratory services that skilled nursing facilities o The Centers for Disease Control and Prevention ordinarily provide; o The Agency for Health Care Research and Quality • Medical social services; o The Centers for Medicare & Medicaid Services • Blood, blood products, and their administration; o A cooperative group or center of any of the above entities or • Medical supplies; of the Department of Defense or the Department of Veterans Affairs • Behavioral health treatment for pervasive developmental disorder or autism; and o A qualified non-governmental research entity identified in the guidelines issued by the National Institutes of Health for • Respiratory therapy. center support grants Coverage for Services Related to “Skilled Nursing Facility o The Department of Veterans Affairs or the Department of Care” Described in Other Sections Defense or the Department of Energy, but only if the study or investigation has been reviewed and approved through Coverage for the following services is described under these a system of peer review that the U.S. Secretary of Health headings: and Human Services determines meets all of the following • Outpatient imaging, laboratory, and special procedures (refer to requirements: (1) it is comparable to the National Institutes “Outpatient Imaging, Laboratory, and Special Procedures”) of Health system of peer review of studies and investigations • Physical, occupational, and speech therapy (refer to and (2) it assures unbiased review of the highest scientific “Rehabilitative and Habilitative Services”) standards by qualified people who have no interest in the outcome of the review Transplant Services For covered services related to a clinical trial, you will pay the cost share you would pay if the services were not related to a clinical We cover transplants of organs, tissue, or bone marrow if the trial. For example, see “Hospital Inpatient Care” in this SPD for the Medical Group provides a written referral for care to a transplant cost share that applies for hospital inpatient care. facility as described in “Medical Group Authorization Procedure for Certain Referrals” under “Getting a Referral” in the “How to Obtain Services In Connection with a Clinical Trial Exclusions Services” section. • The investigational service After the referral to a transplant facility, the following applies: • Services that are provided solely to satisfy data collection and • If either the Medical Group or the referral facility determines analysis needs and are not used in your clinical management that you do not satisfy its respective criteria for a transplant, we will only cover services you receive before that determination Skilled Nursing Facility Care is made. The Health Plan, Plan hospitals, the Medical Group, and Plan physicians are not responsible for finding, furnishing, Inside our service area, we cover up to 100 days per benefit or ensuring the availability of an organ, tissue, or bone marrow period (including any days we covered under any other evidence donor. of coverage offered by your Group) of skilled inpatient services in a Plan skilled nursing facility. The skilled inpatient services must • In accordance with our guidelines for services for living be customarily provided by a skilled nursing facility, and above the transplant donors, we provide certain donation-related services level of custodial or intermediate care. for a donor, or an individual identified by the Medical Group as a potential donor, whether or not the donor is a member. These A benefit period begins on the date you are admitted to a hospital services must be directly related to a covered transplant for you, or skilled nursing facility at a skilled level of care. A benefit period which may include certain services for harvesting the organ, ends on the date you have not been an inpatient in a hospital tissue, or bone marrow and for treatment of complications. or skilled nursing facility, receiving a skilled level of care, for 60 Our guidelines for donor services are available by calling our consecutive days. A new benefit period can begin only after any Member Service Contact Center.

MEDICAL PLANS | 1-30 • For covered transplant services that you receive, you will pay Coverage for Services Related to “Vision Services” Described the cost share you would pay if the services were not related to in Other Sections a transplant. For example, see “Hospital Inpatient Care” in this For services related to the eye or vision other than services SPD for the cost share that applies for hospital inpatient care. covered under this “Vision Services” section, such as outpatient • We provide or pay for donation-related services for actual or surgery and outpatient prescription drugs, supplies, and potential donors (whether or not they are members) in accord supplements, refer to the applicable heading in this SPD. with our guidelines for donor services. Vision Services Exclusions Coverage for Services Related to “Transplant Services” • Industrial frames Described in Other Sections • Eyeglass lenses and frames Coverage for the following services is described under these • Contact lenses, including fitting and dispensing (except for headings: special contact lenses to treat aphakia or aniridia as described • Outpatient imaging and laboratory (refer to “Outpatient Imaging, under this “Vision Services” section) Laboratory, and Special Procedures”) • Eye exams for the purpose of obtaining or maintaining contact • Outpatient prescription drugs (refer to “Outpatient Prescription lenses Drugs, Supplies, and Supplements”) • Low-vision devices • Outpatient administered drugs (refer to “Outpatient Care”)

Vision Services We do not cover eyeglasses or contact lenses (except for special contact lenses described in this “Vision Services” section). However, we do cover the following: • Routine vision screenings that are preventive care services. • Eye exams for refraction to determine the need for vision correction and to provide a prescription for eyeglass lenses. • Special contact lenses for aniridia and aphakia. We cover the following special contact lenses at Plan Medical Offices or Plan optical sales offices when prescribed by a Plan physician or Plan optometrist: o Up to two medically necessary contact lenses per eye (including fitting and dispensing) in any 12-month period to treat aniridia (missing iris). We will not cover an aniridia contact lens if we provided an allowance toward (or otherwise covered) more than one aniridia contact lens for that eye within the previous 12 months (including when we provided an allowance toward, or otherwise covered, one or more aniridia contact lenses under any other evidence of coverage offered by your Group). o Up to six medically necessary aphakic contact lenses per eye (including fitting and dispensing) per calendar year to treat aphakia (absence of the crystalline lens of the eye) for members through age 9. We will not cover an aphakic contact lens if we provided an allowance toward (or otherwise covered) more than six aphakic contact lenses for that eye during the same calendar year (including when we provided an allowance toward, or otherwise covered, one or more aphakic contact lenses under any other evidence of coverage offered by your Group).

MEDICAL PLANS | 1-31 WHAT THE PLANS DO NOT COVER

As with all medical plans, there are some expenses that are not covered.

Exclusions Under the Anthem EPO, PPO and CDHP Plans

• Administrative Charges – Charges for any of the following: • Complications Directly Related to Cosmetic Services o Failure to keep a scheduled visit; Treatment or Surgery – As determined by the Claims Administrator, these are not covered. This exclusion does not o Completion of claim forms or medical records or reports apply to conditions including, but not limited to: myocardial unless otherwise required by law; infarction, pulmonary embolism, thrombophlebitis, and o Physician or hospital’s stand-by services; exacerbation of co-morbid conditions. o Holiday or overtime rates; • Cosmetic Services/Beautification Procedures – Cosmetic o Membership, administrative, or access fees charged by surgery, reconstructive surgery, pharmacological services, physicians or other providers (examples of administrative fees nutritional regimens or other services for beautification, or include, but are not limited to: fees charged for educational treatment relating to the consequences of, or as a result of, brochures or calling a patient to provide their test results); or cosmetic surgery. This exclusion includes, but is not limited to: surgery to correct gynecomastia and breast augmentation o Specific medical reports including those not directly related to procedures, and otoplasties. Reduction mammoplasty the treatment of the member, e.g., employment or insurance and services for the correction of asymmetry, except physicals, and reports prepared in connection with litigation. when determined to be medically necessary by the Claims • Admissions for Non-Inpatient Services – Admission or Administrator, are not covered. continued hospital or skilled nursing facility stay for medical o This exclusion does not apply to surgery to restore function care or diagnostic studies not medically required on an inpatient if any area has been altered by disease, trauma, congenital/ basis. developmental anomalies, or previous therapeutic processes. • Allergy Services – Specific non-standard allergy services This exclusion does not apply to surgery to correct the results and supplies, including but not limited to: skin titration (Rinkle of injuries that caused the impairment, or as a continuation method), cytotoxicity testing (Bryan’s Test), treatment of non- of a staged reconstruction procedure, or congenital defects specific candida sensitivity, and urine autoinjections. necessary to restore normal bodily functions, including but • Alternative Therapies – Hypnotherapy. Services or supplies not limited to, cleft lip and cleft palate. related to alternative or complementary medicine. Services in o This exclusion does not apply to breast reconstructive this category include, but are not limited to: holistic medicine, surgery. homeopathy, hypnosis, aromatherapy, massage therapy at • Court-Ordered Services – Court-ordered services, or those a salon, reiki therapy, herbal, vitamin or dietary products or required by court order as a condition of parole or probation therapies, naturopathy, thermograph, orthomolecular therapy, unless medically necessary and approved by the Plan. contact reflex analysis, bioenergial synchronization technique (BEST) and iridology study of the iris. This exclusion also applies • Crime and Incarceration – Injuries received while committing to biofeedback, recreational or educational sleep therapy or a crime as well as care required while incarcerated in a federal, other forms of self-care or non-medical self-help training and state or local penal institution or required while in custody of any related diagnostic testing. federal, state or local law enforcement authorities, including work release programs, unless otherwise required by law or • Before Coverage Begins/After Coverage Ends – Services regulation. This exclusion does not apply if you were the victim rendered or supplies provided before coverage begins, i.e., of a crime, including domestic violence. before a member’s effective date, or after coverage ends. • Custodial Care and Rest Care – Custodial care, domiciliary • Biomicroscopy – Biomicroscopy, field charting or aniseikonic care, rest cures, or travel expenses even if recommended investigation. for health reasons by a physician. Inpatient room and board • Comfort and Convenience Items – Personal comfort items charges in connection with a hospital or skilled nursing facility such as those that are furnished primarily for your personal stay primarily for environmental change, physical therapy or comfort or convenience, including those services and supplies treatment of chronic pain. not directly related to medical care, such as guest’s meals and • Daily Room Charges – Daily room charges while the Plan is accommodations, barber services, telephone charges, radio paying for an intensive care, cardiac care, or other special care and television rentals, homemaker services, travel expenses, unit. and take-home supplies. • Dental Care – Dental care and treatment and oral surgery (by • Complications – Complications of non-covered procedures are physicians or dentists) including dental surgery; surgical removal not covered. of impacted teeth; dental appliances; dental prostheses such as crowns, bridges, or dentures; implants; orthodontic care;

MEDICAL PLANS | 1-32 operative restoration of teeth (fillings); dental extractions; • Government Programs – Treatment where payment is made endodontic care; apicoectomies; excision of radicular cysts by any local, state, or federal government (except Medicaid), or or granuloma; treatment of dental caries, gingivitis, or for which payment would be made if the member had applied periodontal disease by gingivectomies or other periodontal for such benefits. Services that can be provided through surgery; vestibuloplasties; alveoplasties; dental procedures a government program for which you as a member of the involving teeth and their bone- or tissue-supporting structures; community are eligible for participation. Such programs include, frenulectomy. Any treatment of teeth, gums or tooth-related but are not limited to, school speech and reading programs. service except otherwise specified as covered in this SPD. • Hair – Hair transplants, hairpieces or wigs (except when • Educational/Behavioral Services – Educational services necessitated by disease), wig maintenance, or prescriptions or and treatment of behavioral disorders, together with services medications related to hair growth. for remedial education including evaluation or treatment of • Health Spa – Expenses incurred at a health spa or similar learning disabilities, minimal brain dysfunctions, developmental facility. and learning disorders, behavioral training, and cognitive rehabilitation. This includes services, treatment or educational • Ineligible Hospital – Any services rendered or supplies testing and training related to behavioral (conduct) problems, provided while you are confined in an ineligible hospital. including but not limited to services for conditions related to • Ineligible Provider – Any services rendered or supplies autistic disease of childhood (except to the same extent that provided while you are a patient or receive services at or from the Plan provides for neurological disorders), hyperkinetic an ineligible provider. syndromes, including attention deficit disorder and attention • Inpatient Rehabilitation Programs – Inpatient rehabilitation deficit hyperactivity disorder, learning disabilities, behavioral in the hospital or hospital-based rehabilitation facility, when the problems, and mental retardation. Special education, including member is medically stable and does not require skilled nursing lessons in sign language to instruct a member, whose ability to care or the constant availability of a physician, or: speak has been lost or impaired, to function without that ability, is not covered. o The treatment is for maintenance therapy; or • Employer or Association Medical/Dental Department – o The member has no restorative potential; or Received from a dental or medical department maintained by o The treatment is for congenital learning or neurological or on behalf of an employer, mutual benefit association, labor disability/disorder; or union, trust or similar person or group. o The treatment is for communication training, educational • Excessive Expenses – Expenses in excess of the Plan’s training or vocational training. Maximum Allowed Amount. • International Services – Non-emergency treatment of chronic • Experimental/Investigative Services – Treatments, illnesses received outside the United States performed without procedures, equipment, drugs, devices or supplies (hereafter preauthorization. Please contact Anthem BCBS for information called “services”) which are, in the Claims Administrator’s about the GlobalCore program for further details. judgment, experimental or investigative for the diagnosis • Maintenance Care – Services which are solely performed to for which the member is being treated. An experimental or preserve the present level of function or prevent regression of investigative service is not made eligible for coverage by the functions for an illness, injury or condition which is resolved or fact that other treatment is considered by a member’s physician stable. to be ineffective or not as effective as the service or that the service is prescribed as the most likely to prolong life. • Marital Counseling – Religious, marital and sex counseling, including services and treatment related to religious counseling, • Family Members – Services rendered by a provider who is marital/relationship counseling and sex therapy. a close relative or member of your household. Close relative means wife or husband, parent or grandparent, child, brother or • Medicare Benefits – Services paid under Medicare or which sister, by blood, marriage (including in-laws) or adoption. would have been paid if the member had applied for Medicare and claimed Medicare benefits. With respect to end-stage renal • Foot Care – Foot care only to improve comfort or appearance, disease (ESRD), Medicare shall be treated as the primary payor routine care of corns, bunions (except capsular or related whether or not the member has enrolled in Medicare Part B. surgery), calluses, toe nails (except surgical removal or For services provided pursuant to a private contract between care rendered as treatment of the diabetic foot or ingrown the member and a provider, for which reimbursement under the toenail), flat feet, fallen arches, weak feet, chronic foot strain, Medicare program is prohibited, as specified in Section 1802 or asymptomatic complaints related to the feet. Coverage is (42 U.S.C. 1395a) of Title XVIII of the Social Security Act. available, however, for medically necessary foot care required as part of the treatment of diabetes and for members with impaired • Never Events – The Plan will not pay for errors in medical care circulation to the lower extremities. that are clearly identifiable, preventable, and serious in their consequences for patients, which indicate a problem exists in • Free Services – Services and supplies for which you have no the safety and credibility of a health care facility. The provider legal obligation to pay, or for which no charge has been made or will be expected to absorb such costs. This exclusion includes, would be made if you had no health insurance coverage. but is not limited to: such errors as operating on the wrong side of the body, operating on the wrong part of the body, using the wrong procedure, or operating on the wrong patient.

MEDICAL PLANS | 1-33 • Non-Covered Services – Any item, service, supply or care not • Sexual Dysfunction – Medical/surgical services or supplies specifically listed as a covered service in this SPD. for treatment of male or female sexual or erectile dysfunctions or inadequacies, including treatment for impotency (except • Not Medically Necessary Services – Care, supplies, or male organic erectile dysfunction) regardless of origin or cause. equipment not medically necessary, as determined by the This exclusion also includes penile prostheses or implants and Claims Administrator, for the treatment of an injury or illness. vascular or artificial reconstruction, prescription drugs, and all This includes, but is not limited to, care which does not meet other procedures and equipment developed for or used in the the Claims Administrator’s medical policy, clinical coverage treatment of impotency, and all related diagnostic testing. guidelines, or benefit policy guidelines. • Sexual or Gender Transformation – Surgical care or medical • Obesity Services – Any services or supplies for the treatment treatment or study related to the modification of gender or sex of obesity, including but not limited to: weight reduction, medical (transgenderism) and related services, or the reversal thereof care or prescription drugs, or dietary control (except as related except as specified as covered services. to covered nutritional counseling). Nutritional supplements, services, supplies and/or nutritional sustenance products (food) • Shoes and Orthotics – Shoe inserts, orthotics (except when related to enteral feeding except when it’s the sole means of prescribed by a physician for diseases of the foot or systemic nutrition. Food supplements. Services for inpatient treatment diseases that affect the foot such as diabetes when deemed of bulimia, anorexia or other eating disorders which consist medically necessary), and orthopedic shoes (except when an primarily of behavior modification, diet and weight monitoring orthopedic shoe is joined to a brace). and education. Any services or supplies that involve weight • Spider Veins – Treatment of telangiectatic dermal veins (spider reduction as the main method of treatment, including medical, veins) by any method. psychiatric care, or counseling. Weight loss programs include but are not limited to: commercial weight loss programs • Supplies or Equipment (Including Durable Medical (Weight Watchers, Jenny Craig, and LA Weight Loss), nutritional Equipment) Not Medically Necessary – Supplies or supplements, appetite suppressants, and supplies of a similar equipment not medically necessary for the treatment of an injury nature. This exclusion does not apply to morbid obesity surgery or illness. Non-covered supplies are inclusive of but not limited to: when approved by the Plan. o Band-aids, tape, non-sterile gloves, thermometers, heating • Prescription Drugs – Any prescription drugs purchased at a pads, hot water bottles, home enema equipment, sterile water retail or home delivery (mail service) pharmacy. and bed boards; • Private Duty Nursing – For private duty nursing services o Household supplies, including but not limited to: deluxe except when provided through the “Home Care” benefit. equipment, such as motor-driven chairs or bed, electric stair chairs or elevator chairs; • Private Rooms – Private room, except as specified as covered services. o The purchase or rental of exercise cycles, physical fitness, exercise and massage equipment, ultraviolet/tanning • Research Screenings – For examinations related to research equipment; screenings, unless required by law. o Water purifiers, hypo-allergenic pillows, mattresses or • Reversal of Sterilization – Services related to or performed in waterbeds, whirlpool, spa or swimming pools; conjunction with reverse sterilization. o Escalators, elevators, ramps, stair glides, emergency alert • Routine Examinations – Routine physical examinations, equipment, handrails, heat appliances, improvements made screening procedures, and immunizations necessitated by to a member’s house or place of business and adjustments employment, foreign travel or participation in school athletic made to vehicles; programs, recreational camps or retreats or any insurance program which are not called for by known symptoms of o Air conditioners, humidifiers, dehumidifiers or purifiers; illness or injury except those which may be specifically listed as o Rental or purchase of equipment if you are in a facility which covered in this SPD. provides such equipment; and • Safe Surroundings – Care furnished to provide a safe o Other items of equipment that the Claims Administrator surrounding, including the charges for providing a surrounding determines do not meet the listed criteria. free from exposure that can worsen the disease or injury. • Therapy Services – Services for outpatient therapy or • Sclerotherapy – Sclerotherapy for the treatment of varicose rehabilitation other than those specifically listed as covered veins of the lower extremities including ultrasonic guidance for in this SPD. Excluded forms of therapy include, but are not needle and/or catheter placement and subsequent ultrasound limited to: vestibular rehabilitation, primal therapy, chelation studies to assess the results of ongoing treatment of varicose therapy, rolfing, psychodrama, megavitamin therapy, purging, veins of the lower extremities with sclerotherapy. bioenergetic therapy, cognitive therapy, electromagnetic • Services Not Specified as Covered – No benefits are therapy, salabrasion, chemosurgery and other such skin available for services that are not specifically described as abrasion procedures associated with the removal of scars, covered services in this SPD. This exclusion applies even if your tattoos, actinic changes and/or which are performed as a physician orders the service. treatment for acne.

MEDICAL PLANS | 1-34 • Thermograms – Thermograms and thermography. devices to correct vision or advice on such service. Orthoptic training is covered. This exclusion does not apply for initial • Transplant Services – The following services and supplies prosthetic lenses or sclera shells following intraocular surgery, or rendered in connection with organ/tissue/bone marrow for soft contact lenses due to a medical condition, e.g. diabetes. transplants: • Vision Surgeries – Related to radial keratotomy or o Surgical or medical care related to animal organ transplants, keratomileusis or excimer laser photo refractive keratectomy. animal tissue transplants (except for porcine heart valves), Surgery, services, or supplies for the surgical correction of artificial organ transplants or mechanical organ transplants; nearsightedness and/or astigmatism or any other correction of o Donation-related services or supplies – including search, vision due to a refractive problem. associated with organ acquisition and procurement; • Waived Fees – Any portion of a provider’s fee or charge which o Chemotherapy with autologous, allogenic or syngenic is ordinarily due from a member but which has been waived. If a hematopoietic stem cells transplant for treatment of any type provider routinely waives (does not require the member to pay) of cancer not specifically named as covered; and a deductible or out-of-pocket amount, the Claims Administrator o Any transplant not specifically listed as covered. will calculate the actual provider fee or charge the fee or charge by the amount waived. • Transportation – Transportation provided by other than a state-licensed professional ambulance service, and ambulance • War/Military Duty – Any disease or injury resulting from a war, services that are not medically necessary. Transportation to declared or not, or any military duty or any release of nuclear another area for medical care is also excluded except as stated energy. Also excluded are charges for services directly related as covered under the “Ambulance Service” section. Ambulance to military service provided or available from the Veterans’ transportation from the hospital to the home is not covered. Administration or military facilities except as required by law. • Travel Costs and Mileage – For mileage costs or other travel • Workers’ Compensation – Care for any condition or injury expenses, except as authorized by the Claims Administrator, on recognized or allowed as a compensable loss through any behalf of the Employer. Workers’ Compensation, occupational disease or similar law. If Workers’ Compensation Act benefits are not available to you, • Vision Care – Vision care services and supplies, including then this exclusion does not apply. This exclusion applies if but not limited to: eyeglasses, contact lenses, and related you receive the benefits in whole or in part. This exclusion also examinations and services. Analysis of vision or the testing of applies whether or not you claim the benefits or compensation. its acuity except as otherwise indicated in this SPD. Service or It also applies whether or not you recover from any third party.

Exclusions Under the Kaiser HMO Plan

Certain Exams and Services Cosmetic Services Physical exams and other services (1) required for obtaining or Services that are intended primarily to change or maintain your maintaining employment or participation in employee programs, appearance, except that this exclusion does not apply to any of (2) required for insurance or licensing, or (3) on court order or the following: required for parole or probation. This exclusion does not apply • Services covered under “Reconstructive Surgery” in this SPD. if a Plan physician determines that the services are medically necessary. • The following devices covered under “Prosthetic and Orthotic Devices” in this SPD: testicular implants implanted as part of a covered reconstructive surgery, breast prostheses needed Chiropractic Services after a mastectomy, and prostheses to replace all or part of an Chiropractic services and the services of a chiropractor, unless external facial body part. Note: Having a mental health condition you have coverage for supplemental chiropractic services as does not make cosmetic services become reconstructive described in an amendment to this Evidence of Coverage. surgery.

Conception by Artificial Means Custodial Care Except for artificial insemination covered under "Infertility Services" Assistance with activities of daily living (for example: walking, in this SPD, all other services related to conception by artificial getting in and out of bed, bathing, dressing, feeding, toileting, and means, such as ovum transplants, gamete intrafallopian transfer taking medicine). This exclusion does not apply to assistance with (GIFT), semen and eggs (and services related to their procurement activities of daily living that is provided as part of covered hospice, and storage), in vitro fertilization (IVF), and zygote intrafallopian skilled nursing facility, or inpatient hospital care. transfer (ZIFT).

MEDICAL PLANS | 1-35 Dental and Orthodontic Services Items and Services That Are Not Health Care Items and Services Dental and orthodontic services such as X-rays, appliances, implants, services provided by dentists or orthodontists, dental For example, Kaiser does not cover: services following accidental injury to teeth, and dental services • Teaching manners and etiquette; resulting from medical treatment such as surgery on the jawbone and radiation treatment. • Teaching and support services to develop planning skills such as daily activity planning and project or task planning; This exclusion does not apply to services covered under “Dental and Orthodontic Services” in this SPD. • Items and services for the purpose of increasing academic knowledge or skills; Disposable Supplies • Teaching and support services to increase intelligence; Disposable supplies for home use, such as bandages, gauze, • Academic coaching or tutoring for skills such as grammar, math, tape, antiseptics, dressings, Ace-type bandages, and diapers, and time management; underpads, and other incontinence supplies. This exclusion does • Teaching you how to read, whether or not you have dyslexia; not apply to disposable supplies covered under “Durable Medical Equipment for Home Use,” “Home Health Care,” “Hospice Care,” • Educational testing; “Ostomy and Urological Supplies,” and “Outpatient Prescription • Teaching art, dance, horse riding, music, play or swimming, Drugs, Supplies, and Supplements” in this SPD. except that this exclusion for “teaching play” does not apply to services that are part of a behavioral health therapy treatment Experimental or Investigational Services plan and covered under “Behavioral Health Treatment for Pervasive Developmental Disorder or Autism” in this SPD; A service is experimental or investigational if we, in consultation with the Medical Group, determine that one of the following is true: • Teaching skills for employment or vocational purposes; • Generally accepted medical standards do not recognize it as • Vocational training or teaching vocational skills; safe and effective for treating the condition in question (even if it • Professional growth courses; has been authorized by law for use in testing or other studies on human patients). • Training for a specific job or employment counseling; and • It requires government approval that has not been obtained • Aquatic therapy and other water therapy, except that this when the service is to be provided. This exclusion does not exclusion for aquatic therapy and other water therapy does not apply to any of the following: apply to therapy services that are part of a physical therapy treatment plan and covered under “Home Health Care,” o Experimental or investigational services when an “Hospice Services,” or “Rehabilitative and Habilitative Services” investigational application has been filed with the federal in this SPD. Food and Drug Administration (FDA) and the manufacturer or other source makes the services available to you or Kaiser Items and Services to Correct Refractive Defects of the Eye Permanente through an FDA-authorized procedure, except that we do not cover services that are customarily provided Items and services (such as eye surgery or contact lenses to by research sponsors free of charge to enrollees in a clinical reshape the eye) for the purpose of correcting refractive defects of trial or other investigational treatment protocol. the eye such as myopia, hyperopia, or astigmatism. o Services covered under “Services in Connection with a Massage Therapy Clinical Trial” in this SPD. Massage therapy, except that this exclusion does not apply to Please refer to the “Dispute Resolution” section for information therapy services that are part of a physical therapy treatment plan about independent medical review related to denied requests for and covered under “Home Health Care,” “Hospice Services,” or experimental or investigational services. “Rehabilitative and Habilitative Services” in this SPD.

Hair Loss or Growth Treatment Oral Nutrition Items and services for the promotion, prevention, or other Outpatient oral nutrition, such as dietary supplements, herbal treatment of hair loss or hair growth. supplements, weight loss aids, formulas, and food are excluded. This exclusion does not apply to amino acid–modified products Intermediate Care and elemental dietary enteral formula covered under “Outpatient Care in a licensed intermediate care facility. This exclusion does Prescription Drugs, Supplies, and Supplements” in this SPD. not apply to services covered under “Durable Medical Equipment,” “Home Health Care,” and “Hospice Care” in this SPD.

MEDICAL PLANS | 1-36 Residential Care Services Not Approved by the Federal Food and Drug Care in a facility where you stay overnight, except that this Administrationn exclusion does not apply when the overnight stay is part of Drugs, supplements, tests, vaccines, devices, radioactive covered care in a hospital, a skilled nursing facility, inpatient materials, and any other services that by law require federal Food respite care covered in the “Hospice Care” section, a licensed and Drug Administration (FDA) approval in order to be sold in the facility providing crisis residential services covered under “Inpatient US but are not approved by the FDA. This exclusion applies to Psychiatric Hospitalization and Intensive Psychiatric Treatment services provided anywhere, even outside the U.S. Programs” in the “Mental Health Services” section, or a licensed This exclusion does not apply to any of the following: facility providing transitional residential recovery services covered under the “Chemical Dependency Services” section. • Services covered under the “Emergency Services and Urgent Care” section that you receive outside the U.S. Routine Foot Care Items and Services • Experimental or investigational services when an investigational application has been filed with the FDA and the manufacturer Routine foot care items and services that are not medically or other source makes the services available to you or Kaiser necessary. Permanente through an FDA-authorized procedure, except that we do not cover services that are customarily provided by research sponsors free of charge to enrollees in a clinical trial or other investigational treatment protocol. • Services covered under “Services in Connection with a Clinical Trial” in this SPD.

PRESCRIPTION DRUG COVERAGE

You will be provided with prescription drug coverage through Express Scripts, unless you elect medical coverage through Kaiser Permanente HMO. The amount you pay for your prescriptions depends on whether you: • Choose generic or brand-name drugs • Purchase your prescription at a participating or non-participating pharmacy • Purchase your prescription at a retail pharmacy or through the mail-order service The program costs you less when you use generic drugs and the mail-order service.

Prescription Drug Benefits for the EPO and PPO Plans

Prescription Drugs Plan Pays You Pay

Retail (30-day supply)

• Generic drugs 70% 30% ($10 min / $20 max)

• Brand-name drugs 70% 30% ($20 min / $80 max)

Mail-Order (90-day supply)

• Generic drugs 75% 25% ($20 min / $40 max)

• Brand-name drugs 75% 25% ($40 min / $160 max)

Annual Out-Of-Pocket Maximum: $1,650 (employee only); $3,300 (employee + 1 dependent); and $4,950 (employee + 2 or more dependents) per calendar year in the EPO and PPO plans. Your out-of-pocket costs for all covered prescription drugs apply to this limit.

MEDICAL PLANS | 1-37 Prescription Drug Benefits for the CDHP Plan

Prescription Drugs Plan Pays You Pay

Retail (30-day supply)

• Generic drugs 80%, after the deductible 20%, after the deductible*

• Brand-name drugs 80%, after the deductible 20%, after the deductible*

Mail-Order (90-day supply)

• Generic drugs 80%, after the deductible 20%, after the deductible*

• Brand-name drugs 80%, after the deductible 20%, after the deductible*

Annual Deductible and Out-Of-Pocket Maximum: Under the CDHP, medical and prescription drug expenses apply toward the deductible and out-of-pocket maximum. You must meet the deductible for medical services and prescription drugs before the Plan pays for the cost of services. Once you have reached the combined out-of-pocket maximum, all additional services are covered at 100%. Information on the combined medical-prescription drug deductible and out-of- pocket maximum can be found on page 1-4. *Preventive Drugs: Prescription drugs that can help keep you from developing a health condition are called preventive drugs. If you are taking a drug on Express Scripts’ Expanded Preventive Drug List, the deductible will be waived and you will only pay 20% of the cost of the medication. Visit www.express-scripts.com or call 1-800-711-0917 for more information.

How It Works

Using a Network Pharmacy You can obtain a claim form on Express Scripts’ website at www.express-scripts.com. Simply request the number of claim When you use a network retail pharmacy or the mail-order service, forms that you need to be mailed to your home, complete the the Plan pays a percentage of the cost of the prescription drug. forms and submit them to Express Scripts for reimbursement. You are responsible for the rest, but there is a flat-dollar minimum and maximum amount that you will have to pay, protecting you against extremely high-priced drugs. Generic Prescription Drug Policy If you use a network pharmacy, there are no claim forms to submit Your prescriptions will be filled automatically with a generic drug, if and no further cost incurred by you other than your coinsurance available, unless your provider specifically requests a brand-name payment. If you do not present your combined Anthem and drug and writes “dispense as written” on your prescription. The Express Scripts ID card at the network pharmacy, you will need Food and Drug Administration requires that generic drugs have the to file a claim with Express Scripts for reimbursement. The same active ingredients and take the same form (e.g., pill or liquid) reimbursement will be 100% less your coinsurance payment. as brand-name drugs. If you request that a prescription be filled with a brand-name drug when a generic substitute is available Express Scripts has a large national network of retail pharmacies, and the brand-name is not required by your provider, then you will so even if you are away from home, you are likely to find a network pay the generic coinsurance amount for the prescription plus the pharmacy. To find a network pharmacy near you, go to difference in cost between the brand-name drug and the available www.express-scripts.com or call 1-855-778-1424. generic drug. To find a network pharmacy on Express Scripts’ website at www.express-scripts.com, you will need to register as a Prescription Drug Utilization Management Programs member. Once you are registered, you can log into the website Express Scripts offers programs that help you better manage both using your email address and password to locate a pharmacy. your medication and costs, and helps ensure your medication is covered, as follows: Using an Out-of-Network Pharmacy • Step Therapy – Step therapy is a program for people who take If you do not use a network pharmacy, you will pay the full cost prescription drugs regularly to treat a medical condition, such as of the prescription, and you will need to file a claim with Express arthritis, asthma or high blood pressure. It allows you and your Scripts for reimbursement. You will be reimbursed at the price family to receive the affordable treatment you need and helps that would have been charged at a network pharmacy, less the your organization continue with prescription drug coverage. applicable coinsurance amount.

MEDICAL PLANS | 1-38 • Drug Quantity Management – Drug quantity management, Mail-Order Service also known as DQM, is a program in your pharmacy benefit that’s designed to make the use of prescription drugs safer and The mail-order service is best suited for individuals taking more affordable. It provides the medication you need for your maintenance medications or those prescriptions taken on a good health and the health of your family, while making sure you regular basis over an extended period of time. This service will receive them in the amount—or quantity—considered safe. fill covered prescriptions for a maximum supply of 90 days and • Prior Authorization – Prior authorization is a program that provides coverage as noted in the chart on page 1-37 and 1-38. monitors certain prescription drugs and their costs to get you To use the mail-order service, you can obtain forms from Express the medication you require while monitoring your safety and Scripts’ customer service by phone at 1-855-778-1424 or from reducing costs. Similar to health care plans that approve a Express Scripts’ website at www.express-scripts.com. medical procedure before it’s done to ensure the necessity of the procedure, if you’re prescribed a certain medication, that Complete the entire form, including: drug may need a prior authorization. This program makes sure • Member Information and Order Information as requested on the you’re getting a prescription that is suitable for the intended use form and covered by your pharmacy benefit. For more information on • The Patient Profile section for each new prescription which medications require prior authorization, contact Express Scripts. • The Health, Allergy & Medication Questionnaire (HMQ) • Medical Channel Management – Specialty medications Mail the form with all the original prescription(s) or refill slip(s) are drugs that are used to treat complex conditions and and your coinsurance payment. You may either pay for your illnesses, such as cancer, growth hormone deficiency, prescription with a credit card or include a check for the estimated hemophilia, hepatitis C, immune deficiency, multiple sclerosis, payment amount. You can obtain an estimate by contacting and rheumatoid arthritis. These drugs usually require special Express Scripts, either by phone or via the internet. If the final cost handling, special administration, or intensive patient monitoring. is not the same as the estimate, Express Scripts will send you Medications used to treat diabetes are not considered specialty a bill for the difference when they send you your prescription or medications. Whether they are administered by a health credit your account. care professional, self-injected, or taken by mouth, specialty Prescriptions are delivered, postage-paid, directly to your home medications require an enhanced level of service. address within two weeks from the date you mail your order. If you Specialty pharmaceuticals are covered under your prescription need to start taking your prescription immediately, then you should drug and/or medical benefit program. ask your provider for one 30-day retail prescription along with a prescription for the mail-order service that includes refills. You can The Prescription Drug Plan requires that certain specialty send prescriptions to the mail-order service for up to a 90-day medications be accessed through Accredo Health Group, Inc., supply. an Express Scripts specialty pharmacy. You will not be covered for those specialty medications through the Medical Plan. The Mail-order refills can be obtained by phone or via the internet. list of medications subject to the program is available by calling the number on your prescription drug ID card. If you are currently Voluntary Smart90@Walgreens using specialty medications affected by this requirement and A 90-day supply of medication may be filled at a Walgreens you do not obtain them through Accredo, you will be required or Duane Reade pharmacy at mail-order pricing. When you to transfer those prescriptions to Accredo. If you continue to do so, you will pay less than the cost of three separate 30-day purchase your medications from your doctor or another pharmacy, prescriptions. It will also eliminate any additional trips to the you will be responsible for their full cost. When you order a pharmacy. For more information, please contact Express Scripts’ covered specialty medication through Accredo, your out-of-pocket customer service by phone at 1-855-778-1424 or visit Express cost will be limited to the applicable mail-order co-payment. Scripts’ website at www.express-scripts.com. In order to provide you with sufficient time to transfer your prescriptions from your medical coverage to your pharmacy benefit, you may appeal through the appropriate appeals process for coverage for one additional prescription from your current provider. In addition, if you have an extenuating medical condition that prevents you from transitioning to the pharmacy benefit, you may be granted an override and continue on your medical benefit as long as there is a reviewed medical reason not to transition. The list of medications subject to this specialty drug program may change, and you should check the list before you fill a prescription for a specialty medication. To confirm whether a medication you take is part of the specialty program, you may call the number on your prescription drug ID card.

MEDICAL PLANS | 1-39 Preventive Medications Under the CDHP Plan • Vaccines • Certain vitamins and fluoride supplement Traditionally, CDHP plans carry a deductible for medical services and medications. However, your Plan allows you to fill • Blood pressure lowering medications certain preventive medications without a deductible. If you take • Cholesterol lowering medications a preventive medication, you will pay 20% of the cost of the • Certain antiviral agents medication, even if you have not reached your deductible. • Agents to prevent osteoporosis To promote good health and help prevent the need for costly care, your Plan offers a number of preventive medications for just Please note that you must have an authorized prescription and a coinsurance payment. Examples of preventive medications are the prescription must be filled at an in-network retail pharmacy or listed below: through the Express Scripts Pharmacy in order for the medication to qualify as preventive under your Plan. To find out more, visit • Smoking cessation agents www.express-scripts.com or call 1-855-778-1424. • Weight loss agents

Prescription Drug Coverage for the Kaiser Permanente HMO Plan

Under the Kaiser Permanente HMO Plan, all prescription drug Limitations On Prescription Drug Coverage coverage is provided directly through Kaiser Permanente. You pay: The Company reserves the right to put in programs or limitations • $10 for generic drugs to encourage the use of over-the-counter drugs or to limit certain classifications of drugs in accordance with standard prescribing • $30 for brand-name drugs guidelines. The above co-payments are for up to a 30-day supply purchased at a retail pharmacy. You can use the mail-order service to purchase up to a 100-day supply at two times the retail co-payments listed above.

What Is Not Covered Under Prescription Drug Coverage

Most prescription drugs are covered under the Medical Plans. • Drugs labeled “Caution – limited by federal law to investigational However, some types of prescription drugs are not covered, use” or experimental drugs, even though a charge is made to including, but not limited to: the individual • Non-federal legend drugs • Medication for which the cost is recoverable under any Workers’ Compensation or occupational disease law or any state or • Non-systemic contraceptives or implants governmental agency, or medication furnished by any other • Some injectable medications drug or medical service for which no charge is made to the • Dental fluoride products member • Glucowatch/sensors • Medication which is to be taken by or administered to an individual, in whole or in part, while he or she is a patient in • Ostomy supplies a licensed hospital, rest home, sanitarium, extended care • Mifeprex facility, skilled nursing facility, convalescent facility, nursing • Therapeutic devices or appliances home or similar institution which operates on its premises, or allows to be operated on its premises, a facility for dispensing • Drugs whose sole purpose is to promote or stimulate hair pharmaceuticals growth (i.e., Rogaine®, Propecia®) or for cosmetic purposes only (i.e., Renova®, Vaniqa®, Tri-Luma®, Botox-Cosmetic®, Solage®, • Any prescription refilled in excess of the number of refills Avage®, Epiquin®). specified by the physician, or any refill dispensed after one year from the physician’s original order • Allergy serums • Charges for the administration or injection of any drug • Biologicals, immunization agents or vaccines • Blood or blood plasma products

MEDICAL PLANS | 1-40 HEALTH ADVOCATE

Health Advocate is an independent patient advocacy service that • Help when faced with a serious illness or injury helps you navigate the complexities of the health care system. It • Help with insurance claims and billing inquiries is designed to help you handle health care-related issues that you or your family members may experience. This service will connect There are times when it is vital for you to have accurate information you with a Personal Health Advocate, typically a registered nurse. and someone that you can trust to help you through the clinical choices and administration process. Health Advocate is objective This service is available to you no matter which Medical Plan you and independent and will provide you with the help that you need elect or whether you decline coverage. There is no cost to you to while maintaining your privacy and confidentiality. use this service. Your entire family is able to use Health Advocate’s services. In Health Advocate can assist you with the following services: addition to you, your spouse or children, your parents and the • Finding providers that best meet your or your family’s medical parents of your spouse are covered under this program. needs Health Advocate does not provide medical coverage, cannot • Providing referrals to services for your elderly parents obtain insurance benefits for you or your family, and is not responsible for administration of any ERISA benefits. • Scheduling timely appointments, especially with specialist physicians You can find more information about Health Advocate at www.healthadvocate.net, or by calling 1-866-695-8622.

APPEALING CLAIMS

Filing Health Claims Under the Plan For pre-service claims involving urgent/concurrent care, you may obtain an expedited appeal. You or your authorized Under the Plan, you may file claims for Plan benefits and appeal representative may request it orally or in writing. All necessary adverse claim determinations. Any reference to “you” in this information, including the Claims Administrator’s decision, “Claims,” “Appeals,” and “External Review” section includes you can be sent between the Claims Administrator and you by and your authorized representative. An “authorized representative” telephone, facsimile or other similar method. To file an appeal for is a person you authorize, in writing, to act on your behalf. The a claim involving urgent/concurrent care, you or your authorized Plan will also recognize a court order giving a person authority to representative must contact the Claims Administrator at the submit claims on your behalf. In the case of an urgent care claim, number shown on your identification card and provide at least the a health care professional with knowledge of your condition may following information: always act as your authorized representative. • The identity of the claimant; • The date(s) of the medical service; Anthem Appeals • The specific medical condition or symptom; You have the right to appeal an adverse benefit determination • The provider’s name; (claim denial or rescission of coverage). You or your authorized • The service or supply for which approval of benefits was sought; representative must file your appeal within 180 calendar days and after you are notified of the denial or rescission. You will have the opportunity to submit written comments, documents, • Any reasons why the appeal should be processed on a more records, and other information supporting your claim. The Claims expedited basis. Administrator’s review of your claim will take into account all All other requests for appeals should be submitted in writing by information you submit, regardless of whether it was submitted or the member or the member’s authorized representative, except considered in the initial benefit determination. where the acceptance of oral appeals is otherwise required by The Claims Administrator shall offer a single mandatory level of the nature of the appeal (e.g., urgent care). You or your authorized appeal and an additional voluntary second level of appeal which representative must submit a request for review to: may be a panel review, independent review, or other process Anthem BlueCross and BlueShield consistent with the entity reviewing the appeal. The time frame ATTN: Appeals allowed for the Claims Administrator to complete its review is P.O. Box 105568 dependent upon the type of review involved (e.g., pre-service, Atlanta, GA 30348 concurrent, post-service, urgent, etc.).

MEDICAL PLANS | 1-41 You must include your Member Identification Number when If you appeal a post-service claim, the Claims Administrator submitting an appeal. will notify you of the outcome of the appeal within 60 days after receipt of your request for appeal. Upon request, the Claims Administrator will provide, without charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim. “Relevant” Appeal Denial means that the document, record, or other information: If your appeal is denied, that denial will be considered an • Was relied on in making the benefit determination; or adverse benefit determination. The notification from the Claims Administrator will include all of the information set forth in the • Was submitted, considered, or produced in the course of above section entitled “Anthem Appeals.” making the benefit determination; or • Demonstrates compliance with processes and safeguards to Voluntary Second-Level Appeals ensure that claim determinations are made in accordance with If you are dissatisfied with the Plan’s mandatory first-level appeal the terms of the Plan, applied consistently for similarly situated decision, a voluntary second-level appeal may be available. If you claimants; or would like to initiate a second-level appeal, please write to the • Is a statement of the Plan’s policy or guidance about the address listed above. Voluntary appeals must be submitted within treatment or benefit relative to your diagnosis. 60 calendar days of the denial of the first-level appeal. You are The Claims Administrator will also provide you, free of charge, not required to complete a voluntary second-level appeal prior to with any new or additional evidence considered, relied upon, or submitting a request for an independent external review. generated in connection with your claim. In addition, before you receive an adverse benefit determination on review based on a External Review new or additional rationale, the Claims Administrator will provide If the outcome of the mandatory first-level appeal is adverse to you you, free of charge, with the rationale. and it was based on medical judgment, you may be eligible for an independent external review pursuant to federal law. For Out-of-State Appeals You must submit your request for external review to the Claims You have to file provider appeals with the Host Plan. This means Administrator within four months of the notice of your final internal providers must file appeals with the same Plan to which the claim adverse determination. was filed. A request for an external review must be in writing unless the Claims Administrator determines that it is not reasonable to How Your Appeal Will Be Decided require a written statement. You do not have to re-send the When the Claims Administrator considers your appeal, the Claims information that you submitted for internal appeal. However, you Administrator will not rely upon the initial benefit determination are encouraged to submit any additional information that you think or, for voluntary second-level appeals, on the earlier appeal is important for review. determination. The review will be conducted by an appropriate For pre-service claims involving urgent/concurrent care, you may reviewer who did not make the initial determination and who does proceed with an expedited external review without filing an internal not work for the person who made the initial determination. A appeal or while simultaneously pursuing an expedited appeal voluntary second-level review will be conducted by an appropriate through the Claims Administrator’s internal appeal process. You or reviewer who did not make the initial determination or the first-level your authorized representative may request it orally or in writing. appeal determination and who does not work for the person who All necessary information, including the Claims Administrator’s made the initial determination or first-level appeal determination. decision, can be sent between the Claims Administrator and If the denial was based in whole or in part on a medical judgment, you by telephone, facsimile or other similar method. To proceed including whether the treatment is experimental, investigational, with an expedited external review, you or your authorized or not medically necessary, the reviewer will consult with a health representative must contact the Claims Administrator at the care professional who has the appropriate training and experience number shown on your identification card and provide at least the in the medical field involved in making the judgment. This health following information: care professional will not be one who was consulted in making an • The identity of the claimant; earlier determination or who works for one who was consulted in making an earlier determination. • The date(s) of the medical service; • The specific medical condition or symptom; Notification of the Outcome of the Appeal • The provider’s name; If you appeal a claim involving urgent/concurrent care, the • The service or supply for which approval of benefits was sought; Claims Administrator will notify you of the outcome of the appeal and as soon as possible, but not later than 72 hours after receipt of your request for appeal. • Any reasons why the appeal should be processed on a more expedited basis. If you appeal any other pre-service claim, the Claims Administrator will notify you of the outcome of the appeal within 30 days after receipt of your request for appeal.

MEDICAL PLANS | 1-42 All other requests for external review should be submitted in Requirement to File an Appeal Before Filing a Lawsuit writing unless the Claims Administrator determines that it is not No lawsuit or legal action of any kind related to a benefit decision reasonable to require a written statement. Such requests should may be filed by you in a court of law or in any other forum, unless be submitted by you or your authorized representative to: it is commenced within three years of the Plan’s final decision Anthem BlueCross and BlueShield on the claim or other request for benefits. If the Plan decides ATTN: Appeals an appeal is untimely, the Plan’s latest decision on the merits of P.O. Box 105568 the underlying claim or benefit request is the final decision date. Atlanta, GA 30348 You must exhaust the Plan’s internal appeals procedure but not including any voluntary level of appeal, before filing a lawsuit or You must include Your Member Identification Number when taking other legal action of any kind against the Plan. If your health submitting an appeal. benefit Plan is sponsored by your Employer and subject to the This is not an additional step that you must take in order to fulfill Employee Retirement Income Security Act of 1974 (ERISA) and your appeal procedure obligations described above. Your decision your appeal as described above results in an adverse benefit to seek external review will not affect your rights to any other determination, you have a right to bring a civil action under Section benefits under this health care plan. There is no charge for you 502(a) of ERISA. to initiate an independent external review. The external review decision is final and binding on all parties except for any relief The Claims Administrator reserves the right to modify the available through applicable state laws or ERISA. policies, procedures and time frames in this section upon further clarification from Department of Health and Human Services and Department of Labor.

Kaiser Appeals

Post-Service Claims and Appeals • A court-appointed guardian may file for his or her ward, except that the ward must appoint the court-appointed guardian as This "Post-Service Claims and Appeals" section explains how to authorized representative if the ward has the legal right to file a claim for payment or reimbursement for services that you control release of information that is relevant to the claim; have already received. Please use the procedures in this section in the following situations: • A court-appointed conservator may file for his or her conservatee; and • You have received emergency services, post-stabilization care, out-of-area urgent care, or emergency ambulance services from • An agent under a currently effective health care proxy, to the a non-Plan provider and you want us to pay for the services; extent provided under state law, may file for his or her principal. • You have received services from a non-Plan provider that we Authorized representatives must be appointed in writing using did not authorize (other than emergency services, out-of-area either our authorization form or some other form of written urgent care,post-stabilization care, or emergency ambulance notification. The authorization form is available from the Member services) and you want us to pay for the services; or Services Department at a Plan facility, on our website at www.kaiserpermanente.org, or by calling our Member Service • You want to appeal a denial of an initial claim for payment. Contact Center. Your written authorization must accompany the Please follow the procedures under "Grievances" in the "Dispute claim. You must pay the cost of anyone you hire to represent or Resolution" section in the following situations: help you. • You want us to cover services that you have not yet received; Supporting Documents • You want us to continue to cover an ongoing course of covered treatment; or You can request payment or reimbursement orally or in writing. Your request for payment or reimbursement, and any related • You want to appeal a written denial of a request for services that documents that you give us, constitute your claim. require prior authorization (as described under "Medical Group Authorization Procedure for Certain Referrals"). To file a claim in writing for emergency services, post-stabilization care, out-of-area urgent care, and emergency ambulance Who May File services, please use our claim form. You can obtain a claim form in the following ways: The following people may file claims: • By visiting our website at www.kaiserpermanente.org • You may file for yourself; • In person from any Member Services office at a Plan Facility and • You can ask a friend, relative, or attorney to file a claim for from Plan Providers you by appointing him or her in writing as your authorized representative; • By calling our Member Service Contact Center at 1-800-464-4000 • A parent may file for his or her child under age 18, except that (TTY users call 1-800-777-1370 or 711) the child must appoint the parent as authorized representative if the child has the legal right to control release of information that is relevant to the claim;

MEDICAL PLANS | 1-43 Claim Forms for All Other Services Submitting a Claim for All Other Services To file a claim in writing for all other services, you may use our If you have received services from a non-Plan provider that we did Complaint or Benefit Claim/Request form. You can obtain this not authorize (other than emergency services, post-stabilization form in the following ways: care, out-of-area urgent care, or emergency ambulance services), • By visiting our website at www.kaiserpermanente.org then as soon as possible after you receive the services, you must file your claim in one of the following ways: • In person from any Member Services office at a Plan Facility and from Plan Providers • By delivering your claim to a Member Services office at a Plan Facility (please refer to Your Guidebook for addresses) • By calling our Member Service Contact Center at 1-800-464-4000 (TTY users call 1-800-777-1370 or 711) • By mailing your claim to a Member Services office at a Plan Facility (please refer to Your Guidebook for addresses) Other Supporting Information • By calling our Member Service Contact Center at When you file a claim, please include any information that clarifies 1-800-464-4000 (TTY users call 1-800-777-1370 or 711) or supports your position. For example, if you have paid for • By visiting our website at www.kaiserpermanente.org services, please include any bills and receipts that support your Please call our Member Service Contact Center if you need help claim. To request that we pay a non-Plan provider for services, filing your claim. include any bills from the non-Plan provider. If the non-Plan provider states that they will file the claim, you are still responsible After We Receive Your Claim for making sure that we receive everything we need to process the request for payment. When appropriate, we will request medical We will send you an acknowledgement letter within five days after records from Plan providers on your behalf. If you tell us that you we receive your claim. After we review your claim, we will respond have consulted with a non-Plan provider and are unable to provide as follows: copies of relevant medical records, we will contact the provider to • If we have all the information we need we will send you a written request a copy of your relevant medical records. We will ask you decision within 30 days after we receive your claim. We may to provide us a written authorization so that we can request your extend the time for making a decision for an additional 15 days records. if circumstances beyond our control delay our decision, if we If you want to review the information that we have collected notify you within 30 days after we receive your claim. regarding your claim, you may request, and we will provide without • If we need more information, we will ask you for the information charge, copies of all relevant documents, records, and other before the end of the initial 30-day decision period. We will information. You also have the right to request any diagnosis send our written decision no later than 15 days after the date and treatment codes and their meanings that are the subject of we receive the additional information. If we do not receive the your claim. To make a request, you should follow the steps in the necessary information within the time frame specified in our written notice sent to you about your claim. letter, we will make our decision based on the information we have within 15 days after the end of that time frame. Initial Claims • If we pay any part of your claim, we will subtract applicable To request that we pay a provider (or reimburse you) for services cost share from any payment we make to you or the non-Plan that you have already received, you must file a claim. If you have provider. You are not responsible for any amounts beyond any questions about the claims process, please call our Member your cost share for covered emergency services. If we deny Service Contact Center. your claim (if we do not agree to pay for all the services you requested other than the applicable cost share), our letter will Submitting a Claim for Emergency Services, explain why we denied your claim and how you can appeal. Post-Stabilization Care, Out-of-Area Urgent Care, • If you later receive any bills from the non-Plan provider for and Emergency Ambulance Services covered services (other than bills for your cost share), please call If you have received emergency services, post-stabilization care, our Member Service Contact Center for assistance. out-of-area urgent care, or emergency ambulance services from a non-Plan provider, then as soon as possible after you received Member Service Contact Center: toll-free 1-800-464-4000 the services, you must file your claim by mailing a completed claim (TTY users call 1-800-777-1370 or 711) form and supporting information to the following address: 24 hours a day, 7 days a week (except closed holidays, and closed Kaiser Foundation Health Plan, Inc. after 5 p.m. the day after Thanksgiving, after 5 p.m. on Christmas Claims Department Eve, and after 5 p.m. on New Year's Eve). P.O. Box 7004 Downey, CA 90242-7004 Please call our Member Service Contact Center if you need help filing your claim.

MEDICAL PLANS | 1-44 Appeals Also, you may give testimony in writing or by telephone. Please send your written testimony to the address mentioned If we did not decide fully in your favor on a claim for emergency in our acknowledgement letter, sent to you within five days services, post-stabilization care, out-of-area urgent care, or after we receive your appeal. To arrange to give testimony by emergency ambulance services from a non-Plan provider and you telephone, you should call the phone number mentioned in our want to appeal our decision, you may submit your appeal in one of acknowledgement letter. We will add the information that you the following ways: provide through testimony or other means to your appeal file and • By mailing your appeal to the Claims Department at the we will review it without regard to whether this information was following address: filed or considered in our initial decision regarding your request Kaiser Foundation Health Plan, Inc. for services. You have the right to request any diagnosis and Special Services Unit treatment codes and their meanings that are the subject of your P.O. Box 23280 claim. Oakland, CA 94623 We will share any additional information that we collect in the • By calling our Member Service Contact Center at course of our review and we will send it to you. If we believe that 1-800-464-4000 (TTY users call 1-800-777-1370 or 711) your request should not be granted, before we issue our final If we did not decide fully in your favor on a claim for services decision letter, we will also share with you any new or additional from a non-Plan provider that we did not authorize (other than reasons for that decision. We will send you a letter explaining the emergency services, post-stabilization care, out-of-area urgent additional information and/or reasons. Our letters about additional care, or emergency ambulance services), you may submit your information and new or additional rationales will tell you how you appeal in one of the following ways: can respond to the information provided if you choose to do so. If you do not respond before we must issue our final decision letter, • By visiting our website at www.kaiserpermanente.org that decision will be based on the information in your appeal file. • By mailing your appeal to the Member Services Department at a We will send you a resolution letter within 30 days after we receive Plan facility (please refer to Your Guidebook for addresses) your appeal. If we do not decide in your favor, our letter will explain • In person at any Member Services office at a Plan facility and to why and describe your further appeal rights. Plan providers • By calling our Member Service Contact Center at External Review 1-800-464-4000 (TTY users call 1-800-777-1370 or 711) You must exhaust our internal claims and appeals procedures When you file an appeal, please include any information that before you may request external review unless we have failed to clarifies or supports your position. If you want to review the comply with the claims and appeals procedures described in this information that we have collected regarding your claim, you may “Post-Service Claims and Appeals” section. For information about request, and we will provide without charge, copies of all relevant external review process, see “Independent Medical Review (IMR)” documents, records, and other information. To make a request, in the “Dispute Resolution” section. you should contact our Member Service Contact Center. Additional Review Additional information regarding a claim for services from a non- Plan provider that we did not authorize (other than emergency You may have certain additional rights if you remain dissatisfied services, post-stabilization care, out-of-area urgent care, or after you have exhausted our internal claims and appeals emergency ambulance services): If we initially denied your request, procedure, and if applicable, external review: you must file your appeal within 180 days after the date you • If your Group’s benefit plan is subject to the Employee received our denial letter. You may send us information including Retirement Income Security Act (ERISA), you may file a civil comments, documents, and medical records that you believe action under Section 502(a) of ERISA. To understand these support your claim. If we asked for additional information and you rights, you should check with your Group or contact the did not provide it before we made our initial decision about your Employee Benefits Security Administration (part of the US claim, then you may still send us the additional information so that Department of Labor) at 1-866-444-EBSA (1-866-444-3272). we may include it as part of our review of your appeal. Please send all additional information to the address or fax mentioned in • If your Group’s benefit plan is not subject to ERISA (for example, your denial letter. most state or local government plans and church plans), you may have a right to request review in state court Dispute Resolution. We are committed to providing you with quality care and with a timely response to your concerns. You can discuss your concerns with our Member Services representatives at most Plan facilities, or you can call our Member Service Contact Center.

MEDICAL PLANS | 1-45 Grievances Authorized representatives must be appointed in writing using either our authorization form or some other form of written This “Grievances” section describes our grievance procedure. A notification. The authorization form is available from the Member grievance is any expression of dissatisfaction expressed by you Services Department at a Plan facility, on our website at or your authorized representative through the grievance process. www.kaiserpermanente.org, or by calling our Member Service If you want to make a claim for payment or reimbursement for Contact Center. Your written authorization must accompany the services that you have already received from a non-Plan provider, grievance. You must pay the cost of anyone you hire to represent please follow the procedure in the “Post-Service Claims and or help you. Appeals” section.

Here are some examples of reasons you might file a grievance: How to File • You are not satisfied with the quality of care you received; You can file a grievance orally or in writing. Your grievance must • You received a written denial of services that require prior explain your issue, such as the reasons why you believe a decision authorization from the Medical Group and you want us to cover was in error or why you are dissatisfied about services you the services; received. • Your treating physician has said that services are not medically To file a grievance in writing, please use our Complaint or Benefit necessary and you want us to cover the service;s Claim/Request form. You can obtain the form in the following ways: • You were told that services are not covered and you believe that the services should be covered; • By visiting our website at www.kaiserpermanente.org • You want us to continue to cover an ongoing course of covered • In person from any Member Services office at a Plan facility treatmen;t and from Plan providers • You are dissatisfied with how long it took to get services, • By calling our Member Service Contact Center at including getting an appointment, in the waiting room, or in the 1-800-464-4000 (TTY users call 1-800-777-1370 or 711) exam room; You must file your grievance within 180 days following the incident • You want to report unsatisfactory behavior by providers or staff, or action that is subject to your dissatisfaction. You may send us or dissatisfaction with the condition of a facility; and information including comments, documents, and medical records that you believe support your grievance. • We terminated your membership and you disagree with that termination. Standard Procedure The following people may file a grievance: You must file your grievance in one of the following ways: • You may file for yourself; • By completing a Complaint or Benefit Claim/Request form at a • You can ask a friend, relative, or attorney to file a grievance Member Services office at a Plan facility for you by appointing him or her in writing as your authorized representative; • By mailing your grievance to a Member Services office at a Plan facility • A parent may file for his or her child under age 18, except that the child must appoint the parent as authorized representative if • By calling our Member Service Contact Center at the child has the legal right to control release of information that 1-800-464-4000 (TTY users call 1-800-777-1370 or 711) is relevant to the grievance; • By completing the grievance form on our website at • A court-appointed guardian may file for his or her ward, except www.kaiserpermanente.org that the ward must appoint the court-appointed guardian as Please call our Member Service Contact Center if you need help authorized representative if the ward has the legal right to filing a grievance. control release of information that is relevant to the grievance We will send you an acknowledgement letter within five days • A court-appointed conservator may file for his or her after we receive your grievance. We will send you a resolution conservatee letter within 30 days after we receive your grievance. If you are • An agent under a currently effective health care proxy, to the requesting services, and we do not decide in your favor, our letter extent provided under state law, may file for his or her principal will explain why and describe your further appeal rights. • Your physician may act as your authorized representative If you want to review the information that we have collected with your verbal consent to request an urgent grievance as regarding your grievance, you may request, and we will provide described under “Urgent procedure” in this “Grievances” without charge, copies of all relevant documents, records, and section other information. To make a request, you should contact our Member Service Contact Center.

MEDICAL PLANS | 1-46 Urgent Procedure We will add the information that you provide through testimony or other means to your grievance file and we will consider it in If you want us to consider your grievance on an urgent basis, our decision regarding your pre-service request for medically please tell us that when you file your grievance. necessary services. You must file your urgent grievance in one of the following ways: We will share any additional information that we collect in the • By calling our Expedited Review Unit toll-free at 1-888-987-7247 course of our review and we will send it to you. If we believe (TTY users call 1-800-777-1370 or 711) that your request should not be granted, before we issue our • By mailing a written request to: decision letter, we will also share with you any new or additional Kaiser Foundation Health Plan, Inc. reasons for that decision. We will send you a letter explaining the Expedited Review Unit additional information and/or reasons. Our letters about additional P.O. Box 23170 information and new or additional rationales will tell you how you Oakland, CA 94623-0170 can respond to the information provided if you choose to do so. If your grievance is urgent, the information will be provided to you • By faxing a written request to our Expedited Review Unit toll- orally and followed in writing. If you do not respond before we free at 1-888-987-2252 must issue our final decision letter, that decision will be based on • By visiting a Member Services office at a Plan facility (please the information in your grievance file. refer to Your Guidebook for addresses) We will decide whether your grievance is urgent or non-urgent Additional Information Regarding Appeals of Written Denials unless your attending health care provider tells us your grievance for Services That Require Prior Authorization is urgent. If we determine that your grievance is not urgent, we will You must file your appeal within 180 days after the date you use the procedure described under “Standard Procedure” in this received our denial letter. You have the right to request any “Grievances” section. Generally, a grievance is urgent only if one of diagnosis and treatment codes and their meanings that are the the following is true: subject of your appeal. • Using the standard procedure could seriously jeopardize your Also, you may give testimony in writing or by telephone. Please life, health, or ability to regain maximum function; send your written testimony to the address mentioned in our • Using the standard procedure would, in the opinion of a acknowledgement letter. To arrange to give testimony by physician with knowledge of your medical condition, subject telephone, you should call the phone number mentioned in our you to severe pain that cannot be adequately managed without acknowledgement letter. We will add the information that you extending your course of covered treatment; provide through testimony or other means to your appeal file and we will consider it in our decision regarding your appeal. • A physician with knowledge of your medical condition determines that your grievance is urgent; and We will share any additional information that we collect in the course of our review and we will send it to you. If we believe If we respond to your grievance on an urgent basis, we will give that your request should not be granted, before we issue our you oral notice of our decision as soon as your clinical condition decision letter, we will also share with you any new or additional requires, but not later than 72 hours after we received your reasons for that decision. We will send you a letter explaining the grievance. We will send you a written confirmation of our decision additional information and/or reasons. Our letters about additional within three days after we received your grievance. information and new or additional rationales will tell you how you If we do not decide in your favor, our letter will explain why and can respond to the information provided if you choose to do so. If describe your further appeal rights. your appeal is urgent, the information will be provided to you orally Note: If you have an issue that involves an imminent and serious and followed in writing. threat to your health (such as severe pain or potential loss of life, If you do not respond before we must issue our final decision limb, or major bodily function), you can contact the California letter, that decision will be based on the information in your appeal Department of Managed Health Care at any time at file. 1-888-HMO-2219 (TDD 1-877-688-9891) without first filing a grievance with us. If you want to review the information that we Department of Managed Health Care Complaints have collected regarding your grievance, you may request, and The California Department of Managed Health Care is responsible we will provide without charge, copies of all relevant documents, for regulating health care service plans. If you have a grievance records, and other information. To make a request, you should against your health Plan, you should first telephone your health contact our Member Service Contact Center. Plan toll-free at 1-800-464-4000 (TTY users call 1-800-777-1370 or 711) and use your health Plan’s grievance process before Additional Information Regarding Pre-Service Requests for contacting the department. Utilizing this grievance procedure does Medically Necessary Services not prohibit any potential legal rights or remedies that may be You may give testimony in writing or by telephone. Please available to you. send your written testimony to the address mentioned in our If you need help with a grievance involving an emergency, a acknowledgement letter. To arrange to give testimony by grievance that has not been satisfactorily resolved by your health telephone, you should call the phone number mentioned in our Plan, or a grievance that has remained unresolved for more than acknowledgement letter. 30 days, you may call the department for assistance.

MEDICAL PLANS | 1-47 You may also be eligible for an Independent Medical Review (IMR). Experimental or Investigational Denials If you are eligible for IMR, the IMR process will provide an impartial If we deny a service because it is experimental or investigational, review of medical decisions made by a health plan related to the we will send you our written explanation within three days after medical necessity of a proposed service or treatment, coverage we received your request. We will explain why we denied the decisions for treatments that are experimental or investigational service and provide additional dispute resolution options. Also, we in nature and payment disputes for emergency or urgent medical will provide information about your right to request Independent services. The department also has a toll-free telephone number Medical Review if we had the following information when we made (1-888-HMO-2219) and a TDD line (1-877-688-9891) for the our decision: hearing and speech impaired. The department’s website www.hmohelp.ca.gov has complaint forms, IMR application • Your treating physician provided us a written statement that you forms and instructions online. have a life-threatening or seriously debilitating condition and that standard therapies have not been effective in improving your condition, or that standard therapies would not be appropriate, Independent Medical Review (IMR) or that there is no more beneficial standard therapy we cover If you qualify, you or your authorized representative may have than the therapy being requested. “Life-threatening” means your issue reviewed through the Independent Medical Review diseases or conditions where the likelihood of death is high (IMR) process managed by the California Department of Managed unless the course of the disease is interrupted, or diseases or Health Care. The Department of Managed Health Care determines conditions with potentially fatal outcomes where the end point which cases qualify for IMR. This review is at no cost to you. If you of clinical intervention is survival. “Seriously debilitating” means decide not to request an IMR, you may give up the right to pursue diseases or conditions that cause major irreversible morbidity. some legal actions against us. • If your treating physician is a Plan physician, he or she You may qualify for IMR if all of the following are true: recommended a treatment, drug, device, procedure, or other • One of these situations applies to you: therapy and certified that the requested therapy is likely to be more beneficial to you than any available standard therapies and o You have a recommendation from a provider requesting included a statement of the evidence relied upon by the Plan medically necessary services. physician in certifying his or her recommendation. o You have received emergency services, emergency • You (or your non–Plan physician who is a licensed, and either ambulance services, or urgent care from a provider who a board-certified or board-eligible, physician qualified in the determined the services to be medically necessary. area of practice appropriate to treat your condition) requested o You have been seen by a Plan provider for the diagnosis or a therapy that, based on two documents from the medical and treatment of your medical condition. scientific evidence, as defined in California Health and Safety • Your request for payment or services has been denied, Code Section 1370.4(d), is likely to be more beneficial for you modified, or delayed based in whole or in part on a decision that than any available standard therapy. The physician’s certification the services are not medically necessary. included a statement of the evidence relied upon by the physician in certifying his or her recommendation. We do not • You have filed a grievance and we have denied it or we haven’t cover the services of the non–Plan provider. made a decision about your grievance within 30 days (or three days for urgent grievances). Note: You can request IMR for experimental or investigational denials at any time without first filing a grievance with us. The Department of Managed Health Care (DMHC) may waive the requirement that you first file a grievance with us in extraordinary Binding Arbitration and compelling cases, such as severe pain or potential loss of life, limb, or major bodily function. If we have denied your grievance, For all claims subject to this “Binding Arbitration” section, both you must submit your request for an IMR within six months of the Claimants and Respondents give up the right to a jury or court date of our written denial. However, the DMHC may accept your trial and accept the use of binding arbitration. Insofar as this request after six months if they determine that circumstances “Binding Arbitration” section applies to claims asserted by Kaiser prevented timely submission. Permanente Parties, it shall apply retroactively to all unresolved claims that accrued before the effective date of this Evidence of You may also qualify for IMR if the service you requested has been Coverage. Such retroactive application shall be binding only on the denied on the basis that it is experimental or investigational as Kaiser Permanente Parties. described under “Experimental or Investigational Denials.” If the Department of Managed Health Care determines that your case is eligible for IMR, it will ask us to send your case to the Department of Managed Health Care’s Independent Medical Review organization. The Department of Managed Health Care will promptly notify you of its decision after it receives the Independent Medical Review organization’s determination. If the decision is in your favor, we will contact you to arrange for the service or payment.

MEDICAL PLANS | 1-48 Scope of Arbitration Rules of Procedure Any dispute shall be submitted to binding arbitration if all of the Arbitrations shall be conducted according to the Rules for Kaiser following requirements are met: Permanente Member Arbitrations overseen by the Office of the Independent Administrator (“Rules of Procedure”) developed by • The claim arises from or is related to an alleged violation of any the Office of the Independent Administrator in consultation with duty incident to or arising out of or relating to this Evidence of Kaiser Permanente and the Arbitration Oversight Board. Copies of Coverage or a Member Party’s relationship to Kaiser Foundation the Rules of Procedure may be obtained from our Member Service Health Plan, Inc. (Health Plan), including any claim for medical or Contact Center. hospital malpractice (a claim that medical services or items were unnecessary or unauthorized or were improperly, negligently, or incompetently rendered), for premises liability, or relating to the Initiating Arbitration coverage for, or delivery of, services or items, irrespective of the Claimants shall initiate arbitration by serving a Demand for legal theories upon which the claim is asserted. Arbitration. The Demand for Arbitration shall include the basis • The claim is asserted by one or more Member Parties against of the claim against the Respondents; the amount of damages one or more Kaiser Permanente Parties or by one or more the Claimants seek in the arbitration; the names, addresses, Kaiser Permanente Parties against one or more Member and telephone numbers of the Claimants and their attorney, if Parties. any; and the names of all Respondents. Claimants shall include in the Demand for Arbitration all claims against Respondents • Governing law does not prevent the use of binding arbitration that are based on the same incident, transaction, or related to resolve the claim. Members enrolled under this Evidence circumstances. of Coverage thus give up their right to a court or jury trial, and instead accept the use of binding arbitration except that the Serving Demand for Arbitration following types of claims are not subject to binding arbitration: Health Plan, Kaiser Foundation Hospitals, KP Cal, LLC, The o Claims within the jurisdiction of the Small Claims Court. Permanente Medical Group, Inc., Southern California Permanente o Claims subject to a Medicare appeal procedure as applicable Medical Group, The Permanente Federation, LLC, and The to Kaiser Permanente Senior Advantage Members. Permanente Company, LLC, shall be served with a Demand for o Claims that cannot be subject to binding arbitration under Arbitration by mailing the Demand for Arbitration addressed to that governing law. As referred to in this “Binding Arbitration” Respondent in care of: section, “Member Parties” include: Kaiser Foundation Health Plan, Inc. a. A Member. Legal Department 393 E. Walnut St. b. A Member’s heir, relative, or personal representative. Pasadena, CA 91188 c. Any person claiming that a duty to him or her arises Service on that Respondent shall be deemed completed when from a Member’s relationship to one or more Kaiser received. All other Respondents, including individuals, must be Permanente Parties. served as required by the California Code of Civil Procedure for a “Kaiser Permanente Parties” include: civil action. • Kaiser Foundation Health Plan, Inc. Filing Fee • Kaiser Foundation Hospitals The Claimants shall pay a single, nonrefundable filing fee of $150 • KP Cal, LLC per arbitration payable to “Arbitration Account” regardless of the • The Permanente Medical Group, Inc. number of claims asserted in the Demand for Arbitration or the number of Claimants or Respondents named in the Demand • Southern California Permanente Medical Group for Arbitration. Any Claimant who claims extreme hardship may • The Permanente Federation, LLC request that the Office of the Independent Administrator waive • The Permanente Company, LLC the filing fee and the neutral arbitrator’s fees and expenses. A Claimant who seeks such waivers shall complete the Fee Waiver • Any Southern California Permanente Medical Group or The Form and submit it to the Office of the Independent Administrator Permanente Medical Group physician and simultaneously serve it upon the Respondents. The Fee • Any individual or organization whose contract with any of the Waiver Form sets forth the criteria for waiving fees and is available organizations identified above requires arbitration of claims by calling our Member Service Contact Center. brought by one or more Member Parties • Any employee or agent of any of the foregoing “Claimant” refers to a Member Party or a Kaiser Permanente Party who asserts a claim as described above. “Respondent” refers to a Member Party or a Kaiser Permanente Party against whom a claim is asserted.

MEDICAL PLANS | 1-49 Number of Arbitrators General Provisions The number of arbitrators may affect the Claimants’ responsibility A claim shall be waived and forever barred if (1) on the date for paying the neutral arbitrator’s fees and expenses (see the Rules the Demand for Arbitration of the claim is served, the claim, if of Procedure). asserted in a civil action, would be barred as to the Respondent served by the applicable statute of limitations, (2) Claimants fail to If the Demand for Arbitration seeks total damages of $200,000 pursue the arbitration claim in accord with the Rules of Procedure or less, the dispute shall be heard and determined by one neutral with reasonable diligence, or (3) the arbitration hearing is not arbitrator, unless the parties otherwise agree in writing that the commenced within five years after the earlier of (a) the date the arbitration shall be heard by two party arbitrators and one neutral Demand for Arbitration was served in accord with the procedures arbitrator. The neutral arbitrator shall not have authority to award prescribed herein, or (b) the date of filing of a civil action based monetary damages that are greater than $200,000. If the Demand upon the same incident, transaction, or related circumstances for Arbitration seeks total damages of more than $200,000, the involved in the claim. A claim may be dismissed on other grounds dispute shall be heard and determined by one neutral arbitrator by the neutral arbitrator based on a showing of a good cause. If a and two party arbitrators, one jointly appointed by all Claimants party fails to attend the arbitration hearing after being given due and one jointly appointed by all Respondents. Parties who are notice thereof, the neutral arbitrator may proceed to determine the entitled to select a party arbitrator may agree to waive this right. If controversy in the party’s absence. all parties agree, these arbitrations will be heard by a single neutral arbitrator. The California Medical Injury Compensation Reform Act of 1975 (including any amendments thereto), including sections Payment of Arbitrators’ Fees and Expenses establishing the right to introduce evidence of any insurance or disability benefit payment to the patient, the limitation on recovery Health Plan will pay the fees and expenses of the neutral arbitrator for noneconomic losses, and the right to have an award for under certain conditions as set forth in the Rules of Procedure. future damages conformed to periodic payments, shall apply In all other arbitrations, the fees and expenses of the neutral to any claims for professional negligence or any other claims as arbitrator shall be paid one-half by the Claimants and one-half by permitted or required by law. the Respondents. If the parties select party arbitrators, Claimants shall be responsible for paying the fees and expenses of their Arbitrations shall be governed by this “Binding Arbitration” party arbitrator and Respondents shall be responsible for paying section, Section 2 of the Federal Arbitration Act, and the California the fees and expenses of their party arbitrator. Code of Civil Procedure provisions relating to arbitration that are in effect at the time the statute is applied, together with Costs the Rules of Procedure, to the extent not inconsistent with this “Binding Arbitration” section. In accord with the rule that applies Except for the aforementioned fees and expenses of the neutral under Sections 3 and 4 of the Federal Arbitration Act, the right arbitrator, and except as otherwise mandated by laws that apply to arbitration under this “Binding Arbitration” section shall not to arbitrations under this “Binding Arbitration” section, each party be denied, stayed, or otherwise impeded because a dispute shall bear the party’s own attorneys’ fees, witness fees, and other between a Member Party and a Kaiser Permanente Party involves expenses incurred in prosecuting or defending against a claim both arbitrable and nonarbitrable claims or because one or regardless of the nature of the claim or outcome of the arbitration. more parties to the arbitration is also a party to a pending court action with a third party that arises out of the same or related transactions and presents a possibility of conflicting rulings or findings.

MEDICAL PLANS | 1-50 OTHER IMPORTANT INFORMATION

Important information, such as your rights as a Plan participant and other administrative details, can be found in the General and Administrative Information chapter of this SPD. Information about claims appeals can also be found in that section and following this chapter.

Patient Protection Notices

The Claims Administrator generally allows the designation of a primary care provider. You have the right to designate any primary care provider who participates in the Claims Administrator’s network and who is available to accept you or your family members. For information on how to select a primary care provider, and for a list of the participating primary care providers, contact the Claims Administrator at the number on the back of your ID card. For children, you may designate a pediatrician as the primary care provider. You do not need prior authorization from the Claims Administrator or from any other person (including a primary care provider) in order to obtain access to obstetrical or gynecological care from a health care professional in the Claims Administrator’s network who specializes in obstetrics or gynecology. The health care professional, however, may be required to comply with certain procedures, including obtaining prior authorization for certain services, following a pre-approved treatment plan, or procedures for making referrals. For a list of participating health care professionals who specialize in obstetrics or gynecology, contact the Claims Administrator at the number on the back of your ID card.

MEDICAL PLANS | 1-51 Appendix: The CDHP and Health Savings Account (HSA)

With the Consumer-Directed Health Plan (CDHP), you and the How the HSA Works company share the cost of health care expenses. This coverage has two components, the CDHP Medical and Prescription Drug You can contribute pre-tax dollars to your HSA. Your Employer * Plan and an individually owned Health Savings Account (HSA), may also contribute dollars to your account. The Company, in that work together to help you and your family take control of your its sole discretion, will determine annually whether it will make health care dollars and decisions. contributions to your HSA. This decision and the amount of the contribution will be communicated during annual enrollment. In What Is an HSA? the event that the Company elects to contribute to the HSA, by enrolling in the CDHP you authorize the Company to open a HSA The HSA is an innovative approach to health benefits that puts account on your behalf. you in charge of the money you spend for health care services You can use the dollars to pay for your annual deductible or and helps you get the most out of your company-sponsored coinsurance for health services incurred during the course of the health coverage. With the HSA, you have flexibility and control in year by you and your dependents. You can pay for expenses for choosing the health care services you and your family members your spouse and dependent children even if they are not covered receive and how to pay for these services. by your CDHP. Only eligible health care expenses as defined by the IRS may be reimbursed from a HSA. For more information visit Who Is Eligible for an HSA? http://www.irs.gov/publications/p502/. Unused dollars can be saved or invested and automatically roll The Internal Revenue Service (IRS) and the U.S. Treasury have over to the following year. You pay no federal taxes or state taxes** established the eligibility requirements for an HSA. To be eligible on your HSA contributions when they go into your account and you: you pay no federal taxes or state taxes* on your HSA distributions • Must be covered by a CDHP; when you use funds for qualified medical, dental and vision expenses. As an individually owned account, you can even • Must not be covered by any other health insurance (except accumulate HSA funds until and through retirement, and keep another CDHP, specified disease or hospital indemnity your account if you change jobs. insurance, accident, disability, dental care, vision care or long-term care plan); Generally, you cannot use the money to pay for medical insurance premiums, except under specific circumstances, including: • Must not be entitled to Medicare benefits (generally age 65, but certain exceptions apply); and • Any health plan coverage while receiving federal or state unemployment benefits • Must not be eligible to be claimed as a dependent on someone else’s tax return. • COBRA continuation coverage after leaving employment with a company that offers health insurance coverage If you are enrolled in the CDHP, you will be eligible to enroll in the HSA plan to contribute on a pre-tax basis for your out-of-pocket • Qualified long-term care insurance health expenses. You will not be eligible to enroll in the health care • Medicare premiums and out-of-pocket expenses, including Flexible Spending Account as described in Chapter 6. Employees deductibles, co-pays, and coinsurance for: enrolled in the CDHP may elect to enroll in the Dependent Care Flexible Spending Account as described in Chapter 7. o Part A (hospital and inpatient services) * Information on the HSA is included only for convenience. The HSA is not subject to o Part B (physician and outpatient services) ERISA and does not receive its protections. o Part C (Medicare HMO and PPO plans) o Part D (prescription drugs) In the event that you use your HSA to pay for services that are not qualified health care expenses, you may be subject to a 20% tax. However, when you turn 65, any remaining funds can be used—without tax penalties—for general retirement expenses, but are subject to income tax. Please consult your tax professional or Health Equity, the HSA Trustee, for any questions on the tax implications of using HSA funds for non-qualified expenses. ** Except in New Jersey, California or Alabama, where interest or other earnings earned from a Health Savings Account are considered taxable in the year earned. Please consult your tax advisor for further information about the taxability of HSAs in these states.

MEDICAL PLANS | 1-52 HSA Contribution Limits

For 2018, contributions can be made to your HSA up to the following amounts:

Contributions to Your HSA

Individual Coverage $3,450

Family Coverage $6,900

Catch-Up Contribution You may contribute an additional $1,000 beginning in the year in which you turn 55.

Note: These limits apply to all combined contributions from any source, except rollover funds, and are subject to change.

HSA Fees and Expenses

As an active employee enrolled in a CDHP, you will not be responsible for monthly account fees for your HSA. However, Health Equity, our HSA trustee, will charge you a $1.00 monthly statement fee if you have an available balance and do not elect to receive your statements electronically. Go green and save money by receiving an email notification when your monthly account statement is available online through the Health Equity member portal. Please note that if you leave the Company, you will be responsible for the paying monthly account fees. Additional fees and expenses may be incurred, such as fees for certain investments and services provided by Health Equity. Please contact Health Equity at 877-713-7712 or www.healthequity.com for more information and a current list of fees and expenses.

MEDICAL PLANS | 1-53 1A Medical Coverage During Retirement CONTENTS

...... Page Introduction...... 1A-1

Eligibility...... 1A-1

Enrollment and Effective Date of Coverage...... 1A-2

Pre-Medicare Medical Coverage...... 1A-3

Coverage for Medicare-Eligible Retirees and Dependents...... 1A-3

Prescription Drug Coverage...... 1A-3 • Features...... 1A-4 • Co-payments...... 1A-4

Dental Coverage...... 1A-5

Paying for Retiree Medical and Dental Coverage...... 1A-5 • Sharing the Premium Cost...... 1A-5 • An Example – Retiree Medical Cost Sharing...... 1A-6

Continuation of Coverage for Surviving Spouse...... 1A-6

Termination of Retiree Coverage...... 1A-6

Questions/Contact Information...... 1A-7

Other Important Information...... 1A-7

MEDICAL COVERAGE DURING RETIREMENT INTRODUCTION

You and your enrolled dependents may be eligible to continue your Signature Select medical coverage into your retirement years if you retire from the Company and meet certain eligibility and enrollment requirements. The type of medical coverage available upon retirement depends on whether you (or your enrolled dependents) are eligible for Medicare. The provisions in this Summary Plan Description (“SPD”) may not apply to you if you did not retire from the Company or meet the eligibility requirements. You can verify your eligibility for retiree coverage with your Benefits Department or local Human Resources Representative.

ELIGIBILITY

If you were hired or rehired by Bertelsmann, Inc., Arvato Systems North America, Inc., FremantleMedia North America, Inc., RTL NY, Inc., or Stern Magazine Corporation (together “the Company”) on or prior to December 31, 2008, you will be eligible to continue medical and dental coverage during your retirement, if you meet all of the following requirements: (a) You retire from the Company or affiliated Bertelsmann company that offers this retiree coverage at age 55 or over1; (b) You have at least ten (10) years of service; (c) You were employed by Bertelsmann, Inc., Arvato Systems North America, Inc., FremantleMedia North America, Inc., RTL NY, Inc. or Stern Magazine Corporation on or before December 31, 2008 and were employed by the Company at the time of your retirement; (d) The sum of your age plus your years of service as of your retirement date equals or exceeds 75, in accordance with the following chart:

Minimum Required Total Age at Retirement Years of Service at Retirement (Age+Service) 55 20 75 56 19 75 57 18 75 58 17 75 59 16 75 60 15 75 61 14 75 62 13 75 63 12 75 64 11 75 Age 65 or over 10 75

Your years of service are determined using the same rules as under the Bertelsmann 401(k) Savings Plan. Please see the Bertelsmann 401(k) Savings Plan chapter in this SPD for more information. Your years of service may also include any pre-Bertelsmann service with other companies acquired by Bertelsmann.2

Transfers Rehires If you meet the eligibility criteria stated above and were later If you were hired on or before December 31, 2008 and terminated transferred to any other affiliated Bertelsmann companies2 and are from a Bertelsmann Company, either voluntarily or involuntarily, employed by the Company at the time of your retirement, you will and are later rehired by the Company, you will be eligible for retiree continue to be eligible for this retiree coverage. coverage if you retire from the Company at age 55 or over1, have Employees that were hired on or after January 1, 2018 by at least ten (10) years of service, and the sum of your age plus your Bertelsmann Accounting Services, Inc. that later transfer to or years of service as of your retirement date equals or exceeds 75. were rehired by any other affiliated Bertelsmann companies2 are If you are rehired as an active employee after you have retired not eligible to participate in this retiree coverage in the future. from the Company, any Signature Select retiree coverage for you and/or your dependent(s) will be suspended when you or

1 If you become totally and permanently disabled before age 55, you will be eligible for Signature Select retiree coverage upon termination of employment if you have completed at least 20 years of service with the Company. If you terminate employment for any other reason prior to age 55 and/or before completing the required years of service, coverage will not be available (whether or not you have an entitlement to a pension benefit from the Company). 2 For these purposes, affiliated companies are those that meet the definition of an Affiliated Company under the Bertelsmann 401(k) Savings Plan.

MEDICAL COVERAGE DURING RETIREMENT | 1A-1 your dependent, as applicable, become an active employee. You cannot receive medical coverage intended for both active ENROLLMENT AND EFFECTIVE employees and retirees at the same time. Once you cease employment with the Company, you will be able to elect the retiree DATE OF COVERAGE coverage that is available at that time. Special circumstances If eligible, you may elect: may apply in this situation; please check with your local Human Resources Representative or Benefits Department. • Medical, prescription drug, and Dental coverage • Medical and prescription drug only Acquired Companies • Medical coverage only If you were hired by the Company in connection with an • Prescription drug only or acquisition that occurred on or after December 31, 2008, you are not eligible for retiree coverage, even if you received prior service • Dental coverage only. credit from the acquired company. You may elect Medical coverage only if you were covered under a Signature Select Medical plan immediately prior to your All Other Retirees retirement. Similarly, you may elect Dental coverage only if you If you do not meet the eligibility requirements as described were covered under a Signature Select Dental plan immediately above, you are not eligible to continue medical coverage into your prior to your retirement. If you are over 65 you may also elect a retirement years. Medical plan separately from a prescription drug plan. To elect this retiree coverage for yourself and any eligible Eligible Dependents dependents, you must enroll within 31 days after your last date of active employment with the Company. In the event of your death, If you elect Signature Select retiree coverage, you may also elect your dependents, if eligible, must enroll within 31 days after your to continue the medical coverage for any eligible dependents death. (spouse and/or children) that were enrolled in Signature Select If you are involuntarily terminated with severance and are eligible medical coverage immediately prior to your retirement. for COBRA continuation of medical coverage with a Company- Once retired, you cannot add additional dependents to your provided subsidy, you and any eligible dependents may defer coverage. (An exception may apply for a dependent spouse your enrollment in retiree coverage within 31 days from one of who continues working and has coverage through their the following events: i) your termination date, ii) the end of your employer. Please see the section “Enrollment and Effective subsidized COBRA period, iii) or you become eligible for Medicare Date of Coverage” for more details.) If you remove your eligible while still on subsidized COBRA. dependents from coverage you will not be able to enroll them at a If you enroll prior to your retirement date or within 31 days future date. thereafter, your coverage as a retiree will begin as of your retirement date (i.e., your coverage as an active employee will be Eligible dependents include: continued into retirement, or, if you are eligible for Medicare, you • Your spouse can enroll in Medicare supplemental coverage and/or Medicare • Your dependent children up to age 26, including your (or your prescription drug coverage as described later in this chapter). spouse’s): However, if you do not enroll before the enrollment deadline (i.e., o Natural children 31 days after your retirement date), your coverage will terminate as o Legally adopted children (or placed for adoption) of your last date of active employment, and you will no longer be eligible for retiree coverage through the Company. Any dependent o Foster children (placed through an authorized agency) that is not enrolled during your initial eligibility cannot be added o Stepchildren later, unless described below. If you later remove a dependent o Children for whom you are the legal guardian from coverage, you cannot add them to the Plan on a future date. Disabled dependent children can be covered beyond age 26 if disabled before their 26th birthday (and were covered under Working Spouses Signature Select medical coverage or another medical plan) A special rule applies for your spouse if he or she is working and immediately prior to your retirement. Proof of the child’s disability has medical coverage through his or her employer at the time must be provided within 31 days after the child’s 26th birthday, of your retirement (“Working Spouse”). A Working Spouse is and also from time to time upon request by the Plan Administrator. eligible to be enrolled in dependent coverage under Signature Occasionally, you may be asked for proof of dependent status for Select retiree coverage even though he or she was not enrolled in your enrolled dependents. Failure to timely provide satisfactory Signature Select medical coverage at the time of your retirement. proof may result in retroactive termination of coverage, and you In addition, you may enroll your Working Spouse in dependent may be required to reimburse the Plan for any benefits paid for coverage under Signature Select retiree coverage at a later an ineligible dependent’s expenses. The Plan may also take legal time—within 31 days of the Working Spouse’s retirement date action against you or the ineligible dependent. (“Working Spouse’s retirement date”)—which is the date the Working Spouse next terminates employment after your death. If you die during this deferral period, your Working Spouse may be

MEDICAL COVERAGE DURING RETIREMENT | 1A-2 eligible for Signature Select retiree coverage provided he or she enrolls within 31 days after the date of your death or within 31 days PRESCRIPTION of your Working Spouse’s retirement date. DRUG COVERAGE PRE-MEDICARE MEDICAL Prescription Drug Coverage If You Are Not COVERAGE Medicare-Eligible If you (or your dependents) are not eligible for Medicare, the When a retiree or covered dependent is not eligible for Medicare prescription drug coverage available under Signature Select (e.g., under age 65), the Signature Select medical coverage retiree medical coverage is generally the same as the prescription provided immediately before retirement may be continued drug coverage available to active employees, unless you have until reaching Medicare eligibility, unless coverage is otherwise elected Kaiser Permanente HMO (California residents only). terminated or changed (for example, due to failure to pay premiums or due to changes in Plan offerings or insurers). You will be allowed to make changes during annual enrollment each year Prescription Drug Coverage If You Are among the options offered, but you may not add any dependents Medicare-Eligible at that time. (An exception applies if your spouse is a Working Spouse – refer to the Enrollment and Effective Date of Coverage Coverage for Medicare-eligible retirees and/or dependents is section.) If you drop your or your dependent’s coverage during provided through a Medicare Part D qualified prescription drug annual enrollment, you and/or your dependent (as applicable) will plan with Express Scripts Medicare. If you become Medicare- not be able to re-enroll, whether in the following year or at any later eligible as a retiree, you may sign up for this plan when you first time. become eligible for Medicare (generally three months before the month you turn age 65 until three months after you turn age 65). If you get Medicare due to a disability, you can join from three COVERAGE FOR months before to three months after your 25th month of Social Security Disability payments. MEDICARE-ELIGIBLE RETIREES You may choose to enroll in a Medicare Supplemental Insurance AND DEPENDENTS Plan but not in a Medicare Part D prescription drug plan (or vice versa). If you decide not to enroll in the Signature Select Medicare Part D prescription drug plan, Signature Select will If you or your enrolled dependent is (or becomes) eligible not cover any prescription drug costs. Likewise, if you decide not for Medicare (e.g., age 65), Signature Select offers United to enroll in a Medicare Supplemental Insurance Plan, Signature Healthcare’s AARP® Medicare Supplement Insurance Plans and Select will not cover any medical costs. Express Scripts Medicare prescription drug coverage. You may choose among the plans available to you based on the state It has been determined that the prescription drug coverage offered where you live. Each of these plans is designed to supplement through the Company is, on average for all our Plan participants, your Medicare coverage. at least as good as standard Medicare Part D prescription drug coverage. You can keep coverage through the Company and not Signature Select retiree medical coverage is made available with pay an extra fee if you later decide to enroll in a different Medicare the assumption that a person who is eligible for Medicare has full Part D prescription drug coverage plan. Medicare coverage (Part A, Part B, and Part D) and uses Medicare for all expenses that are payable by Medicare. If you and/or your If you decide to drop or opt out of the prescription drug coverage dependent are eligible for Medicare, Signature Select will only offered through the Company, you cannot re-enroll in prescription pay eligible amounts that would not be covered by Medicare, even drug coverage later. if you have not enrolled in Medicare. Therefore, it is important You should also know that if you drop or lose your prescription for you and your eligible dependents to apply for Medicare drug coverage through the Company and do not enroll in (Part A, Part B, and Part D) as soon as you are eligible. Medicare Part D prescription drug coverage after your coverage ends, you may have to pay more to enroll at a later date. You will have to pay the higher premium as long as you have Medicare coverage. If you didn’t join Medicare Part D when you were first eligible, your next opportunity to join will be during the next Medicare open enrollment period, typically held from October 15th through December 7th each year.

MEDICAL COVERAGE DURING RETIREMENT | 1A-3 Medicare Prescription Drug Features Medicare Prescription Drug Coverage

Here are some of the key features of the Signature Select Mail Service Pharmacy Medicare Part D prescription drug coverage plan: You can have convenient home delivery when you order • No annual deductible or out-of-pocket maximum prescriptions through the mail service pharmacy. • Flat co-pays—as low as $10 for generic drugs • Tier 1: Generic Drugs • No coverage gaps $30 co-pay for a three-month (90-day) supply of drugs in this tier from the Express Scripts mail-order pharmacy. • A formulary that includes 100% of the drugs covered by Medicare Part D • Tier 2: Preferred Brand Drugs $90 co-pay for a three-month (90-day) supply of drugs in this • National pharmacy network with over 60,000 locations in the tier from the Express Scripts mail-order pharmacy. United States • Tier 3: Non-Preferred Brand Drugs $150 co-pay for a three-month (90-day) supply of drugs in this Four Levels of Co-Payments tier from the Express Scripts mail-order pharmacy.

The prescription drug coverage offered by the Company has • Tier 4: Specialty Tier Drugs four different levels of co-pays for a 31- to 90-day supply of $150 co-pay for a three-month (90-day) supply of drugs in this prescription drugs. The formulary covers 100% of the drugs tier from the Express Scripts mail-order pharmacy. covered by Medicare Part D. A complete formulary listing is available online at www.express-scripts.com. Medicare Prescription Drug

Contracted Retail Pharmacy Type of Medication Catastrophic Coverage Co-pay Levels After your yearly out-of-pocket costs reach $5,000 (for 2018, as Tier 1 Most generic drugs, adjusted by Medicare annually), the amount you pay will change. Generic Drugs: $10 lowest co-pay You will pay the greater of: 90-day supply: $30 • $3.35 for a generic drug (including brand drugs treated as Tier 2 Preferred Brand Drugs: $30 Preferred brand drugs generics) and $8.35 for all other covered drugs (for 2018, as 90-day supply: $90 adjusted by Medicare annually), or Tier 3 • 5% of the total cost, with a maximum not to exceed the Non-preferred brand Non-Preferred Brand Drugs: $50 drugs standard cost-sharing amount during the initial coverage stage. 90-day supply: $150 Tier 4 Non-preferred or Specialty Tier: $50 Additional Information for All Retiree unique drugs 90-day supply: $150 Prescription Drug Coverage Use Network Pharmacies Under Medicare If you enroll in prescription drug coverage, you will receive a membership ID card and a welcome kit in the mail that thoroughly Prescription Drug Coverage explains the coverage. If you have questions, you can call 1-800-236-4782 24 hours a To keep your costs low, you should fill your prescriptions at a day, 7 days a week. TTY/TDD users should call 1-800-716-3231 network pharmacy. The pharmacy network includes more than 24 hours a day, 7 days a week. More information can be found at 60,000 pharmacies nationwide including retail, mail order, long- . term care and home infusion pharmacy services. A complete www.express-scripts.com listing of the pharmacies is available by calling 1-800-236-4782 For more information on Medicare programs, call Medicare 24 hours a day, 7 days a week (TTY/TDD users should call toll free at 1-800-MEDICARE (1-800-633-4227), TTY/TDD 1-800-716-3231 24 hours a day, 7 days a week) or online at 1-877-486-2048, 24 hours a day, 7 days a week or visit the www.express-scripts.com. www.medicare.gov website.

MEDICAL COVERAGE DURING RETIREMENT | 1A-4 DENTAL COVERAGE

If you meet the eligibility requirements (see the Eligibility section of this chapter) and elect retiree dental coverage within 31 days after your retirement date, your dental plan coverage provided immediately before retirement may be continued after retirement (regardless of your age) unless your coverage is otherwise terminated or changed. If you later decline or remove dental coverage for yourself or your dependent, you cannot later re-enroll yourself or your dependent in the dental coverage on a future date. You will be allowed to make changes during annual enrollment each year among the plans or options offered, however, you may not add any dependents who were not covered by the plan immediately before you retired. Since Medicare does not provide dental benefits (except in very limited circumstances), your dental plan coverage is not affected when you (and/or your eligible dependents) become eligible for Medicare.

PAYING FOR RETIREE MEDICAL AND DENTAL COVERAGE

Retiree medical costs are typically lower for Medicare-eligible retirees and dependents than pre-Medicare retirees and dependents. Medicare-eligible retirees and dependents typically pay less because Medicare is their primary source of coverage. Therefore, the cost for coverage under the AARP® Medicare Supplement Insurance through United Healthcare Insurance Company is considerably lower than the cost of coverage for retirees and dependents under age 65. As Medicare does not provide dental coverage, the cost of the dental plan is the same for both pre-Medicare and Medicare-eligible retirees. Your Human Resources or Benefits Department can provide you with information regarding current retiree premium rates. Generally, any changes to premium amounts are effective January 1.

Sharing the Premium Cost

A portion of the average cost (or premium) for retiree and dependent coverage is paid by the Company. As of the effective date of this chapter, retirees pay the difference between: (a) Their applicable premium rate (which is based on their medical, prescription drug, and/or dental plan options elected, Medicare eligibility status, and election of any dependent coverage), and (b) The share of the premium that is paid by the Company.

Company Contribution to Retiree Medical Coverage

If you and/or your spouse are under age 65 (and not yet eligible for Medicare) •  The Company contributes $127.46 per year* of credited service at retirement for you and your spouse (if under age 65), to be applied toward the annual cost of retiree medical coverage. The amount is based on your year of retirement and does not increase after you retire.

If you and/or your spouse are age 65 or older (or are younger than 65 but eligible for Medicare) • The Company contributes $62.19 per year* of credited service at retirement for you and your spouse (if Medicare-eligible), to be applied toward the annual cost of retiree medical coverage.

What You Pay You pay the difference between the total annual cost of the coverage and the Company contribution. There is no Company contribution for a non-spouse dependent. The subsidies will not increase, but the Company may decrease or eliminate the subsidy at any time.

* Subject to change each year; The Company reserves the right to modify the Company contribution formula and subsidy amount for existing or future retirees at any time.

MEDICAL COVERAGE DURING RETIREMENT | 1A-5 Example

Retiree Medical Cost Sharing Let’s assume that you retired in 2018 after 20 years of credited service. Under the first scenario, you were age 60 when you retired, and under the second scenario, you were age 65 when you retired.

Retire at age 60 Retire at age 65 Company contributes $127.46 x 20 years Company contributes $62.19 x 20 years Full premium cost for the year 2018*: $12,000.00 Full premium cost for the year 2018*: $5,000 Company's contribution (20 x $127.46) - $2,549.20 Company's contribution (20 x $62.19) - $1,243.80 Retiree’s annual share for 2018: $9,450.80 Retiree’s annual share for 2018: $3,756.20 ÷ 12 ÷ 12 Retiree’s monthly share for 2018: $787.57 Retiree’s monthly share for 2018: $313.02

The example above is for a retiree with single coverage. *Actual annual premiums are determined as of each January 1. Premiums are lower after age 65 because Medicare is the primary source of coverage for post-65 retirees and spouses. The Company reserves the right to modify the Company contribution formula and subsidy amount for existing or future retirees at any time.

CONTINUATION OF COVERAGE FOR A SURVIVING SPOUSE

In the event of your death after retiring, your covered dependents will not be eligible to enroll in Signature Select retiree medical, (spouse and any children) may elect to continue their Signature prescription drug, and/or dental coverage. A covered employee’s Select retiree coverage. death is also an event that permits COBRA continuation coverage for enrolled dependents. See the COBRA Continuation Coverage If you die before retiring, and you met the age and service eligibility section of the General and Administrative Information chapter for requirements (see the Eligibility section of this chapter) at the more information. time of your death, your dependents will be eligible to enroll in Signature Select retiree medical, prescription drug, and/or If you die during the deferral period for your Working Spouse dental coverage provided they were enrolled in Signature Select (see the Enrollment and Effective Date of Coverage section of medical, prescription drug, and/or dental coverage immediately this chapter), your Working Spouse may be eligible for Signature prior to your death. Your dependents must enroll within 31 days Select retiree medical, prescription drug, and/or dental coverage after the date of your death. If you die before retiring and you provided he or she enrolls within 31 days after the date of your did not meet the age and service requirements described in death. the Eligibility section at the time of your death, your dependents

TERMINATION OF RETIREE COVERAGE

Signature Select retiree medical coverage and dental coverage (including any Medicare Part D prescription drug coverage) will terminate upon: • Your request to cancel coverage. In the event that you cancel coverage, your dependents will no longer be eligible for coverage. • Failure to pay your premium within the 60-day grace period after each premium due date. • Termination of Signature Select (i.e., the Bertelsmann Employee Protection Plan), or termination of the portion of the Plan that provides the relevant coverage. • Termination or cancellation of the underlying insurance policy for any reason. • Ceasing to be eligible for Signature Select retiree coverage (whether as a result a Plan amendment or due to loss of eligibility resulting from divorce, legal separation, attainment of age 26, or other events). • Failure to complete dependent eligibility verification requirements. • Fraud, intentional misrepresentation or misconduct attempted with regard to any Signature Select retiree coverage or benefits. In the event that your coverage is terminated for any reason, you cannot enroll in the Plan in the future.

MEDICAL COVERAGE DURING RETIREMENT | 1A-6 Notwithstanding any other provisions of this SPD, the Plan sponsor of Signature Select may amend or terminate the Signature Select retiree medical, prescription drug, and dental program, including, but not limited to, the Company contribution, at any time at its sole discretion.

QUESTIONS/CONTACT INFORMATION

Medical Coverage (if you are not Medicare-eligible) Prescription Drug Coverage (if you are Medicare-eligible) Anthem BlueCross BlueShield (third-party administrator of Express Scripts Medicare Prescription Plan (insurer of insured self-funded benefit) benefit) PO Box 105187 1-800-236-4782– 24 hours a day, 7 days a week Atlanta, GA 30348-5187 TTY/TDD: 1-800-716-3231 1-855-702-1127 Group # BERTMD11 Group # 3330119 www.express-scripts.com www.anthem.com Medicare Kaiser Foundation Health Plan, Inc. (insurer of insured benefit) 1-800-MEDICARE (1-800-633-4227) 3100 Thornton Ave. TTY: 1-877-486-2048 Burbank, CA 91504 www.medicare.gov 1-800-464-4000 Northern California Policy # 605741 COBRA and Retiree Billing Administrator Southern California Policy # 233723 WageWorks, Inc. www.kaiserpermanente.org P.O. Box 14055 Lexington, KY 40512 Medical Coverage (if you are Medicare-eligible) 1-877-502-6272 AARP Health Care Options Customer Service (insurer of insured www.wageworks.com benefit) 1-800-545-1797 – Weekdays, 7 a.m. to 11 p.m. Eastern Time and Saturdays, 9 a.m. to 5 p.m. Eastern Time TTY: 1-866-524-7865 – Weekdays, 9 a.m. to 5 p.m. Eastern Time Group #863 www.aarphealthcare.com

Prescription Drug Coverage (if you are not Medicare-eligible) Express Scripts (third-party administrator of self-funded benefit) 1 Express Way St. Louis, MO 63121 1-855-778-1424 Group # BERTRX1 www.express-scripts.com

OTHER IMPORTANT INFORMATION

Important information, such as your rights as a Plan participant and other administrative details, can be found in the General Information section of this SPD. Descriptions regarding Signature Select retiree medical coverage, prescription drug coverage, and dental coverage contained in booklets provided by authorized insurers and administrators (for example, regarding benefits, how to make a claim for benefits, appealing denied benefits, and various legally required disclosures) are incorporated by reference into this chapter and deemed to be a part of this SPD. In the event of a conflict between the provisions in the above sections and in any insurer- or administrator-provided documents, the provisions in the above sections will govern with respect to enrollment eligibility, and the provisions in the insurer- or administrator- provided documents will govern in all other respects.

MEDICAL COVERAGE DURING RETIREMENT | 1A-7 2 Dental Plans CONTENTS

...... Page

Key Terms to Know...... 2-1

The Signature Select Dental Plans...... 2-2

The High, Standard and Core Dental Preferred Provider Organization (DPPO) Plans ...... 2-2

• Using Network Providers...... 2-2

• Finding a Delta Dental DPPO Network Provider...... 2-2

The Dental Health Maintenance Organization (DHMO) Plan...... 2-2

• Finding a DHMO Network Provider...... 2-2

How the Plans Work...... 2-3

• Differences Between High, Standard and Core DPPO Plans...... 2-4

What the DPPO Plans Cover...... 2-5

• Covered Services...... 2-5

• Maximum Plan Allowance (MPA) ...... 2-6

What the DPPO Plans Do Not Cover...... 2-6

What the DHMO Plan Covers...... 2-7

What the DHMO Plan Does Not Cover...... 2-8

Filing Claims...... 2-9

• For In-Network Dental Expenses...... 2-9

• For Out-of-Network Dental Expenses...... 2-9

• How to File a Claim...... 2-9

• Pre-Treatment Estimate for Services Over $300...... 2-9

Other Important Information...... 2-10

Appendix A – Delta Dental Denial Appeal...... 2-11

Appendix B – Delta Dental Utilization Review...... 2-12

Appendix C - DHMO Description of Benefits and Copayments...... 2-16

Exhibit A – Notice of Adverse Determination...... 2-17

Exhibit B – Notice of Final Adverse Determination...... 2-18

DENTAL PLANS KEY TERMS TO KNOW

Here are a few important terms that are used to describe the Dental Plans in this SPD. Knowing these benefit terms will help you better understand how the Plans work.

Allowed Amount As the full payment for services, Delta Dental’s participating dentists accept Delta Dental’s Maximum Plan Allowances or their charged fees, whichever is less (Allowed Amount). Delta Dental pays the allowed amount, less co-payments, deductibles, amounts over contractual limitations and other maximums, directly to the participating dentist. The patient is only responsible to the participating dentist for the Patient Payment, i.e., the difference between the allowed amount and the Delta Dental Payment.

Annual Deductible The Annual Deductible is the amount you pay for eligible dental services before the Plan will begin to reimburse you. Under the dental plans, the Annual Deductible period is a calendar year.

Annual Maximum The Annual Maximum is the most that a covered individual can receive in dental benefits in one calendar year.

Coinsurance The specific percentage you pay toward the cost of certain covered services. For example, if the Plan pays 80 percent of covered services, you are responsible for paying the remaining 20 percent.

Co-payment A Co-payment is a flat dollar amount paid for a medical or dental service by an insured person. It is a generally a small portion of the actual cost of the service.

Maximum Plan Allowance (MPA) (also known as Usual, Customary and Reasonable) Delta Dental refers to its reimbursement levels as Maximum Plan Allowance (MPA). Delta Dental calculates an MPA for use in payment to participating and non-participating fee-for-service dentists, and is based upon charges submitted on a regional basis for a given service by dentists of similar training, within the same geographical area. Delta Dental blends the claim charges with dentist fee information from a number of other sources, including dentist fee filings, using various factors, subject to regulatory limitations and adjustment for extreme difficulty or unusual circumstances. (For more information, see the section MPA on page 2-6.)

Reimbursement Level The Reimbursement Level is the percentage of covered expenses paid by the Plan once the deductible is met.

DENTAL PLANS | 2-1 THE SIGNATURE SELECT DENTAL PLANS

Good dental care is an important part of your overall health. The Signature Select Dental Plan options encourage preventive care, while offering protection against a wide range of dental expenses. The Plans can help you and your covered dependents prevent dental problems with regular checkups—and provide protection if you need major dental work. Your participation in a dental plan is voluntary. At annual enrollment, or as a new hire, you can elect or decline coverage. If you do not enroll in coverage at that time, you cannot enroll in the coverage until the next annual enrollment, unless you experience a change in status event. You have flexibility in choosing a dental plan to best meet your needs and the needs of your eligible dependents. You may choose one of the following dental plan options, or you may decline dental coverage. • High Dental Preferred Provider Organization (DPPO) • Standard Dental Preferred Provider Organization (DPPO) • Dental Health Maintenance Organization (DHMO)*

The High and Standard DPPO Plans

The High and Standard DPPO Plans are administered by Delta Using Network Providers Dental and cover most of the same dental expenses, but at different coverage levels. With these Plans, you can: For the High and Standard DPPO Plans, you have access to • Lower your overall costs – If you use a participating Premier or two Delta Dental provider networks, the Delta Dental Premier® PPO dental provider, they will accept Delta Dental’s Maximum Network and the Delta Dental PPO Network.You can choose a Plan Allowance (MPA) as full payment. Payments will be made dentist from the larger Delta Dental Premier Network anytime you directly to your dental provider, which reduces your “up-front” need to, or you can take advantage of the lower allowances— expenses. You will be responsible for all deductible and/or and lower out-of-pocket costs—associated with dentists who coinsurance amounts. participate in the smaller Delta Dental PPO Network. You can also choose a dentist who does not participate with Delta Dental and • Avoid filing claims – When you stay in-network under the High receive applicable benefits. and Standard DPPO Plans, there are no claim forms to file; your participating dental provider is paid directly by the Plan. And, you The dental providers in both networks agree to provide services don’t have to worry about charges that exceed the MPA. at the applicable allowed amount as payment in full for covered services. You save money because your share of the cost is based • Have flexibility – You are free to go to any dentist of your on the reduced fees. You have complete freedom of choice in choice. However, if you receive your care from a dental provider selecting a dentist. Your choice of dentist can determine the cost outside the Delta Dental Network, that provider may charge fees savings you receive. in excess of MPA because there aren’t any agreements in place with Delta Dental. You will be responsible for paying the dental provider when services are rendered and submitting the claim Finding a Delta Dental DPPO Network Provider for reimbursement to Delta Dental. You are responsible for fees in excess of the MPA rate. If you are in the High and Standard DPPO Plan, using a Delta Dental participating dental provider will ensure that you minimize your out-of-pocket costs for any dental expenses. You can visit Delta Dental’s website at www.deltadentalins.com for an up-to-date listing of dental providers in your area, or you can contact Delta Dental by telephone at 1-800-932-0783 (between 8:00 a.m. and 8:00 p.m. Eastern Time).

The Dental Health Maintenance Organization (DHMO) Plan

The DHMO Plan (insured by DeltaCare USA, a division of Delta Finding a DHMO Network Provider Dental) offers a managed care approach to dental care through a Dental Health Maintenance Organization (DHMO). The Delta When you are in the DHMO, you must receive all your dental DHMO nationwide network of dentists and other dental providers care through their network. There is no out-of-network coverage. have agreed to offer their services at predetermined rates. There For the DHMO, you can locate a participating dentist by calling are no deductibles and most expenses are covered in full, except 800‑422‑4234 or go to www.deltadentalins.com and choose the for specified out-of-pocket co-payments. Co-payment information DeltaCare USA Network. can be found in in Appendix C. * The DHMO is only available in certain locations. DENTAL PLANS | 2-2 HOW THE PLANS WORK

When you have a dental care expense, the Plan pays a percentage of your cost. The percentage is based on the type of service you or your covered dependents receive, the Dental Plan you are enrolled in, if the dentist is in the network and the allowed amount. In the High and Standard DPPO Plans, for certain types of expenses, a covered employee or dependent is required to meet his or her individual annual deductible before Plan coverage begins (excluding preventive and diagnostic services). To meet the deductible, an individual must incur eligible deductible dental expenses in a calendar year (January 1 through December 31) that are equal to the individual deductible amount. After you meet the deductible, the Plan pays benefits up to a maximum benefit for each covered individual each year. For the DHMO plan, no deductibles or annual maximums apply.

Here is a quick overview of how the Plans work:

STANDARD HIGH DHMO DPPO DPPO

Annual per person deductible $100 $50 None

Annual per person maximum benefit $1,500 $3,000 None

Reimbursement Level—After deductible, Plan pays:

Preventive & diagnostic services* • In-network 100%* 100%* 100% in excess of co-pay • Out-of-network 80%* 85%* Not covered

Basic restorative services • In-network 80% 85% 100% in excess of co-pay • Out-of-network 80% 60% Not covered

Major restorative services • In-network 60% 85% 100% in excess of co-pay • Out-of-network 60% 60% Not covered

Orthodontia coverage** 50% 60% 100% in excess of co-pay

Implants 50% 50% Not covered

Temporomandibular Joint Dysfunction (TMJ) 50% 50% Not covered

* Preventive and diagnostic services do not have a deductible and will not apply toward the annual maximum benefit limit. ** Orthodontia coverage in the Standard and High DPPO options is available for you and your covered dependents with no age restrictions and a lifetime maximum of $2,000.

DENTAL PLANS | 2-3 Differences Between the High and Standard DPPO Plans

Standard DPPO Plan High DPPO Plan

• The Standard DPPO Plan has a higher deductible and lower • The High DPPO Plan has a lower deductible but higher premium contributions, so you pay less out of each pay- premium contributions, so you pay more out of each pay- check but more when you need care. check but less when you need care.

• The Standard DPPO Plan provides a more moderate level of • The High DPPO Plan provides a higher level of in-network coverage and a lower annual per person maximum benefit. coverage, and a higher annual per person maximum benefit.

Example of how the Plan pays

Anne lives in New York and is enrolled in the High DPPO Plan. She visits a dentist and has a tooth filled. Here is an example of Anne’s responsibility whether she receives care from a PPO, Premier or non-participating dentist.

PPO Dentist Premier Dentist Non-Participating Dentist

Dentist’s charge $117 $117 $117

Delta Dental’s MPA $90 $100 $110

Deductible $50 $50 $50

Coinsurance 85% 85% 85%

Delta Dental pays $34 $42.50 $51 [($90 – $50) x 85%] [($100 – $50) x 85%] [($110 – $50) x 85%]

Anne’s responsibility $56 $ 57.50 $66 ($90 – $34) ($100 – $42.50) ($117 – $51)

DENTAL PLANS | 2-4 WHAT THE STANDARD AND HIGH DPPO PLANS COVER

The Signature Select High and Standard DPPO Plans pay Basic Restorative Services benefits for covered services and supplies provided by a legally • Fillings, amalgam (silver) and restorations (white) licensed dentist or doctor (or a licensed hygienist for the cleaning and scaling of teeth under a dentist’s supervision). These • Oral surgery, including extractions (unless covered under the services and supplies must be necessary for the care, diagnosis, Medical Plan) prevention or treatment of non-occupational dental conditions, • Anesthesia, for covered oral surgery procedures injuries or diseases. • Endodontics (pulpal and root canal therapy), for the treatment of The DPPO Plans categorize treatments and services as follows: dental pulp diseases • Preventive and Diagnostic Services • Periodontics, services related to diseases of the gums and • Basic Services supporting structures of your teeth; benefits for surgery in the same quadrant (e.g. upper right side of mouth) are limited to • Major Services once in any five-year period • Orthodontic Services • Implants Major Restorative Services • Temporomandibular Joint Dysfunction (TMJ) • Crowns, inlays and onlays (and replacement once in any five- year period in the event that the existing one is not satisfactory Each of these categories is reimbursed at a different percentage and cannot be made satisfactory) (other than orthodontic services and implants) based on the participating status of the dentist and the Plan you selected. To • Prosthodontics (bridges and dentures), procedures and find out the reimbursement level for a specific procedure, ask materials related to bridges and dentures (and replacement your dentist to request a “Pre-Treatment Estimate.” For more of dentures once in any five-year period in the event that information, see the Pre-Treatment Estimate section later in this the existing ones are not satisfactory and cannot be made chapter. satisfactory) • Injectable antibiotics, antibiotic drugs that are administered by Covered Services injection.

The following services will be covered at the appropriate Orthodontia reimbursement level under each DPPO Plan when necessary and • Braces, retainers and other services related to the straightening customary as determined by the standards of generally accepted of teeth. Orthodontic care corrects the positioning of teeth dental practice. Certain limits apply. or an abnormal bite through braces or other appliances. This care includes the installation and adjustment of braces and Preventive and Diagnostic Services appliances as well as regular examinations by an orthodontist • Oral exams, once every six months according to an approved orthodontic treatment plan. Orthodontia coverage is available for you and your covered • Cleaning of teeth, once every six months; includes scaling and dependents with no age restrictions and with a lifetime maximum polishing of $2,000. • X-rays and bitewings twice every calendar year; full-mouth Dental implants, appliances placed into bone serving as once every three years prosthodontic abutments. • Fluoride treatments, once every six months for children to age 19 Temporomandibular Joint Dysfunction (TMJ), if non-medical in nature, reversible procedures for treatment of temporomandibular • Space maintainers, for children to age 14 joint dysfunctions. • Sealants, once in any 36-month period on unfilled permanent first and second molars for children to age 14

Understanding How Orthodontic Benefits Are Paid

Once a treatment plan is approved, you’ll need to work out a payment arrangement with the orthodontist. You should know that: • The Plan covers orthodontic benefits for you and your covered dependents. • The Plan reimburses for the cost of eligible expenses incurred during treatment. You may not file claims for expenses incurred after the date treatment is completed. • Orthodontic benefits are paid on a quarterly basis while you are covered by the Plan. Orthodontic benefits cease when you are no longer covered, even though the treatment plan was approved in advance.

DENTAL PLANS | 2-5 Maximum Plan Allowance (MPA)

Payment for services performed for you by participating dentists Payment for services performed by a non-participating dentist who are Delta Dental PPO dentists or Delta Dental Premier is calculated using a maximum fee level that may be higher dentists only is calculated by Delta Dental on the basis of a than Delta Dental’s Maximum Plan Allowance. The Delta Dental reduced Maximum Plan Allowance (“reduced MPA”) or the fee Payment will be made to you, and you are responsible for payment charged, whichever is less (“PPO Allowed Amount” or “Delta of the non-participating dentist’s total fee, which may include Dental Premier allowed amount”). Participating dentists who are additional amounts and services not covered by the contract. Delta Dental PPO dentists or Delta Dental Premier dentists only Remember, when you stay in-network, there are no claims to file; have agreed to accept the PPO allowed amount or Delta Dental the participating dentist is paid directly by the Plan and you don’t Premier allowed amount as full payment for services covered by have to worry about charges that exceed the allowed amount or the contract. MPA. If you go to a non-participating dentist, you generally will be Delta Dental calculates its share of the PPO allowed amount or asked to pay the total cost of your care at the time of your visit and Delta Dental Premier allowed amount based on its co-payment submit a claim to Delta Dental for reimbursement. schedule (“Delta Dental Payment”) and sends it to the participating dentist. Delta Dental advises you of any charges not payable for Limitation on Optional Treatment Plan which you are responsible (“Patient Payment”). If your dentist is In all cases in which there are optional plans of treatment with a Delta Dental PPO or Premier dentist, the Patient Payment is different treatment costs, payment will be made based upon the generally the difference between the Delta Dental Payment and least costly course of treatment that will restore the oral condition the PPO allowed amount—i.e., co-payments, deductibles, charges in a professionally accepted manner. where maximums have been exceeded—and charges for services not covered by the contract.

WHAT THE STANDARD AND HIGH DPPO PLANS DO NOT COVER

Expenses Not Covered There are some expenses that the High and Standard DPPO Plans do not cover. These include (but are not limited to): • Any dental services or supplies otherwise covered under the Medical Plan • Charges for hospitalization, including hospital visits • Services or supplies that are not specifically covered under the Plan • Services or supplies required as a result of a job-related accident or injury or an act of war • Services or supplies provided or paid for by any governmental agency • Services or supplies to the extent that they exceed Delta Dental’s Allowed Amount • Procedures to correct congenital or developmental malformations, except for covered dependent children or newborn children eligible at birth • Procedures for increasing vertical dimension of an occlusion • Replacement of tooth structure lost by attrition or erosion • Services or supplies which, in the exclusive judgment of the Plan, are cosmetic or experimental in nature • Services or supplies for which there is no legal obligation to pay • Periodontal splinting • Gnathological recordings (recordings of bite measurement) • Services for equilibration • Plaque control programs, including oral hygiene instruction • Prescription drugs, pre-medications, analgesics and separate charges for local anesthetics • General anesthesia, except with covered oral surgery procedures of one or more simple extractions and/or with surgical extractions for patients under age 19; and except with three or more simple extractions and/or surgical extractions for patients age 19 and over • Replacement of a prosthetic device within five years of its installation or previous replacement

DENTAL PLANS | 2-6 WHAT THE DHMO PLAN COVERS

With the DHMO plan, you choose a dentist from a nationwide • X-rays , complete set once every three years; panoramic once network. There’s no deductible to meet, no annual dollar every three years; and as needed if associated with a specific maximum and no claim forms to file. issue As a member, you select a primary dentist to provide care. You will • Fluoride treatments, once every six months to age 19 contact your primary dentist for all of your dental needs – routine • Space maintainers, as determined by general dentist check-ups as well as emergency situations. If specialty care is • Sealants, limited to permanent molars through age 15 needed, your general dentist will provide the necessary referral. You may choose a primary dentist when you enroll, or Delta Dental will assign a primary dentist to you. Basic Restorative Services • Fillings, amalgam (silver) and restorations (white) For covered procedures, including approved specialty care, you’ll pay the pre-set Co-payment described in the Patient Charge • Crowns, inlays and onlays (and replacement once in any five- Schedule year period in the event that the existing one is not satisfactory and cannot be made satisfactory) Covered Services • Oral surgery, including extractions (unless covered under the Medical Plan) The provisions (e.g., covered services, co-payments, limitations • Anesthesia for oral surgery, if medically necessary and exclusions) of the Dental Health Maintenance Organization • Pulpal and root canal therapy (DHMO) plan are provided in Delta’s Patient Charge Schedule and in the enrollment materials. The Patient Charge Schedule lists the Major Restorative Services benefits of the Plan, including covered procedures and patient co- payment charges, and is subject to annual change. Procedures • Bridges and dentures, procedures and materials related to not listed on the Patient Charge Schedule are not covered by the bridges and dentures (and replacement of dentures once in Plan. The Patient Charge Schedule is provided in Appendix C. any five-year period in the event that the existing ones are not satisfactory and cannot be made satisfactory) The following services will be covered at the appropriate • Replacement , if necessary, of dental appliances, no more than reimbursement level under the Plan when necessary and once in any five-year period customary as determined by the standards of generally accepted • Gum disease, services related to diseases of the gums and dental practice. supporting structures of your teeth • Benefits for surgery in the same quadrant (e.g., upper right Preventive and Diagnostic Services side of mouth), once every three years • Oral exams, once every six months • Problem focused oral exams, available as needed Orthodontia • Cleaning of teeth, once every six months •Orthodontic benefit, is available for dependent children up to • Scaling and root planning, limited to 4 quadrants during any 12 age 19 as well as you and your spouse with no age restrictions consecutive months

Additional Limits may apply, please see Appendix C for more information.

DENTAL PLANS | 2-7 WHAT THE DHMO PLAN DOES NOT COVER

Expenses Not Covered There are some expenses that the DHMO Plan does not cover. These include (but are not limited to): • Any procedure that is not specifically listed under Appendix C: Description of Benefits and Copayments. • Any procedure that in the professional opinion of the Contract Dentist: o Has poor prognosis for a successful result and reasonable longevity based on the condition of the tooth or teeth and/or surrounding structures, or o Is inconsistent with generally accepted standards for dentistry. • Services solely for cosmetic purposes, with the exception of procedure D9975 (External bleaching for home application, per arch), or for conditions that are a result of hereditary or developmental defects, such as cleft palate, upper and lower jaw malformations, congenitally missing teeth and teeth that are discolored or lacking enamel, except for the treatment of newborn children with congenital defects or birth abnormalities. • Porcelain crowns, porcelain fused to metal, cast metal or resin with metal type crowns and fixed partial dentures (bridges) for children under 16 years of age. • Lost or stolen appliances including, but not limited to, full or partial dentures, space maintainers, crowns and fixed partial dentures (bridges). • Procedures, appliances or restoration if the purpose is to change vertical dimension, or to diagnose or treat abnormal conditions of the temporomandibular joint (TMJ). • Precious metal for removable appliances, metallic or permanent soft bases for complete dentures, porcelain denture teeth, precision abutments for removable partials or fixed partial dentures (overlays, implants, and appliances associated therewith) and personalization and characterization of complete and partial dentures. • Implant-supported dental appliances and attachments, implant placement, maintenance, removal and all other services associated with a dental implant. • Consultations for non-covered benefits. • Dental services received from any dental facility other than the assigned Contract Dentist, a preauthorized dental specialist, or a Contract Orthodontist except for Emergency Services as described in the Contract and/or Evidence of Coverage. • All related fees for admission, use, or stays in a hospital, out-patient surgery center, extended care facility, or other similar care facility. • Prescription drugs. • Dental expenses incurred in connection with any dental or orthodontic procedure started before the Enrollee’s eligibility with the DeltaCare USA Program. Examples include: teeth prepared for crowns, root canals in progress, full or partial dentures for which an impression has been taken and orthodontics unless qualified for the orthodontic treatment in progress provision. • Lost, stolen or broken orthodontic appliances. • Changes in orthodontic treatment necessitated by accident of any kind. • Myofunctional and parafunctional appliances and/or therapies, with the exception of procedure D9940 (occlusal guard, per report). • Composite or ceramic brackets, lingual adaptation of orthodontic bands and other specialized or cosmetic alternatives to standard fixed and removable orthodontic appliances. • Treatment or appliances that are provided by a Dentist whose practice specializes in prosthodontic services.

DENTAL PLANS | 2-8 FILING CLAIMS

For In-Network Dental Expenses $300). This will help you understand what the Plan covers based upon the treatment plan submitted and if certain services are not For the DPPO and DHMO Plans, you will not need to file a claim if covered by the Plan. you use a participating provider. Your dentist will file the claim with To file a pre-treatment estimate, you or your dental provider can Delta Dental, and you will be notified of any balance due. submit a claim form to: Delta Dental For Out-of-Network Dental Expenses P.O. Box 2105 Mechanicsburg, PA 17055-2105 When you receive dental care from an out-of-network provider Delta Dental will return a predetermination voucher to your dental in the DPPO Plans, you may be responsible for paying the full provider with your eligibility, scope of benefits and a period for cost at the time the service is performed. In some cases, your completion of services. Once the services are completed, the provider may agree to wait for payment. It’s up to you to make that voucher with service dates and signatures should be submitted to arrangement. After you pay the full cost, you or your provider must Delta Dental for payment. submit an itemized claim for covered expenses.

You can obtain claim forms with the group number (#02165) by If Your DPPO Claim Is Denied contacting your Human Resources or Benefits department. You Delta Dental administers claim denial and appeal processes, as can also obtain claim forms on Delta Dental’s website at approved by the State of New York, for: www.deltadentalins.com. • Denial of payment based upon lack of coverage of benefit under the Plan or your eligibility status, i.e., claim benefit determinations How to File a Claim that are not considered Utilization Review under Article 49 of the New York Insurance Law (see Appendix A). 1. Obtain a claim form. Claim forms can be obtained on Delta Dental’s website at www.deltadentalins.com. On the • Denial of a covered benefit where the service is not dentally homepage, click on “Individuals and Enrollees” and “How to necessary, appropriate or efficient, i.e., claim benefit File a Dental Claim.” Then select Delta Dental of New York Inc., determinations that are considered Utilization Review under which will allow you to view and print a claim form. Article 49 of the New York Insurance Law (see Appendix B). 2. Complete the claim form. Complete the employee section of the claim form. Bring the form with you to your appointment. If Your DHMO Claim Is Denied Ask your dentist to complete the Attending Dentist’s Statement. Delta has a two-step appeal process for coverage decisions in the All claim forms must be completed with the appropriate patient DHMO. To initiate an appeal you must submit a request in writing information and with the Company’s group number (#02165). An to Delta within one year from the initial Delta claim decision. You itemized bill may be attached to the claim form as an alternative should state the reason you feel your appeal should be reviewed to completing the dentist’s information section. and include any information to support your appeal. You can 3. Send the claim form. Mail the completed form to: contact Delta Member Services at 1-800‑422‑4234 to confirm the local mailing address for your written appeal or to register your Delta Dental appeal by phone. P.O. Box 2105 Mechanicsburg, PA 17055-2105 There are four levels of appeal: You will receive an Explanation of Benefits (EOB) statement when • Level 1 Appeal your claim is processed. If Delta Dental cannot fully evaluate • Level 2 Appeal your claim, you will be notified in writing to provide the additional • Independent Review Procedure information requested. • Appeal to your State (timing is state-specific.) Pre-Treatment Estimate for Services over $300 Delta will not cancel or refuse to renew your coverage because you or your dependent has filed a complaint or an appeal. It’s a good idea to find out exactly how much a dental treatment Please review Appendices A and B for a more detailed explanation will cost and how much the Plan will pay before you have the of Delta Dental’s claim denial and appeal processes for the above dental work done. In order to avoid any misunderstanding claim benefit determinations. between you, your dental provider and Delta Dental, you or your dental provider may submit a pre-treatment estimate in advance of any basic or major restorative service or any orthodontic or periodontic treatment (particularly if total charges may exceed

DENTAL PLANS | 2-9 OTHER IMPORTANT INFORMATION

Important information, such as your rights as a Plan participant and other administrative details, can be found in the General and Administrative Information chapter of this SPD and also following this chapter. • Appendix A – Delta Dental Claim Denials and Appeals • Appendix B – Delta Dental Utilization Review Denials and Appeals • Appendix C – DHMO Description of Benefits and Copayments • Exhibit A – Notice of Adverse Determination • Exhibit B – Notice of Final Adverse Determination

DENTAL PLANS | 2-10 APPENDIX A – DELTA DENTAL DENIALS AND APPEALS

(1) Denial of payment based upon lack of coverage of benefit under the Contract or Enrollee’s eligibility status i.e., claim benefit determinations that are not considered Utilization Review under Article 49 of the New York Insurance Law.

If a post-service claim1 is denied in whole or in part, Delta Dental individual. If the review is of a claim denial based in whole or in shall notify the Enrollee and the attending dentist of the denial in part on a clinical judgment in applying the terms of the Contract, writing within thirty (30) days after the claim is filed, unless special Delta Dental shall consult with a dentist who has appropriate circumstances require an extension of time, not exceeding fifteen training and experience in the pertinent field of dentistry and who (15) days, for processing. If there is an extension, the Enrollee and is neither the Delta Dental dental consultant who made the claim the attending dentist shall be notified of the extension and the denial nor the subordinate of such consultant. The identity of reason for the extension within the original thirty (30) day period. the Delta Dental dental consultant whose advice was obtained If an extension is necessary because either the Enrollee or the in connection with the denial of the claim whether or not the attending dentist did not submit the information necessary to advice was relied upon in making the benefit determination is also decide the claim, the notice of extension shall specifically describe available to the Enrollee or the attending dentist upon request. In the required information. The Enrollee or the attending dentist shall making the review, Delta Dental will not afford deference to the be afforded at least forty-five (45) days from receipt of the notice initial adverse benefit determination. within which to provide the specific information. The extension If after review, Delta Dental continues to deny the claim, Delta period (15 days) – within which a decision must be made by Delta Dental shall notify the Enrollee and the attending dentist in writing Dental – will begin to run from the date on which the Enrollee’s of the decision on the request for review within thirty (30) days of response is received by the plan (without regard to whether all of the date the request is received. Delta Dental shall send to the the requested information is provided) or, if earlier, the due date Enrollee or attending dentist a notice, which contains the specific established by the plan for furnishing the requested information (at reason or reasons for the adverse determination and reference to least 45 days). the specific Contract provisions on which the benefit determination The notice of denial shall explain the specific reason or reasons is based. The notice shall state that the Enrollee is entitled to why the claim was denied in whole or in part, including a specific receive, upon request and free of charge, reasonable access reference to the pertinent Contract provisions on which the denial to, and copies of all documents, records and other information is based, a description of any additional material or information relevant to the Enrollee’s claim for benefits. The notice shall refer necessary for the Enrollee to perfect the claim and an explanation to any internal rule, guideline, and protocol that was relied upon as to why such information is necessary. The notice of denial shall (and that a copy will be provided free of charge upon request). also contain an explanation of Delta Dental’s claim review and The notice shall state that if the claim denial is based on lack of appeal process and the time limits applicable to such process, dental necessity, experimental treatment or a clinical judgment including a statement of the Enrollee’s right to bring a civil action in applying the terms of the Contract, an explanation is available under ERISA upon completion of Delta Dental’s second level of free of charge upon request by either the Enrollee or the attending review. The notice shall refer to any internal rule, guideline, and dentist. The notice shall also state that the Enrollee has a right to protocol that was relied upon (and that a copy will be provided free bring an action under ERISA upon completion of Delta Dental’s of charge upon request). second level of review, and shall state: “You and your plan may have other voluntary alternative dispute resolution options, such If the Enrollee or the attending dentist wants the denial of benefits as mediation. One way to find out what may be available is to reviewed, the Enrollee or the attending dentist must write to Delta contact your local U.S. Department of Labor Office and your State Dental within one hundred eighty (180) days of the date on the insurance regulatory agency.” denial letter. In the letter, the Enrollee or attending dentist should state why the claim should not have been denied. Also any other If in the opinion of the Enrollee or attending dentist, the matter documents, data, information or comments which are thought warrants further consideration, the Enrollee or the attending to have bearing on the claim including the denial notice, should dentist should advise Delta Dental in writing as soon as possible. accompany the request for review. The Enrollee or the attending The matter shall then be immediately referred to Delta’s Dental dentist is entitled to receive upon request and free of charge Affairs Committee. This stage can include a clinical examination, reasonable access to and copies of all documents, records, and if not done previously, and a hearing before Delta’s Dental Affairs other information relevant to the denied claim. The review will Committee if requested by the Enrollee or the attending dentist. take into account all comments, documents, records, or other The Dental Affairs Committee will render a decision within thirty information, regardless of whether such information was submitted (30) days of the request for further consideration. The decision of or considered in the initial benefit determination. the Dental Affairs Committee shall be final insofar as Delta Dental is concerned. Recourse thereafter would be to the state regulatory The review shall be conducted on behalf of Delta Dental by a agency, a designated state administrative review board, or to the person who is neither the individual who made the claim denial courts with an ERISA or other civil action. that is the subject of the review, nor the subordinate of such

1 Delta Dental does not condition receipt of a benefit, in whole or in part, on approval of the benefit in advance of obtaining dental care. Additionally, Delta Dental does not conduct concurrent review relating to continued or extended health care services, or additional services for an insured undergoing a course of continued treatment.

DENTAL PLANS | 2-11 APPENDIX B – DELTA DENTAL UTILIZATION REVIEW DENIALS AND APPEALS

Delta Dental administers claim denial and appeal processes, as approved by the State of New York, for: • Denial of a covered benefit where the service is not dentally necessary, appropriate or efficient, i.e., claim benefit determinations that are considered Utilization Review under Article 49 of the New York Insurance Law

I. Definitions

A. Adverse Determination shall mean a determination by a treatments or services, including services provided within a Utilization Review Agent that an admission, extension of stay, or clinical trial, and the provision of a pharmaceutical product other health care service, upon review based on the information pursuant to prescription by the patient’s attending physician provided, is not medically necessary. for a use other than those uses for which such pharmaceutical product has been approved for marketing by the Federal Food B. Appeal Determination shall mean a determination by Delta and Drug Administration to the extent that coverage for such Dental of New York’s Dental Affairs Committee that a health service is prohibited by law from being excluded under the plan, care service, upon review based on the information provided, or (2) in all other cases, health care procedures, treatments or is not medically necessary. services provided by a facility licensed pursuant to Article 28, 36, C. Clinical Peer Reviewer shall mean a physician who 44, or 47 of the Public Health Law pursuant to Article 19, 23, 31, possesses a current and valid non-restricted license to or 32 of the Mental Hygiene Law, or provided by a health care practice medicine or a health care professional other than professional, and the provision of pharmaceutical products or a licensed physician who: (1) where applicable, possesses services or durable medical equipment. a current and valid non-restricted license, certificate or J. Subscriber shall mean a person subject to Utilization Review. registration or, where no provision for a license, certificate or registration exists, is credentialed by the national accrediting K. Utilization Review shall mean the review to determine body appropriate to the profession, and (2) is in the same whether a Health Care Service that has been provided is being profession and same similar specialty as the Health Care provided or is proposed to be provided to a patient, whether Provider who typically manages the medical condition or undertaken prior to, concurrent with or subsequent to the disease or provides the Health Care Service or treatment delivery of such service, is medically necessary. None of the under review. following shall be considered Utilization Review: (1) denials based on failure to obtain a Health Care Service D. Clinical Standards shall mean those guidelines and from a designated or approved Health Care Provider as standards set forth in the Utilization Review Plan by the required under a contract, (2) where any determination is Utilization Review Agent whose Adverse Determination is rendered pursuant to Subdivision 3(a) of Section 2807(c) of under appeal. the Public Health Law, (3) the review of the appropriateness of E. External Appeal shall mean an appeal conducted by an the application of a particular coding to a patient, including the External Appeal Agent pursuant to Section 4914 of the New assignment of diagnosis and procedure, (4) any issues relating York Insurance Law. to the determination of the amount or extent of payment other F. External Appeal Agent shall mean an entity certified by the than determinations to deny payment based on an Adverse superintendent pursuant to Section 4911 of the New York Determination, and (5) any determination of any coverage Insurance Law. issues other than whether a Health Care Service is or was medically necessary. G. Final Adverse Determination shall mean an Adverse Determination which has been upheld by a Utilization Review L. Utilization Review Agent shall mean any insurer subject to Agent with respect to a proposed Health Care Service Article 32 or 43 of the New York Insurance Law performing following a standard appeal, or an expedited appeal where Utilization Review and any independent Utilization Review Agent applicable, pursuant to Section 4904 of the New York performing Utilization Review under contract with such insurer. Insurance Law. M. Utilization Review Plan shall mean: (1) a description of the H. Health Care Provider shall mean a Health Care Service or a process for developing the written clinical review criteria, (2) facility licensed pursuant to Article 28, 36, or 47 of the Public a description of the types of written clinical information which Health Law or a facility licensed pursuant to Article 19, 23, 31, the Plan might consider in its clinical review, including but not or 32 of the Mental Hygiene Law. limited to a set of specific written clinical review criteria, (3) a description of practice guidelines and standards used by I. Health Care Service shall mean: (1) for purposes of appeals a Utilization Review Agent in carrying out a determination of requested pursuant to Paragraph two of Subsection b of medical necessity, (4) the procedures for scheduled review Section 4910 of Title 2 the New York Insurance Law, Health Care and evaluation of the written clinical review criteria, and (5) a Service shall mean experimental or investigational procedures, description of the qualifications and experience of the health

DENTAL PLANS | 2-12 care professionals who developed the criteria, who are comments which are thought to have bearing on the claim responsible for periodic evaluation of the criteria and of the including the denial notice, should accompany the request health care professionals or others who use the written clinical for review. Both the Subscriber and the attending dentist are review criteria in the process of Utilization Review. entitled to receive upon request and free of charge reasonable access to and copies of all documents, records, and other II. Standard Claims & Appeals Procedure information relevant to the denied claim. E. Notification of Information Necessary to Conduct the A. Claims for Benefits: In the case of a post-service claim which Appeal: If Delta Dental requires information necessary to has been denied on the basis that such service was not dentally conduct a standard internal appeal, Delta Dental shall notify the necessary, Delta Dental shall notify the Subscriber and the Subscriber and the attending dentist, in writing within fifteen attending dentist of its Adverse Determination in writing within (15) days of receipt of the appeal, to identify and request the a reasonable period of time, but not later than thirty (30) days necessary information. In the event that only a portion of such after the claim is filed. However, this period may be extended necessary information is received, Delta Dental shall request the one time by Delta Dental for up to fifteen (15) days, if necessary missing information, in writing, within five (5) business days of due to the failure of the Subscriber to submit the information receipt of the partial information. necessary to decide the claim. If there is an extension, the F. The Review: The review shall be conducted for Delta Dental Subscriber and the attending dentist shall be notified of the by a Clinical Peer Reviewer who is neither the Clinical Peer extension and the reason for the extension within the original Reviewer who made the claim denial that is the subject of thirty (30) day period. The notice of extension shall specifically the review, nor the subordinate of such individual. The review describe the required information, and the Subscriber or the will take into account all comments, documents, records, or attending dentist shall be afforded at least forty-five (45) days other information, regardless of whether such information was from receipt of the notice within which to provide the specific submitted or considered in the initial benefit determination. If information. The extension period (15 days)—within which a the review is of a claim denial based in whole or in part on a decision must be made by Delta Dental—will begin to run from lack of dental necessity, experimental treatment, or a clinical the date on which the Subscriber’s response is received by the judgment in applying the terms of the contract, Delta Dental plan (without regard to whether all of the requested information shall consult with a dentist who has appropriate training and is provided) or, if earlier, the due date established by the plan for experience in the pertinent field of dentistry and who is neither furnishing the requested information (at least 45 days). the Delta Dental dental consultant who made the claim denial B. Reconsideration of Adverse Determination: In the event nor the subordinate of such consultant. The identity of the the Utilization Review of a claim results in an Adverse Delta Dental dental consultant whose advice was obtained Determination, and this determination was made without in connection with the denial of the claim, whether or not the attempting to discuss such matter with the attending dentist advice was relied upon in making the benefit determination, is who specifically recommended the health care service, also available on request. In making the review, Delta Dental procedure or treatment, the attending dentist shall have will not afford deference to the initial Adverse Determination. A the opportunity to request a reconsideration of the Adverse clinical examination at Delta Dental’s cost may be implemented, Determination. Such reconsideration shall be conducted by along with discussion among dentist consultants. At this point, the attending dentist and the Clinical Peer Reviewer making the Subscriber may also request a hearing. the initial determination or a designated Clinical Peer Reviewer G. Final Adverse Determination: Delta Dental shall make a if the original Clinical Peer Reviewer cannot be available. If the Final Adverse Determination within thirty (30) days of the Adverse Determination is upheld after reconsideration, Delta date the request for appeal is received. Delta Dental shall Dental shall notify the Subscriber of the Adverse Determination advise the Subscriber and the attending dentist of the Appeal as provided below in Section III(A). Determination within two (2) days of the rendering of such C. Informal Inquiry Option: If a claim is denied in whole or in determination. Notification of the Final Adverse Determination part, a Subscriber may make an informal inquiry regarding will be provided in accordance with Section III(B) below. general program and eligibility questions by contacting Delta H. Appeal to Delta Dental’s Dental Affairs Committee: If in Dental via its toll-free number at 1-800-932-0783. Every caller the opinion of the Subscriber or the attending dentist the has access to a supervisor if dissatisfied with the response. matter warrants further consideration and the Subscriber D. Non-Emergency Appeals of Adverse Determination: chooses not to file an External Appeal pursuant to Section In lieu of making an informal inquiry, a Subscriber or his or 4914 of the New York Insurance Article, the Subscriber or her attending dentist may choose to appeal the Adverse attending dentist should advise Delta Dental in writing as soon Determination. The Subscriber may do so within one hundred as possible. The matter shall be immediately referred to Delta eighty (180) days, either by writing to Delta Dental or by calling Dental’s Dental Affairs Committee. Delta Dental’s Dental Affairs Delta Dental at its toll-free number. Written acknowledgement Committee, which contains at least one licensed dentist, will of the filing of the appeal to the appealing party will be review the claim and either approve payment for the dental provided to the Subscriber and the attending dentist within service or issue an Adverse Determination. If the Dental Affairs fifteen (15) days of the filing of the appeal. The letter or oral Committee requires information necessary to conduct the request for appeal should state why the claim should not have Internal Appeal, Delta Dental shall notify the Subscriber or been denied. Also any other documents, data, information or attending dentist, in writing within fifteen (15) days of receipt of

DENTAL PLANS | 2-13 the appeal, to identify and request the necessary information. B. Content of Notification of Adverse Determination on In the event that only a portion of such necessary information Review i.e., “Final Adverse Determination.”(See Exhibit B). is received, Delta Dental shall request the missing information, If after the claim is reviewed, Delta Dental continues to deny in writing, within five (5) business days of receipt of the partial the claim, Delta Dental shall send the Subscriber/attending information. This stage can include a clinical examination, if dentist a notice, which contains: not done previously, and a hearing before the Dental Affairs 1. A clear statement describing the basis and clinical rationale for Committee if requested. The Dental Affairs Committee will the denial as applicable to the insured including the specific render a decision within thirty (30) days of the request for reason or reasons for the determination, reference to the further consideration. The decision of the Dental Affairs specific plan provisions upon which the Adverse Determination Committee shall be final insofar as Delta Dental is concerned. is based; Recourse thereafter would be to the courts with an ERISA or 2. A clear statement that the notice constitutes the Final Adverse other civil action or the filing of an External Appeal pursuant Determination; to Section 4914 of the New York Insurance Article, if the time period for doing so had not previously expired. 3. The insured’s coverage type; 4. The name and full address of Delta Dental’s Utilization Review III. Distribution of Information to Subscribers/ Agent; Attending Dentists Upon Entry of Adverse 5. Delta Dental’s contact person and his or her telephone number; 6. A description of the health care service that was denied, Determination including the dates of the service, the name of the facility and/or physician proposed to provide the treatment and the developer/ A. Content of Notification of Adverse Determination manufacturer of the health care service; (See Exhibit A). A notice of an initial Adverse Determination will include: 7. A statement that the Subscriber and the attending dentist may be eligible for an External Appeal and the time frames for 1. The specific reason or reasons for the Adverse Determination requesting an appeal; including the clinical rationale, if any; 8. A clear statement written in bolded text that the forty-five (45) 2. Reference to the specific plan provisions on which the Adverse day time frame for requesting an External Appeal begins upon Determination is based; receipt of the Final Adverse Determination of the first-level 3. Instructions on how to initiate standard and expedited appeals appeal, regardless of whether or not a second-level appeal including a description of Delta Dental’s review procedures and is requested, and that by choosing to request a second-level the time limits applicable to such procedures and a statement of internal appeal, the time may expire for the Subscriber to the Subscriber’s right to bring a civil action under Section 502(a) request an External Appeal; of ERISA upon completion of the second level of review of Delta 9. A copy of the standard description of the External Appeal Dental’s Internal Appeals Procedure; process as developed jointly by the superintendent and 4. Instructions on how to initiate an External Appeal pursuant to commission, including a form and instructions for requesting an Section 4914 of the New York Insurance Law; External Appeal; 5. If an internal rule, guideline, protocol, or other similar criterion 10. A statement that the Subscriber is entitled to receive, upon was relied upon in making the Adverse Determination, a request and free of charge, reasonable access to, and copies statement that a copy of such will be provided free of charge of, all documents, records, and other information relevant to upon request; the claimant’s claim for benefits; 6. If the Adverse Determination is based on dental necessity or 11. A statement that when the Subscriber completes the second experimental treatment or similar exclusion or limit, a statement level of Delta Dental’s Internal Appeals Procedure, the that an explanation applying the terms of the Plan to the Subscriber will then have a right to bring an action under Subscriber’s medical circumstances is available upon request; Section 502(a) of ERISA; 12. If an internal rule, guideline, protocol, or other similar criterion 7. A description of any additional material or information necessary was relied upon in making the Adverse Determination, a for the claimant to perfect the claim and an explanation of why statement that a copy of such will be provided free of charge such material or information is necessary. upon request; 13. If the Adverse Determination is based on a medical necessity or experimental treatment or similar exclusion or limit, a statement that an explanation applying the terms of the plan to the Subscriber’s medical circumstances is available upon request; 14. The following statement: “You and your plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency.”

DENTAL PLANS | 2-14 IV. Cooperation with the External Appeal Agent in no event shall Delta Dental take longer than two (2) business days to provide the requested information. Delta Dental will facilitate the prompt completion of External C. Providing the form and instructions, developed jointly by the Appeal requests by: superintendent and commissioner, for the attending dentist to A. Transmitting the Subscriber’s dental and treatment records request an External Appeal in connection with a retrospective pursuant to an appropriately completed release or release Adverse Utilization Review determination under Section 4904 signed by the Subscriber or by a person authorized pursuant to of the Insurance Law, within three (3) business days of an law to consent to health care for the Subscriber and, in the case attending dentist’s request for a copy of the form. of dental necessity appeals, transmit the clinical standards used D. In the event that an Adverse Determination is overturned on to determine medical necessity for the Health Care Service External Appeal, or in the event that Delta Dental reverses a within three (3) business days of receiving notification regarding denial which is the subject of an External Appeal, Delta Dental the identity and address of the certified External Appeal Agent shall make payment for the Health Care Service which is the to which the subject appeal is assigned. basis of the External Appeal to the Subscriber. B. Providing information requested by the assigned certified E. No fee will be charged by Delta Dental to a Subscriber for an External Appeal Agent as soon as is reasonably possible, but External Appeal.

DENTAL PLANS | 2-15 APPENDIX C – DESCRIPTION OF BENEFITS AND COPAYMENTS

The Benefits shown below are performed as deemed appropriate by the attending Contract Dentist subject to the limitations and exclusions of the Program. Please refer to Schedule B for further clarification of Benefits.Enrollees should discuss all treatment options with their Contract Dentist prior to services being rendered. Text that appears in italics below is specifically intended to clarify the delivery of Benefits under the DeltaCare USA Program and is not to be interpreted as CDT-2017 procedure codes, descriptors or nomenclature that are under copyright by the American Dental Association. The American Dental Association may periodically change CDT codes or definitions. Such updated codes, descriptors and nomenclature may be used to describe these covered procedures in compliance with federal legislation.

CODE DESCRIPTION ENROLLEE PAYS

D0100-D0999 I. DIAGNOSTIC D0120 Periodic oral evaluation - established patient No Cost D0140 Limited oral evaluation - problem focused No Cost D0145 Oral evaluation for a patient under three years of age and counseling with primary caregiver No Cost D0150 Comprehensive oral evaluation - new or established patient No Cost D0160 Detailed and extensive oral evaluation - problem focused, by report No Cost D0170 Re-evaluation - limited, problem focused (established patient; not post-operative visit) No Cost D0171 Re-evaluation - post-operative office visit $5.00 D0180 Comprehensive periodontal evaluation - new or established patient No Cost D0190 Screening of a patient No Cost D0191 Assessment of a patient No Cost D0210 Intraoral - complete series of radiographic images - limited to 1 series every 24 months No Cost D0220 Intraoral - periapical first radiographic image No Cost D0230 Intraoral - periapical each additional radiographic image No Cost D0240 Intraoral - occlusal radiographic image No Cost D0250 Extraoral - 2D projection radiographic image created using a stationary radiation source, and detector . No Cost D0251 Extraoral posterior dental radiographic image No Cost D0270 Bitewing - single radiographic image No Cost D0272 Bitewings - two radiographic images No Cost D0273 Bitewings three radiographic images No Cost D0274 Bitewings - four radiographic images - limited to 1 series every 6 months No Cost D0277 Vertical bitewings - 7 to 8 radiographic images No Cost D0330 Panoramic radiographic image No Cost D0415 Collection of microorganisms for culture and sensitivity No Cost D0425 Caries susceptibility tests No Cost D0460 Pulp vitality tests No Cost D0470 Diagnostic casts No Cost D0472 Accession of tissue, gross examination, preparation and transmission of written report No Cost D0473 Accession of tissue, gross and microscopic examination, preparation and transmission of written report No Cost D0474 Accession of tissue, gross and microscopic examination, including assessment of surgical margins for presence of disease, preparation and transmission of written report. No Cost D0601 Caries risk assessment and documentation, with a finding of low risk - 1 every 3 years No Cost D0602 Caries risk assessment and documentation, with a finding of moderate risk - 1 every 3 years No Cost D0603 Caries risk assessment and documentation, with a finding of high risk - 1 every 3 years No Cost D0999 Unspecified diagnostic procedure, by report - includes office visit, per visit (in addition to other services) No Cost

DENTAL PLANS | 2-16 D1000-D1999 II. PREVENTIVE D1110 Prophylaxis cleaning - adult - 1 D1110, D1120 or D4346 per 6 month period $5.00 D1110 Additional prophylaxis cleaning - adult (within the 6 month period) $45.00 D1120 Prophylaxis cleaning - child - 1 D1110, D1120 or D4346 per 6 month period $5.00 D1120 Additional prophylaxis cleaning - child (within the 6 month period) $35.00 D1206 Topical application of fluoride varnish - child to age 19; 1 D1206 or D1208 per 6 month period No Cost D1208 Topical application of fluoride - excluding varnish - child to age 19; 1 D1206 or D1208 per 6 month period No Cost D1310 Nutritional counseling for control of dental disease No Cost D1330 Oral hygiene instructions No Cost D1351 Sealant - per tooth - limited to permanent molars through age 15 $15.00 D1352 Preventive resin restoration in a moderate to high caries risk patient - permanent tooth - limited to permanent molars through age 15 $15.00 D1353 Sealant repair - per tooth - limited to permanent molars through age 15 $15.00 D1354 Interim caries arresting medicament application - child to age 19; 1 per 6 month period No Cost D1510 Space maintainer - fixed - unilateral $70.00 D1515 Space maintainer - fixed - bilateral $70.00 D1520 Space maintainer - removable - unilateral $80.00 D1525 Space maintainer - removable - bilateral $80.00 D1550 Re-cement or re-bond space maintainer $15.00 D1555 Removal of fixed space maintainer $15.00 D1575 Distal shoe space maintainer - fixed - unilateral - child to age 9 $70.00

D2000-D2999 III. RESTORATIVE - Includes polishing, all adhesives and bonding agents, indirect pulp capping, bases, liners and acid etch procedures. - When there are more than six crowns in the same treatment plan, an Enrollee may be charged an additional $100.00 per crown, beyond the 6th unit. - Replacement of crowns, inlays and onlays requires the existing restoration to be 5+ years old.

D2140 Amalgam - one surface, primary or permanent $8.00 D2150 Amalgam - two surfaces, primary or permanent $12.00 D2160 Amalgam - three surfaces, primary or permanent $18.00 D2161 Amalgam - four or more surfaces, primary or permanent $22.00 D2330 Resin-based composite - one surface, anterior $22.00 D2331 Resin-based composite - two surfaces, anterior $26.00 D2332 Resin-based composite - three surfaces, anterior $30.00 D2335 Resin-based composite - four or more surfaces or involving incisal angle (anterior . $55.00 D2390 Resin-based composite crown, anterior $65.00 D2391 Resin-based composite - one surface, posterior $65.00 D2392 Resin-based composite - two surfaces, posterior $75.00 D2393 Resin-based composite - three surfaces, posterior $85.00 D2394 Resin-based composite - four or more surfaces, posterior $95.00 D2510 Inlay - metallic - one surface $185.00 D2520 Inlay - metallic - two surfaces $195.00 D2530 Inlay - metallic - three or more surfaces $205.00 D2542 Onlay - metallic - two surfaces $200.00 D2543 Onlay - metallic - three surfaces $210.00 D2544 Onlay - metallic - four or more surfaces $230.00 D2610 Inlay - porcelain/ceramic - one surface $310.00 D2620 Inlay - porcelain/ceramic - two surfaces $345.00 D2630 Inlay - porcelain/ceramic - three or more surfaces $365.00 D2642 Onlay - porcelain/ceramic - two surfaces $340.00

DENTAL PLANS | 2-17 D2643 Onlay - porcelain/ceramic - three surfaces $375.00 D2644 Onlay - porcelain/ceramic - four or more surfaces $395.00 D2650 Inlay - resin-based composite - one surface $210.00 D2651 Inlay - resin-based composite - two surfaces $235.00 D2652 Inlay - resin-based composite - three or more surfaces $270.00 D2662 Onlay - resin-based composite - two surfaces $265.00 D2663 Onlay - resin-based composite - three surfaces $290.00 D2664 Onlay - resin-based composite - four or more surfaces $335.00 D2710 Crown - resin-based composite (indirect) $185.00 D2712 Crown - ¾ resin-based composite (indirect) $185.00 D2720 Crown - resin with high noble metal $335.00 D2721 Crown - resin with predominantly base metal $235.00 D2722 Crown - resin with noble metal $275.00 D2740 Crown - porcelain/ceramic substrate $395.00 D2750 Crown - porcelain fused to high noble metal $395.00 D2751 Crown - porcelain fused to predominantly base metal $295.00 D2752 Crown - porcelain fused to noble metal $335.00 D2780 Crown - ¾ cast high noble metal $395.00 D2781 Crown - ¾ cast predominantly base metal $295.00 D2782 Crown - ¾ cast noble metal $335.00 D2783 Crown - ¾ porcelain/ceramic $395.00 D2790 Crown - full cast high noble metal $395.00 D2791 Crown - full cast predominantly base metal $295.00 D2792 Crown - full cast noble metal $335.00 D2794 Crown - titanium $395.00 D2910 Re-cement or re-bond inlay, onlay, veneer or partial coverage restoration $20.00 D2915 Re-cement or re-bond indirectly fabricated or prefabricated post and core $20.00 D2920 Re-cement or re-bond crown $20.00 D2921 Reattachment of tooth fragment, incisal edge or cusp (anterior) $55.00 D2929 Prefabricated porcelain/ceramic crown - primary tooth - anterior $75.00 D2930 Prefabricated stainless steel crown - primary tooth $75.00 D2931 Prefabricated stainless steel crown - permanent tooth $75.00 D2932 Prefabricated resin crown - anterior primary tooth $85.00 D2933 Prefabricated stainless steel crown with resin window - anterior primary tooth $75.00 D2940 Protective restoration $20.00 D2941 Interim therapeutic restoration - primary dentition $20.00 D2949 Restorative foundation for an indirect restoration $80.00 D2950 Core buildup, including any pins when required $80.00 D2951 Pin retention - per tooth, in addition to restoration $15.00 D2952 Post and core in addition to crown, indirectly fabricated - includes canal preparation $110.00 D2953 Each additional indirectly fabricated post - same tooth - includes canal preparation $80.00 D2954 Prefabricated post and core in addition to crown - base metal post; includes canal preparation $95.00 D2957 Each additional prefabricated post - same tooth - base metal post; includes canal preparation $70.00 D2971 Additional procedures to construct new crown under existing partial denture framework $60.00 D2980 Crown repair necessitated by restorative material failure $30.00 D2981 Inlay repair necessitated by restorative material failure $30.00 D2982 Onlay repair necessitated by restorative material failure $30.00 D2990 Resin infiltration of incipient smooth surface lesions - limited to permanent molars through age 15 $15.00

DENTAL PLANS | 2-18 D3000-D3999 IV. ENDODONTICS D3110 Pulp cap - direct (excluding final restoration) $5.00 D3120 Pulp cap - indirect (excluding final restoration) $5.00 D3220 Therapeutic pulpotomy (excluding final restoration) - removal of pulp coronal to the dentinocemental junction and application of medicament $45.00 D3221 Pulpal debridement, primary and permanent teeth $50.00 D3222 Partial pulpotomy for apexogenesis - permanent tooth with incomplete root development $45.00 D3230 Pulpal therapy (resorbable filling) - anterior, primary tooth (excluding final restoration) $60.00 D3240 Pulpal therapy (resorbable filling) - posterior, primary tooth (excluding final restoration) $60.00 D3310 Root canal - endodontic therapy, anterior tooth (excluding final restoration) $125.00 D3320 Root canal - endodontic therapy, bicuspid tooth (excluding final restoration) $215.00 D3330 Root canal - endodontic therapy, molar (excluding final restoration) $365.00 D3331 Treatment of root canal obstruction; non-surgical access $80.00 D3332 Incomplete endodontic therapy; inoperable, unrestorable or fractured tooth $80.00 D3333 Internal root repair of perforation defects $80.00 D3346 Retreatment of previous root canal therapy - anterior $155.00 D3347 Retreatment of previous root canal therapy - bicuspid $245.00 D3348 Retreatment of previous root canal therapy - molar $395.00 D3351 Apexification/recalcification - initial visit (apical closure/calcific repair of perforations, root resorption, etc.) $80.00 D3352 Apexification/recalcification - interim medication replacement (apical closure/ calcific repair of perforations, root resorption, pulp space disinfection, etc.) $55.00 D3353 Apexification/recalcification - final visit (includes completed root canal therapy - apical closure/calcific repair of perforations, root resorption, etc.) $55.00 D3410 Apicoectomy - anterior $155.00 D3421 Apicoectomy - bicuspid (first root) $165.00 D3425 Apicoectomy - molar (first root) $175.00 D3426 Apicoectomy (each additional root) $100.00 D3427 Periradicular surgery without apicoectomy $155.00 D3430 Retrograde filling - per root $75.00 D3450 Root amputation - per root $85.00 D3920 Hemisection (including any root removal), not including root canal therapy $75.00

D4000-D4999 V. PERIODONTICS - Includes preoperative and postoperative evaluations and treatment under a local anesthetic. D4210 Gingivectomy or gingivoplasty - four or more contiguous teeth or tooth bounded spaces per quadrant $160.00 D4211 Gingivectomy or gingivoplasty - one to three contiguous teeth or tooth bounded spaces per quadrant $95.00 D4212 Gingivectomy or gingivoplasty to allow access for restorative procedure, per tooth $95.00 D4240 Gingival flap procedure, including root planing - four or more contiguous teeth or tooth bounded spaces per quadrant $160.00 D4241 Gingival flap procedure, including root planing - one to three contiguous teeth or tooth bounded spaces per quadrant $95.00 D4245 Apically positioned flap $175.00 D4249 Clinical crown lengthening - hard tissue $150.00 D4260 Osseous surgery (including elevation of a full thickness flap and closure) - four or more contiguous teeth or tooth bounded spaces per quadrant $385.00 D4261 Osseous surgery (including elevation of a full thickness flap and closure) - one to three contiguous teeth or tooth bounded spaces per quadrant $308.00 D4263 Bone replacement graft - retained natural tooth - first site in quadrant $235.00 D4264 Bone replacement graft - retained natural tooth - each additional site in quadrant $85.00 D4270 Pedicle soft tissue graft procedure $235.00 D4274 Mesial/distal wedge procedure, single tooth (when not performed in conjunction

DENTAL PLANS | 2-19 with surgical procedures in the same anatomical area) $90.00 D4277 Free soft tissue graft procedure (including recipient and donor surgical sites) first tooth, implant, or edentulous tooth position in graft $235.00 D4278 Free soft tissue graft procedure (including recipient and donor surgical sites) each additional contiguous tooth, implant, or edentulous tooth position in same graft site $235.00 D4341 Periodontal scaling and root planing - four or more teeth per quadrant - limited to 4 quadrants during any 12 consecutive months $60.00 D4342 Periodontal scaling and root planing - one to three teeth per quadrant - limited to 4 quadrants during any 12 consecutive months $50.00 D4346 Scaling in presence of generalized moderate or severe gingival inflammation - full mouth, after oral evaluation - 1 D1110, D1120 or D4346 per 6 month period $5.00 D4355 Full mouth debridement to enable comprehensive evaluation and diagnosis - limited to 1 treatment in any 12 consecutive months $60.00 D4910 Periodontal maintenance - limited to 1 treatment each 6 month period $45.00 D4910 Additional periodontal maintenance (within the 6 month period) $55.00 D4921 Gingival irrigation - per quadrant No Cost

D5000-D5899 VI. PROSTHODONTICS (removable) - For all listed dentures and partial dentures, Copayment includes after delivery adjustments and tissue conditioning, if needed, for the first six months after placement. The Enrollee must continue to be eligible, and the service must be provided at the Contract Dentist’s facility where the denture was originally delivered. - Rebases, relines and tissue conditioning are limited to 1 per denture during any 12 consecutive months. - Replacement of a denture or a partial denture requires the existing denture to be 5+ years old. D5110 Complete denture - maxillary $365.00 D5120 Complete denture - mandibular $365.00 D5130 Immediate denture - maxillary $385.00 D5140 Immediate denture - mandibular $385.00 D5211 Maxillary partial denture - resin base (including any conventional clasps, rests and teeth) $325.00 D5212 Mandibular partial denture - resin base (including any conventional clasps, rests and teeth) $325.00 D5213 Maxillary partial denture - cast metal framework with resin denture bases (including any conventional clasps, rests and teeth) $395.00 D5214 Mandibular partial denture - cast metal framework with resin denture bases (including any conventional clasps, rests and teeth) $395.00 D5221 Immediate maxillary partial denture - resin base (including any conventional clasps, rests and teeth) $325.00 D5222 Immediate mandibular partial denture - resin base (including any conventional clasps, rests and teeth) $325.00 D5223 Immediate maxillary partial denture - cast metal framework with resin denture bases (including any conventional clasps, rests and teeth) $395.00 D5224 Immediate mandibular partial denture - cast metal framework with resin denture bases (including any conventional clasps, rests and teeth) $395.00 D5225 Maxillary partial denture - flexible base (including any clasps, rests and teeth) $445.00 D5226 Mandibular partial denture - flexible base (including any clasps, rests and teeth) $445.00 D5410 Adjust complete denture - maxillary $18.00 D5411 Adjust complete denture - mandibular $18.00 D5421 Adjust partial denture - maxillary $18.00 D5422 Adjust partial denture - mandibular $18.00 D5510 Repair broken complete denture base $55.00 D5520 Replace missing or broken teeth - complete denture (each tooth) $35.00 D5610 Repair resin denture base $55.00 D5620 Repair cast framework $55.00 D5630 Repair or replace broken clasp - per tooth $55.00 D5640 Replace broken teeth - per tooth $45.00 D5650 Add tooth to existing partial denture $45.00

DENTAL PLANS | 2-20 D5660 Add clasp to existing partial denture - per tooth $55.00 D5670 Replace all teeth and acrylic on cast metal framework (maxillary) $180.00 D5671 Replace all teeth and acrylic on cast metal framework (mandibular) $180.00 D5710 Rebase complete maxillary denture $105.00 D5711 Rebase complete mandibular denture $105.00 D5720 Rebase maxillary partial denture $105.00 D5721 Rebase mandibular partial denture $105.00 D5730 Reline complete maxillary denture (chairside) $60.00 D5731 Reline complete mandibular denture (chairside) $60.00 D5740 Reline maxillary partial denture (chairside) $60.00 D5741 Reline mandibular partial denture (chairside) $60.00 D5750 Reline complete maxillary denture (laboratory) $95.00 D5751 Reline complete mandibular denture (laboratory) $95.00 D5760 Reline maxillary partial denture (laboratory) $95.00 D5761 Reline mandibular partial denture (laboratory) $95.00 D5820 Interim partial denture (maxillary) - limited to 1 in any 12 consecutive months $125.00 D5821 Interim partial denture (mandibular) - limited to 1 in any 12 consecutive months $125.00 D5850 Tissue conditioning, maxillary $30.00 D5851 Tissue conditioning, mandibular $30.00

D5900-D5999 VII. MAXILLOFACIAL PROSTHETICS - NOT COVERED D6000-D6199 VIII. IMPLANT SERVICES - NOT COVERED D6200-D6999 IX. PROSTHODONTICS, FIXED (EACH RETAINER AND EACH PONTIC CONSTITUTES A UNIT IN A FIXED PARTIAL DENTURE [BRIDGE]) - When a crown and/or pontic exceeds six units in the same treatment plan, an Enrollee may be charged an additional $100.00 per unit, beyond the 6th unit. - Replacement of a crown, pontic, inlay, onlay or stress breaker requires the existing bridge to be 5+ years old. D6210 Pontic - cast high noble metal $395.00 D6211 Pontic - cast predominantly base metal $295.00 D6212 Pontic - cast noble metal $335.00 D6240 Pontic - porcelain fused to high noble metal $395.00 D6241 Pontic - porcelain fused to predominantly base metal $295.00 D6242 Pontic - porcelain fused to noble metal $335.00 D6245 Pontic - porcelain/ceramic $395.00 D6250 Pontic - resin with high noble metal $335.00 D6251 Pontic - resin with predominantly base metal $235.00 D6252 Pontic - resin with noble metal $275.00 D6600 Retainer inlay - porcelain/ceramic, two surfaces $345.00 D6601 Retainer inlay - porcelain/ceramic, three or more surfaces $365.00 D6602 Retainer inlay - cast high noble metal, two surfaces $295.00 D6603 Retainer inlay - cast high noble metal, three or more surfaces $305.00 D6604 Retainer inlay - cast predominantly base metal, two surfaces $195.00 D6605 Retainer inlay - cast predominantly base metal, three or more surfaces $205.00 D6606 Retainer inlay - cast noble metal, two surfaces $225.00 D6607 Retainer inlay - cast noble metal, three or more surfaces $235.00 D6608 Retainer onlay - porcelain/ceramic, two surfaces $340.00 D6609 Retainer onlay - porcelain/ceramic, three or more surfaces $375.00 D6610 Retainer onlay - cast high noble metal, two surfaces $300.00 D6611 Retainer onlay - cast high noble metal, three or more surfaces $310.00 D6612 Retainer onlay - cast predominantly base metal, two surfaces $200.00 D6613 Retainer onlay - cast predominantly base metal, three or more surfaces $210.00 D6614 Retainer onlay - cast noble metal, two surfaces $220.00 D6615 Retainer onlay - cast noble metal, three or more surfaces $240.00 D6720 Retainer crown - resin with high noble metal $335.00

DENTAL PLANS | 2-21 D6721 Retainer crown - resin with predominantly base metal $235.00 D6722 Retainer crown - resin with noble metal $275.00 D6740 Retainer crown - porcelain/ceramic $395.00 D6750 Retainer crown - porcelain fused to high noble metal $395.00 D6751 Retainer crown - porcelain fused to predominantly base metal $295.00 D6752 Retainer crown - porcelain fused to noble metal $335.00 D6780 Retainer crown - ¾ cast high noble metal $395.00 D6781 Retainer crown - ¾ cast predominantly base metal $295.00 D6782 Retainer crown - ¾ cast noble metal $335.00 D6783 Retainer crown - ¾ porcelain/ceramic $395.00 D6790 Retainer crown - full cast high noble metal $395.00 D6791 Retainer crown - full cast predominantly base metal $295.00 D6792 Retainer crown - full cast noble metal $335.00 D6930 Re-cement or re-bond fixed partial denture $25.00 D6940 Stress breaker $50.00 D6980 Fixed partial denture repair necessitated by restorative material failure $70.00

D7000-D7999 X. ORAL AND MAXILLOFACIAL SURGERY - Includes preoperative and postoperative evaluations and treatment under a local anesthetic. D7111 Extraction, coronal remnants - deciduous tooth $10.00 D7140 Extraction, erupted tooth or exposed root (elevation and/or forceps removal) $14.00 D7210 Extraction, erupted tooth requiring removal of bone and/or sectioning of tooth, and including elevation of mucoperiosteal flap if indicated $55.00 D7220 Removal of impacted tooth - soft tissue $70.00 D7230 Removal of impacted tooth - partially bony $95.00 D7240 Removal of impacted tooth - completely bony $120.00 D7241 Removal of impacted tooth - completely bony, with unusual surgical complications $140.00 D7250 Removal of residual tooth roots (cutting procedure) $45.00 D7251 Coronectomy - intentional partial tooth removal $140.00 D7270 Tooth reimplantation and/or stabilization of accidentally evulsed or displaced tooth . $130.00 D7280 Exposure of an unerupted tooth $120.00 D7282 Mobilization of erupted or malpositioned tooth to aid eruption $120.00 D7283 Placement of device to facilitate eruption of impacted tooth No Cost D7286 Incisional biopsy of oral tissue - soft - does not include pathology laboratory procedures $40.00 D7310 Alveoloplasty in conjunction with extractions - four or more teeth or tooth spaces, per quadrant $100.00 D7311 Alveoloplasty in conjunction with extractions - one to three teeth or tooth spaces, per quadrant $100.00 D7320 Alveoloplasty not in conjunction with extractions - four or more teeth or tooth spaces, per quadrant $120.00 D7321 Alveoloplasty not in conjunction with extractions - one to three teeth or tooth spaces, per quadrant $120.00 D7450 Removal of benign odontogenic cyst or tumor - lesion diameter up to 1.25 cm No Cost D7451 Removal of benign odontogenic cyst or tumor - lesion diameter greater than 1.25 cm No Cost D7471 Removal of lateral exostosis (maxilla or mandible) $100.00 D7472 Removal of torus palatinus $100.00 D7473 Removal of torus mandibularis $100.00 D7510 Incision and drainage of abscess - intraoral soft tissue $25.00 D7960 Frenulectomy - also known as frenectomy or frenotomy - separate procedure not incidental to another procedure $20.00 D7970 Excision of hyperplastic tissue - per arch $80.00 D7971 Excision of pericoronal gingiva $80.00

DENTAL PLANS | 2-22 D8000-D8999 XI. ORTHODONTICS - The listed Copayment for each phase of orthodontic treatment (limited, interceptive or comprehensive) covers up to 24 months of active treatment. Beyond 24 months, an additional monthly fee, not to exceed $125.00, may apply. - The Retention Copayment includes adjustments and/or office visits up to 24 months. Pre and post orthodontic records include:

The benefit for pre-treatment records and diagnostic services includes:...... $200.00 D0210 Intraoral - complete series of radiographic images D0322 Tomographic survey D0330 Panoramic radiographic image D0340 2D cephalometric radiographic image - acquisition, measurement and analysis D0350 2D oral/facial photographic images obtained intraorally or extraorally D0351 3D photographic image D0470 Diagnostic casts

The benefit for post-treatment records includes:...... $70.00 D0210 Intraoral - complete series of radiographic images D0470 Diagnostic casts D8010 Limited orthodontic treatment of the primary dentition $1,150.00 D8020 Limited orthodontic treatment of the transitional dentition - child or adolescent to age 19 $1,150.00 D8030 Limited orthodontic treatment of the adolescent dentition - adolescent to age 19 $1,150.00 D8040 Limited orthodontic treatment of the adult dentition - adults, including covered dependent adult children $1,350.00 D8050 Interceptive orthodontic treatment of the primary dentition $1,150.00 D8060 Interceptive orthodontic treatment of the transitional dentition $1,150.00 D8070 Comprehensive orthodontic treatment of the transitional dentition - child or adolescent to age 19 $1,900.00 D8080 Comprehensive orthodontic treatment of the adolescent dentition - adolescent to age 19 $1,900.00 D8090 Comprehensive orthodontic treatment of the adult dentition - $2,100.00 adults, including covered dependent adult children D8660 Pre-orthodontic treatment examination to monitor growth and development $25.00 D8680 Orthodontic retention (removal of appliances, construction and placement of removable retainers) $275.00 D8681 Removable orthodontic retainer adjustment No Cost D8999 Unspecified orthodontic procedure, by report - includes treatment planning session $100.00

D9000-D9999 XII. ADJUNCTIVE GENERAL SERVICES D9110 Palliative (emergency) treatment of dental pain - minor procedure $20.00 D9211 Regional block anesthesia No Cost D9212 Trigeminal division block anesthesia No Cost D9215 Local anesthesia in conjunction with operative or surgical procedures No Cost D9219 Evaluation for deep sedation or general anesthesia No Cost D9223 Deep sedation/general anesthesia - each 15 minute increment $80.00 D9243 Intravenous moderate (conscious) sedation/analgesia - each 15 minute increment $80.00 D9310 Consultation - diagnostic service provided by dentist or physician other than requesting $25.00 dentist or physician D9311 Consultation with medical health care professional No Cost D9430 Office visit for observation (during regularly scheduled hours) - no other services performed $5.00 D9440 Office visit - after regularly scheduled hours $35.00 D9450 Case presentation, detailed and extensive treatment planning No Cost D9932 Cleaning and inspection of removable complete denture, maxillary No Cost D9933 Cleaning and inspection of removable complete denture, mandibular No Cost D9934 Cleaning and inspection of removable partial denture, maxillary No Cost D9935 Cleaning and inspection of removable partial denture, mandibular No Cost D9940 Occlusal guard, by report - limited to 1 in 3 years $105.00 D9943 Occlusal guard adjustment $10.00 D9951 Occlusal adjustment, limited $55.00

DENTAL PLANS | 2-23 D9952 Occlusal adjustment, complete $105.00 D9975 External bleaching for home application, per arch; includes materials and fabrication $125.00 of custom trays - limited to one bleaching tray and gel for two weeks of self-treatment D9986 Missed appointment - without 24 hour notice - per 15 minutes of appointment time $10.00 D9987 Canceled appointment - without 24 hour notice - per 15 minutes of appointment time $10.00 D9991 Dental case management - addressing appointment compliance barriers No Cost D9992 Dental case management - care coordination No Cost

If services for a listed procedure are performed by the assigned Contract Dentist, the Enrollee pays the specified Copayment. Listed procedures which require a Dentist to provide Specialist Services, and are referred by the assigned Contract Dentist, must be authorized by Delta Dental. The Enrollee pays the Copayment specified for such services.

DENTAL PLANS | 2-24 SCHEDULE B LIMITATIONS AND EXCLUSIONS OF BENEFITS Limitations per arch), (2) treatment that is due to accident or injury, and directly attributable thereto, or (3) reconstructive surgery 1. The frequency of certain Benefits is limited. All frequency necessary because of a congenital disease or anomaly which limitations are listed in Schedule A, Description of Benefits and has resulted in a functional defect. Copayments. This exclusion will not apply if the treatment is approved by 2. If the Enrollee accepts a treatment plan from the Contract an external appeal agent pursuant to Section 4910 of the Dentist that includes any combination of more than six New York Insurance Law. Refer to ENROLLEE COMPLAINT crowns, bridge pontics and/or bridge retainers, the Enrollee PROCEDURES and Appendix A, DELTA DENTAL OF NEW may be charged an additional $100.00 above the listed YORK’S INTERNAL GRIEVANCE PROCEDURE Rider for Copayment for each of these services after the sixth unit has additional information. been provided. 4. Porcelain crowns, porcelain fused to metal or resin with metal 3. General anesthesia and/or intravenous sedation/analgesia type crowns and fixed partial dentures (bridges) for children is limited to treatment by a contracted oral surgeon and in under 16 years of age. conjunction with an approved referral for the removal of one 5. Lost, stolen or broken appliances including, but not limited to, or more partial or full bony impactions, (Procedures D7230, full or partial dentures, space maintainers, crowns, fixed partial D7240, and D7241). dentures (bridges) and orthodontic appliances. 4. Benefits provided by a pediatric Dentist are limited to children 6. Procedures, appliances or restoration if the purpose is to through age seven following an attempt by the assigned change vertical dimension, replace or stabilize tooth structure Contract Dentist to treat the child and upon Authorization loss by attrition, realignment of teeth, periodontal splinting, by Delta Dental, less applicable Copayments. The Plan will gnathologic recordings or to treat abnormal conditions of the consider exceptions on an individual basis if a child has a temporomandibular joint (TMJ) which are medical in nature, physical or mental impairment, limitation or condition which with the exception of procedures D9951 and D9952 as shown substantially interferes with that child’s ability to have Benefits on Schedule A. provided by a Contract Dentist. 7. Precious metal for removable appliances, metallic or 5. The cost to an Enrollee receiving orthodontic treatment permanent soft bases for complete dentures, porcelain whose coverage is cancelled or terminated for any reason denture teeth, precision abutments for removable partials will be based on the Contract Orthodontist’s usual fee for or fixed partial dentures (overlays, implants, and appliances the treatment plan. The Contract Orthodontist will prorate associated therewith) and personalization and characterization the amount for the number of months remaining to complete of complete and partial dentures. treatment. The Enrollee makes payment directly to the 8. Implant-supported dental appliances and attachments, Contract Orthodontist as arranged. implant placement, maintenance, removal and all other 6. Orthodontic treatment in progress is limited to new DeltaCare services associated with a dental implant. USA Enrollees who, at the time of their original effective date, 9. Consultations or other diagnostic services for non-covered are in active treatment started under their previous employer benefits. sponsored dental plan, as long as they continue to be eligible 10. Dental services received from any dental facility other than the under the DeltaCare USA Program. Active treatment means assigned Contract Dentist or an authorized dental specialist tooth movement has begun. Enrollees are responsible for (oral surgeon, endodontist, periodontist, pediatric dentist or all Copayments and fees subject to the provisions of their Contract Orthodontist) except for Emergency Services as prior dental plan. Delta Dental is financially responsible only described in the Contract and/or Evidence of Coverage. for amounts unpaid by the prior dental plan for qualifying orthodontic cases. 11. All related fees for admission, use, or stays in a hospital, out- patient surgery center, extended care facility, or other similar Exclusions care facility. 12. Prescription and over-the-counter drugs. Exclusions do not apply to procedures listed on Schedule 13. Dental expenses incurred in connection with any dental A, Description of Benefits and Copayments, if dental care or procedure started before the Enrollee’s eligibility with the treatment is necessary due to congenital disease or anomaly. DeltaCare USA Program. Examples include: teeth prepared 1. Any procedure that is not specifically listed under Schedule A, for crowns, root canals in progress, full or partial dentures for Description of Benefits and Copayments. which an impression has been taken and orthodontics unless 2. Any procedure that has poor prognosis for a successful result qualified for the orthodontic treatment in progress provision. and reasonable longevity based on the condition of the tooth 14. Composite or ceramic brackets, lingual adaptation of or teeth and/or surrounding structures, or is inconsistent with orthodontic bands, Invisalign and other specialized or generally accepted standards for dentistry. cosmetic alternatives to standard fixed and removable 3. Services not due to medical or dental necessity, but done orthodontic appliances. solely for cosmetic purposes with the exception of (1) 15. Treatment or appliances that are provided by a Dentist whose procedure D9975 (external bleaching for home application, practice specializes in prosthodontic services. DENTAL PLANS | 2-25 EXHIBIT A – NOTICE OF ADVERSE DETERMINATION This notice, provided to you pursuant to the requirements of Article 49 of the New York Insurance Law and the United States Department of Labor Claims Procedure Regulations, constitutes an Adverse Determination of your claim.

Reasons for the Determination If after review, Delta Dental continues to deny the claim, Delta Dental shall notify you and your attending dentist in writing of the The NOTICE OF PAYMENT OR ACTION attached hereto outlines decision on the request for review within thirty (30) days of the the specific reason(s) and the specific Plan provision(s) on which date the request is received. Delta Dental shall send you and your the determination was based. attending dentist a notice, similar to this notice. If in the opinion of you or your attending dentist, the matter warrants further consideration, you have two choices: (1) you may continue to Availability of Clinical Review Criteria Relied avail yourself of Delta Dental’s Internal Appeals Procedure and Upon to Make this Determination eventually, upon completion of Delta Dental’s second level of review, file an action in the courts pursuant to section 502(a) of Upon request and free of charge, Delta Dental will provide to ERISA, or (2) you may file an External Appeal with the New York you a copy of any internal rule, guideline or protocol, and/or an Insurance Department. Attached hereto is “Standard Description explanation of the scientific or clinical judgment if relied upon in and Instructions for Health Care Consumers to Request an denying your claim. External Appeal.” More information on these two options will be provided to you after you complete the first level of review. Instructions on How to Initiate a Standard Additional Necessary Information Which Must Appeal & How to Initiate an External Appeal be Provided in Order for Delta Dental to Render If you or your attending dentist wants the denial of benefits reviewed, you or your attending dentist must contact Delta Dental, a Decision on Your Appeal either in writing or by calling Delta Dental’s toll-free number, If you should choose to avail yourself of Delta Dental’s Internal 1-800-932-0783 within one hundred eighty (180) days of the Appeals Procedure, Delta Dental may require additional date on this notice. Failure to comply with such requirements information in order to render a decision on your appeal. If this may lead to forfeiture of your right to challenge this denial, is the case, Delta Dental has attached to this notice a separate You even when a request for clarification has been made. sheet containing a list of such necessary information, which also should state why the claim should not have been denied. Also, explains why such material or information is necessary. Please any other documents, data, information or comments which are submit such information to the address listed thereon. Please thought to have bearing on the claim, including the denial notice, also include any other documents, data, information or comments should accompany the request for review. You or your attending which you believe to have bearing on the claim including this dentist are entitled to receive, upon request and free of charge, denial notice. reasonable access to and copies of all documents, records, and other information relevant to the denied claim. The review will take into account all comments, documents, records, or other information, regardless of whether such information was submitted or considered initially. The review shall be conducted for Delta Dental by a Clinical Peer Reviewer who is neither the Clinical Peer Reviewer who made the claim denial that is the subject of the review, nor the subordinate of such individual. If the review of a claim denial is based in whole or in part on a lack of dental necessity, experimental treatment, or a clinical judgment in applying the terms of the contract, Delta Dental shall consult with a dentist who has appropriate training and experience in the pertinent field of dentistry who is neither the Delta Dental dental consultant who made the claim denial nor the subordinate of such dental consultant. The identity of such dental consultant is available upon request whether or not the advice was relied upon. In making the review, Delta Dental will not afford deference to the initial Adverse Determination.

DENTAL PLANS | 2-26 EXHIBIT B – NOTICE OF FINAL ADVERSE DETERMINATION

This notice is to inform you that upon review of your request for appeal of the Adverse Determination of your claim for benefits,Delta Dental continues to deny your claim. Attached are copies of the following: (1) a copy of the standard description of and instructions for initiating New York’s External Appeal process; and (2) an application form for requesting an External Appeal. Upon completion of the second level of Delta Dental’s Internal Appeals Procedure, you will then have a right to bring an action under Section 502(a) of ERISA. Please note that you or your attending dentist now have a right to file an External Appeal with the State of New York Insurance Department, but you must do so within forty-five (45) days from the date of your receipt of THIS NOTICE. Even though Delta Dental’s plan provides for two levels of review, the forty-five (45) day time period for requesting an External Appeal begins upon receipt of THIS NOTICE, the Final Adverse Determination of the first-level appeal, regardless of whether or not a second-level appeal is requested. By choosing to request a second-level internal appeal, the time may expire for you to request an External Appeal. Additionally, you and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local US Department of Labor Office and your State insurance regulatory agency.

Availability of Clinical Review Criteria Relied Upon to Make this Determination

Upon request and free of charge, Delta Dental will provide to you a copy of any documents, records or other information relevant to your claim for benefits, as well as any internal rule, guideline or protocol, and/or an explanation of the scientific or clinical judgment if relied upon in denying your claim.

1. Coverage type:

2. Description of the service for which payment was denied:

3. Basis and clinical rationale for the denial:

DENTAL PLANS | 2-27 4. Specific criteria and standards, including interpretive guidelines on which the decision was based:

5. Plan provisions upon which the determination is based:

6. The following is the name, business address, and business telephone number of the Delta Dental representative who has responsibility for Delta Dental’s Internal Appeals Procedure:

7. The following is the name, business address, and business telephone number of the Utilization Review Agent, if different from the answer provided in number 6, above:

By:

Title:

Date

DENTAL PLANS | 2-28 3 Vision Care Plan CONTENTS

...... Page

Key Terms to Know...... 3-1

Highlights of the Vision Care Plan...... 3-2

The Vision Care Plan...... 3-3

How the Vision Care Plan Works...... 3-3

• United Healthcare Vision Network Providers...... 3-3

• Using a Network Provider...... 3-3

• Using an Out-of-Network Provider...... 3-3

• Using a Combination of In-Network and Out-of-Network Providers...... 3-3

What the Plan Covers...... 3-4

What the Plan Does Not Cover...... 3-4

• What the Standard and High Vision Plans Cover...... 3-4

• What the Standard and High Vision Plans Do Not Cover...... 3-4

Filing Claims in the Standard and High Vision Plans...... 3-5

• For In-Network Vision Care Expenses...... 3-5

• For Out-of-Network Vision Care Expenses...... 3-5

• Appealing a Claim...... 3-5

• Damages or Award Settlement...... 3-5

Other Important Information...... 3-6

• Questions About the Vision Care Program...... 3-6

VISION CARE PLAN KEY TERMS TO KNOW

Here are a few important terms that are used to describe the Signature Select Vision Care benefits in this Summary Plan Description (SPD). Knowing these terms will help you better understand how your vision coverage works.

Allowance An allowance is the allowed coverage amount for a particular service or supply. For example, an allowance may apply to the cost of a contact lens exam and contact lenses.

Reimbursement Level The reimbursement level is the amount the Plan will reimburse you for covered expenses you paid out of your own pocket.

Selection Contact Lenses This refers to the vision plan’s formulary contact list as determined by United Healthcare Vision, Inc. Contact lenses not listed on the formulary are referred to as non-selection. A copy of the list can be found at www.myuhcvision.com.

VISION CARE PLAN | 3-1 Highlights of the Vision Care Plan Standard Vision Plan High Vision Plan Reimbursement Level In-Network Out-of-Network In-Network Out-of-Network Vision Exam (once every 100% Up to $40 100% Up to $80 calendar year) Frames (once every 100% (up to a retail value Up to $45 100% (up to a retail value Up to $70 calendar year) of $130*) of $130*) Lenses (once every calendar year) • Single 100% Up to $40 100% Up to $65 • Bifocal 100% Up to $60 100% Up to $70 • Trifocal 100% Up to $80 100% Up to $80 • Lenticular 100% Up to $80 100% Up to $80 Lens Options The Standard Vision Plan covers the following The High Vision Plan covers the following lens options in full: lens options in full: • Standard Scratch-resistant Coating • Standard Scratch-resistant Coating • Polycarbonate Lenses for Dependents • Polycarbonate Lenses for Dependents • Standard AR Coating • Photochromic lenses • Ultraviolet coating • Edge coating and Tints Contact lenses in both Covered-in-Full elective Selection contact lenses Elective contact lenses the Plans (once every • The fitting/evaluation fees, contact lenses, and up to • $200 reimbursed, for elective contacts in lieu of calendar year, in lieu of two follow-up visits are covered in full. eyeglasses (includes materials only). glasses) • If you choose disposable contacts, up to eight boxes • Toric, gas permeable and bifocal contact lenses are If your provider considers are included when obtained from a network provider. not covered. your contacts medically necessary, you should All other elective Non-Selection contact lenses Medically necessary contact lenses ask your provider to • A $200 allowance is applied toward the purchase of • $210 reimbursed, for necessary contacts in lieu of contact United Healthcare contact lenses outside the covered selection. eyeglasses (includes materials only). Vision to confirm what • Toric, gas permeable and bifocal contact lenses are reimbursement applies not covered. Materials copay (if applicable) is waived. before you purchase your contacts. Medically necessary contact lenses • Medically necessary • Covered in full. contact lenses are • Covered Contact Lens Selection does not apply determined at the at Costco, Walmart or Sam’s Club locations. The provider’s discretion allowance for Non-Selection contact lenses applies for one or more of the to materials. No portion will be exclusively applied to following conditions: the fitting and evaluation. o Following post- cataract surgery without intraocular lens implant o To correct extreme vision problems that cannot be corrected with spectacle lenses o With certain conditions of anisometropia, keratoconus, irregular corneal/ astigmatism, aphakia, facial deformity or corneal deformity Discounts in Both Plans The Plan offers discounts on lenses, coatings, tints, progressive lenses and other special eye care options, including laser surgery. For more information on available discounts, visit www.myuhcvision.com.

* If you choose a non-selection frame, you will be provided a $50 wholesale allowance and will be responsible for any difference in cost

VISION CARE PLAN | 3-2 THE VISION CARE PLAN

Taking care of your vision is vital not only to your eyesight, but to your overall health. The Signature Select Vision Care Plan (the “Vision Care Plan” or “Program”) offers coverage for annual eye examinations and quality eyewear. Signature Select offers coverage for these services and supplies through a nationwide network of private practice optometrists and ophthalmologists as well as retail optical providers. Your participation in the Vision Care Plan is voluntary. At annual enrollment, or as a new hire, you can elect or decline coverage. If you elect coverage, then you pay a premium cost. The Vision Care Plan is administered by United Healthcare Vision, Inc.

HOW THE VISION CARE PLAN WORKS

When you have a covered vision care expense, the Vision Care and date of birth. Identify yourself as having United Healthcare Plan reimburses you for all or a portion of the cost. There are two Vision coverage. The network provider will verify your eligibility levels of coverage: and receive authorization prior to your appointment. You will be provided with two vision benefits reference cards for your • Standard Vision Plan convenience. Although these cards do not guarantee benefits, you • High Vision Plan may present them to your vision care provider to communicate With both plans, when you use vision care services (including the important vision coverage information. These cards are not purchase of eyewear), you can decide whether to receive your required to visit a provider. vision care services in-network with a United Healthcare Vision Network Provider or out-of-network. In most cases, you will Using an Out-of-Network Provider receive a higher level of benefits if the services and supplies are If you choose to see an out-of-network provider: provided through a United Healthcare Vision Network Provider. • Make an appointment and receive the necessary services from the provider. Pay the provider the full fee and obtain an itemized United Healthcare Vision Network Providers receipt. If you choose to see a United Healthcare Vision Network Provider, • You will be reimbursed directly by United Healthcare Vision you can use United Healthcare Vision's online Provider Locator according to the out-of-network reimbursement level. 24 hours a day, 7 days a week to locate a network provider in your local area. You may also call United Healthcare Vision’s • See the Filing Claims section in this chapter for instructions on 24-hour, toll-free number at 1-800-638-3120 to locate a network how to file an out-of-network claim for reimbursement. provider. Following the voice prompts, simply enter your member identification number or your Social Security Number and your Using a Combination of In-Network and work or home zip code. An automated response will provide you Out-of-Network Providers with a list of the names, addresses and telephone numbers of If you choose to see an out-of-network provider for an eye network providers in your local area. examination and have a United Healthcare Vision Network For the online Provider Locator service, go to United Healthcare Provider fill your prescription for eyeglasses or contact lenses: Vision’s website at www.myuhcvision.com and click on “Provider • Obtain an examination from the out-of-network provider and pay Locator.” The Standard and High Vision Plan have the same the provider the full exam fee. Request a receipt for the exam as network. well as the prescription for your eyeglasses or contact lenses. The online Provider Locator will present a list of network • To fill your prescription, follow the procedures for locating a providers as well as the approximate distance and directions United Healthcare Vision Network Provider, as explained above. to each provider. The website also lists the services that each network provider offers, i.e., Exam only, Dispense only, Exam and • Contact one of the United Healthcare Vision Network Providers Dispense. in your local area who provides “Dispense Only” or “Exam and Dispense” services, as indicated in the online Provider Locator. Using a Network Provider If any problems arise with your eyeglasses or contact lenses due to an inaccurate prescription written by an out-of-network Once you select a network provider, you can contact that provider, United Healthcare Vision and the United Healthcare network provider directly to schedule an appointment. You will Vision Network Provider assume no responsibility. need to give your name, member identification number or Social Security Number, group name, patient’s name (if not yourself) • See the Filing Claims section in this chapter for further instructions.

VISION CARE PLAN | 3-3 WHAT THE STANDARD AND HIGH VISION PLANS COVER

The Vision Care Plan covers the following vision care services and • Medically Necessary and Elective Contact Lenses – The supplies: reimbursement for medically necessary or elective lenses depends on whether you use an In-Network or Out-of-Network • Vision examination – A complete analysis of the eyes Provider (see chart on page 3-2). and related structures to determine the presence of vision problems is covered once every calendar year. An optometrist Medically necessary contact lenses are determined at the or ophthalmologist can provide a comprehensive vision provider’s discretion for one or more of the following conditions: examination. o Following post cataract surgery without intraocular lens • Eyeglass lenses – You may purchase a new pair of eyeglass implant lenses once every calendar year. All clear, standard eyeglass o To correct extreme vision problems that cannot be corrected lenses are covered. with spectacle lenses • Frames – You may purchase new eyeglass frames once o With certain conditions of anisometropia, keratoconus, every calendar year. However, if you select a frame that costs irregular corneal/astigmatism, aphakia, facial deformity or more than the amount allowed by the Program, you will be corneal deformity responsible for any additional charges. If your provider considers your contacts medically necessary, you • Prescription sunglasses in lieu of eyeglasses – You should ask your provider to contact United Healthcare Vision to may purchase sunglasses in lieu of eyeglasses. You will be confirm what reimbursement applies before you purchase your responsible for tint charges. contacts.

WHAT THE STANDARD AND HIGH VISION PLANS DO NOT COVER

Charges Not Covered Additional Charges Not Covered

As with all vision plans, there are some expenses that may not be This Program is designed to cover vision needs rather than covered. These include (but are not limited to): cosmetic materials. You will be responsible for additional charges • Orthoptics or vision training incurred if you select any of the following items: • Post-cataract spectacle lenses • Tinted, coated (e.g., UV or anti-reflective) or laminated lenses in the Standard Vision Plan • Non-prescription lenses • Photochromic lenses in the Standard Vision Plan • Two pairs of glasses in lieu of bifocals • Polycarbonate/Hi-Index lenses in the Standard Vision Plan and • Medical or surgical services for eye disease that requires the High Vision Plan services of a physician • Progressive/Seamless multifocal lenses in the Standard Vision • Refractive laser eye surgery such as LASIK, PRK and ASA Plan and High Vision Plan • Any eye examination or corrective eyewear required by an • A frame that is not part of the United Healthcare Vision employer as a condition of employment, unless it is your once a “Selection” in the Standard Vision Plan and High Vision Plan year eye examination • Contact lenses in excess of the Program allowance in the • Services or materials provided as a result of any Workers’ Standard Vision Plan and High Vision Plan Compensation or similar law • Glasses and contacts during the same eligibility period • Any services or materials provided by any other vision plan or group benefit plan containing benefits for vision care Lenses and frames that are lost or broken will not be replaced except at the normal intervals when the services are otherwise available through the Program.

VISION CARE PLAN | 3-4 FILING CLAIMS IN THE STANDARD AND HIGH VISION PLANS

For In-Network Vision Care Expenses Appealing a Claim

When you or your enrolled dependents use United Healthcare If your claim is denied, you may file a written appeal and send to: Vision Network Providers, you are not required to file claim forms United Healthcare Vision or obtain vouchers to pre-authorize services and materials. Attention: Appeals Instead, network providers are responsible for obtaining the P.O. Box 30978 pre-authorization to perform services, provide materials and Salt Lake City, UT 84130 submit claims for reimbursement. For information on the Program’s procedures regarding claims When visiting a United Healthcare Vision Network Provider, you and appeals, including timing of benefits and appeal are only responsible for "Non-Selection" supplies or options, such determinations, the manner in which appeals are conducted, as tints and coatings. If you choose a frame that is not part of the and notice of any adverse benefit determinations, see the General United Healthcare Vision “Selection,” you will receive an allowance section of this SPD. and are only responsible for the difference between the allowance and the full cost of the frame. Damages or Award Settlement

For Out-of-Network Vision Care Expenses If you or a covered dependent are awarded damages or reach a settlement which includes payment for any vision expenses When you receive care from an out-of-network provider, you are resulting from an injury or illness caused by a third party, the responsible for filing a claim. After you pay the full cost, you must Plan must be reimbursed to the extent that it has paid benefits submit a written request for reimbursement, along with your for those expenses. itemized receipt(s), in order to get reimbursed.

How to File a Claim 1. Pay the fee and obtain an itemized receipt. Be sure it includes all services and supplies received and the date(s) of purchase.

2. Include a note requesting reimbursement. Receipts for services and materials purchased on different dates must be submitted at the same time to receive reimbursement. The following information should be included with the itemized receipt submission: • Your name and address • Patient’s name and date of birth • Your member identification number (or Social Security Number)

3. Send receipt and note to: United Healthcare Vision Attention: Claims Department P.O. Box 30978 Salt Lake City, UT 84130 Fax: 248-733-6060

VISION CARE PLAN | 3-5 OTHER IMPORTANT INFORMATION

Questions About the Vision Care Program

United Healthcare Vision's Customer Service Representatives are available to answer any questions you may have regarding your vision care benefits. You can reach United Healthcare Vision's Customer Service Department at 1-800-638-3120. Bilingual Customer Service Representatives are available. The hours of operation for the Customer Service Department are Monday through Friday, from 8:30 a.m. to 8:00 p.m. Eastern Time and Saturday, from 9:00 a.m. to 5:00 p.m. Eastern Time. This chapter only provides a general summary of the Signature Select vision benefits. For additional information, you should review additional coverage materials available from your Benefits Department. These materials, provided by United Healthcare Vision, more fully describe the specific benefit provisions, limitations and exclusions. Important information, such as your rights as a participant and other administrative details, can be found in the General Information section of this SPD.

VISION CARE PLAN | 3-6 4 Disability Plan CONTENTS

...... Page Key Terms to Know...... 4-1

Highlights of the Signature Select Disability Plan...... 4-2

The Signature Select Disability Plan...... 4-3 • How the Plan Works ...... 4-3

Short-Term Disability Benefits...... 4-4 • Your Benefit Amount...... 4-4 • How Benefits Are Paid...... 4-4

Long-Term Disability Benefits...... 4-5 • Your Benefit Amount...... 4-5 • Offset of Benefits...... 4-5 • How Long You Can Receive Benefits...... 4-6

Filing Claims...... 4-8 • How to File a Short-Term Disability Claim...... 4-8 • Long-Term Disability Claims...... 4-8

What Is Not Covered...... 4-8 • Short-Term Disability...... 4-8 • Long-Term Disability...... 4-8

When Coverage Ends...... 4-9

Claims Appeal...... 4-10

Other Important Information...... 4-11

DISABILITY PLAN KEY TERMS TO KNOW

Here are a few important terms that are used to describe the Signature Select Disability Plan in this Summary Plan Description (SPD). Knowing these benefits terms will help you better understand how the Plan works. Please see the insurance policy for more information. The insurance policy will control in the event of any conflict between this SPD or theSignature Select plan document and the insurance policy.

Benefit Waiting Period Pre-Existing Condition (Applies to Long-Term Disability only) The Benefit Waiting Period is the amount of time you must be disabled before benefits begin. For example, Short-Term Disability A Pre-Existing Condition means any injury or sickness for which benefits will begin after you have been disabled for more than you incurred expenses; received medical treatment, care or seven consecutive calendar days. services, including diagnostic measures; took prescribed drugs or medicines; or for which a reasonable person would have Covered Earnings consulted a physician within three months before your most recent effective date of insurance. The insurance company will Your coverage is based on your current Covered Earnings. not pay benefits on account of any disability which is caused or Covered Earnings means your annual base wage or pay, as contributed to by, or results from, a Pre-Existing Condition, until reported by the Employer for work performed for the Employer, 12 months after the employee’s most recent effective date of just prior to the date your disability begins. It excludes overtime, insurance. The Pre-Existing Condition limitation will apply to any bonuses, commissions and/or other compensation. Your added benefits or increases in benefits. Covered Earnings will be determined before any pay reductions from participation in a qualified retirement plan, a non-qualified Disability/Disabled retirement plan, Section 125 “cafeteria” benefit plan, Flexible Spending Accounts or any other arrangement where your • You are considered to be Disabled if you are unable to perform compensation is reduced on a voluntary basis. Covered Earnings the material duties of your regular occupation, or if, solely due to are initially determined on the date you apply for coverage. A injury or sickness, you are unable to earn 80% of your Covered change in the amount of Covered Earnings is effective on the first Earnings. of the month following the change in annual base wage or salary. • After receiving Disability benefits for 24 months, you are Any increase in your Covered Earnings will not be effective during considered to have a Total Disability if you are unable to perform a period of continuous disability. the material duties of any occupation for which you are (or could become) reasonably qualified by education, training or Indexed Covered Earnings experience, or solely due to injury or sickness, you are unable to (Also Applicable to Work Incentive Benefit) earn more than 80% of your Indexed Covered Earnings. For the first year you are disabled, your Indexed Covered Earnings will be equal to your Covered Earnings. After you have been disabled for one year, your Indexed covered Earnings will be your Covered Earnings plus an increase applied on each annual anniversary of the date you became disabled. The amount of each increase will be the lesser of: 1. 10% of your Indexed Covered Earnings during the preceding year of disability; or 2. The rate of increase in the Consumer Price Index (CPI-W) during the preceding calendar year.

DISABILITY PLAN | 4-1 Highlights of the Signature Select Disability Plan

Basic Option (Company-Paid) Premium Option+ (Employee-Paid)

Short-Term Disability (STD)

Benefit level 50% of pay** 90% of pay for 6 weeks, then 70% of pay for up to 20 weeks**

Benefit commencement* After 7 days* After 7 days*

Maximum benefit duration 26 weeks 26 weeks

Maximum Covered Earnings $360,000 $360,000

Long-Term Disability (LTD)

Benefit level 50% of pay** 65% of pay

Benefit commencement After 26 weeks of STD After 26 weeks of STD

Maximum benefit duration Age 65*** Age 65***

Maximum covered salary $360,000 $360,000

+ Bertelsmann Accounting Services, Inc. employees receive for the Premium Option Short-Term Disability as their Company-Paid Option. The Premium Long-Term Disability Option is Employee-Paid.

* STD has a 7-calendar day “Benefit Waiting Period” before benefits begin. However, if you are admitted as an inpatient in a hospital within these first 7 days, then benefits begin on the first day of hospitalization or outpatient surgery. During the “Benefit Waiting Period,” you may use any available sick days, personal or vacation days for continued incomee.

** Or the benefit required under the applicable California, Hawaii, New York, New Jersey or Rhode Island State statutory disability plan, if greater.

*** For disabilities that begin at or after age 62, benefits may continue beyond age 65 as explained later in this Summary Plan Description under How Long You Can Receive Benefits (see page 4-6). For disabilities related to a mental disorder or substance abuse, LTD benefits are limited to 24 months after LTD begins unless you remain confined to a hospital. Periods that you are confined in a hospital for more than 14 consecutive days for treatment of the disorder do not count toward this 24-month limit.

DISABILITY PLAN | 4-2 THE SIGNATURE SELECT DISABILITY PLAN

For most of us, becoming disabled is not something we expect to occur. Yet statistics provide an important reality check: One in eight workers will be disabled for five years or more during their working careers.1 Protecting your ability to earn an income is critical and a key component in a solid financial plan.

How the Plan Works Disability Income Options The Company provides you a Basic level of Short- and Long- Signature Select offers you flexibility in choosing a disability Term Disability coverage at no charge for employees. You have income option to best meet your needs. The Signature Select the option to elect Premium Short- and/or Long-Term Disability*, Disability Plan provides continuous income if you are unable to which you pay for with payroll deductions. work due to disability resulting from injury, sickness or pregnancy. You are required to have Premium STD in order to elect Premium Your disability coverage includes two parts: LTD. Every eligible employee must elect an STD and LTD coverage • Short-Term Disability (STD) provides weekly disability benefits option. If you do not elect an option upon initial eligibility, you will if you are disabled for more than seven consecutive days or be enrolled in the Basic options for both STD* and LTD. on the first day of inpatient hospital confinement. Benefits may If you elect the Premium STD* and LTD option(s), your continue up to 26 weeks from the date disability begins. The contributions may be deducted pre-tax or post-tax from your Company self-funds Short-Term Disability benefits and pays paycheck, which will affect how your disability benefits are taxed if claims, but the claims administrator decides if benefits are you become disabled and are eligible to receive disability benefits payable. (see Taxation of Benefits on pages 4-5 and 4-6). To determine • Long-Term Disability (LTD) provides monthly disability benefits whether your deductions are made on a pre or post tax basis, if you are disabled for more than 26 weeks. The Long-Term contact Benefits Department or Human Resources to review your Disability benefits are fully insured under an insurance policy enrollment elections. If you only enroll in the Basic STD and LTD and fully payable by the insurer. The insurer decides if benefits options, you are not required to make any contributions towards are payable and the Company does not pay any LTD benefits. this benefit. Disability benefits are based on your Covered Earnings as defined in Key Terms to Know in this section. Changing Your Disability Election While you are on Short-Term or Long-Term Disability, you will You may request a change to your disability income option continue to pay for benefits at the same rate as if you were actively election during any annual enrollment period. at work or a lesser amount as determined by the Company. Please contact your Human Resources or the Benefits Department for If you reduce the level of your coverage (i.e., from the Premium more information. option to the Basic option), your new coverage level will become effective on the following January 1. Eligibility However, if you elect to increase the level of your coverage You are eligible for Short-Term and Long-Term Disability coverage (i.e., from the Basic option to the Premium option), you will need if you are a benefits eligible regular full-time or part-time employee to submit an Evidence of Insurability form in a timely manner, of the Company who is regularly scheduled to work at least 20 and your new coverage level will become effective on the later hours per week. of January 1 or the date of approval by Cigna Life Insurance Part-time employees working less than 20 hours per week, Company of New York. If your request to increase coverage is Temporary, or Seasonal employees are not eligible for the denied, then your current level of disability benefits will continue. Signature Select Disability Plan.2

When Coverage Begins How Much Disability Protection Do I Need? Disability coverage will begin on the first of your active As you consider how much disability protection you might need, employment as a benefits-eligible employee (Please see Eligibility here are some key questions to ask yourself: section above). Coverage is provided for employees only (i.e., • Are you the sole wage earner? dependents are not covered for disability benefits under this Plan). Benefit payments do not commence, however, until after you have • Do you have a mortgage, car payments or other obligations? satisfied your waiting period of either seven consecutive days • How much are your monthly expenses? (STD) or 26 weeks (LTD). • Do you have savings you could draw from in the event of illness or injury? The answers may help you decide the amount of coverage that’s right for you.

1 Commissioner’s Disability Insurance Tables A and C, assuming equal weights by gender and occupation class, Council for Disability Awareness, 20132 2 Part-time employees working less than 20 hours, Temporary and Seasonal employees working in California, Hawaii, New York, New Jersey or Rhode Island may be entitled to statutory disability benefits. * Bertelsmann Accounting Services, Inc. employees receive for the Premium Option Short-Term Disability as their Company-Paid Option. The Premium Long-Term Disability Option is Employee-Paid.

DISABILITY PLAN | 4-3 SHORT-TERM DISABILITY BENEFITS

The Short-Term Disability Plan provides continuous weekly o Any Workers’ Compensation, occupational disease, income if you are Disabled for more than seven consecutive days unemployment compensation law or similar state or federal (or immediately if you are admitted as an inpatient in a hospital). law payable for injury or sickness arising out of work with the Disability means that solely because of a covered injury or Employer, including all permanent and temporary disability sickness, you are unable to perform all the material duties of your benefits. This includes any damages, compromises or settlement paid in place of such benefits, whether or not regular occupation, or are unable to earn more than 80% of your liability is admitted; Covered Earnings. Benefits may continue up to 26 weeks from the date disability begins. • Any Social Security disability or retirement benefits you or any third party receives (or is assumed to receive) on your own behalf or for your dependents; or which your dependents Your Benefit Amount receive (or are assumed to receive*) because of your entitlement to such benefits; Under Short-Term Disability coverage, your weekly benefit depends on the option you choose: • Any Retirement Plan benefits funded by the Employer. “Retirement Plan” means any defined benefit or defined • Basic option equal to 50% of Covered Earnings, or contribution plan sponsored or funded by the Employer. It does • Premium option equal to 90% of annual Covered Earnings for not include an individual deferred compensation agreement; a 6 weeks, then 70% of annual covered earnings for up to 20 profit sharing or any other retirement or savings plan maintained weeks. in addition to a defined benefit or other defined contribution Your benefit is not subject to a maximum of Covered Earnings. pension plan; or any employee savings plan including a thrift, Your weekly benefit will be reduced by any payment you receive or stock option or stock bonus plan, and/or Individual Retirement are entitled to receive for the same weekly period under any state Account (IRA) or 401(k) plan; law, including Workers’ Compensation. • Any proceeds payable under any franchise or group insurance or similar plan. If other insurance applies to the same claim How Benefits Are Paid for Disability, and contains the same or similar provision for reduction because of other insurance, the Plan will pay for its You will receive a weekly benefit if you are disabled for more than pro rata share of the total claim. “Pro rata share” means the seven consecutive calendar days. This is the Benefit Waiting proportion of the total benefit that the amount payable under Period. If, however, you are admitted as an inpatient to a hospital one policy, without other insurance, bears to the total benefits within the first seven days of your disability, benefits are payable under all such policies; from the first day of hospitalization. • Any amounts paid because of loss of earnings or earning Short-Term Disability benefits can be paid for up to 26 weeks capacity through settlement, judgment, arbitration or otherwise, for any one period of disability. You will need to provide periodic where a third party may be liable, regardless of whether liability evidence of disability from your attending physician, and your is determined case will be subject to review by Cigna Life Insurance Company of • Any wage or salary for work performed. New York. Successive Periods of Disability Offset of Benefits/Other Income Benefits Once you are eligible to receive disability benefits under the Plan, While you are disabled, you may be eligible for benefits from other separate periods of disability resulting from the same or related income sources. Your Short-Term Disability benefit will be offset causes are considered to be a continuous period of disability (reduced) by: unless you return to active service for more than 14 consecutive • Any amounts received (or assumed to be received) by you or calendar days. your dependents under: o The Canada and Quebec Pension Plans; A period of disability is not continuous if separate periods of disability result from unrelated causes or the later disability occurs o The Railroad Retirement Act; after participation in the Plan ends. The Successive Periods of o Any local, state, provincial or federal government disability or Disability provision will not apply if you are eligible for coverage retirement plan or law payable for injury or sickness provided under a plan that replaces this Plan. as a result of employment with the Employerr; o Any sick leave or salary continuation plan of the Employer; If you are disabled more than once by the same or a related o Any work loss provision in mandatory “no-fault” auto injury or illness, your absences will be considered as a single insurance; period of disability unless separated by at least 14 consecutive calendar days of regular, active employment. If your absences are considered to be a single period of disability, you will not be required to satisfy a new seven-day Benefit Waiting Period for the later absence. However, your prior absence will be counted against the 26-week maximum benefit period.

DISABILITY PLAN | 4-4 If you are disabled more than once due to unrelated illnesses or Benefits During a Leave injuries, your absences will be considered as separate periods The Family and Medical Leave Act of 1993 of disability provided you return to regular, active employment between disabilities. If your absences are considered to be The Family and Medical Leave Act (FMLA) of 1993 is a federal separate periods of disability, you will be required to satisfy a new law that entitles eligible employees up to a maximum of 12 weeks seven-day Benefit Waiting Period before benefits can commence. (84 calendar days) of job-protected leave in a 12-month period However, your prior period of disability will not count against the if you have worked for the Company for at least 12 months 26-week maximum benefit period for your subsequent disability. and for at least 1,250 hours in the last 12 months. If your FMLA- related leaves, including Short-Term Disability, do not exceed 12 workweeks in any 12-month period, you will be reinstated to Taxation of Benefits your former position or an equivalent position. Exceptions to this Short-Term Disability benefits are subject to income and provision apply when permitted by law. withholding taxes in accordance with lRS and any applicable state, city and local income tax regulations. In general, benefits are taxable when paid by the Company and/or you with pre-tax contributions.

LONG-TERM DISABILITY BENEFITS

The Long-Term Disability Plan provides continuous income if you o Any sick leave or salary continuation plan of your Employer; are Disabled for more than 26 weeks. o Any work loss provision in any mandatory “no-fault” auto • You are considered to be Disabled if solely because of a insurance; covered injury or sickness, you are unable to perform all the • Any Social Security disability or retirement benefits you or any material duties of your regular occupation, or are unable to earn third party receive (or are assumed to receive) either on your more than 80% of your Covered Earnings. behalf or for your dependents; or, if applicable, which your • After receiving Disability benefits for 24 months, you are dependents receive (or are assumed to receive) because of your considered to have a Total Disability if you are unable to perform entitlement to such benefits; the material duties of any occupation for which you are (or • Any Retirement Plan benefits funded by your employer. could become) reasonably qualified by education, training or “Retirement Plan” means any defined benefit or defined experience, or solely due to injury or sickness, you are unable to contribution plan sponsored or funded by your Employer. It does earn more than 80% of your Indexed Covered Earnings.1 not include an individual deferred compensation agreement; a profit sharing or any other retirement or savings plan maintained Your Benefit Amount in addition to a defined benefit or other defined contribution pension plan; or any employee savings plan including a thrift, Your monthly Long-Term Disability benefit depends on the option stock option or stock bonus plan, IRA or 401(k) plan; you choose: • Any proceeds payable under any franchise or group insurance • Basic option equal to 50% of Covered Earnings, or or similar plan. If there is other insurance that applies to the • Premium option equal to 65% of Covered Earnings same claim for disability and contains the same or similar The minimum monthly Long-Term Disability benefit is $100 under provision for reduction because of other insurance, Cigna will each option. For periods of less than one month, monthly benefits pay the pro rata share of the total claim. “Pro rata share” means are pro-rated by 1/30 for each day of disability. Your maximum the proportion of the total benefit that the amount payable under Covered Earnings under the LTD Plan are $360,000. one policy, without other insurance, bears to the total benefits under all such policies; Offset of Benefits/Other Income Benefits • Any amounts you or your dependents, if applicable, receive (or While you are disabled, you may be eligible for benefits from other are assumed to receive) under any Workers’ Compensation, income sources. Your monthly Long-Term Disability benefit will be occupational disease, unemployment compensation law or offset (reduced) by: similar state or federal law, including all permanent as well as temporary disability benefits; • Any amounts you or your dependents, if applicable, receive (or are assumed to receive) under: • Any amounts paid on account of loss of earnings or earning o The Canada and Quebec Pension Plans; capacity through settlement, judgment, arbitration or otherwise, o The Railroad Retirement Act; where a third party may be liable, regardless of whether liability is determined; o Any local, state, provincial or federal government disability or retirement plan or law as it pertains to your Employer;

1 For disabilities related to a mental disorder or substance abuse, LTD benefits are limited to 24 months after LTD begins unless you remain confined to a hospital. Periods that you are confined in a hospital for more than 14 consecutive days for treatment of the disorder do not count toward this 24-month limit.

DISABILITY PLAN | 4-5 • Any wage or salary for work performed while disability benefits How Long You Can Receive Benefits are payable, to the extent they exceed the amount allowed under the Work Incentive Benefit (see page 4-7). You will continue to receive monthly Long-Term Disability benefits Benefits will also be offset by any damages recovered due to an for up to 24 months, as long as because of injury or illness, you act or omission of a third party, but only to the extent that such are unable to perform the material duties of your occupation; or damages represent your loss of income. If you are paid other if, solely due to injury or sickness, you are unable to earn 80% of income benefits in a lump sum, they will be prorated: 1) over the your Indexed Covered Earnings. period of time it would have been paid if not paid in a lump sum; After receiving Disability benefits for 24 months, you will be or 2) if such period of time cannot be determined, over a period of eligible for continued benefits if you are considered to have a Total 60 months. Disability, which means you are unable to perform the material duties of any occupation for which you are (or could become) Taxation of Benefits reasonably qualified by education, training or experience, or solely due to injury or sickness, you are unable to earn more than 80% Long-Term Disability benefits are subject to income and of your Indexed Covered Earnings. However, you will not be able withholding taxes in accordance with lRS and any applicable to continue benefits beyond 24 months if your disability is related state, city and local income tax regulations. In general, benefits to a mental disorder or a substance use disorder. Periods that you are taxable when paid by the Company and/or you with pre-tax are confined in a hospital for more than 14 consecutive days for contributions. treatment of the disorder do not count toward this 24-month limit.

When Benefits Begin The Long-Term Disability Plan has a maximum benefit period, which will provide a benefit to you until you turn age 65. The Your monthly Long-Term Disability benefit will begin after you are benefit period could extend beyond age 65, based on your age disabled for 26 consecutive weeks. This is the Benefit Waiting when disability began. Period. However, you may return to work for up to 14 consecutive days on a “trial basis” during this period. These trial days will Age When Disability Maximum Benefit neither cause the consecutive period of disability to end nor be counted towards the 26-week Benefit Waiting Period. Begins Period

Age 62 or under To age 65 or the date the 42nd monthly benefit is payable, if later

Age 63 36 months

Age 64 30 months

Age 65 24 months

Age 66 21 months

Age 67 18 months

Age 68 15 months

Age 69 or older 12 months

DISABILITY PLAN | 4-6 Work Incentive Benefit Survivor Benefit For the first 12 months after you return to work, your disability The Plan will pay a survivor benefit if you die while disability benefit is as shown on page 4-2. If, for any month during this benefits are payable and at least six monthly benefits have been period, the sum of your disability benefit, your current earnings payable to you for a continuous period of disability. The “monthly and any additional other income benefits exceed 100% of your survivor benefit” will equal 100% of the sum of the last full disability indexed Covered Earnings, your disability benefit will be reduced benefit payable to you plus any current earnings by which the by the excess amount. disability benefit was reduced for that month. A single lump sum payment equal to 3 monthly survivor benefits will be payable. The After 12 months, your disability benefit is as shown on page 4-2, survivor benefit will be payable to the first surviving class of the reduced by 50% of your current earnings received during any following living relatives: spouse, children, parents, brothers and month you return to work. If the sum of your disability benefit, your sisters; or to the executors or administrators of your estate. current earnings and any additional other income benefits exceed 80% of your monthly indexed Covered Earnings, your disability benefit will be reduced by the excess amount. How the Plan Works – An Example If you are working for another employer on a regular basis when your disability coverage begins, your earnings will include the Dan sustains a bad back injury, and his condition requires amount of any increase in the amount you are earning from this surgery and months of physical therapy. Due to recurring work while you are disabled. pain, he can’t sit in a chair for long periods and can’t perform his job duties for a year. Cigna will, from time to time, review your status and will require satisfactory proof of earnings and continued disability. Dan’s Salary: $40,000 Coverage: Premium Option Rehabilitation During a Period of Disability Short-Term Disability Benefit Long-Term Disability Benefit If it is determined that you are a suitable candidate for $692.31 per week for $2,166.66 per month rehabilitation, you may be required to participate in a rehabilitation 6 weeks after satisfying plan. Cigna has the sole discretion to approve your participation in the 7-day waiting period, a rehabilitation plan and to approve a program as a rehabilitation then up to $538.46 for up plan. to 20 weeks The rehabilitation plan may, at Cigna’s discretion, allow for payment of your medical expense, education expense, moving Coverage amounts may be reduced in the event you receive other income expense, accommodation expense or family care expense while benefits, such as Social Security. This is a hypothetical illustration only. Your you participate in the program. situation will differ as certain coverage exclusions, offsets, limitations, terms and conditions may apply If you fail to fully cooperate in all required phases of the rehabilitation plan without good cause, no disability benefits will be paid, and insurance will end.

If You Have a Second Disability If you are disabled more than once due to unrelated illnesses or injuries, your absences will be considered as separate periods of disability if you return to active employment between disabilities. As such, a new 26-week Benefit Waiting Period is required. If you are disabled more than once within a six-month period due to the same (or a related) illness or injury, your absences will be considered as part of the same period of disability. As such, you will not be required to satisfy a new 26-week Benefit Waiting Period. If you are again disabled after you have returned to work for more than six months, the second disability will be considered a separate disability and a new 26-week Benefit Waiting Period must be satisfied regardless of whether the disabilities are due to the same, related or separate cause.

DISABILITY PLAN | 4-7 FILING CLAIMS WHAT IS NOT COVERED

How to File a Short-Term Disability Claim Short-Term Disability If you are disabled for seven consecutive calendar days (or have The Plan will not pay any disability benefits for a disability that been hospitalized for a disabling condition) you may qualify for results, directly or indirectly, from: Short-Term Disability benefits. Contact Human Resources and/or the Benefits Department as soon as possible. A claim for disability • Suicide, attempted suicide or self-inflicted injury benefits must be initiated within 31 days after the disability begins • War or any act of war, whether or not declared to avoid a possible reduction or forfeiture of benefits. • Active participation in a riot You can contact Cigna, the Plan’s disability administrator, at • Injury or sickness while you are serving on full-time active duty 800-362-4462. When you call, Cigna will ask you for the following in any armed forces information: • Commission of a felony • Your name, address, phone number, birth date, Social Security • The revocation, restriction or non-renewal of your license, number and email address; permit or certification necessary to perform the duties of your • The reason you are filing the claim – illness or injury; occupation unless due solely to injury or sickness otherwise covered by the Plan • A description of your illness, symptoms and/or diagnosis, including the date the symptoms first appeared and whether or • Any cosmetic surgery or surgical procedure that is not medically not you had the illness or symptoms before; necessary. Medically necessary means the surgical procedure is: (a) prescribed by a physician as required treatment of the • Whether you have filed or have plans to file a Worker’s injury or sickness; and (b) appropriate according to conventional Compensation claim; medical practice for the injury or sickness in the locality in • Information regarding any visits you have made to a doctor, which the surgery is performed. The Plan will pay benefits if hospital or clinic for the claim; the disability is caused by you donating an organ in a non- • Employment information, including your hire date, job title and experimental organ transplant procedure. job description; and • Injury or Sickness for which you are entitled to benefits from • Disclosure Authorization. Worker’s Compensation • Injury or Sickness that is work-related Case Management A Cigna Case Manager may contact you to ask questions and The Plan will not pay disability benefits for any period of disability discuss the claim process or to obtain any additional information during which you: that is required. The Cigna Case Manager will be responsible • Are incarcerated in a penal or corrections institution for managing your claim and will be your main contact for any • Are not receiving appropriate care questions you may have. The Cigna Case Manager will contact • Fail to cooperate with the Plan in the administration of the claim. the Company for a description of your job requirements and will Such cooperation includes, but is not limited to, providing also contact your doctor for medical reports. You may be required any information or documents needed to determine whether to authorize your doctor to release medical reports to the Case benefits are payable or the actual benefit amount due. Manager. • Refuse to participate in rehabilitation efforts as required by the For Short-Term Disability claims, once your claim is approved, Plan you will receive an approval letter that shows the date you are • Refuse to participate in a modified work arrangement expected to return to work and your weekly benefit. Cigna will also inform the Company of your claim approval and your anticipated return-to-work date. Long-Term Disability The Plan will not pay any disability benefits for a disability that Long-Term Disability Claims results, indirectly or directly, from: • Suicide, attempted suicide, or self-inflicted injury If you expect to be disabled for more than 26 weeks and it is likely • War or any act of war, whether or not declared that you will qualify for Long-Term Disability benefits, your claim • An injury or sickness that occurs while engaged in the activities will be transferred by Cigna to Long-Term Disability. You do not of active duty service in the armed forces of any country or need to file a new claim. international organization. An injury or sickness that occurs while engaged in Reserve or National Guard training is not Questions About Your Claim excluded until training extends beyond 31 days. Once you have provided all required information, you will receive • Commission of a felony or attempted felony an acknowledgment package by mail. If you have questions, call 1-800-36-CIGNA (24462) between 7 AM and 7 PM Central Time. If you call outside this time frame, please leave a voicemail message and a representative will respond (typically the next business day).

DISABILITY PLAN | 4-8 The Plan will not pay Disability Benefits for any period of Disability during which you: WHEN COVERAGE ENDS • Are incarcerated in a penal or corrections institution Termination of Benefits • Are not receiving appropriate care • Fail to cooperate with Cigna in the administration of the claim. Your Short-Term Disability benefits will terminate upon: Such cooperation includes, but is not limited to, providing • The date you earn more in secondary income than the any information or documents needed to determine whether percentage of annual salary used for payment of your disability benefits are payable or the actual benefit due. benefits • Refuse to participate in rehabilitation efforts as required by • The date the Plan determines that you are no longer disabled Cigna • The end of the 26-week maximum benefit period • The date you die Long-Term Disability Limitations • The date you refuse to participate in rehabilitation efforts as The Long-Term Disability Plan will pay disability benefits on a required by the Plan limited basis for a disability caused or contributed to by any one or • The date you are no longer receiving appropriate care from a more of the following conditions. The maximum benefits payable physician for any of these conditions is 24 months. Your Long-Term Disability benefits will terminate on the earliest of • Alcoholism the dates below: • Anxiety disorders • The date you earn more than the percentage of your indexed • Delusional (paranoid) disorders Covered Earnings which is used to determine if you are disabled • Depressive disorders • The date that Cigna determines you are no longer disabled • Drug addiction • The date the maximum benefit period ends • Eating disorders • The date you die • Mental illness If, before reaching the lifetime maximum benefit, you are Termination of Coverage confined in a hospital for more than 14 consecutive days, that Your Short-Term Disability coverage will terminate upon: period of confinement will not count against the lifetime limit. • The earlier of the date of termination or the last day of active The confinement must be for the appropriate care of any of the employment conditions listed above. • The date you transfer to an ineligible classification of employees Long-Term Disability Pre-Existing Condition Limitation • The date you enter active full-time military duty (other than for a training period of two months or less) Cigna will not pay benefits on account of any disability which • The day after the period for which premiums are paid is caused or contributed to by, or results from, a Pre-Existing Condition, until 12 months after the employee’s most recent • The date the Plan is terminated effective date of insurance. No increase in benefits will be paid on Your Long-Term Disability income coverage will terminate on the account of any disability which is caused or contributed to by, or earliest of the dates below: results from, a Pre-Existing Condition, until 12 months after the • The date you are eligible for coverage under a plan intended to effective date of the increase. replace this coverage A “Pre-Existing Condition” means any injury or sickness for which • The date the Plan policy is terminated the employee incurred expenses, received medical treatment, • The date you transfer to an ineligible classification of employees care or services including diagnostic measures, took prescribed • The day after the period for which premiums are paid drugs or medicines, or for which a reasonable person would have consulted a physician within 3 months before his or her most • The date you are no longer in active service recent effective date of insurance. Extension of Coverage Except for any amount of benefit in excess of a prior plan’s benefits, this limitation will not apply if you were covered under If you are disabled at the time your coverage would otherwise a prior long-term disability plan and satisfied the Pre-Existing terminate employment, your Short- and Long-Term Disability Condition limitation, if any, under that plan. If you were covered income coverage will be continued for the duration of your under a prior plan, but did not fully satisfy the Pre-Existing disability in accordance with the provisions of the Plan. If you do Condition limitation of that plan, Cigna will credit you for any time not return to employment, coverage ends when the disability ends you did satisfy. Time will not be credited for any day you were not or when benefits are no longer payable, whichever occurs first. in active service or were not actively at work due to sickness.

DISABILITY PLAN | 4-9 Conversion of Coverage o if an internal rule, guideline, protocol or other similar criterion was relied on to determine a claim, you’ll receive either a copy If your Long-Term Disability coverage terminates because of your of the actual rule, guideline, protocol or other criterion, or a termination of active employment (other than for retirement) or if statement that the rule, guideline, protocol or other criterion you are no longer in an eligible classification of employees, you was used and how you can request a copy free of charge; may be eligible for Long-Term Disability conversion insurance. To and be eligible for the “converted policy”, you must have been covered under the Signature Select Long-Term Disability Plan for at least o if the denial is based on a provision such as medical 12 consecutive months and you must apply within 62 days of the necessity, experimental treatment or a similar exclusion or termination of your Long-Term Disability coverage or as required limit, you’ll receive either an explanation of the scientific or by the insurer. Conversion of coverage is provided by the insurer clinical judgment for the determination based on the Plan and is not part of the Signature Select plan. terms and your medical circumstances, or a statement that you can receive the explanation free of charge upon request; Please see Human Resources or Benefits Department for further information and restriction. • For claims filed on or after April 2, 2018 involving a determination of disability: o either the specific internal rules, guidelines, protocols, standards or other similar criteria of the plan relied upon in CLAIMS AND APPEALS making the adverse determination or a statement that such rules, guidelines, protocols, standards or other similar criteria Filing a Claim of the Plan do not exist; Your claim should provide the date of disability/loss, name and o A discussion of the decision that includes, if applicable, address, and the Company’s name and address. This should be the reason(s) for not following the view of the treating mailed to: professional, medical or vocational experts, or a disability Cigna Claim Operations determination by the Social Security Administration; and 2000 Park Lane o If the decision is based on medical necessity or experimental Pittsburgh, PA 15275 treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, Claims Review applying the terms of the Plan to your medical circumstances, or a statement that such explanation will be provided free of The Plan will decide your claim within a reasonable time, but not charge upon request; and later than 45 days after the Plan receives it. The time to decide your claim can be extended by up to 30 days if necessary due to o A statement that you are entitled, upon request and free of matters beyond the control of the Plan. You’ll be notified before the charge, reasonable access to and copies of all documents, end of the first 45-day period why the extension is necessary and records, and other information relevant to your claim. when the Plan expects to make a decision. • A description of any additional material or information needed to Notification may be extended again up to 30 days if an extension perfect the claim and an explanation of why it’s necessary; is necessary due to matters beyond the control of the Plan. • An explanation of the Plan’s claim review procedures, applicable You’ll be notified before the end of the first 30-day extension time limits and your rights to bring a civil action under ERISA why the extension is necessary and when the Plan expects to section 502(a) following a final denial on review; make a decision.

If you failed to submit necessary information, the notice will specify Appeal Procedure for Denied Claims what information is necessary, and you’ll have at least 45 days Whenever a claim is denied, you have the right to appeal the to provide it. If an extension is necessary because you failed to decision. You (or your duly authorized representative) must make a submit necessary information, the days from the date the claims written statement for appeal to the Claim Administrator within 180 administrator sends you the extension notice until the earlier of the days from the date you receive the claim denial or rescission. If date: (a) the claims administrator receives the response, or you do not make this request within that time, you will have waived (b) your time to provide the requested information expires, will not your right to appeal. be counted toward the time for the claims administrator to provide its decision. Once your request has been received by the Claim Administrator, a prompt and complete review of your claim will take place. This If Your Benefit Claim Is Denied review will give no deference to the original claim decision, and will not be made by the person who made the initial claim decision. If an adverse benefit determination is made with respect to your During the review, you (or your duly authorized representative) benefit claim (or if your coverage is rescinded), in whole or in part, have the right to review any documents that have a bearing on you’ll receive a written notice that contains all of the following: the claim, including the documents which establish and control • A reference to the specific reasons for the denial; the Plan. If the denial was based, in whole or in part, on a medical • The specific Plan provisions on which the denial is based; judgment, the person will consult with a health care professional • For all claims that do not involve a determination of disability and who has appropriate training and experience in the field involving claims involving a determination of disability filed before April 2, the medical judgment. This health care professional cannot be 2018:

DISABILITY PLAN | 4-10 the same person who made the initial decision of denial, nor a • In the case of claims involving a determination of disability filed subordinate of the person. Any medical or vocational experts on or after April 2, 2018: consulted by the Plan will be identified. You may also submit o A discussion of the decision that includes, if applicable, the issues and comments that you feel might affect the outcome of reason(s) for not following the view of the treating professional, the review. Review of your claim will take into account all medical or vocational experts, or a disability determination by comments, documents, records and other information, without the Social Security Administration; and regard to whether such information was submitted or considered o Any contractual limitation period that applies to your right to in the initial benefit determination. For claims filed on or after April file a lawsuit, including the calendar date when the contractual 2, 2018, the Claim Administrator will provide you with, and allow limitations period expires; you a reasonable opportunity to respond to, any new or additional o If the decision is based on medical necessity or experimental evidence it considered, relied upon, or generated, or any new or treatment or similar exclusion or limit, either an explanation additional rationale in support of a denial. of the scientific or clinical judgment for the determination, The Plan has a reasonable time, but not later than 45 days from applying the terms of the Plan to your medical circumstances, the date it receives your request to review your claim and notify or a statement that such explanation will be provided free of you of its decision. Under special circumstances, the Plan may charge upon request; and require more time to review your claim. If this should happen, o Either the specific internal rules, guidelines, protocols, the Plan will notify you, in writing, that its review period has been standards or other similar criteria of the Plan relied upon in extended for an additional 45 days. Once its review is complete, making the adverse determination or a statement that such the Plan will notify you, in writing, of the results of the review and rules, guidelines, protocols, standards or other similar criteria indicate the Plan provisions upon which it based its decision. If an of the Plan do not exist. extension is necessary because you failed to submit necessary You must exhaust these internal procedures before filing a civil information, the days from the date the claims administrator sends action for benefits under Section 502(a) of ERISA. Except to the you the extension notice until the earlier of the date: (a) the claims extent the Plan Documents (including insurance certificates or administrator receives the response, or (b) your time to provide the policies) provide a shorter time limit, any legal action to receive requested information expires, will not be counted toward the time Plan benefits must be filed within the earlier of: (i) twelve months for the claims administrator to provide its decision. from the date a final determination is made under the Plan with regard to your claim for benefits or should have been made in If Your Appeal Is Denied accordance with the Plan’s claims review procedures; or (ii) three If an adverse benefit determination is made with respect to your years from the date the event occurred giving rise to the benefit appeal (i.e., benefit denial or rescission of coverage), in whole or in claimed. part, you’ll receive a written notice that contains the following: • The specific reasons for the decision; • A reference to the specific Plan provisions on which the determination is based; OTHER IMPORTANT • A statement that you are entitled to receive, upon request and free of charge, Access to and copies of all documents, records INFORMATION and other information relevant to the claim; Important information, such as your rights as a Plan participant • A statement describing any additional appeal procedures and other administrative details, can be found in the General under the Plan, your right to get information about such appeal Information section of this SPD, as well as the Plan Documents procedures (if any); and the insurance policies. In the event of a conflict between • A statement of your right to bring a civil action under ERISA this SPD or other Plan Documents and any insurance policy, the 502(a) (if applicable); insurance policy will control. • For all claims that do not involve a determination of disability and claims involving a determination of disability filed before April 2, 2018: o if an internal rule, guideline, protocol or other similar criterion was relied on to determine a claim, you’ll receive either a copy of the actual rule, guideline, protocol or other criterion, or a statement that the rule, guideline, protocol or other criterion was used and how you can request a copy free of charge; and o if the denial is based on a provision such as medical necessity, experimental treatment, or a similar exclusion or limit, you’ll receive either an explanation of the scientific or clinical judgment for the determination based on the Plan terms and your medical circumstances, or a statement that you can receive the explanation free of charge upon request; and

DISABILITY PLAN | 4-11 CHAPTER NAME | 4-12 5 Life and Accident Insurance Plans CONTENTS

...... Page

Key Terms to Know...... 5-1

Highlights of the Signature Select Life and Accident Insurance Plans...... 5-2

Signature Select Life and Accident Insurance...... 5-3

• When Coverage Begins...... 5-3

Employee Life Insurance...... 5-4

• Company-Provided Amount...... 5-4

Dependent Spouse and Child Life Insurance...... 5-6

• Eligible Dependents...... 5-6

Accidental Death & Dismemberment (AD&D) Insurance...... 5-7

• Your AD&D Coverage Amount...... 5-7

What Is Not Covered (Life & AD&D)...... 5-8

When Coverage Ends (Life & AD&D)...... 5-8

Business Travel Accident Insurance...... 5-9

• Your Business Travel Accident Insurance Coverage Amount...... 5-9

What Is Not Covered (BTA)...... 5-11

Filing a Claim...... 5-11

When Coverage Ends (BTA)...... 5-11

Income Tax Considerations...... 5-11

Other Important Information...... 5-11

LIFE AND ACCIDENT PLANS KEY TERMS TO KNOW

Here are a few important terms that are used to describe the Signature Select Life and Accident Insurance plans in this SPD. Knowing these benefits terms will help you better understand how the Plans work.

Annual Insured Earnings Your Annual Insured Earnings (AIE) refers to the amount of life insurance coverage based on your current Annual Base Salary, excluding any overtime, bonus, commissions, or other compensation. Your AIE will be determined before any pay reductions from participation in a qualified retirement plan, a non-qualified retirement plan, Section 125 “cafeteria” benefit plan, Flexible Spending Accounts or any other arrangement where your compensation is reduced on a voluntary basis.

Evidence of Insurability Evidence of Insurability typically refers to “proof of good health” and may be required by the insurance company when electing coverage.

Imputed Income Imputed Income is the term the IRS applies to the value of any benefit or service that should be considered income for the purpose of calculating your federal taxes. One of the benefits that is considered Imputed Income is the value of employer-provided life insurance coverage greater than $50,000.

Terminal Illness Benefit If, while actively employed, you become terminally ill (with a prognosis of 12 months or less to live), you may elect to receive a portion of your Employee Life Insurance benefit while still living, if you meet certain requirements (see Terminal Illness section). This Terminal Illness Benefit equals the lesser of 50% of the Employee Life Insurance benefit in effect at the time the insurance company determines you to be terminally ill or $50,000. The remaining balance of your Employee Life Insurance benefit would be payable to your designated beneficiary upon your death.

LIFE AND ACCIDENT PLANS | 5-1 HIGHLIGHTS OF THE SIGNATURE SELECT LIFE AND ACCIDENT INSURANCE PLANS

Employee Life Insurance Your options for Employee Life Insurance are: Subject to a maximum of • Basic, Company-paid coverage up to 1 or 2 times your Annual Insured Earnings, rounded to the $2,500,000 in coverage next $1,000 of coverage (if not already a multiple of $1,000) • $50,000 flat amount* • Supplemental, employee-paid coverage of: - 3 times your Annual Insured Earnings (2 times Basic + 1 times Supplemental) - 4 times your Annual Insured Earnings (2 times Basic + 2 times Supplemental) - 5 times your Annual Insured Earnings (2 times Basic + 3 times Supplemental) - 6 times your Annual Insured Earnings (2 times Basic + 4 times Supplemental) - 7 times your Annual Insured Earnings (2 times Basic + 5 times Supplemental) - 8 times your Annual Insured Earnings (2 times Basic + 6 times Supplemental)

Dependent Life Insurance Pays you a benefit in the event of a spouse and/or eligible child’s death. You have three coverage options to choose from (high, medium or low), or you may decline coverage. Spouse and Child coverage must be elected separately.

Coverage Levels High Medium Low

Spouse $50,000 $25,000 $10,000

Each Child $15,000 $10,000 $5,000

Accidental Death & • Equals the Employee Life Insurance coverage amount you choose, up to a maximum of Dismemberment Insurance $2,500,000 in coverage. • Payable in addition to your Employee Life Insurance benefit.

Business Travel Accident • Equals 2 times your Annual Insured Earnings up to a maximum coverage amount of $2,000,000. Insurance • Payable in addition to your Employee Life Insurance and AD&D Insurance benefits.

* If you elect this option, you avoid income tax on the “imputed” value (“premium”) of Employee Life Insurance in excess of $50,000 (as required by IRS regulations). In accordance with IRS rules, if you have Employee Life Insurance coverage in excess of $50,000, the value will be treated as taxable income and will be indicated on your pay stubs and on your year-end W-2 Wage and Tax Statement.

LIFE AND ACCIDENT PLANS | 5-2 SIGNATURE SELECT LIFE AND ACCIDENT INSURANCE

Life and Accident Insurance protects those you leave behind and can offer you peace of mind. Having adequate insurance is an important component in a solid financial plan. Your Signature Select Life and Accident Insurance coverage includes Employee Life Insurance, Dependent Life Insurance, Accidental Death and Dismemberment (AD&D) Insurance and Business Travel Accident Insurance. The coverage is designed to provide a measure of financial security to your beneficiary if you die, or to you if you are severely injured in an accident. Dependent Life Insurance coverage is also available for your spouse and/or children. As a regular, full-time employee eligible for life insurance coverage, you can choose the amount of your Employee Life Insurance, AD&D Insurance and Dependent Life Insurance from a number of available coverage options. The following table summarizes the main coverage features and benefits of the Life and Accident Insurance coverage:

Covered Events Benefit

In the event of your death as the result of a covered cause The full Employee Life Insurance benefit is payable to your designated beneficiary.

In the event of your death as the result of a covered accident The full AD&D Insurance benefit is payable to your designated beneficiary in addition to your full Employee Life Insurance benefit.

If you suffer the loss of limb, sight, speech or hearing from a AD&D Insurance benefits are payable to you. covered accident

In the event of your death from a covered accident while The full Business Travel Accident Insurance benefit is payable to traveling on Company business your designated beneficiary in addition to your full Employee Life Insurance and AD&D Insurance benefits.

If you suffer the loss of limb, sight, speech or hearing or become The Business Travel Accident Insurance benefit is payable to totally and permanently disabled as a result of a covered you, in addition to your AD&D Insurance benefit. accident while traveling on Company business

In the event of your covered dependent’s death as the result of The Dependent Life Insurance benefit (if elected) is payable to a covered cause you.

If you become terminally ill A portion of your Employee Life Insurance benefit can be elected as a “living benefit.”

When Coverage Begins

Life insurance coverage begins on your first day actively at work as Coverage Based on Annual Insured Earnings an eligible, regular full-time or part-time employee of the Company. The coverage available to you under the Signature Select Life Please see the General and Administrative Information chapter for Insurance Program (other than Dependent Life Insurance) is based more information on eligibility. on your current Annual Insured Earnings (AIE). You must designate a beneficiary for Employee Life Insurance, AD&D Insurance and Business Travel Accident Insurance and How Annual Insured Earnings Is Determined elect your coverage amounts from the available options through the Company’s online enrollment portal. If you do not have access If any portion of your covered pay is deferred under a qualified to the portal, please contact the Benefits Department for a retirement plan, a non-qualified retirement plan, Section 125 beneficiary designation form. “cafeteria” benefit plan, Flexible Spending Accounts or any other arrangement under which your compensation is reduced on a voluntary basis, your Life Insurance coverage will be determined using your current Annual Insured Earnings before any such reductions.

LIFE AND ACCIDENT PLANS | 5-3 EMPLOYEE LIFE INSURANCE

Your Employee Life Insurance benefit is payable to your designated beneficiary if you die from any cause while you are insured (except as listed in the What Is Not Covered section). You may choose any person or persons as your beneficiary and you may change your beneficiary at any time by completing the applicable sections of aSignature Select Enrollment/Change form and returning it to your Benefits Department.

Payment of Claims Death benefits for the Insured will be paid to the beneficiary named on file, if any. If there is no named beneficiary or surviving beneficiary, death benefits for the Insured will be paid in one sum to the first surviving class of the following: 1. Spouse of the Insured; 2. Child or children of the Insured; 3. Mother or father of the Insured; 4. Sisters or brothers of the Insured; or 5. The estate of the Insured.

Employee Life Insurance Options When you are first eligible for life insurance coverage, you may choose any one of the following Employee Life Insurance options:

Signature Select Employee Life Insurance Options

Group 8 times 7 times 6 times 5 times 4 times 3 times 2 times 1 times $50,000 Term Life your your your your your your your your Flat Insurance Annual Annual Annual Annual Annual Annual Annual Annual Amount* Insured Insured Insured Insured Insured Insured Insured Insured Earnings Earnings Earnings Earnings Earnings Earnings Earnings Earnings

Maximum $2,500,000 Coverage Level

*If 2 times your AIE is less than $50,000, the difference between 2 times your AIE and $50,000 will be treated as Supplemental Life Insurance.

Company-Provided Amount

The Company will pay the full premium cost for Employee Life and Changing Your Coverage AD&D Insurance coverage of up to two times your Annual Insured Once you make your coverage election, you will not be able to Earnings. change your coverage amount until the next annual enrollment If you want to avoid paying income tax on the “imputed” value period (usually held in October or November for coverage effective (“premium”) of Company-paid life insurance in excess of $50,000 January 1), unless you experience a qualified Change in Status (as required by IRS regulations), you may elect the $50,000 Event as described in the General and Administrative Information Employee Life Insurance option. section. If you want to change your Signature Select Employee Life Employee Premiums Insurance during a subsequent annual enrollment period, you The premium cost for any amount of Employee Life and AD&D will be required to provide Evidence of Insurability (EOI) to the Insurance you elect that is higher than the Company-provided insurance company if the change results in an increase of more amount is determined by the insurance company’s rates for your than one level in your Employee Life Insurance coverage amount, age as of the end of the prior calendar year. Your life insurance or if you are electing coverage for the first time after initial eligibility. premiums (for coverage above 2 times your Annual Insured For example, if you want to increase your coverage amount of Earnings) are paid with after-tax dollars. Employee Life Insurance from three times your AIE to five times your AIE, you will need to provide EOI for the amount above four times your AIE. EOI is also required if you are increasing your Employee Life Insurance coverage from the Flat $50,000 option to 2 times your AIE. You may decrease your Employee Life Insurance coverage amount during any annual enrollment period. LIFE AND ACCIDENT PLANS | 5-4 In cases where EOI is necessary, your new higher level of be payable to your designated beneficiary upon your death. coverage will become effective on the later of January 1 following To receive the Terminal Illness Benefit, you must meetall of the your annual enrollment election or the date of approval by the following requirements. You must: insurance company, provided that you submit the applicable EOI form and that your application is subsequently approved by the • Request this benefit in writing while you are living. If legally insurance company. Until your application is approved, an amount incapacitated, your legal representative may request it for you. that is limited to one times higher than your prior level of coverage • Be insured for life insurance benefits under the group policy. will remain in place. • Have life insurance coverage of at least $5,000 as shown in the certificate. Terminal Illness Benefit • Provide a doctor’s statement which gives the diagnosis of your If, while actively employed, you become terminally ill (with a medical condition, and states that because of the nature and prognosis of 12 months or less to live), you may elect to receive severity of such condition, your life expectancy is no more a portion of your Employee Life Insurance benefit while still living. than 12 months. The insurance company may require that you This Terminal Illness Benefit equals 50% of the Employee Life be examined by a doctor of their choosing. If required, the Insurance benefit (Basic and Supplemental) in effect at the time insurance company pays for the exam. the insurance company determines you to be terminally ill or • Provide to the insurance company written consent from any $50,000, whichever is less. This benefit is for employees only. The irrevocable beneficiary, assignee, and, in community property remaining balance of your Employee Life Insurance benefit would states, from your spouse.

If You Retire

If you retire from the Company and you meet the age and service requirements for benefit coverage during retirement (see Chapter 1A) a portion of your Employee Life Insurance will continue, at no cost to you, for the remainder of your life. This amount will be paid to your designated beneficiary upon your death from a covered cause* during your retirement.

The amount of coverage is determined by your Annual Insured Earnings on your last day of active employment before retirement as shown on the following table:

Annual Insured Earnings Retiree Life Insurance Less than $25,000 $10,000 $25,000 - $49,999 $20,000 $50,000 - $74,999 $30,000 $75,000 - $99,999 $40,000 $100,000 and over $50,000

For example, if your Annual Insured Earnings were $30,000 on your last day of active employment before retirement, you would have $20,000 in Retiree Life Insurance coverage for the rest of your life.

*As defined by the insurance company

LIFE AND ACCIDENT PLANS | 5-5 DEPENDENT SPOUSE AND CHILD LIFE INSURANCE

Dependent Life Insurance benefits will be paid if one of your covered dependents dies from a covered cause while insured. You will always be the beneficiary of your Dependent Life Insurance coverage unless you specifically designate otherwise in writing.

Eligible Dependents Dependent Life Insurance Options You may choose from three levels of Dependent Life Insurance Your eligible dependents include: (high, medium or low). You must separately elect a level of • Your spouse (unless insured as an employee of the Company). coverage for your spouse and children. You may also decline coverage for one or all your dependents. Evidence of Insurability • Your children* under age 26, regardless of residence, marital is not required for your spouse when they are initially eligible for status, student status or financial dependency. coverage. EOI is never required for your child(ren). • Your unmarried children* over age 26 who are unable to support themselves due to a mental or physical handicap that began Signature Select before age 26. Proof must be provided within 31 days of the Dependent Life High Medium Low child attaining age 26. Insurance Options

Eligibility and Enrollment Spouse $50,000 $25,000 $10,000 As an eligible employee, you are first eligible to elect Dependent Life Insurance on the later of your first day of active regular full-time Each Child $15,000 $10,000 $5,000 employment with the Company after completing any applicable waiting period or the day on which you first obtain an eligible You will not be able to change your Dependent Life Insurance election dependent (e.g., through marriage, birth of a child, etc.). until the next annual enrollment period, except to decrease or drop coverage, unless you first become eligible for this benefit during the If you enroll for Dependent Life Insurance coverage within 31 year or have a qualified Change in Status Event as described in the General and Administrative Information section. days after you first become eligible, that coverage will be effective retroactively back to the date you first became eligible. If you do not apply for Dependent Life Insurance coverage within 31 days Changing Your Coverage after you first become eligible, you must wait until the next annual You may increase your Dependent Life Insurance during each enrollment period. annual enrollment period. You are required to provide Evidence of Insurability if you elect to increase your spouse coverage after * Under the Plan, the term “children” includes adopted children, they are initially eligible. EOI is not required for your dependent and stepchildren for whom you are legally responsible for child(ren) if you are increasing their coverage. support and maintenance.

LIFE AND ACCIDENT PLANS | 5-6 ACCIDENTAL DEATH AND DISMEMBERMENT (AD&D) INSURANCE

Accidental Death and Dismemberment (AD&D) Insurance benefits will be paid if, while you are insured, you suffer the loss of life, limb, sight, speech or hearing as a result of bodily injury caused solely as a result of an accident. The loss must occur within 90 days of the accident. AD&D Insurance benefits are payable in addition to any benefits that may be paid under Employee Life Insurance or Business Travel Accident Insurance.

Your AD&D Insurance Coverage Amount

Your AD&D Insurance coverage amount equals your Employee Life Insurance coverage amount, which is based on your election of one of the available coverage options. For example, if you have elected Employee Life Insurance coverage equal to three times your Annual Insured Earnings, you will have an equal amount of AD&D Insurance coverage (in addition to your Employee Life Insurance). Any increase or decrease in your Employee Life Insurance coverage will result in a corresponding increase or decrease in the amount of your AD&D Insurance coverage.

How Benefits Are Paid The amount of the AD&D Insurance benefit and to whom it is paid depends on the nature of your loss, as shown in the following table:

Covered AD&D Losses AD&D Benefit

The full AD&D Insurance benefit is payable to your designated Loss of life beneficiary in addition to your Employee Life Insurance benefit.

Loss of both hands, both feet or sight of both eyes The full AD&D Insurance benefit is payable to you.

Loss of one hand and one foot The full AD&D Insurance benefit is payable to you.

Loss of speech and hearing in both ears The full AD&D Insurance benefit is payable to you.

Loss of one hand or one foot and sight of one eye The full AD&D Insurance benefit is payable to you.

Loss of one hand or one foot or sight of one eye One-half the AD&D Insurance benefit is payable to you.

Loss of speech One-quarter the AD&D Insurance benefit is payable to you.

Loss of hearing in both ears One-quarter the AD&D Insurance benefit is payable to you.

Loss of thumb and index finger of same hand One-quarter the AD&D Insurance benefit is payable to you.

Quadriplegia The full AD&D Insurance benefit is payable to you.

Paraplegia One-half the AD&D Insurance benefit is payable to you.

Hemiplegia One-half the AD&D Insurance benefit is payable to you.

Only one amount, the largest to which you are entitled, is paid for all losses resulting from a single accident.

If You Retire

As an eligible retiree (see Chapter 1A), the Company will provide AD&D coverage (in the amount equal to your retiree life insurance) at no cost to you.

LIFE AND ACCIDENT PLANS | 5-7 WHAT IS NOT COVERED (LIFE & AD&D)

Employee and Dependent Life Insurance Accidental Death & Dismemberment Insurance The Life Insurance Plan pays limited benefits for suicide. If an AD&D Insurance does not cover losses resulting from: Insured employee commits suicide, the beneficiary will receive the • An accident occurring before the effective date of your full Basic Life benefit. However, for Employee Supplemental and coverage; Dependent Life Insurance, if an Insured employee commits suicide within two years of the coverage effective date, the insurance • Suicide or intentionally self-inflicted injury; company will refund the amount of premiums paid for coverage • Physical or mental illness; instead of paying the death benefit. If an Insured employee was • Bacterial infection or bacterial poisoning. Exception: Infection previously covered for Supplemental or Dependent Life Insurance from a cut or wound caused by an accident; for more than two years and elected to increase their coverage, the original Supplemental or Dependent Life coverage amount • Aviation. Exception: A fare-paying passenger on a scheduled would be paid to the beneficiary as a death benefit and premiums or charter flight operated by a scheduled airline; paid for the higher coverage amount would be refunded. • Any armed conflict, whether declared as war or not, involving If a dependent child commits suicide and is survived by other any country or government; dependent children covered under the same certificate, no refund • An accident which occurs while in the military service for any of premiums will be paid. country or government; • An accident which occurs when you commit or attempt to commit a crime; • Use of any drug, narcotic or hallucinogenic agent, unless prescribed by a doctor or taken as directed by a doctor or the manufacturer.

WHEN COVERAGE ENDS (LIFE & AD&D)

Your Employee Life Insurance, Accidental Death and Conversion of Coverage Dismemberment Insurance and Dependent Life Insurance will end If your Signature Select Life Insurance coverage ends for any upon: reason other than nonpayment of premiums, you may convert • Termination of your active employment your coverage to an individual policy. You will not be required to submit medical evidence of good health. To convert coverage, • Your transfer to an ineligible classification of employees you must apply for the conversion policy and pay the first premium • Termination of the group policies payment within 31 days after your Signature Select coverage If you die within 31 days following your termination of active ends. Family members may also convert their coverage. employment or transfer to an ineligible classification of employees, Converted policies are subject to certain benefits and limits as your Employee Life Insurance will be paid to your designated outlined in the conversion brochure, which may be requested from beneficiary as though it was still in effect at the time of your death. the insurance company. Premiums for converted coverage may be substantially higher than your Signature Select coverage. Your Benefits Department will provide additional information in the event that your coverage terminates. This conversion provision also applies to any portion of your life insurance coverage that terminates upon retirement. Business Travel Accident Insurance cannot be converted to an individual policy.

LIFE AND ACCIDENT PLANS | 5-8 BUSINESS TRAVEL ACCIDENT INSURANCE

Business Travel Accident Insurance benefits will be paid if you sustain injuries or die as a result of an accident while traveling on Company business. These benefits are payable in addition to any benefits that may be payable under Employee Life Insurance and Accidental Death and Dismemberment Insurance.

Your Business Travel Accident Insurance Coverage Amount

Your Business Travel Accident Insurance coverage equals two times your Annual Insured Earnings up to a maximum coverage amount of $2,000,000.

How Benefits Are Paid The amount of the benefit and to whom it is paid depends on the nature of your loss:

Covered Business Travel Accident Losses Business Travel Accident Benefits

100% of the Business Travel Accident Insurance benefit is Loss of life payable to your designated beneficiary in addition to your Employee Life Insurance and AD&D Insurance benefits.

100% of the Business Travel Accident Insurance benefit is Loss of two or more hands or feet payable to you.

100% of the Business Travel Accident Insurance benefit is Loss of sight of both eyes payable to you.

100% of the Business Travel Accident Insurance benefit is Loss of One Hand or One Foot and Sight in One Eye payable to you.

100% of the Business Travel Accident Insurance benefit is Loss of speech and hearing in both ears payable to you.

100% of the Business Travel Accident Insurance benefit is Quadriplegia payable to you.

75% of the Business Travel Accident Insurance benefit is payable Paraplegia to you.

50% of the Business Travel Accident Insurance benefit is payable Hemiplegia to you.

1% of the Business Travel Accident Insurance benefit is payable at the end of each month you remain comatose to a maximum Coma of 11 months. After 11 months, if you remain comatose, 100% of the Business Travel Accident Insurance benefit is payable to your designated beneficiary beginning in month 12.

50% of the Business Travel Accident Insurance benefit is payable Loss of one hand or foot to you.

50% of the Business Travel Accident Insurance benefit is payable Loss of sight in one eye to you.

50% of the Business Travel Accident Insurance benefit is payable Loss of speech to you.

50% of the Business Travel Accident Insurance benefit is payable Loss of hearing in both ears to you.

25% of the Business Travel Accident Insurance benefit is payable Loss of thumb and index finger of the same hand to you.

Only one amount, the largest to which you are entitled, is paid for all losses resulting from a single accident.

LIFE AND ACCIDENT PLANS | 5-9 Aggregate Benefit Exposure and Disappearance The aggregate of all Business Travel Accident Insurance amounts BTA benefits are paid, subject to conditions and exclusions, if available from all losses arising out of any one accident is limited the covered person suffers a covered loss while traveling on the to $25,000,000, irrespective of the number of employees injured. business of the policyholder and the covered loss results directly If the total of individual losses exceeds this limit, proportionate and independently of all other causes from a covered accident amounts will be paid to (or on behalf of) each individual. that causes the covered person’s unavoidable exposure to the elements following the forced landing, sinking, stranding or Additional Benefits wrecking of a vehicle. Permanent Total Disability Benefit If the covered person disappears and is not found within one year from the date of wrecking, sinking or disappearance of the The full Business Travel Accident Insurance benefit is payable, conveyance in which the covered person was riding in the course subject to conditions and exclusions, when a covered person’s of a trip which would otherwise be covered under this policy, it will total disability results directly and of all other causes, from a be presumed that the covered person’s death resulted directly and covered accident. Total and permanent disability must continue for independently of all other causes from a covered accident. 12 consecutive months. Travel or trip must have been authorized in advance by the Seatbelt and Airbag Benefit policyholder. Business Travel Accident Insurance (BTA) benefits are paid, War Risk subject to conditions and exclusions, when a covered person’s death results directly and of all other causes, from a covered BTA benefits are paid, subject to all applicable conditions and accident while wearing a seatbelt and operating or riding as a exclusions, if the covered person suffers a covered loss that passenger in a private passenger automobile. Death must occur results, directly and independently of all other causes, from a within 90 days of the covered accident. An additional benefit covered accident that occurs during war or acts of war that occur is provided if the covered person was also positioned in a seat worldwide except for Afghanistan, Egypt, Iraq, Pakistan, Sudan, protected by a properly functioning and properly deployed Somalia, Syria and countries where travel is permitted only under Supplemental Restraint System (Airbag). licenses granted by the Office of Foreign Assets Control, unless such license is granted. Verification of proper use of the seatbelt at the time of the covered accident and that the Supplemental Restraint System properly Relocation Benefit inflated upon impact must be a part of an official police report of BTA benefits are paid, subject to all applicable conditions and the covered accident or be certified, in writing, by the investigating exclusions, if the covered person suffers a covered loss that officer(s) and submitted in the claim. results, directly and independently of all other causes, from a covered accident that occurs during relocation. This benefit is in 10% of the principal sum subject Seatbelt Benefit effect beginning when the covered person departs from his prior to a maximum of $25,000 place of residence, or if later, his prior place of employment and begins travel to his new place of residence or employment. It 5% of the principal sum subject to ceases to be in effect when the covered person begins his first full Airbag Benefit a maximum of $10,000 day of employment at his new location or 10 days from the date this coverage began. Default Benefit $1,000

LIFE AND ACCIDENT PLANS | 5-10 WHAT IS NOT COVERED (BTA) FILING A CLAIM

Business Travel Accident Insurance does not cover losses Contact your Benefits Department to obtain or determine resulting from: what forms and documents are needed to file an Employee or • Normal commuting between the Covered Person’s home and Dependent Life Insurance, AD&D Insurance or Business Travel place of work; Accident Insurance claim. When the necessary information has been obtained, the claim should be submitted to your Benefits • Travel to another location where the Covered Person is Department or directly to Cigna. expected to be assigned for more than 90 days; For general information on the Program’s procedures regarding • Any activity not authorized or organized, or not reimbursable, by benefit claims and appeals, including timing of benefits and appeal the Policyholder; determinations, the manner in which appeals are conducted, • The Covered Person’s Personal Deviation, unless shown in the and notice of any adverse benefit determinations, see the Claims Schedule of Benefits; Denial and Appeal section in the General and Administrative Information chapter of this SPD. • The Covered Person’s driving any vehicle or Private Passenger Automobile for pay or hire; • Business Travel Coverage is not in effect while the Covered Person is performing job duties: (a) during work hours; and INCOME TAX CONSIDERATIONS (b) in a residence work area, which are specified in a written In accordance with IRS rules, if you elect Employee Life Insurance telecommuting agreement between him and his employer. coverage in excess of $50,000, a portion of the premium cost • Intentionally self-inflicted injury, suicide or any attempt thereat; will be treated as taxable income and will be indicated on your • Commission or attempt to commit a felony or an assault; year-end W-2 Wage and Tax Statement. This does not apply to Accidental Death & Dismemberment Insurance, Dependent Life • Declared or undeclared war or act of war; Insurance or Business Travel Accident Insurance. • Aviation, except as a fare-paying passenger on a scheduled In the event of death, benefits are not currently subject to federal commercial or charter flight operated by a scheduled airline income tax when paid to a designated beneficiary under Employee or as a passenger on an aircraft used by the Air Mobility Life Insurance, Accidental Death and Dismemberment Insurance, Command or its foreign equivalent; Dependent Life Insurance and/or Business Travel Accident • Sickness, disease, bodily or mental infirmity, bacterial or viral Insurance. However, federal and/or state estate (“inheritance”) infection or medical or surgical treatment thereof, including taxes may apply. exposure, whether or not accidental, to viral, bacterial or Tax rules are complex and each individual situation is different. chemical agents except for any bacterial infection resulting from Therefore, you should consult with your tax advisor to determine an accidental external cut or wound or accidental ingestion of the extent to which any coverage and/or benefits may be taxable. contaminated food; or • Voluntary ingestion of any narcotic, drug, poison, gas or fumes, unless prescribed or taken under the direction of a physician OTHER IMPORTANT and taken in accordance with the prescribed dosage. Business Travel Accident Insurance is an accident-only policy and INFORMATION does not pay benefits for loss caused by or resulting from illness, disease or bodily infirmity. Important information, such as your rights as a Plan participant and other administrative details, can be found in the General and Administrative Information chapter of this SPD. WHEN COVERAGE ENDS (BTA)

Your BTA Insurance will end on the earliest of: • Termination of your active employment* • The date you are no longer in an eligible class of employees • Termination of the group policy

* Termination does not affect a claim for a Covered Loss due to a Covered Accident that occurs before the termination date. However, in no instance will benefits extend beyond the earliest of: 1. The end of the Benefit Period; and 2. The date benefits equal to any applicable Benefit Limit, as shown in the Schedule of Benefits, have been paid; and 3 The date benefits equal to any applicable Policy Aggregate Maximum, as shown in the Schedule of Benefits, have been paid.

LIFE AND ACCIDENT PLANS | 5-11 6 Health Care Flexible Spending Account Plan CONTENTS

...... Page

Signature Select Health Care Flexible Spending Account Plan...... 6-1

• How It Works...... 6-1

Enrollment...... 6-2

• Annual Enrollment...... 6-2

• Change in Status...... 6-2

Contributions...... 6-3

• Use It or Lose It...... 6-3

Eligible Expenses...... 6-3

Ineligible Expenses...... 6-4

Filing Claims...... 6-4

• Orthodontia Claims...... 6-5

• Appealing a Claim...... 6-5

Tax Advantages/Considerations...... 6-6

When Coverage Ends...... 6-7

• Submitting Claims After You Leave the Company...... 6-7

Other Important Information...... 6-7

HEALTH CARE FLEXIBLE SPENDING ACCOUNT SIGNATURE SELECT HEALTH CARE FLEXIBLE SPENDING ACCOUNT

The Signature Select Health Care Flexible Spending Account If you are paying for services or items from a health-care-related (FSA) Plan offers you a tax-effective way to pay for health care merchant or one that has implemented an inventory information expenses that are not covered under the Medical, Dental or Vision approval system, your transaction will be automatically approved Plan (or other insurance plans under which you and your eligible at the point of sale. You should always keep your itemized receipts family members are covered). and Explanation of Benefits (EOB) in the event that you need to provide them to PayFlex or the IRS. With the Health Care FSA, you can use before-tax dollars to pay for certain health care expenses you would normally pay for with If you purchase eligible health care items along with non-qualifying after-tax “take home” pay. You do not pay federal, state* or local items, be sure to ask the merchant to ring up eligible items income taxes (if applicable), or Social Security taxes on the money separately so that you can use your PayFlex Card. you use to pay for eligible expenses through the Health Care FSA. Your card can be valid for up to a three-year period. Each year you *Certain states do not exempt FSA contributions from state income tax. enroll, the card will reflect that Plan Year's election amount(s). Your card will also include remaining funds from the prior Plan Year (if How It Works applicable) to be used during the grace period.

PayFlex® is the Claims Administrator for the Health Care FSA. When Not to Use Your Card You can obtain information about your account and claim status In certain situations, you should not use your PayFlex Card to pay by calling PayFlex or going online to www.payflex.com. for services: Customer Service: 1-800-284-4885 • For instance, when you see an in-network medical doctor, Monday-Friday, 7:00 AM - 7:00 PM (CT) do not use your card to pay at the doctor’s office, unless you only owe a co-pay. Your doctor must first file a claim with Saturday, 9:00 AM - 2:00 PM (CT) your insurance carrier. Your insurance carrier will apply your PayFlex provides online account information at deductible, network discounts and/or out-of-pocket maximum www.payflex.com. This information includes account balances, amounts and will send an Explanation of Benefits to your doctor, detailed claims and reimbursement information as well as access along with payment. Your doctor will then send you a bill. to various forms. Visit PayFlex’s website homepage and click Once you receive the bill from your doctor, after your insurance "Sign In." The first time you log in, you will need to click Create" company has processed your claim, you can use your PayFlex Your Profile" to create your account. Your personal identification MasterCard to pay the bill. number (PIN) will be sent to you within a few minutes at the email • You should not use the card when visiting an out-of-network address you have specified. Your employee ID# is your Social physician either, as the FSA is only for non-reimbursed Security Number and your home zip code should be used. expenses. If your medical plan pays any of the out-of-network You will also need your employer number to register on the claim then you would file for reimbursement only the amount not PayFlex website: paid by the insurance plan. • If you use the card for an ineligible expense or fail to provide Employer number requested documentation, the card may be deactivated. 116076 You will be required to offset with another unclaimed expense or reimburse PayFlex for the amount not eligible for reimbursement. Pay with PayFlex Card PayFlex offers the PayFlex CardTM (a credit/debit card) which Pay and Submit for Reimbursement debits eligible expenses directly from your account when billed by You can pay for any eligible out-of-pocket expenses as they occur a provider who accepts MasterCard. All you have to do is swipe during the year and submit an online or paper claim for those your card and select “Credit.” However, some merchants may expenses to PayFlex and be reimbursed tax-free from your FSA. ask you to select “Debit.” This means you will need to enter a PIN You do not pay any taxes on the money that goes into the FSA to complete the transaction. To get a PIN, call Card Services at and you do not pay any taxes on the reimbursements you receive. 1-888-999-0121. A PIN can be created at any time. If you order a card for your spouse or dependent, they will use the same PIN you use.

HEALTH CARE FLEXIBLE SPENDING ACCOUNT | 6-1 Use It or Lose It Grace Period If you don’t spend the money in your Health Care FSA, Internal The Company offers a 2-1/2 month extension from the end of Revenue Code regulations require that you forfeit your unused the calendar year (December 31) in which you can incur eligible account balance. In other words, if you do not use it, you expenses for the Health Care FSA. If you have not spent all your will lose it! Therefore, you should conservatively estimate your contributions by December 31, a grace period exists to incur expected expenses that are eligible under the Health Care FSA expenses through March 15 following the Plan Year. You have until and carefully consider how much (if anything) you may want to April 30 to file a claim reimbursement for any expenses incurred contribute. Any unused balances (participant forfeitures) will be between January 1 through March 15 of the following Plan Year; used to cover administrative expenses of the FSA Plan. otherwise you will forfeit any remaining balance.

ENROLLMENT

To participate in the Health Care FSA Plan, you must complete online enrollment or an enrollment form, as directed by your Human Resources or Benefits Department, authorizing the Company to make automatic voluntary payroll deductions for contributions to your account. In accordance with Internal Revenue Service (IRS) regulations, you must re-enroll for each calendar year in which you want to participate. Additionally, the IRS does not allow you to enroll in the Health Care FSA if you are enrolled in the Consumer-Directed Health Plan, but you may be eligible for a Health Savings Account to pay for health care expenses. (See Chapter 1 for more information.)

Annual Enrollment Change in Status

Each year, as part of the annual enrollment process, you must Once your Health Care FSA election is made upon initial make a new election for the following Plan Year if you wish to enrollment or annual enrollment, the election remains in effect until contribute to the Health Care FSA. Therefore, you must decide the end of the applicable calendar year and cannot be changed how much (if anything) you will contribute to your account for the unless you have a qualified change in status, which includes the entire year before the year begins. If you do not re-enroll in the following events: Health Care FSA each year, your participation will expire and no • Change in your legal marital status contributions will be taken from your pay in the following calendar year. You will not be able to re-enroll in the Health Care FSA until • Change in the number of your tax dependents the next annual enrollment period for the following calendar year, • Your dependent satisfies (or ceases to satisfy) eligibility unless you have a qualified change in status as described in the requirements such as reaching the age limit General and Administrative Information chapter. • Change in employment for you or your spouse or dependent If you join the Company after the annual enrollment period, or that affects eligibility of your benefits become benefits-eligible in the middle of the Plan Year, you If a change in status occurs, your Health Care FSA deductions have up to 31 days following your date of hire or eligibility date can be started, suspended, increased or decreased within the to enroll in the Health Care FSA Plan. Only those expenses course of the year, provided such change is consistent with the incurred after you join the Health Care FSA Plan will be eligible for related change in status. To make a change in your annual election reimbursement. When joining the Health Care FSA Plan mid-year, amount, you must make your election within 31 days of your your election amount will apply for the remainder of the current change in status. calendar year. Once processed, your contributions that are deducted from your pay will be adjusted for the remainder of the calendar year.

If You Suspend FSA Deductions If you suspend FSA deductions because of a change of status, you may only submit claims for reimbursement for expenses incurred prior to the date of the change of status.

HEALTH CARE FLEXIBLE SPENDING ACCOUNT | 6-2 CONTRIBUTIONS ELIGIBLE EXPENSES

Under the Health Care FSA Plan, you may make voluntary Your Health Care FSA Plan provides reimbursement for health contributions up to a maximum of $2,600 per year, which are care expenses that are not paid or reimbursed by any medical, deducted from your pay before taxes. If an employee and spouse dental or vision insurance plan. In general, most medical expenses both work and the spouse’s employer also offers a Health Care qualified under Internal Revenue Code Section 213 are eligible for FSA, both you and your spouse can fund a Health Care FSA up payment by the Health Care FSA. However, once these expenses to the $2,600 limit to a maximum of $5,200. The minimum annual are reimbursed through the FSA, a tax deduction for the same amount for you to contribute is $200. Voluntary contributions expenses cannot be taken. to your Health Care FSA are deducted from your pay each pay Eligible expenses include: period in equal amounts throughout the calendar year. • Deductibles, co-payments, coinsurance and expenses in excess of any maximum benefit amount Use It or Lose It • Insulin If you don’t spend the money in your Health Care FSA, Internal • Vision care expenses, such as eye examinations, eyeglasses, Revenue Code regulations require that you forfeit your unused contact lenses and supplies not covered by a medical or vision account balance. In other words, if you do not use it, you plan will lose it! Therefore, you should conservatively estimate your • Laser eye surgery expected expenses that are eligible under the Health Care FSA and carefully consider how much (if anything) you may want to • Hearing exams and hearing aids (not covered under a medical contribute. Any unused balances (participant forfeitures) will be plan) used to cover administrative expenses of the FSA Plan. • Braces (orthodontia) not covered by a dental plan However, different rules may apply for employees who serve as • Obesity treatment if required by a physician to treat a medical active-duty reservists in the U.S. Armed forces. Please check with condition your Benefits Department to determine if you fall into this category. • Routine physicals and well-baby care not covered by a medical plan Did You Know? • Acupuncture if required by a physician with a prescription dated You don’t have to participate in the Medical Plan to take advantage within the Plan Year stating medical necessity of the Health Care FSA. • Certain other unreimbursed health care expenses that qualify for a deduction under the Internal Revenue Code More information regarding eligible expenses for a Health Care FSA is detailed in IRS Publication 502, which can be obtained from the IRS at www.irs.gov/pub/irs-pdf/p502.pdf. Please note, however, that not all expenses listed in Publication 502 may be eligible for reimbursement under the Health Care FSA. Please note that the IRS can make changes at any time and without notice. Visit www.payflex.com for the most current information about eligible expenses.

When Expenses Are Incurred You may only use your Health Care FSA for eligible expenses incurred during the calendar year during which your contributions are deducted from your pay, or during the grace period (until March 15 of the following year). Expenses are considered incurred on the date services or supplies are provided, not when you are billed or when you pay for them.

HEALTH CARE FLEXIBLE SPENDING ACCOUNT | 6-3 INELIGIBLE EXPENSES FILING CLAIMS

Ineligible expenses include: All Health Care FSA claims must be submitted to PayFlex for • Over-the-counter medicines and drugs (except insulin), unless reimbursement. you have a prescription; • Health care expenses to the extent that they are reimbursed Filing a Claim under a medical, dental or vision insurance pla;n After you incur an eligible expense, you have the option of • Health insurance premiums; submitting a claim online or completing a paper claim form and • Long-term care coverage or expenses; mailing or faxing it along with your itemized documentation. • Health care expenses incurred in a different calendar year;* • To file a claim online, log in to your PayFlex account and select “File a Spending Account Claim” on the left navigation • Over-the-counter products that promote general wellness such bar or visit “My Resources” to download a claim form from as weight-loss aids and vitamins; herbal remedies; “Administrative Forms”. • General health expenditures such as fitness programs, health • To print a paper claim form, click on “My Resources” and then club membership fees and exercise machines not prescribed by select “Administrative Forms”. a physician for a medical condition;

• Non-prescription sunglasses; Acceptable Documentation • Teeth bleaching; Acceptable documentation consists of one of the following: • Cosmetic surgery that is not medically necessary; • An Explanation of Benefits (EOB) is the preferred form of • Any health care expense that you deduct on your income tax documentation, which is provided to you by your insurance return; and provider. • Childcare or eldercare expenses, whether or not eligible under • An itemized receipt is also acceptable, but it must show the the Dependent Care Flexible Spending Account Plan (described date of purchase or service, amount of purchase or service, in Chapter 7). description of item or service, name of merchant or service provider, and name of patient if a medical claim. Correction Methods • Prescription drug receipt containing the pharmacy name, If your purchase is determined by the Administrator to not qualify patient name, date the prescription was filled, the name of the as a medical expense, the Administrator, in its discretion, shall use drug, and dollar amount. one of the following correction methods to make the Plan whole. • Over-the-counter (OTC) items must be clearly described on Until the amount is repaid, the Administrator shall take further the receipt. OTC drugs and medicines (except insulin) require a action to ensure that further violations of the terms of the card prescription from your physician in order to get reimbursed. do not occur, up to and including denial of access to the PayFlex Please note that a cancelled check is not acceptable Card. documentation. 1. Repayment of the improper amount by the Participant; 2. Withholding the improper payment from the Participant’s wages Mailing or Faxing Claims or other compensation to the extent consistent with applicable 1. Obtain a claim form. If you choose to submit your Health Care federal or state law; FSA claim via mail or fax, then you can download a claim form 3. Claims substitution or offset of future claims until the amount is from PayFlex’s website at www.payflex.com. repaid; and 2. Complete the claim form. When submitting claims, be sure 4. If subsections (1) through (3) fail to recover the amount, to attach copies of your itemized documentation such as an consistent with the Employer’s business practices, the Employer Explanation of Benefits to the claim form. For over-the-counter may treat the amount as any other business indebtedness. medications, you must submit an itemized cash register receipt that clearly indicates the store name, item name, date and cost of item purchased. OTC drugs and medicines (except insulin) require a prescription from your physician in order to get reimbursed. 3. Send the claim form. Mail or fax the completed form to: PayFlex Systems USA, Inc. Flex Dept. P.O. Box 981158 El Paso, TX 79998-1158 Fax: 1-855-703-5305

* You may only use your Health Care FSA for eligible expenses incurred during the calendar year or during the Grace Period described on page 6-2 in which your voluntary contributions are withheld from your pay. Expenses are considered incurred on the date that services are provided, not when you are billed or when you pay for them.

HEALTH CARE FLEXIBLE SPENDING ACCOUNT | 6-4 Orthodontia Claims Appealing a Claim

The IRS recognizes that orthodontia treatment is different from You should submit all claims for reimbursement during the Plan any other type of health care expense. To get reimbursed for Year. For the Health Care FSA, you must submit claims no later orthodontia expenses you are required to submit one of the than 120 days after the end of the Plan Year. Any claims submitted following: after that time will not be considered. • Coupon Payment Option – You can submit an itemized In the case of a claim for medical expenses under the Health statement of your orthodontia expenses as the service is Flexible Spending Account, the following timetable for claims provided. Submit this documentation with a completed claim applies: form for reimbursement. Notification of whether claim is accepted or denied...... 30 days • Total Payment Option – If you paid the full amount when the Extension due to matters beyond the control of the Plan...... 15 days treatment began, PayFlex will reimburse you for the amount not covered by your dental plan, up to your available FSA balance. Insufficient information to process the claim:

Simply send a copy of your paid receipt to PayFlex, along with Notification to Participant...... 15 days an itemized statement with the following information: Response by Participant...... 45 days o Provider name Review of claim denial...... 60 days o Patient name The Plan Administrator will provide written or electronic notification o Date treatment started of any claim denial. The notice will state: o Amount of expense (a) The specific reason or reasons for the denial; o Amount insurance will pay (b) Reference to the specific Plan provisions on which the denial was based; Note: A paid receipt must be submitted and no expense reimbursement will be allowed in future plan years. (c) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; (d) A description of the Plan’s review procedures and the time limits applicable to such procedures. This will include a statement of your right to bring a civil action under section 502 of ERISA following a denial on review; (e) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim; and (f) If the denial was based on an internal rule, guideline, protocol, or other similar criterion, the specific rule, guideline, protocol, or criterion will be provided free of charge. If this is not practical, a statement will be included that such a rule, guideline, protocol, or criterion was relied upon in making the denial and a copy will be provided free of charge to the claimant upon request. When you receive a denial, you will have 180 days following receipt of the notification in which to appeal the decision. You may submit written comments, documents, records, and other information relating to the claim. If you request, you will be provided, free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim. The period of time within which a denial on review is required to be made will begin at the time an appeal is filed in accordance with the procedures of the Plan. This timing is without regard to whether all the necessary information accompanies the filing. A document, record, or other information shall be considered relevant to a claim if it: (a) Was relied upon in making the claim determination; (b) Was submitted, considered, or generated in the course of making the claim determination, without regard to whether it was relied upon in making the claim determination; HEALTH CARE FLEXIBLE SPENDING ACCOUNT | 6-5 (c) Demonstrated compliance with the administrative processes submitted or considered in the initial claim determination. The and safeguards designed to ensure and to verify that claim review will not afford deference to the initial denial and will be determinations are made in accordance with Plan documents conducted by a fiduciary of the Plan who is neither the individual and Plan provisions have been applied consistently with who made the adverse determination nor a subordinate of that respect to all claimants; or individual. (d) Constituted a statement of policy or guidance with respect to the Plan concerning the denied claim. Questions? The review will take into account all comments, documents, To receive more information about PayFlex and Health Care FSAs, records, and other information submitted by the claimant relating visit www.payflex.com and click the “Sign In” link or call PayFlex to the claim, without regard to whether such information was at 1-800-284-4885.

TAX ADVANTAGES/CONSIDERATIONS

Compensation that is normally subject to federal income tax, Social Security tax and state* and local income tax (if applicable) is not taxed if contributed to the Health Care FSA. Reimbursements provided under the Health Care FSA are also tax-free.

*Certain states do not exempt FSA contributions from state income tax.

FSA Savings Example This example illustrates the tax savings that can result from participating in the Health Care FSA versus paying for health care expenses after tax.

Participate in the Do not participate in the Health Care FSA Health Care FSA

Annual income $50,000 $50,000

Health Care FSA contributions ($2,000) ($0)

Remaining income $48,000 $50,000

Federal, state and Social Security ($13,272) ($13,825) taxes*

Post-tax health care expenses ($0) ($2,000)

Remaining income $34,728 $34,175

Tax savings $553 $0

*Assumes 15% federal tax, 5% state tax and 7.65% Social Security tax.

Once you are reimbursed for an eligible health care expense, you may not take a corresponding deduction on your income tax return because these expenses have been paid through the Health Care FSA Plan with tax-free dollars.

Social Security Since you do not pay Social Security taxes on your before-tax voluntary Health Care FSA contributions, your future Social Security benefits could be slightly reduced. Although this reduction is usually small, it could occur if your taxable compensation is below the Social Security wage base.

Tax Exemptions Certain states (such as Pennsylvania) do not exempt FSA contributions from state income tax. However, the federal income tax exemption applies to employees in all states.

HEALTH CARE FLEXIBLE SPENDING ACCOUNT | 6-6 WHEN COVERAGE ENDS OTHER IMPORTANT

If you leave the Company for any reason, your contributions to the INFORMATION Health Care FSA Plan will automatically stop. If you have a PayFlex Card, it will be deactivated. Important information, such as the Company’s eligibility requirements, your rights as a Plan participant and other administrative details, can be found in the General and Submitting Claims After You Administrative Information chapter of this SPD. Leave the Company

You may continue to request reimbursement from your Health Care FSA for expenses incurred on or before the last day of your employment. However, all such requests must be made before April 30 of the year following the end of the Plan Year. If you voluntarily end your employment, retire, or the Company terminates your employment during the year and you do not elect to continue participation in the Health Care FSA via COBRA, you may continue to submit health care claims for eligible expenses incurred through the last day of your employment at the Company up to the amount you have elected for the Plan Year, regardless of your cash balance. Claims will need to be submitted by fax or mail. You will have until April 30 of the following year to submit claims. Any money left in the account after this date will be forfeited. If you die while employed, your beneficiary may elect to continue participation in the Health Care FSA via COBRA. If your beneficiary does not elect to continue participation via COBRA, they may continue to submit health care claims for eligible expenses incurred through the day on which you died, up to the amount you have elected for the Plan Year, regardless of the cash balance. They will have until April 30 of the following year to submit claims. Any money left in the account after this date will be forfeited.

Continuation of Participation Through COBRA You may elect to continue participation in the Health Care FSA by making post-tax contributions through COBRA for the remainder of the calendar year in which your employment terminates. You can then continue to incur claims past your termination date through the grace period of March 15 of the following year. You have until April 30 of the following year to submit claims for reimbursement. Please see the General and Administrative Information chapter of this SPD for information about your right to continue coverage through COBRA.

HEALTH CARE FLEXIBLE SPENDING ACCOUNT | 6-7 7 Dependent Care Flexible Spending Account Plan CONTENTS

...... Page

Signature Select Dependent Care Flexible Spending Account Plan...... 7-1

How It Works...... 7-1

Enrollment...... 7-2

• Annual Enrollment ...... 7-2

• Change in Status ...... 7-2

Contributions...... 7-2

• Use It or Lose It...... 7-2

Eligible Expenses...... 7-3

Ineligible Expenses...... 7-4

Filing Claims ...... 7-4

• Dependent Child or Adult Day Care ...... 7-4

Tax Advantages/Considerations...... 7-6

When Coverage Ends...... 7-7

• Submitting Claims After You Leave the Company ...... 7-7

Other Important Information...... 7-7

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT SIGNATURE SELECT DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT

The Signature Select Dependent Care Flexible Spending Account (FSA) Plan offers you a tax-effective means of paying for eligible dependent day care expenses that you incur while you are at work. With the Dependent Care FSA, you can use before-tax dollars to pay for certain dependent care expenses you would normally pay for with after-tax “take home” pay. You do not pay federal, state* or local income taxes (if applicable), or Social Security taxes on the money you use to pay for eligible expenses through the Dependent Care FSA.

*Certain states do not exempt FSA contributions from state income tax.

HOW IT WORKS

PayFlex® is the Claims Administrator for the Dependent Pay and Submit for Reimbursement Care FSA. You can obtain information about your account You can also choose to pay for any eligible dependent care and claim status by calling PayFlex or going online to services as they occur during the year, and submit an online or www.payflex.com. paper claim for those expenses to PayFlex to be reimbursed Customer Service: 1-800-284-4885 tax-free from your FSA. You do not pay any taxes on the money Monday-Friday, 7:00 AM - 7:00 PM (CT) that goes into the FSA and you do not pay any taxes on the Saturday, 9:00 AM - 2:00 PM (CT) reimbursements you receive.

PayFlex provides online account information at Use It or Lose It www.payflex.com. This information includes account balances, detailed claims and reimbursement information as well as access If you don’t spend the money in your Dependent Care FSA, to various forms. Visit PayFlex’s website homepage and click Internal Revenue Code regulations require that you forfeit your "Sign In." The first time you log in, you will need to click Create" unused account balance. In other words, if you do not use it, Your Profile" to create your account. Your employee ID# is your you will lose it! Therefore, you should conservatively estimate Social Security Number and your home zip code should be used. your expected expenses that are eligible under the Dependent Care FSA and carefully consider how much (if anything) you may You will also need your employer number to register on the want to contribute. Any unused balances (participant forfeitures) PayFlex website: will be used to cover administrative expenses of the FSA Plan.

Employer number

116076 Grace Period The Company offers a 2-1/2 month extension from the end of the calendar year (December 31) in which you can incur eligible Pay with PayFlex Card expenses for the Dependent Care FSA. For example, you will PayFlex offers the PayFlex CardTM (a credit/debit card) which have until March 15 following the Plan Year to incur eligible FSA debits eligible expenses directly from your account when billed by expenses and until April 30 to submit those eligible expenses a provider who accepts MasterCard. All you have to do is swipe for reimbursement. your card and select “Credit.” However, some providers may ask you to select “Debit.” This means you will need to enter a personal identification number (PIN) to complete the transaction. To get a PIN, call Card Services at 1-888-999-0121. A PIN can be created at any time. If you order a card for your spouse, they will use the same PIN you use. Sufficient funds must be available on the card to enable a successful transaction. You should always keep receipts in the event that you need to provide them to PayFlex or the Internal Revenue Service (IRS). Your card can be valid for up to a three-year period. Each year you enroll, the card will reflect that Plan Year’s election amount(s). Your card will also include remaining funds from the prior Plan Year (if applicable) to be used during the grace period.

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT | 7-1 increase in hours of employment; or any other similar change ENROLLMENT which makes the individual become (or cease to be) eligible for a particular employee benefit. To participate in the Dependent Care FSA Plan, you must Dependent Eligibility Requirements: An event that causes complete an online enrollment or an enrollment form, as directed a participant’s dependent to satisfy or cease to satisfy the by your Human Resources or Benefits Department, authorizing dependent eligibility requirements for a particular benefit, such as the Company to make automatic voluntary payroll deductions for attaining a specified age. contributions to your account. In accordance with IRS regulations, you must re-enroll for each calendar year in which you want to Change in Residence: A change in the place of residence of participate. the participant, the participant’s spouse or the participant’s dependent. Annual Enrollment If a change in status occurs, your Dependent Care FSA deductions can be started, suspended, increased or decreased Each year, as part of your annual enrollment, you must make a within the course of the year, provided such change is consistent new election for the total annual amount that you would like to with the related change in status. To make a change in your annual contribute to the Dependent Care FSA for the following calendar election amount, you must make your election within 31 days of year. Therefore, you must decide how much (if anything) you your change in status. Once processed, your contributions that will contribute to your account for the entire year before the year are deducted from your pay will be adjusted for the remainder of begins. If you do not re-enroll in the Dependent Care FSA each the calendar year. year, your participation will expire and no contributions will be taken from your pay in the following calendar year. You will not be able to re-enroll in the Dependent Care FSA until the next annual enrollment period for the following calendar year, unless you CONTRIBUTIONS have a qualified change in status as described in the General and Administrative Information chapter. Under the Dependent Care FSA Plan, you may make voluntary contributions up to $5,000 each calendar year, which are If you join the Company after the annual enrollment period, you deducted from your pay before taxes. The minimum annual have up to 31 days following your date of hire or the date you amount you can contribute is $200. Voluntary contributions to the first become eligible to enroll in the Dependent Care FSA Plan. Dependent Care FSA are deducted from your pay each pay period Only those expenses incurred after you join the Dependent Care in equal amounts throughout the calendar year. FSA Plan will be eligible for reimbursement. When joining the Dependent Care FSA Plan mid-year, your election amount will Annual Maximum apply for the remainder of the current calendar year. IRS regulations impose a contribution limit of $2,500 for married Change in Status employees filing separate income tax returns. This limit includes your voluntary Dependent Care FSA contributions plus any Once your Dependent Care FSA election is made upon initial Dependent Care FSA contributions that your spouse may make to enrollment or annual enrollment, the election remains in effect until a Dependent Care FSA sponsored by his/her company. the end of the applicable calendar year and cannot be changed unless you have a qualified change in status, which includes the Discrimination Testing following events: Each year, the IRS requires that employers offering a dependent Legal Marital Status: A change in a participant’s legal marital care account to their employees must run discrimination tests to status, including marriage, death of a spouse, divorce, legal ensure that these accounts do not favor the highly compensated separation or annulment. ($120,000 for 2018) with respect to eligibility and benefits. If the Change in Number of Dependents: A change in the participant’s Company fails one or more of these discrimination tests, highly number of dependents, including the birth of a child, the adoption compensated employees will be notified in writing that their annual or placement for adoption of a dependent, or the death of elections will be reduced. dependent. Change in Employment Status: Any change in employment Use It or Lose It status of the participant, the participant’s spouse or the If you have any money left in your Dependent Care FSA at the end participant’s dependents that affects benefit eligibility under a of the calendar year that is not claimed by April 30 of the following cafeteria plan (including this Plan) or other employee benefit plan calendar year, Internal Revenue Code regulations require that you (including component benefit(s)) of the employer of the participant, forfeit your unused account balance. In other words, if you do the spouse, or dependents. Such events include any of the not use it, you will lose it! Therefore, you should conservatively following changes in the employment status of the participant, the estimate your expected dependent care expenses and carefully participant’s spouse or the participant’s dependent: termination consider how much (if anything) you may want to contribute. Any or commencement of employment; a strike or lockout; a unused balances (participant forfeitures) will be used to cover commencement of or return from an unpaid leave of absence; a administrative expenses of the FSA Plan. change in worksite; switching from salaried to hourly-paid, union to non-union, or part-time to full-time; incurring a reduction or

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT | 7-2 ELIGIBLE EXPENSES

Your Dependent Care FSA Plan provides reimbursement for day • Household services related to the care of an elderly or disabled care expenses that allow you and, if you are married, your spouse adult who lives with you, as long as the service provider is also to work. If you are married, both you and your spouse (unless a responsible for providing personal care to the elderly or disabled full-time student or disabled) must work for day care expenses to adult. be eligible. Please note that the list above has been compiled based on IRS According to the Internal Revenue Service, qualifying individuals guidelines and is subject to change without notice. for eligible expenses are defined as: For detailed guidelines on who qualifies as an eligible dependent • Child dependents under age 13 who live with you for more than or what constitutes an eligible dependent care expense, view the half the year, or IRS guidelines at www.irs.gov/pub/irs-pdf/p503.pdf or contact the IRS by phone at 1-800-829-3676. You can also request a • Adult disabled dependents or spouses who live with you for copy of Publication 503, Child and Dependent Care Expenses. more than half the year and do not have more than a minimum amount of gross income per year as set by the IRS (including Please note that the IRS can make changes at any time and taxable Social Security benefits). without notice. Visit www.payflex.com for the most current information and a list of qualified dependent care expenses. Note: There is a requirement that a qualifying individual regularly spend eight hours a day in the employee’s home in determining whether expenses incurred for care outside the home are employment-related expenses. Eligible dependent day care expenses may include charges for: • Au pair expenses for dependent care (does not include travel expenses); • Babysitter inside or outside the household; • Before- and after- school or extended day programs (supervised activities after the regular school program); • Custodial childcare or eldercare expenses for a qualifying individual; • Day camps, if the primary reason for being there is the care and well-being of the child and is custodial in nature, and not educational; • Day care centers; • FICA (Medicare and Social Security) and FUTA (Federal Unemployment) taxes of day care provider; • Household employee whose services include care of a qualifying person; • Late pick-up fees; • Looking-for-work expenses incurred to enable an employee to look for work; • Nanny expenses; • Preschool/Nursery school for pre-kindergarten; • Sick-child care center to the extent the care is not for medical services; • Summer day camps (not overnight camps); • Temporary absence such as for vacation or minor illness and required to pay provider weekly or monthly and the payment includes the short absence as well as work days; • Work-related day care expenses - must allow you to work or look for work. You must be gainfully employed (earning income). This does not include volunteer work that is unpaid or for nominal pay.

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT | 7-3 INELIGIBLE EXPENSES FILING CLAIMS

Ineligible dependent care expenses include: PayFlex is the Claims Administrator for the Dependent Care FSA. • Payment to your dependents, including your spouse; All Dependent Care FSA claims must be submitted to PayFlex for reimbursement. • Payments for a non-custodial parent’s day care expenses; • Dependent day care expenses incurred in a different calendar Filing a Claim year*; After you incur an eligible expense, you have the option of • Medical, dental and/or vision care expenses whether or not they submitting a claim online or completing a paper claim form and are otherwise covered under the Company benefits or any other mailing or faxing it along with your itemized documentation. health insurance pla;n To file a claim online, log in to your PayFlex account and select • Educational/tuition expenses for kindergarten, first grade and “File a Claim” on the left navigation bar or visit “My Resources” above; to download a claim form from “Administrative Forms”. • Expenses paid to the child of a participant; To print a paper claim form, click on “My Resources” and then • Field trip expenses; select “Administrative Forms”. • Food, clothing, education or entertainment expenses; Acceptable documentation consists of one of the following: • Household services (chauffeur, bartender, gardener); • A completed dependent day care claim form with dates of service, name of dependent, amount requested and day care • Incidental expenses (diaper, activities, etc. charges); provider’s name and signature. The claim form can be used as • Overnight camp (not even the portion attributed to the daytime an itemized statement if your day care provider provides this cost); information and signs the form where indicated. • Payments for care where you are not the custodial parent (in • A completed dependent day care claim form and an itemized divorce situations); statement from your day care provider. The itemized statement must include the provider’s name, your dependent’s name, as • Payments for care while you are off work because you are on a well as the specific dates day care services were provided and leave of absence; the cost of care. • Payments for care while you are off work because you are on Please note that a cancelled check is not acceptable maternity or other medical leave; documentation. • Payments for care while you are off work because you are on Please note that you are required to report the provider’s name, vacation, unless required to pay weekly or monthly and the address and Tax Identification Number or Social Security Number payment includes the short absence as well as work days; on Form 2441 with your personal income tax return. • Payments for care while you are off work due to illness unless temporary absence, required to pay weekly or monthly and the Dependent Child or Adult Day Care payment includes the short absence as well as work days; • Payment for services not yet provided (advance payments); In order to get reimbursed for dependent child or adult day care expenses, the expenses must be work-related, meaning you • Registration fees/reservation fees/holding fees unless paid and your spouse, if married, must be employed, actively seeking in order to obtain care and only if and when that provider is employment or a full-time student. selected; When submitting a claim for dependent day care expenses: • Transportation expenses unless furnished by the care provider to or from a place where care is provided. • Complete a claim form and provide an itemized statement from your day care provider. *You may only use your Dependent Care FSA for eligible expenses incurred during the calendar year or during the Grace Period described on page 7-1 in which your voluntary • Your provider’s signature on the claim form may be used as contributions are withheld from your pay. Expenses are considered incurred on the date that services are provided, not when you are billed or when you pay for them. a substitute for an itemized statement. Remember, either the provider’s signature on the claim form OR an itemized statement is required. PLEASE DO NOT SEND BOTH. Adequate Funds • If submitting the itemized statement instead of having the You can only be reimbursed for eligible expenses up to the provider sign the claim form, the itemized statement must amount that has already been deducted from your pay (cash include the provider’s name, your dependent’s name, as well as balance) and credited to your account at PayFlex. For example, the specific dates day care services were provided and the cost if you submit an expense for reimbursement of $500, but you have of care. only contributed $275 year-to-date, then you will be reimbursed • Cancelled checks cannot be accepted as a form of for $275 and the remainder of the claim will be reimbursed as documentation. contributions are credited to your account.

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT | 7-4 • IRS regulations require you to report the provider’s name, Appealing a Claim address and Tax Identification Number (or Social Security You should submit all reimbursement claims during the Plan Year. Number) on Form 2441 to be filed with your personal income tax For the Dependent Care Flexible Spending Account, you must return. A dependent is considered eligible if they are under age submit claims no later than 120 days after the end of the Plan Year. 13 or otherwise meet the “Qualifying Person Test” as described Any claims submitted after that time will not be considered. in Publication 503. All other general requests should be directed to the Administrator • Remember, you can only get reimbursed for day care services of our Plan. If a dependent care claim under the Plan is denied received, not for services to be provided in the future. in whole or in part, you or your beneficiary will receive written notification. The notification will include the reasons for the denial, Mailing or Faxing Claims with reference to the specific provisions of the Plan on which Obtain a claim form. If you choose to submit your Dependent the denial was based, a description of any additional information Care FSA claim via mail or fax, then you can download a claim needed to process the claim and an explanation of the claims form from PayFlex’s website at www.payflex.com. review procedure. Within 60 days after denial, you or your beneficiary may submit a written request for reconsideration of the Complete the claim form. When submitting claims, be sure to denial to the Administrator. attach copies of your itemized documentation to the claim form. Any such request should be accompanied by documents or Send the claim form. Mail or fax the completed form to: records in support of your appeal. You or your beneficiary may PayFlex Systems USA, Inc. review pertinent documents and submit issues and comments in Flex Dept. writing. The Administrator will review the claim and provide, within P.O. Box 981158 60 days, a written response to the appeal. (This period may be El Paso, TX 79998-1158 extended an additional 60 days under certain circumstances.) Fax: 1-855-703-5305 In this response, the Administrator will explain the reason for the decision, with specific reference to the provisions of the Plan on which the decision is based. The Administrator has the exclusive right to interpret the appropriate plan provisions. Decisions of the Did You Know? Administrator are conclusive and binding. If you are enrolled in both the Health Care Flexible Spending Account Plan and the Dependent Care Flexible Spending Questions? Account Plan, you will receive one PayFlex Card for both To receive more information about PayFlex and dependent care accounts. This card may be used for eligible health care FSAs, visit www.payflex.com and click the “Sign In” link or call expenses in the Health Care Flexible Spending Account and PayFlex at 1-800-284-4885. eligible dependent care expenses in the Dependent Care Flexible Spending Account.

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT | 7-5 TAX ADVANTAGES/CONSIDERATIONS

Compensation that is normally subject to federal income tax, Social Security tax and state* and local income tax (if applicable) is not taxed if contributed to the Dependent Care FSA. Reimbursements provided under the Dependent Care FSA are also tax-free.

*Certain states do not exempt FSA contributions from state income tax.

Dependent Care FSA Savings Example This example illustrates the tax savings that can result from participating in the Dependent Care FSA versus paying for dependent care expenses after tax. In this example, you have $3,000 in annual dependent care expenses.

Participate in the Do not participate in the Dependent Care FSA Dependent Care FSA

Annual income $50,000 $50,000

Dependent Care FSA contributions ($3,000) ($0)

Remaining income $47,000 $50,000

Federal, state and Social Security taxes* ($12,996) ($13,825)

Post-tax dependent care expenses ($0) ($3,000)

Remaining income $34,004 $33,175

Total savings $829 $0

*Assumes 15% federal tax, 5% state tax and 7.65% Social Security tax.

Dependent Care Tax Credit Social Security Once you are reimbursed for an eligible dependent care expense, Since you do not pay Social Security taxes on your before- you may not take a corresponding deduction on your income tax tax voluntary Dependent Care FSA contributions, your future return because these expenses have been paid through the FSA Social Security benefits could be slightly reduced. Although Plan with tax-free dollars. this reduction is usually small, it could occur if your taxable Use of the Dependent Care FSA will reduce—dollar for dollar—the compensation is below the Social Security wage base. amount you may claim as a child and dependent care tax credit.

You should consult with a tax advisor concerning your personal Tax Exemptions tax situation. Changes to the Child and Dependent Care Tax Credit or the Earned Income Tax Credit will affect the calculation Certain states (such as Pennsylvania) do not exempt FSA of which program is better for you each year. You may qualify contributions from state income tax. However, the federal income for the Child Care Tax Credit for some amounts in excess of the tax exemption applies to employees in all states. $5,000 Dependent Care FSA maximum.

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT | 7-6 WHEN COVERAGE ENDS

If you leave the Company for any reason, your contributions to the Dependent Care FSA Plan will automatically stop. If you have a PayFlex Card, it will be deactivated, and any outstanding claims will need to be submitted via fax or paper. Submitting Claims After You Leave the Company

You may continue to request reimbursement from your Dependent Care FSA for expenses incurred through the Grace Period of March 15 of the following year until any cash balance is exhausted. However, all such requests must be made before April 30 of the next year. Any money left in the account after this date will be forfeited.

OTHER IMPORTANT INFORMATION

Important information, such as the Company’s eligibility requirements, your rights as a Plan participant and other administrative details, can be found in the General and Administrative Information chapter of this SPD.

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT | 7-7 8 Long Term Care Insurance CONTENTS

...... Page

Introduction...... 8-1

• Key Terms to Know...... 8-1

Eligibility...... 8-2

Available Coverage ...... 8-2

Plan Cost...... 8-2

Effective Date of Coverage...... 8-2

Changing Coverage Options...... 8-2

Change of Employment Status...... 8-2

Key Things to Do...... 8-3

How the Plan Works...... 8-3

• Benefits...... 8-3

• Benefit Increase Options...... 8-3

• Covered Expenses ...... 8-3

• Conditions for Receiving Benefits...... 8-3

What the Plan Does Not Cover...... 8-4

End of Coverage ...... 8-4

Continuation of Coverage for Surviving Spousel ...... 8-4

Change, Replacement or Termination of the Plan...... 8-4

Claims and Appeals...... 8-5

LONG TERM CARE INSURANCE INTRODUCTION

Bertelsmann, Inc. (the “Company”) is pleased to sponsor the Coverage Maximum is the maximum amount of benefits payable Bertelsmann Group Long Term Care Insurance Program (the to the insured, and is reduced by the amount of claims paid. The “Plan”), which is a component of the Bertelsmann Employee Policy Lifetime Maximum is determined by multiplying the Facility Protection Plan (the “Employee Protection Plan” or “Signature Care Maximum by the benefit duration. ”). This program provides eligible employees with affordable Select Covered Care means only those Qualified Long Term Care coverage that can assist with the high costs of long term care Services for which the insurance pays benefits or would pay services, including care at home, in the community, in assisted benefits in the absence of an Elimination Period. living facilities (including Alzheimer’s facilities), and in nursing homes. Covered Expenses means costs incurred for Covered Care. Each benefit defines the Covered Expenses under that benefit. Genworth Life Insurance Company (“Genworth Life”) is the An expense is considered incurred on the day on which the care, underwriting company for the Plan and will serve as Benefits and service or other item forming the basis for it is received by the Claims Administrator under the Plan. Genworth Life fully insures all insured individual. benefits. The Company does not pay any claims. Licensed Health Care Practitioner means any of the following This Summary Plan Description (“SPD”) summarizes provisions of who is not a member of the insured person’s immediate family: the Plan in effect on June 1, 2018 (the “Effective Date”). This SPD • A physician (as defined in Sec. 1861(r)(1) of the Social Security and the related materials do not provide all details of the Plan. Act); More specific information is contained in Group Policy Numbers 18645 and 18662 (Arvato Digital Services LLC, “Arvato”) issued • A registered professional nurse; by Genworth Life. Certificates of Insurance issued to each insured • A licensed social worker; or person contain details of the coverage under the Plan. Copies of • Any other individual who meets such requirements as may be the Group Policy are available for review in the Company’s Benefits prescribed by the Secretary of the Treasury of the United States. Department. Nursing Facility Maximum is the maximum amount that will be If there is any conflict between the terms of this SPD or the paid for confinement in a nursing facility, assisted living facility or Employee Protection Plan document and the Group Policy, the hospice care facility. This amount is also used to determine other Group Policy will control. If there is a conflict between this SPD benefit maximums. and the Employee Protection Plan, then the Employee Protection A Plan of Care is a written, individualized plan for care and Plan document controls. If the terms of the Plan change, you will support services for the insured that specifies: be notified of all material changes. • The type, frequency and duration of all services required to meet the insured’s needs; Key Facts to Know • The kinds of providers appropriate to furnish those services; Insurance provided under the Plan is intended to be federally tax- and qualified long term care insurance within the meaning of Internal • An estimate of the appropriate cost of such services. Revenue Code Section 7702B(b), as amended. Qualified Long Term Care Services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative, maintenance or personal care services which: Key Terms to Know • Are required by a Chronically Ill Individual; and Here are a few important terms that are used to describe the long • Are provided pursuant to a Plan of Care prescribed by a term care insurance benefits in the SPD. Knowing these terms will Licensed Health Care Practitioner. help you better understand how your long term care insurance As used above, “maintenance or personal care services” means works. Other definitions for this coverage can be found in your any care the primary purpose of which is the provision of needed Certificate of Insurance. assistance with any of the disabilities as a result of which an Activities of Daily Living are bathing, continence, dressing, insured is Chronically Ill. This includes protection from threats to eating, toileting and transferring (getting into and out of a bed, health and safety due to Severe Cognitive Impairment. chair or wheelchair). Severe Cognitive Impairment is a loss or deterioration in A Chronically Ill Individual is a person who has been certified by intellectual capacity that: a Licensed Health Care Practitioner as being unable to perform, • Is comparable to (and includes) Alzheimer’s disease and similar without Substantial Assistance from another individual, at least forms of irreversible dementia; and two (2) Activities of Daily Living due to a loss of functional capacity. • Is measured by clinical evidence and standardized tests that In addition, this loss of functional capacity must be expected reliably measure impairment in the person’s short-term or to exist for a period of at least 90 days; or a person requiring long-term memory; orientation as to people, places or time; substantial supervision to protect the person from threats to health deductive or abstract reasoning; and judgment as it relates to and safety due to a Severe Cognitive Impairment. safety awareness.

LONG TERM CARE INSURANCE | 8-1 ELIGIBILITY PLAN COST

You are generally eligible to participate in the Plan if you meet the Premium rates are included in the Group Policy and are available eligibility requirements as listed in the General and Administrative on the enrollment website. The insured pays the cost for the section of this SPD and are Actively at Work. optional Long Term Care Insurance. The cost of coverage Actively at Work means the proposed insured is a benefit-eligible depends on the options selected and the age of the applicant. employee who is performing the usual duties of their job, at their Insurance for an employee or spouse can be paid through usual place of work, on a full-time or part-time basis as described after-tax payroll deductions. Payroll deductions begin as soon as in the General and Administrative section. administratively possible following the first pay period after the An employee is considered Actively at Work while on Company- enrollment is accepted by Genworth Life. All others will be billed approved vacations, holidays and regularly scheduled days directly for their coverage from Genworth Life and are required to off, or during temporary business closures. An employee is not remit payment in a timely manner to the insurance company. considered to be Actively at Work if they are unable to perform The Company is only responsible for paying premiums that are their usual duties due to a sickness, accident or injury, or if withheld from your pay to Genworth Life. Genworth Life pays all they are on a leave of absence, a sabbatical or retired from the benefits under this Plan according to the Group Policy. Company. In addition, an eligible employee’s family members (spouse, parents, adult children, siblings, grandparents, parents-in-law and EFFECTIVE DATE OF grandparents-in-law) between the ages of 18 and 75 may also apply for Long Term Care Insurance under the Plan if they meet COVERAGE the eligibility requirements. A person cannot be eligible in more than one class under the Plan. This optional coverage is subject to underwriting approval by Genworth Life, and will take effect upon their approval of your The Group Policy requires that all eligible persons must be at least application as provided in the Group Policy. 18 years of age, maintain a permanent United States residence, and have an active Social Security number or tax identification However, any additional coverage elected at a later date will take number issued by the United States government. effect upon such approval only if an employee is Actively at Work for the prior 30-calendar-day period. If this requirement is not met, the effective date of coverage will be deferred until the first day AVAILABLE COVERAGE of the month on which the employee is Actively at Work and has been Actively at Work for the prior 30-calendar-day period.

Two Optional Levels of Coverage

• 2-Year Plan o 24 months benefit duration CHANGING COVERAGE o 75% of the Nursing Facility Maximum (NFM) for Home and Community Care OPTIONS o Informal Family Care included Long Term Care Coverage selections can be changed at any time, • 3-Year Plan o 36 months benefit duration as follows: o 75% of the Nursing Facility Maximum (NFM) for Home and • To increase the coverage level to a higher option at any time Community Care a request must be sent with satisfactory proof of good health. o Informal Family Care included Upon approval, premiums for the additional coverage will be Three Levels of the Nursing Facility Maximum based on the age of the insured on the date the change is effective. • $1,500 per month • $3,000 per month • To decrease the coverage level, proof of good health is not • $4,500 per month required. The premium for the reduced coverage will be based on the original issue age. Three Inflation Protection Options

• Future Purchase Option Benefit • Automatic 3% Compound for Life CHANGE OF EMPLOYMENT • Automatic 5% Compound for Life

Optional Nonforfeiture Benefit Rider STATUS

An optional Nonforfeiture Benefit Rider is also available for If your employment status changes (for example, if you take an additional premium. The rider allows the insured to retain an unpaid leave of absence or go out on long-term disability), partial coverage if he or she decides to cancel his or her Long coverage will continue as long as premiums are paid when due. Term Care Coverage after it has been in force for more than Payroll deductions for premiums will stop, and then you will be set three (3) years. up for direct billing purposes. If you subsequently return to work, payroll deductions can be resumed. LONG TERM CARE INSURANCE | 8-2 KEY THINGS TO DO Other Plan benefits include: • Care Coordination Services. Professional care coordinators review the insured’s specific situation and develop an To make the most of the Group Long Term Care Insurance appropriate Plan of Care to meet those needs. The cost of this Program, consider the sources of income that would be available service is not deducted from the Coverage Maximum. to your family to pay for care if you could no longer function independently. Considering factors such as your marital status • International Nursing Facility Benefit. This benefit will pay for and other financial assets will help you determine the type and Covered Expenses received while the insured person is outside amount of insurance you need. the United States. Subject to the Coverage Maximum, it pays up to 75% of the Nursing Facility Maximum for confinement in an out-of-country nursing facility. This benefit terminates four (4) HOW THE PLAN WORKS years after the date for which payment is first made. • Waiver of Premiums while the insured is receiving benefits for facility care or Home and Community Care. Benefits • Graded Refund of Premium on Death Benefit. This benefit provides for the payment of a death benefit equal to 100% of Benefits are payable for expenses incurred for: the total premium paid, less claims if you are age 65 or younger. • Care and services during confinement in anursing facility or At age 66, the premium percentage returned reduces to 90%. assisted living facility, up to the Nursing Facility Maximum Each year thereafter, the percentage of premium payable is based on the option selected. reduced by 10%. This benefit terminates on the premium due date on which you are 75 years of age and is not available to • Home and Community Care Benefit, which includes adult day new enrollees who are aged 65 or older. care, nurse or therapist services, home health or personal care services, and incidental homemaker and chore care provided in the insured’s home, up to 75% of the Nursing Facility Maximum. Benefit Increase Options • Bed Reservation, which is available for temporary absences The Plan provides ways for an insured person to help keep up with of up to 60 days per calendar year when room charges are the increasing costs of Covered Care over time. covered in the facility. Benefit Increase Options available under the Group Program are: • Home Assistance Benefit, which covers home modifications, assistive devices, supportive equipment, emergency medical • Future Purchase Options. This benefit will apply if neither of response systems, and caregiver training. It pays up to a lifetime the automatic options are selected. Every three (3) years the limit equal to three (3) months of full Nursing Facility Benefits. insured is offered the opportunity to increase his or her benefit amounts by 5% compounded annually. The premium for the • Hospice Care Benefit, which covers services designed to additional coverage is based on the insured’s attained age as provide palliative care and alleviate discomforts if the insured of the effective date of the increase. The offer is not made if the person is both chronically and terminally ill. Benefits are payable insured is in claim, is benefit-eligible, is receiving benefits, or is up to the Nursing Facility Maximum for care received in a satisfying the Elimination Period. covered facility, and the limit for the Home and Community Care Benefit when care is received while the insured person is living • Automatic 5% Compound Benefit Increases. With this at home. optional benefit, the benefit amounts increase automatically each year by 5% compounded annually while the insurance is • Informal Care Benefit, which includes maintenance or in effect and premiums are paid. There is an additional premium personal care services provided in the insured’s home by for this optional inflation protection. someone who does not normally reside there. This is a daily benefit up to 1% of the Nursing Facility Maximum, up to 30 days • Automatic 3% Compound Benefit Increases. With this per calendar year. optional benefit, the benefit amounts increase automatically each year by 3% compounded annually while the insurance is • Respite Care Benefit, which provides short-term coverage in effect and premiums are paid. There is an additional premium to relieve the person who normally and primarily provides the for this optional inflation protection. insured person with care in their home on a regular, unpaid basis. It pays for up to 30 days per calendar year. • Alternate Care Benefit, which may, subject to approval and Covered Expenses mutual agreement with the insurer, pay for Covered Expenses The Plan pays benefits as reimbursement for Covered Expenses incurred for services, devices or treatments that are Qualified for Covered Care. Covered Care must: Long Term Care Services not specifically covered under another benefit. • Constitute Qualified Long Term Care Services; • Be provided pursuant to a written Plan of Care prescribed by a Licensed Health Care Practitioner; and • Occur while coverage is in force and prior to the exhaustion of any benefit limits and the Coverage Maximum.

LONG TERM CARE INSURANCE | 8-3 Conditions for Receiving Benefits • For which the insured receives, or is eligible to receive, workers’ compensation benefits, occupational disease act benefits, or For an insured to be eligible for benefits: similar benefits. • The insured person must be Chronically Ill; Benefits are payable for Alzheimer’s disease, subject to the same exclusions, limitations and provisions otherwise applicable to other • Genworth Life must receive a current eligibility certification for Covered Care. the insured person from a Licensed Health Care Practitioner, and; Non-Duplication of Benefits: Benefits will be paid only for Covered Care expenses that are in excess of the amount paid or • Genworth Life must receive ongoing proof which verifies that payable under: the Covered Care the insured person receives is needed due to continually being Chronically Ill. • Medicare (including amounts that would be reimbursable but for the application of a deductible or coinsurance amount); and Before benefits are payable, the Elimination Period must be satisfied. Elimination Period means 90 calendar days, beginning • Any other federal, state or other governmental health care with the first day on which a Covered Expense is incurred, program or law except Medicaid. before the insured is entitled to benefits. Days used to satisfy the Coordination of Benefits: Benefits will be reduced for Covered Elimination Period do not need to be consecutive and can be Care when the total amount payable under this and all other Long accumulated over time. Term Care Coverage is greater than the actual expense incurred. Once satisfied, the insured person will never have to satisfy a new State variations may apply to coverage options, exclusions and Elimination Period for this coverage. limitations. Read the Outline of Coverage in the Information Kit carefully. It will reflect any required state variations and other details of the Plan. All state variations are included in the Certificate WHAT THE PLAN of Insurance that is part of the Group Policy. Pre-Existing Conditions Limitation: Genworth Life will not pay DOES NOT COVER for Covered Expenses incurred for any care or confinement that is a result of a pre-existing condition when the care or confinement Exclusions begins within 12 months following the initial certificate effective Benefits are not paid for any expenses incurred for any Covered date. See the Certificate of Insurance for more details. Care: • For which no charge is normally made in the absence of insurance; END OF COVERAGE • Provided outside the United States of America, its territories and possessions, except as described in the International Nursing Coverage ends on the first to occur of: Facility Benefit; • The date the insured dies; • Provided by the insured’s Immediate Family, unless a benefit • The date coverage is canceled by the insured; specifically states that a member of the Immediate Family can • The date the Policy Lifetime Maximum is exhausted; or provide Covered Care. Genworth Life will not consider care to have been provided by a member of the Immediate Family • The end of the grace period if the amount of any overdue when: premium is not received. o He or she is a regular employee of the organization that is If a person ceases to be eligible, they can continue coverage providing the services; under the Plan by paying premiums directly to Genworth Life. o Such organization receives payment for the services; and o He or she receives no compensation other than the normal Continuation of Coverage for Surviving Spouse compensation for employees in his or her job category. Coverage ends at the death of the insured or as otherwise • Provided by or in a Veteran’s Administration or federal provided in the Plan or Group Policy. Generally, if the surviving government facility, unless a valid charge is made to the spouse also has coverage, that coverage will remain in place, insured’s estate; as long as he or she continues to pay the premiums in a timely • Resulting from war or any act of war, whether declared or not; manner. If premiums for the spouse’s coverage were paid through payroll deductions, those deductions will end upon the employee’s • Resulting from attempted suicide or an intentionally self-inflicted death, and the billing will be sent directly to the surviving spouse injury; and he or she must remit payments directly to the insurer. • Resulting from participation in a felony, riot or insurrection; • Resulting from the insured’s alcoholism or addiction to drugs or narcotics (except for an addiction to a prescription medication when administered in accordance with the advice of a physician); and

LONG TERM CARE INSURANCE | 8-4 Change, Replacement or Termination of Appeals the Plan If a claim under the Plan is denied in whole or in part, the insured will receive written notice. This notice will include the reasons for The Company expects and intends to continue the benefits the denial, with reference to the specific provisions of the Plan described in this summary, but reserves the right to terminate, on which the denial was based, a description of any additional amend or replace the Plan in whole or in part at any time and for information needed to process the claim, and an explanation of any reason, including but not limited to your ability to purchase this the claims review procedure. coverage. Additionally, Genworth Life can terminate or amend the Within 180 days after denial, the insured may submit a written benefits available under the insurance policy. request for reconsideration of the claim. Documents or records If the Company stops offering you the ability to purchase this in support of the appeal should accompany any such request. coverage, you might be able to continue the coverage by paying The insured may review pertinent documents and submit issues the premiums yourself. and comments in writing. Genworth Life will review the claim and provide, within 45 days, a written response to the appeal. In the Please contact Genworth Life for more information. written response, Genworth Life will explain the reason for the decision, with specific reference to the provisions of the Plan on which the decision is based. CLAIMS AND APPEALS Genworth Life Insurance Company has the exclusive right to interpret the appropriate Plan provisions. Decisions of Genworth Filing a Claim Life Insurance Company are conclusive and binding. Payment of claims under the Plan will be made by the Claims Please see the Group Policy for more information. Administrator, Genworth Life Insurance Company. Claims for benefits under the Plan are to be submitted to Genworth Life as provided in the Claim Payments section of the Certificate of Insurance. Contact the Claims Administrator at 1-800-416-3624 with any questions regarding a claim or need for claim forms. Notify Genworth Life within 30 days of the date the covered loss starts or as soon as reasonably possible thereafter. Upon receipt of a notice of claim, the claim forms needed to file proof of loss will be sent. If the claim forms are not received within 15 days, proof of loss can be filed without them with a letter describing the nature and extent of the loss and the Covered Expense for which the claim is made. If the claim is for a continuing loss, written proof of loss must be given to Genworth Life within 90 days after the end of each monthly period for which benefits may be payable. For any other loss, written proof must be given within 90 days after the date of such loss. Unless the insured is not legally capable, the required proof must always be given to Genworth Life no later than one (1) year from the time specified. Genworth Life must receive updates to the insured’s Plan of Care on an ongoing basis. Once the Elimination Period is satisfied, benefit payments will be made on a monthly basis after receipt of the claim as long as the insured remains eligible to receive benefits. When a claim is paid, a notice showing the total amount of benefits that have been paid to date will be sent. No action may be brought to recover under the Plan until 60 days after proof of loss has been given. No action can be brought more than three (3) years from the date written proof of loss was required to be given. Please see the Group Policy for more information.

LONG TERM CARE INSURANCE | 8-5 9 General Information Retirement Income Program

• Bertelsmann Pension Account Plan • Bertelsmann 401(k) Savings Plan CONTENTS

...... Page

Plan Identification – Pension Account Plan...... 9-1

Plan Identification – 401(k) Savings Plan ...... 9-1

Fiduciary Information – Pension Account and 401(k) Savings Plans...... 9-1

Participating Companies...... 9-2

Top-Heavy Rules...... 9-3

Non-Assignability of Benefits...... 9-3

Claims Denial and Appeal...... 9-3

Time to Bring Legal Action...... 9-3

Plan Documents...... 9-3

Changing or Terminating Plans...... 9-3

Employment at Will...... 9-4

Your Rights Under ERISA...... 9-4

RETIREMENT INCOME PROGRAM GENERAL INFORMATION

Plan Identification – Pension Account Plan

Name of Plan: Bertelsmann Pension Account Plan Plan Number: 003 Type of Plan: Defined benefit pension plan Plan Trustee: The Northern Trust Company 50 South La Salle Street Chicago, IL 60603 Plan Funding: Company contributions

Plan Identification – 401(k) Savings Plan

Name of Plan: Bertelsmann 401(k) Savings Plan Plan Number: 004 Type of Plan: Defined contribution pension plan Plan Trustee: Fidelity Management Trust Company 82 Devonshire Street Boston, MA 02109 Plan Funding: Company contributions and Employee contributions

Fiduciary Information – Pension Account Plan and 401(k) Savings Plan

Plan Sponsor: Bertelsmann, Inc. 1745 Broadway New York, NY 10019 (212) 782-1150 Employer Identification Number: 95-2949493 Plan Year: January 1 through December 31 Plan Administrator: 401(k) Savings Plan Bertelsmann Defined Contribution Administration & Investment Committee Pension Account Plan Bertelsmann Defined Benefit Administration & Investment Committee c/o Corporate Benefits Department Bertelsmann, Inc. 1745 Broadway New York, NY 10019 (212) 782-1150 Type of Administration: Company Administration Agent for Service of Legal Process: Chief Legal Counsel c/o Bertelsmann, Inc. 1745 Broadway New York, NY 10019

Service of legal process may also be made upon the Trustee or Plan Administrator.

RETIREMENT INCOME PROGRAM | 9-1 PARTICIPATING COMPANIES

Participating Companies* Pension Plan** 401(k) Plan

Advance Practice Strategies, Inc. X

AHC Media LLC X

Arvato Digital Services, LLC X X

Arvato Entertainment, LLC X X

Arvato Systems North America, Inc. X X

Berryville Graphics, Inc. X

Bertelsmann, Inc. X X

Bertelsmann Accounting Services, Inc. X

BMG Rights Management (US) LLC X

Care Management Technologies, Inc. X

Coral Graphic Services, Inc. (Dynamic division only) X

FremantleMedia Latin America, Inc. X

FremantleMedia North America, Inc. X X

Golden Treasures LLC X

Penguin Random House LLC X

Prestel Publishing LLC X

Penguin Random House Foundation, Inc. X X

PRH Holdings, Inc. X

Random House Children's Entertainment LLC X X

Red Brown Venture, LLC X

Redilearning Corp. X

Relias Learning, LLC X

Rise Records, Inc. X

RTL AdConnect, Inc. X

RTL NY, Inc. X

Smashing Ideas LLC X

Stern Magazine Corp. X

Straightaway Health Careers, Inc. X

StyleHaul, Inc. X

This is Hit, Inc. X

White Cloud Analytics, Inc. X * Employees who are characterized by their Employer (whether or not a Related Employer) as production employees are not eligible for the Bertelsmann 401(k) Savings Plan or the Bertelsmann Pension Account Plan. ** The Pension Account Plan is frozen with respect to all future eligibility and benefit accruals (see Chapter 10, Bertelsmann Pension Account Plan).

RETIREMENT INCOME PROGRAM | 9-2 Your appeal should include all documents or records in support TOP-HEAVY RULES of your claim and state the reasons you believe you are eligible for the benefit you have claimed. You or your authorized A “top-heavy” plan means a plan that allocates more than 60% representative may review pertinent documents and submit issues of its benefits to “key employees.” Both “top-heavy” and “key and comments in writing. The Plan Administrator will review the employees” are terms defined under the Internal Revenue Code. claim and within 60 days–subject to extension (made in writing If the Bertelsmann Pension Account Plan or the Bertelsmann within the initial 60-day period) in special circumstances for 401(k) Savings Plan (singularly a “Plan” and collectively the “Plans”) up to an additional 60 days–will provide a written response to became top heavy, all Plan members would be informed and the appeal. If your appeal is denied, the notification will explain benefits could be modified to provide special accelerated vesting, the reason for the decision, the specific reference to the Plan special minimum benefits and limits on covered compensation. provisions on which the decision is based, and a statement that you are entitled to receive, upon written request and free of charge, reasonable access to, and copies of, all documents, NON-ASSIGNABILITY OF BENEFITS records and other information relevant to your claim. The Plan Administrator has the sole discretionary authority and exclusive Benefits payable under a Plan are payable only to Plan members right to interpret the appropriate Plan provisions. Decisions by the or their beneficiaries. No one has the right to commute, pledge, Plan Administrator are conclusive and binding. If you fail to timely withdraw, encumber or assign benefits to any other individual(s) or file a request for reconsideration, you will lose your right to pursue organization(s). However, in certain circumstances, a lien against your claim in court. If your claim for benefits is denied or ignored, Plan assets may be made by federal or state governments. Also, a in whole or part, you can file suit in a state or federal court. beneficiary may waive his or her rights to benefits under the Plans pursuant to a Qualified Disclaimer as defined in Section 2518 of the Internal Revenue Code. TIME TO BRING LEGAL ACTION Notwithstanding the preceding paragraph, in the event that a valid Qualified Domestic Relations Order (QDRO) is properly served on You cannot bring an action in court to pursue your claim a Plan, benefits will be paid accordingly. A QDRO is an order or a for benefits later than one year from the date of the Plan judgment from a state court directing the Plan Administrator to pay Administrator’s decision on your appeal (or, if no decision is all or a portion of a member’s Plan benefits to a spouse, former provided to you within 120 days of the Plan Administrator’s receipt spouse or dependent. A copy of the QDRO procedures for each of your appeal, no later than 12 months from the 120th day after Plan is available upon request and without charge from the Plan the Plan Administrator’s receipt of your appeal). Administrator. PLAN DOCUMENTS CLAIMS DENIAL AND APPEAL The summaries contained in this booklet describe the key features If you have a complaint or claim concerning the operation or of the Plans as of January 1, 2018, and do not cover all details. administration of a Plan, or about your benefits under a Plan, The full terms and conditions of the Plans are provided in the you or your authorized representative has the right to have the various Plan documents and insurance contracts. The documents complaint reviewed by the Plan Administrator. All complaints and legally govern the operations of the Plans. In the event of a conflict claims for benefits must be submitted in writing within two years, or discrepancy of any kind between the Plan documents and the beginning (i) in the case of a lump-sum payment, on the date descriptions contained in these summaries, the Plan documents on which the payment was made, (ii) in the case of installment control. payments, on the date on which the first in the series of payments Copies of all Plan documents, as well as the annual reports of Plan was made, or (iii) for all other claims, on the date on which the operations filed with the Internal Revenue Service, are available for action complained of occurred. You are entitled to receive, upon review during normal business hours at your Human Resources request and free of charge, reasonable access to and copies of all Department. documents, records and other information relevant to your claim. If an application for benefits under a Plan is denied in whole or in part, you or your beneficiary will receive written notification CHANGING OR within 90 days, subject to extension (made in writing within the initial 90-day period) in special circumstances for up to an TERMINATING PLANS additional 90 days. The notification will include the reasons for the denial with reference to the specific Plan provisions on which Although the Company expects, and intends, to continue the the denial is based, a description of any additional information Plans indefinitely, the Company, by decision of the Board of needed to process the claim, an explanation why such information Directors obtained at an authorized meeting or by written consent is needed, and an explanation of the claim review procedure of the Board of Directors (or their designee), may change or including time limits. Within 60 days after receiving a denial, you terminate the Plans at any time. or your authorized representative may submit a written request for The Company’s decision to change or terminate a Plan may be reconsideration of the application to the Plan Administrator. due to changes in federal or state laws, the requirements of the RETIREMENT INCOME PROGRAM | 9-3 Internal Revenue Code or ERISA, or any other reason. A Plan B. Prudent Actions by Plan Fiduciaries change may involve transferring Plan assets and liabilities to In addition to creating rights for Plan members, ERISA imposes another plan or dividing the Plan into two or more parts. If the duties upon the people who are responsible for the operation of Company does make a change or terminates a Plan, it may decide each Plan. The people who are responsible for the management to set up a different plan providing similar or identical benefits. of the Plan, called “fiduciaries” of the Plan, have a duty to act If a Plan is terminated, a benefit may be payable to you. The prudently and in the best interest of you and other Plan members amount of your benefit may be paid to you in one or more cash and beneficiaries. payments or an annuity contract that will pay you a monthly income. The exact form of payment may be set by law; if there is C. Enforce Your Rights a choice, the Plan Administrator will decide the type and timing of Another one of your rights relates to the claim appeal procedure– payment, unless otherwise determined by the Plan Administrator. i.e., the right to receive written notice if your claim for benefits should, for any reason, be denied in whole or in part, plus the right to have your claim reconsidered. And, of course, the Company will EMPLOYMENT AT WILL not dismiss you or discriminate against you in any way to prevent you from obtaining benefits from the Plans or exercising your rights Participation in a Plan does not create or imply an employment under ERISA. contract between the Company and any Plan member. If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal YOUR RIGHTS UNDER ERISA any denial, all within certain time schedules. Under ERISA, there are steps you can take to enforce the above Your benefits as an employee are covered by the Employee rights. For instance, if you request materials from a Plan and do Retirement Income Security Act of 1974, as amended (ERISA) not receive them within 30 days, you may file suit in a federal and, as a member in a Plan, you are entitled to certain rights and court. In such a case, the court may require the Plan Administrator protections under ERISA. to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because A. Receive Information About Your Plan and Benefits of reasons beyond the control of the Plan Administrator. If you Although the law does not require a company to provide benefits, have a claim for benefits that is denied or ignored, in whole or in it does set standards for those that do. The Company believes you part, you may file suit in a state or federal court (subject to the should know as much as possible about your benefits. You are time limit set forth under “Time to Bring Legal Action.” In addition, entitled to receive copies of Plan documents (including insurance if you disagree with a Plan’s decision, or lack thereof, concerning contracts and collective bargaining agreements, if applicable) the qualified status of a domestic relations order or a medical and other Plan information upon written request to your Human child support order, you may file suit in federal court. If it should Resources Department. Under ERISA, a nominal charge can be happen that Plan fiduciaries misuse the Plan’s money, or if you made for each page of any Plan document that you request. You are discriminated against for asserting your rights, you may seek are also entitled to view the documents and contracts governing assistance from the U.S. Department of Labor, or you may file the Plan, including a copy of the latest annual report (Form 5500) suit in a federal court. The court will decide who should pay court filed by the Plan with the U.S. Department of Labor, without costs and legal fees. If you are successful the court may order the charge, at the Plan Administrator’s office. The Form 5500 is also person you have sued to pay these costs and fees. If you lose, the available at the Public Disclosure Room of the Employee Benefits court may order you to pay these costs and fees, for example, if it Security Administration. finds your claim is frivolous. You have a right to receive, without charge, a statement of your D. Assistance with Your Questions accrued and vested benefits under each Plan as follows: If you have any questions about the Plans, you should contact • For the 401(k) Savings Plan, you will receive a statement your Human Resources Department. If you have any questions showing the value of your account at the end of every calendar about this statement or about your rights under ERISA, or if quarter (March 31, June 30, September 30 and December 31). you need assistance in obtaining documents from the Plan • For the Pension Account Plan, you will receive a statement at Administrator, you should contact the nearest Area Office of least once every three years if you are employed at the time the the Employee Benefits Security Administration (EBSA), U.S. statement is provided and you have a vested benefit under the Department of Labor, listed in your telephone directory or Plan. You may also request a statement in writing once each the Division of Technical Assistance and Inquiries, Employee year without charge. Benefits Security Administration, U.S. Department of Labor, 200 The Plan Administrator is required by law to furnish you with a Constitution Avenue, NW, Washington, DC 20210. You may also copy of a summary of the 401(k) Savings Plan’s annual financial obtain certain publications about your rights and responsibilities report (SAR) each year without charge. under ERISA by calling the publications hotline of EBSA.

RETIREMENT INCOME PROGRAM | 9-4 10 The Bertelsmann 401(k) Savings Plan CONTENTS

...... Page

Plan Highlights ...... 10-1

Eligibility...... 10-2

Enrollment...... 10-3

• Automatic Enrollment...... 10-3

• Resolicitation and Re-Enrollment ...... 10-3

• Qualified Default Investment Alternative...... 10-4

• How to Enroll...... 10-5

How the Plan Works...... 10-5

• Pre-Tax Contributions ...... 10-5

• Roth 401(k) Contributions...... 10-5

• Pre-Tax or Roth 401(k) Contributions...... 10-5

• Maximum Contributions...... 10-5

• Annual Increase and Resolicitation Program ...... 10-6

• How Catch-Up Contributions Work...... 10-6

• Covered Earnings...... 10-6

• Tax Examples ...... 10-7

Company Contributions ...... 10-9

• Company Matching Contributions...... 10-9

• Company Annual Contributions...... 10-9

• Company Profit Sharing Contributions...... 10-9

Your Choice of Investment Funds...... 10-10

• Short-Term Trading Fees...... 10-11

• How the Fees Work...... 10-11

• What Do These Fees Mean to You...... 10-11

• Selection of Investment Options ...... 10-11

• Responsibility for Investment Decisions...... 10-12

• Financial Engines ...... 10-12

How Your Account Balance Can Grow — Examples...... 10-13

Vesting...... 10-14

• Five-Year Break ...... 10-14

Rollovers from Other Plans ...... 10-15

Plan Payments...... 10-15

• Timing of Plan Payments...... 10-15

• Payment Methods ...... 10-15

• Loans...... 10-16

• Withdrawals Not Due to Hardship ...... 10-16

THE BERTELSMANN 401(K) SAVINGS PLAN • Hardship Withdrawals...... 10-17

• Qualified Reservist Distribution...... 10-17

• Distribution While Performing Service in the Uniformed Services...... 10-17

• Minimum Required Distributions...... 10-17

• In-Plan Roth Conversions...... 10-17

• Tax Considerations...... 10-18

• How to Apply for Benefits...... 10-18

Plan Flexibility...... 10-18

Online and Toll-Free Telephone Services ...... 10-19

• NetBenefitsSM (Online Access)...... 10-19

• Voice Response System...... 10-19

• Participant Service Representative ...... 10-19

Other Important Information...... 10-20

Appendix A – Participating Affiliates...... 10-21

Appendix B – Company Annual Contribution...... 10-22

Appendix C – Penguin Random House Group Profit Sharing Contribution...... 10-23

This Summary Plan Description (SPD) is merely a summary of the terms of the Plan. In the event of a conflict between the actual terms of the Plan and this summary, the terms of the Plan will control. The Company reserves the right to unilaterally amend, modify or terminate the Plan in its sole discretion at any time for any reason.

THE BERTELSMANN 401(K) SAVINGS PLAN PLAN HIGHLIGHTS

The Bertelsmann 401(k) Savings Plan (the “Plan”) offers you incentives to save and invest for your future. The Plan is maintained under Section 401(k) of the Internal Revenue Code, which offers tax advantages to encourage you to save for retirement. The Plan, which became effective April 1, 1987, is voluntary and is subject to continuing government approval under the Internal Revenue Code. The Random House, Inc. Incentive Investment Plan was merged into the Plan effective December 31, 2009. The Ten Speed Press 401(k) and Profit Sharing Plan was merged into the Plan effective January 13, 2010. The BMG 401(k) Savings Plan was merged into the Plan effective December 31, 2013. A portion of The Pearson Retirement Plan was merged into the Plan effective January 17, 2014. The G + J USA Group Inc. Retirement Savings Plan was merged into the Plan effective January 16, 2015. The following table summarizes the main features of the Plan as of January 1, 2018::

Highlights of the Plan

Here’s What The Plan Does For You Through These Features

You can invest 1%–75% of your Covered Earnings* each pay Helps you save for the future period through convenient payroll deductions.

The Company matches your contributions** dollar for dollar up to 6% of your Covered Earnings. Company Annual Adds to your investments Contributions and Profit Sharing Contributions may also be made in certain cases.

You can direct your contributions, rollovers and the Company’s contributions into different investment funds. You can also Lets you choose how to invest reallocate your existing account balances into different investment funds.

You pay no federal income taxes on your own pre-tax contributions, the Company’s contributions, or any investment Defers and saves taxes while you invest earnings until this money is paid to you in the future. Roth 401(k) contributions are taxable but grow tax-free and are not taxable when distributed if you meet certain requirements.

You are always 100% “vested” (that is, you have a non- forfeitable right) in the current value (including investment earnings and returns) of your Plan contributions and the Provides rapid vesting Company’s matching contributions. Company Annual Contributions require three years of service to vest. Profit Sharing Contributions vest on a three-year graded vesting schedule.

The full vested value of your Plan account is available when Funds are available when needed most your service ends at retirement, total disability or termination of employment.

While you are employed, you can make cash withdrawals under certain circumstances if you have a financial hardship, or are Allows withdrawals and loans over 59½ years of age. You can borrow from your account for any reason.

* Subject to IRS regulations and restrictions. ** You must have one year of service to be eligible for Company Matching Contributions.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-1 ELIGIBILITY

Unless you are subject to the rules below for certain part-time and January 1, 2014, your past service with Pearson plc or any of its temporary employees, you are eligible to join the Plan as follows: subsidiaries is also counted. If you were employed by Gruner + Jahr USA Group, Inc. on January 1, 2015, your past service with • You may begin making contributions immediately after you join Gruner + Jahr USA Group, Inc. and certain of its affiliates is also the eligible class. counted. Employment as a “leased employee” as described under • The Company will begin matching your contributions (up to 6% the Internal Revenue Code is also treated as employment with the of Covered Earnings) after the later of the date you complete Company if you are later hired as an employee of the Company one year of eligibility service or the date you join the eligible or an affiliate. Employment as a part-time employee or as a class. Generally, you complete one year of eligibility service on temporary employee continues to count as employment with the the first anniversary of your employment. Company if you are subsequently hired as a full-time employee. If you are classified by the Company as a part-time employee who You are in the eligible class if you are employed by the Company is regularly scheduled to work less than 20 hours per week (1,000 (or an Active Participating Affiliate listed in Appendix A, attached), hours per year) or as a temporary employee, you are eligible to provided that: make contributions and to receive matching contributions (up to • You are not in a class of employees eligible to participate in 6% of Covered Earnings) on the later of the date you complete one another defined contribution retirement plan sponsored by year of eligibility service or the date you join the eligible class. a U.S. Bertelsmann affiliate company, or in any retirement plan You complete one year of eligibility service as a part-time or established under the laws of a foreign country maintained by temporary employee by working at least 1,000 hours in the any Bertelsmann affiliate company. twelve (12) consecutive month period beginning on your date of • You are not a “leased employee” as described under the Internal employment. If you do not meet this requirement in that period, Revenue Code and you are not classified by the Company as an you will complete one year of eligibility service if you work at least independent contractor, freelancer or other similar classification 1,000 hours in any plan year. If you are reclassified (e.g., you that is not on the payroll of the Company. increase your hours to at least 20 per week), you will no longer be subject to these special rules. You may begin making your • If you are covered by a collective bargaining agreement of any own contributions immediately, and you will complete one year of kind, it provides for your participation in the Plan. eligibility service without regard to the 1,000-hour requirement. • You are not a nonresident alien with no income from the Hours of service include hours of actual service for performing Company earned for services performed in the U.S. duties with the Company and hours for which you are paid by the • You are not characterized by your employer as a production Company during any absences, such as vacation (up to 501 hours employee. for any single absence). Throughout this summary, the Active Participating Affiliates are In determining hours, all of your service with the Company and referred to as “the Company.” any of its affiliates or subsidiaries that are owned at least 20% by either the Company or any of its parent companies is treated Once you become eligible to participate in the Plan, you will as employment with the Company. If you were employed by the remain eligible until the date you retire, die, terminate employment Penguin Random House Group (see Appendix C) on or otherwise leave the eligible class.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-2 ENROLLMENT

Automatic Enrollment

If you were newly hired or rehired on or before December 31, 2016, you were automatically enrolled in the Plan with a 3% pre-tax deferral rate, unless you elected otherwise, 60 days after you met the eligibility requirements for the Plan. Once you are automatically enrolled in the Plan, at the beginning of each year, your contribution rate will increase by 1% until you reach 6%. Or you can choose to change your contribution rate on your own or set up a personalized annual increase schedule at any time. If you were hired or rehired in the first half of the year, your first increase date is the following January st1 . If you were hired or rehired in the second half of the year, your first automatic increase is delayed to a year from the following January 1st. If you are newly hired or rehired on or after January 1, 2017, you will be automatically enrolled in the Plan with a 6% pre-tax deferral rate, unless you elect otherwise, sixty (60) days after you meet the eligibility requirements for the Plan. Your 6% pre-tax deferral rate will not be automatically increased in the future, but you may choose to change your contribution rate on your own or set up a personalized annual increase schedule at any time.

Resolicitation and Re-Enrollment

If you elect not to make any contributions to the Plan or if you discontinue your contributions at any time subsequent to your initial enrollment, you will be automatically re-enrolled in the Plan on your re-enrollment date, unless you elect otherwise within the sixty (60) day notice period prior to your re-enrollment date. If you discontinue your contributions in the first half of the year, your re-enrollment date is the following January 1st. If you discontinue your contributions in the second half of the year, your re-enrollment date is delayed to a year from the following January 1st. If your re-enrollment date was prior to January 1, 2017, you were re-enrolled at a 3% pre-tax deferral rate, and your pre-tax deferral rate will increase by 1% each following January 1st until you reach 6%. If your re-enrollment date is on or after January 1, 2017, you will be re-enrolled at a 6% pre-tax deferral rate. Your deferral contributions will be automatically invested in the Fidelity Institutional Asset Management (FIAM) Index Target Date Fund that matches your date of birth according to the chart below, unless you give Fidelity other investment instructions before the end of the sixty-day (60) “opt-out” period. For example, if you were born in 1975, your contributions will be invested in FIAM Index Target Date 2040 Fund. This fund is known as a Qualified Default Investment Alternative (QDIA). Information regarding this QDIA, including a description of the investment objectives, risk and return characteristics, and fees and expenses, can be obtained by contacting Fidelity Customer Service as indicated on the next page.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-3 Qualified Default Investment Alternative

FIAM Index Target Date Birth Date Range Retirement Date Range ...will be mapped to Commingled Pool Class V

12/31/1937 & earlier Retired before 2002 Ô FIAM Income

1/1/1938–12/31/1942 2003–2007 Ô FIAM 2005

1/1/1943–12/31/1947 2008–2012 Ô FIAM 2010

1/1/1948–12/31/1952 2013–2017 Ô FIAM 2015

1/1/1953–12/31/1957 2018–2022 Ô FIAM 2020

1/1/1958–12/31/1962 2023–2027 Ô FIAM 2025

1/1/1963–12/31/1967 2028–2032 Ô FIAM 2030

1/1/1968–12/31/1972 2033–2037 Ô FIAM 2035

1/1/1973–12/31/1977 2038–2042 Ô FIAM 2040

1/1/1978–12/31/1982 2043–2047 Ô FIAM 2045

1/1/1983–12/31/1987 2048–2052 Ô FIAM 2050

1/1/1988–12/31/1992 2053–2057 Ô FIAM 2055

1/1/1993 & later 2058 & later Ô FIAM 2060

If you do not want to automatically enroll or re-enroll, you and re-elect the FIAM Index Target Date Fund that matches your must contact Fidelity by phone at 1 866-733-1170 or log on date of birth. Resolicitation means you automatically will be swept to NetBenefitsSM at www.netbenefits.com and make a new back into the Professional Management Program unless you deferral election of 0% before the sixty-day (60) “opt-out” period affirmatively elect another investment option(s). expires. You may also contact Fidelity if you want to begin making The Financial Engines Program is a fee-based, discretionary contributions before the end of the sixty-day (60) “opt-out” period, account management service where Financial Engines Advisors if you want to change your deferral percentage or if you want to L.L.C., an independent, SEC-registered investment advisor, choose your own investment options within the Plan. will provide ongoing monitoring and management of your Plan Your account will continue to be invested in the QDIA until account. The Financial Engines Program serves as a QDIA. You you elect to transfer all or a portion of your account or future will be automatically enrolled in the Financial Engines Program if contributions to any of the other investment funds available under you meet the above criteria and you do not opt out in accordance the Plan. You can make such an election at any time, by visiting with the Financial Engines Program terms. More information on NetBenefitsSM at www.netbenefits.com or by calling Fidelity at Financial Engines and the Financial Engines Program is available 1-866-733-1170. A description of the available investment funds under Financial Engines on page 10-12 of this chapter, and in also is available on the Fidelity website at www.netbenefits.com. the Financial Engines Program Terms and Conditions, which is There are no restrictions, fees or expenses in connection with available from Financial Engines. electing to transfer out of the QDIA. Soon after Fidelity is notified of your eligible status, an enrollment Beginning in 2014 and annually thereafter, if (i) you are age 45 or kit will be automatically mailed to your home address. The kit older; (ii) you did not opt out of having your deferral contributions contains a brief summary of the Plan provisions and provides automatically invested in the FIAM Index Target Date Fund that additional information regarding the enrollment process and a matches your date of birth; (iii) your Plan account is currently description of the various investment options. Also included is a 100% invested in the applicable FIAM Index Target Date Fund; Rollover Acceptance form to be completed if you would like to roll and (iv) you had not previously opted out of the Financial Engines over money into the Plan from another qualified plan or IRA that Professional Management Program (the “Financial Engines qualifies for rollover, as described in the “Rollovers from Other Program”), then you will be automatically enrolled in the Financial Plans” section of this chapter. Your rollover contributions will be Engines Program (see Financial Engines on page 10-12 of this automatically invested in the FIAM Index Target Date Fund that chapter). Every five years you will be resolicited if you subsequently matches your date of birth according to the chart above, unless opt out of the Professional Management Program you give Fidelity other investment instructions as provided on the Rollover Acceptance form. THE BERTELSMANN 401(K) SAVINGS PLAN | 10-4 How to Enroll Through Fidelity, you will: • Select the deferral percentage you want to invest in the Plan Eligible employees may enroll in the Plan at any time online at from your Covered Earnings; www.netbenefits.com. • Choose whether your contributions will be pre-tax or after-tax Select the New User Registration link and enter your Social Roth contributions; Security Number and follow the instructions. You will also need your date of birth and ZIP Code. You will have the opportunity to • Authorize the Company to make regular payroll deductions for select a unique Customer ID to use in place of your Social Security your Plan contributions; Number. • Choose how you want to invest your money and the Company’s Please note that if you have ever registered and established an ID contributions; and and PIN at any of the following Fidelity sites – Fidelity.com, • Designate a beneficiary to receive the value of your Plan account 401k.com, eWorkplace, or NetBenefitsSM – from either a current or in the event of your death. (If you are married, your spouse must previous employer, you should use the same ID and PIN to access be your beneficiary, unless he or she consents in writing before NetBenefitsSM. a notary public to your naming another beneficiary.) You can also enroll by contacting Fidelity by phone at Your Plan deductions will begin with the first paycheck issued on 1-866-733-1170. or after the date Fidelity confirms your enrollment. Generally, you NOTE: You should maintain the security of your 401(k) account should allow ten working days for your enrollment or a change in just like you would your bank account. Do not share your your contribution election to be reflected in your paycheck. password with anyone. If you transfer from one Bertelsmann affiliated company to another, you should contact your new Benefits Department regarding your Plan participation.

HOW THE PLAN WORKS

When you join the Plan, you elect a percentage—in whole percentages, from 1% to 75%—that you would like deducted from your Covered Earnings and deposited into the Plan after each pay period. You have the option of making your contributions on a pre-tax and/ or after-tax Roth basis, as described below.

Pre-Tax 401(k) Contributions If you make Roth 401(k) contributions, you give up a tax break today in exchange for a tax break in the future. Therefore, a Roth When you make pre-tax contributions, the percentage you elect 401(k) contribution might benefit you if your tax rate in retirement to invest is deducted from your Covered Earnings before federal is higher than during the years you contribute. (You should note – and in most locations, state and local – income taxes are that because Roth 401(k) contributions are made after-tax, you withheld. Therefore, your contributions are not taxed until paid may take home less money in your paycheck than you would if out from the Plan in the future, and your current taxable income you made traditional pre-tax 401(k) contributions.) However, if is reduced. The reduced taxable income will be reflected in your your tax rate is lower in retirement, then traditional pre-tax 401(k) W-2 statement issued after the end of each year. Your salary contributions might be more beneficial to you than the Roth reduction contributions are, however, subject to Social Security contribution option. and Medicare withholding taxes. For more information on taxes, please see page 10-7. This summary is for informational purposes and is not intended to be Roth 401(k) Contributions tax advice. You should talk with a tax professional about whether pre-tax or Roth 401(k) contributions are right for you since the You also have the option of making Roth contributions, which decision will depend on your individual tax situation and other are treated as “after-tax”; they are taxable to you before they are circumstances that differ from person to person. More information contributed to the Plan, but not taxable when distributed as long about the Roth 401(k) option is available on www.netbenefits.com. as you receive a “qualified distribution.” (A qualified distribution is one that is made at least five years after your first Roth contribution Maximum Contributions is made, and after you are at least 59 ½ or are disabled or die.) If you qualify to make traditional pre-tax contributions, you are The IRS limits the amount that you may invest on a pre-tax or eligible to make Roth 401(k) contributions. Roth basis. For 2018, the limit is $18,500. This limit includes the combined total of your pre-tax and Roth contributions into any Pre-Tax or Roth Considerations tax-qualified retirement plan during the year (including contributions to a plan maintained by another unrelated employer). The potential benefits of pre-tax versus Roth 401(k) contributions In addition, as described in the next section, you may make a depend on your personal financial situation, your existing tax special “catch-up” contribution if you are age 50 or older. (You rate and your anticipated tax rate at the time of your retirement. are considered to be age 50 for the entire year you turn age 50,

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-5 no matter when your birthday occurs during the year.) For 2018, If you are newly hired or rehired on or after January 1, 2017, the the catch-up contribution limit is $6,000. Future increases to the automatic increase program will not apply to you; however, you contribution limits will be determined each year by the IRS (in $500 may set up a personalized annual increase schedule or change increments) based upon increases in the Consumer Price Index. your contribution rate on your own at any time.

Annual Increase and Resolicitation Program How Catch-Up Contributions Work

If you were newly hired or rehired on or before December 31, To be eligible for catch-up contributions in 2018, you must be 2016, once you were automatically enrolled or re-enrolled in the age 50 or older in 2018. For eligible participants, the maximum Plan with a contribution rate of 3%, your contribution rate began pre-tax and Roth contributions that can be made in 2018 are to increase by 1% each year and will continue to do so until you $24,500 ($18,500 plus a $6,000 catch-up). If you choose to reach 6%. If you were hired or rehired in the first half of the year, take advantage of the catch-up contribution in 2018, you must your first increase date is the following January st1 . If you were elect a contribution percentage that will allow you to exceed the hired or rehired in the first half of the year, your first automatic IRS annual contribution limit of $18,500 before the end of the increase is delayed to a year from the following January 1st. year. Any contributions made to the Plan in excess of $18,500, Your contribution rate will then increase by 1% each following but less than $24,500, will be deemed, or categorized, as January 1 until you reach 6%. Or you can choose to change catch-up contributions at the end of the year. You must elect your contribution rate on your own at any time. By electing your a contribution percentage that will allow you to reach $24,500 own contribution rate, you will opt out of the automatic increase before the end of the year if you want to contribute the maximum program; however, you may set up a personalized annual increase catch-up contribution amount of $6,000. In order to provide the schedule at any time. best opportunity for reaching this maximum amount, the Plan’s maximum deferral percentage is 75% of your Covered Earnings. If you discontinue your contributions in the first half of the year, you will be re-enrolled the following January 1st. If you discontinue your If you are age 50 or older and you do not wish to make catch-up contributions in the second half of the year, your re-enrollment contributions, make sure that your deferral percentage election will be delayed to a year from the following January 1st. If your re- is set low enough that it will not defer more than you intended to enrollment date was prior to January 1, 2017, you were re-enrolled save. As always, you should re-evaluate your contribution election at a 3% pre-tax deferral rate, and your pre-tax deferral rate will regularly to be sure it is consistent with your retirement planning increase by 1% each following January 1st until you reach 6%. If objectives. your re-enrollment date is on or after January 1, 2017, you will be The following example illustrates how making catch-up re-enrolled at a 6% pre-tax deferral rate. contributions can vary depending on a participant’s individual situation.

Catch-Up Contribution Example Sam’s annual salary is $50,000. In 2017, Sam was contributing 36% of his salary to the Plan. At the end of 2017, Sam contributed a total of $18,000 to the Plan. In 2018, Sam will reach age 50 and wishes to take advantage of the catch-up election and the additional salary deferral of $6,000. Since the Plan’s maximum deferral percentage is 75%, Sam can increase his deferral rate by 13 percentage points. By increasing his deferral rate to 49%, Sam will have contributed $24,500 by the end of 2018. Please note: The percentage of your catch-up election will depend upon your salary and the time of the year at which you make your election. For example, using the above scenario, if Sam delayed his election change until April 1, 2018, his election would need to be increased by 18 percentage points (in addition to his previous deferral rate of 36%) for a total deferral percentage of 54%. As mentioned earlier, you should re-evaluate your contribution election regularly to be sure it is consistent with your retirement goals.

Covered Earnings

As used throughout this summary, the term "Covered Earnings" includes your base salary or wages and any overtime pay, sales incentives, commissions, bonuses, vacation and holiday pay, and non-insured sick pay reported to you by the Company on IRS Form W-2. Covered Earnings also include any salary reductions you make under this Plan and any pre-tax deductions under the Signature Select Benefits Plan, such as pre-tax deductions for health plan coverage and transportation fringe benefits. Covered Earnings do not include any other Company contributions to or resulting from your benefit plans – including this Plan and plans such as the Medical or Dental Plans, any third-party sick pay or any imputed income as a result of your Group Life Insurance protection. Covered Earnings also do not include severance pay or any amounts deferred under any non-qualified income deferral or bonus arrangement with the Company. However, Covered Earnings does include your regular compensation for services during regular working hours, and compensation for services outside your regular working hours (such as overtime or shift differential), commissions, bonuses or other similar payments that are paid after you terminate employment if (i) the compensation is paid by the later of 2-1/2 months after you terminate employment or December 31 of the year in which you terminate employment, and (ii) those amounts would have been included as “Covered Earnings” if they were paid before you terminated employment.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-6 Under IRS regulations, the Plan may recognize a maximum of $275,000 as Covered Earnings for each Plan participant in 2018. This limit is subject to adjustment by the IRS each year (in $5,000 increments) based upon increases in the Consumer Price Index.

Tax Examples

Below is an example that compares the impact on annual take-home pay by investing on a pre-tax basis under the Plan versus an investment on an after-tax basis outside the Plan—for example, in a passbook savings account. For purposes of this example, let’s assume that your annual Covered Earnings are $35,000 and you elect to invest 6% through the Plan.

Comparing Pre-Tax Contributions versus After-Tax Contributions

After-Tax Contributions Impact on Earnings Pre-Tax Contribution $35,000 Covered Earnings $35,000 $0 Before-Tax Investment - $2,100 $35,000 Taxable Pay $32,900 -$5,520 Taxes* - $4,935 $29,750 After-Tax Pay $27,965 -$2,100 After-Tax Investment $0 $27,650 Take-Home Pay $27,965

Tax Savings (additional take-home pay) $315

PLUS the Company Match, after at least one year of employment + $2,100

Total Saved $2,415

* Calculated using an estimated federal income tax rate of 15%.

As the example above shows, investing on a pre-tax basis through the Plan lowers your taxable income. Therefore, you pay less income tax now. The employee in this example would have $315 more spendable income by investing under the Plan on a pre-tax basis than by investing the same amount on an after-tax basis. The $315 represents current federal income tax savings. And the advantages of pre- tax savings will be even greater in most states and cities that have their own income tax laws. In addition, after completing one year of employment, you will be eligible to receive a dollar-for-dollar Company Matching Contribution up to 6% of pay. In the example above, that is an additional $2,100 for a combined total of $2,415 saved by investing on a pre-tax basis. On the next page is an example that compares the tax savings impact by contributing on a traditional pre-tax basis under the Plan versus contributing on an after-tax Roth basis. For purposes of this example, let’s assume that your annual Covered Earnings are $35,000, you elect to invest 6% through the Plan, and you are currently 40 years old and will take a full distribution of your account balance when you are 65 years old.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-7 Comparing Traditional Pre-Tax and Roth Contributions

Traditional Pre-Tax 401(k) Contribution Roth 401(k) Contribution

Covered Earnings $35,000 $35,000

Employee Contribution 6% 6%

Contribution Amount $2,100 $2,100

Taxes Paid $11,515 $12,250

Net Take-Home Pay $21,385 $20,650

Estimated Total Account Balance at $7,100 $7,100 Age 65

Taxes at Distribution $2,485 $0

Total Amount of Taxes Paid $2,485 $735

Total Tax Savings $1,750

Assumptions: • Calculated using an estimated federal income tax rate of 35%. • Current age is 40 with 25 years until retirement. • Assumes investment earnings of 5% per year. • Earnings on the Roth balance are not taxed. • Taxes on the Roth 401(k) contributions were paid up front.

As the above example shows, investing on a pre-tax basis through the Plan lowers your taxable income. Therefore, you pay less income tax now. The employee in this example would have $735 more spendable income by investing under the Plan on a pre-tax basis than by investing the same amount on a Roth basis. The $735 represents current federal income tax savings. However, the employee in this example could save $2,485 in taxes when he takes a distribution at age 65 if he invested on a Roth basis. This is a total tax savings of $1,750. This is because he paid the taxes up front, and earnings on Roth contributions are not taxed. These examples are for illustrative purposes only. You should talk with a tax professional about whether pre-tax or Roth 401(k) contributions are right for you.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-8 COMPANY CONTRIBUTIONS

Company Matching Contributions

Through its matching contributions, the Company helps your Plan account grow even faster—and these investments are not taxed until taken out of the Plan. Company Matching Contributions made on Roth contributions are not taxed at the time made but are taxable when distributed. The Company Matching Contribution rate is: • $1.00 for every $1.00 you contribute up to 6% (pre-tax or Roth) of Covered Earnings

For example... If you earn $35,000 per year and you invest 6% of your Covered Earnings (a total of $2,100 per year) through the Plan, the Company would match your contribution as follows: Your contribution 6% x $35,000 = $2,100 Company Match $2,100 x $1.00 = $2,100 Total amount credited to your account $4,200

As you can see in this example, by contributing $2,100, your account would be credited with a total of $4,200. That's equivalent to an immediate return of 100% on your investment—before adding any investment earnings! The maximum possible Company Matching Contribution is $16,500 in 2018, based on a participant contributing at least 6% (the maximum percentage eligible for the Company match) and eligible compensation of at least $275,000 (the maximum annual compensation that the IRS allows to be considered for a qualified plan). The Company Matching Contributions made after your first year of service under this Plan substantially exceed the level needed to qualify as “Safe-Harbor” contributions and so the Plan is not subject to discrimination testing that could reduce your salary deferral and matching contributions.

Company Annual Contributions

Eligible employees of Bertelsmann, Inc. and certain of its affiliates receive an additional Company Annual Contribution. Eligibility for and the amount of the Company Annual Contributions are described in Appendix B.

Company Profit Sharing Contributions

Eligible employees of the Penguin Random House Group (see Appendix C) may be entitled to receive an additional Company Profit Sharing Contribution, depending on the financial performance of the Company. Eligibility for and the amount of the Company Profit Sharing Contribution are described in Appendix C.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-9 YOUR CHOICE OF INVESTMENT FUNDS

Choosing the right asset allocation (mix of investment options) is an important step toward achieving your retirement savings goal. You have a choice of using thirteen investment funds to build your own portfolio or using any of thirteen FIAM Index Target Date Funds. Investment earnings are tax-deferred until you receive them. The available investment options are:

Fund Name Ticker Fund Type : Managed Income Portfolio (MIP) II Class 3 None Managed Income

Prudential Core Plus Bond Fund Class 5 None Bond

Vanguard Total Bond Market Index Fund Institutional Shares VBTIX Bond

American Funds American Balanced (R6) RLBGX Balanced/Hybrid

PIMCO Inflation Response Multi-Asset Fund Institutional PIRMX Balanced/Hybrid

American Beacon Large Cap Value Fund Institutional Class AADEX Large Cap Value

Vanguard Institutional Index Fund Institutional Plus Shares VIIIX Large Cap Blend

Prudential Jennison Growth Fund Class Z PJFZX Large Cap Growth

Vanguard Extended Market Index Fund Institutional Plus Shares VEMPX Mid Cap Blend

Fidelity Low-Priced Stock Fund – Class K FLPKX Mid Cap Blend

Fidelity Diversified International Fund – Class K FDIKX International Stock

Vanguard Total International Stock Index Fund – Institutional Shares VTSNX Foreign Large Blend

Deutsche Real Estate Securities Fund Class R6 RRRZX Specialty

FIAM Index Target Date 2005 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2010 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2015 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2020 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2025 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2030 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2035 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2040 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2045 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2050 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2055 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date 2060 Commingled Pool Class V None Targeted Asset Allocation

FIAM Index Target Date Income Commingled Pool Class V None Targeted Asset Allocation

PLEASE NOTE: At this time, the funds being offered do not have Short Term Trading Fees.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-10 Short-Term Trading Fees: What Are They? Selection of Investment Options

Some funds assess a short-term trading fee—sometimes called a The Plan is designed to be a long-term investment, and you “redemption fee.” These fees are imposed to discourage “short- should not attempt to time the market or make frequent transfers. term trading”—exchanging in and out of a fund within a short If you make investment changes or transfers because you believe period of time. Short-term trading increases the transaction costs, there will be short-term changes in the markets, your strategy may which can ultimately result in lower investment returns of the fund be frustrated by the timing of the Plan’s administrative process. for all participants who invest in the fund. The fee is assessed by Because the Plan is not designed to allow for day trading, you the fund and offsets the costs of short-term trading. Funds that will not be reimbursed for any investment losses or opportunity experience high levels of exchange activity often implement short- costs resulting from administrative delays in implementing your term trading fees; however, any fund may implement a fee in the investment elections or investing your contributions. future. If you do not have any investment direction set up with Fidelity, your Plan monies will be deposited into the QDIA (please see the How the Fees Work QDIA chart on page 10-4 of this chapter). Other circumstances in which default investment allocations are made to the QDIA The fee is charged only if you place an exchange out of the funds include failure of a participant or beneficiary to provide investment that assess a redemption fee before the stated holding period— directions following (i) the elimination of an investment fund, (ii) a and the fee is charged only on the shares you exchange out. For change in service provider, (iii) a rollover from another plan, or (iv) example, say you have a balance of $2,000 in the DWS RREEF any other failure of a participant to provide investment instructions. Real Estate Securities Fund and the entire balance is less than Additionally, if (i) you are age 45 or older; (ii) you did not opt out 15 days old. You decide to exchange $1,000 out of that fund into of having your deferral contributions automatically invested in the the Managed Income Portfolio. This exchange of $1,000 will be FIAM Index Target Date Fund that matches your date of birth; (iii) subject to the 2% fee ($20). This fee is deducted from the amount your Plan account is currently 100% invested in the applicable of money that would be transferred into the Managed Income FIAM Index Target Date Fund; and (iv) you had not previously Portfolio (now $980). Again, this fee is charged by the fund, not by opted out of the Financial Engines Program, then you will be the Company or Fidelity. automatically enrolled in the Financial Engines Program as your QDIA. What Do These Fees Mean to You When you make changes to your investments, depending upon the nature of those changes, they will normally be implemented on • It’s important to note that if you are contributing to any fund that the same business day as long as you request the change prior charges a redemption fee, a portion of your shares held in the to 4 pm Eastern time on a day that the market is open. However, fund will be subject to the holding period at any given time. the Plan does not guarantee immediate implementation of your To avoid this, you must redirect your contributions to another investment changes or transfers, and it is possible that there will fund (that does not assess the fee). be administrative delays. Your contributions to the Plan will be • When you place an exchange out of a fund that charges a deposited in the Plan’s trust fund as soon as it is administratively redemption fee, shares held longer than the stated holding feasible to do so. period will be applied first to avoid the redemption fee. NOTE: As with all investments of this type, there is no assurance Moreover, if a fee is assessed, the representative (or system) will that the funds will achieve their objectives, so please tell you approximately how much the fee is and how many days carefully read the fund prospectus before investing. you must wait to avoid the fee before placing the exchange. The Company (and Fidelity) will make every effort to • The funds that charge redemption fees are subject to change, provide you descriptive information to enable you to and it is quite likely that more funds will do so in the future. You make informed investment decisions. You must read the will be informed at the time of your request for a transfer into or information carefully and make your investment decision out of a fund if a redemption fee currently applies. based on your particular situation. No representative of the Company (or Fidelity) will give you specific investment For more detailed information on all of your investment choices, advice or recommendations. If you would like help please contact Fidelity by phone at 1-866-733-1170 or log on to with your own retirement planning, visit a local Fidelity NetBenefitsSM at www.netbenefits.com. You may also find the Investor Center. For information on investor centers current prices for all of the funds (except the FIAM Index Target near you, go to www.fidelity.com. You should consider Date Commingled Pool Funds and Managed Income Portfolio) in consulting with a professional investment advisor of your most newspapers in the financial section. choice in making your investment decisions or enroll You can invest all of your Plan monies in one fund or split your in Professional Management with Financial Engines contributions (and/or the Company Matching Contributions) as described on page 10-12. Please note that the between any of the available funds. You can also transfer investment funds offered under the Plan may change all or a portion of the monies in one fund to another fund. from time to time. Your contribution allocation among funds must be in whole percentages (e.g., 23%; not 23½%).

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-11 Responsibility for Investment Decisions

By providing you with a choice of investment funds that are diversified across the major asset classes, and the flexibility to direct and change your investment allocations, this Plan is covered by Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended (ERISA). As a result, you are solely responsible for investment decisions and results concerning your account, and the Plan fiduciaries (identified in the General Information section) are not liable for losses arising from the investment instructions given by you. In other words, the Plan fiduciaries are not responsible for choosing how to invest your account among those various options and for bearing the risk of loss of your decision.

Financial Engines

To assist in your investment decisions, the Plan offers you independent, objective investment advice and management from Financial Engines Advisors L.L.C., a registered investment advisor. For more information call 1-877-401-5762.

Professional Management Online Advice With Professional Management, a team of professionals using If you prefer to actively manage your Plan account, Online Advice proprietary tools analyzes the investments available in the Plan may be right for you. This easy-to-use website offers objective, and selects a personalized mix designed to be appropriate for you. professional advice to help you refine your investment strategy. Financial Engines works with Fidelity to handle all transactions to You can get a personalized forecast showing how much your put an investment strategy into action for you and continues to investments may be worth when you retire based on various manage your account over time to help keep you on track. assumptions, and see a step-by-step action plan with specific investment recommendations. You can also fine-tune your As part of Professional Management, you have access to the strategy by exploring different contributions, risk levels, and Income+ feature. Income+ is a service designed to help provide retirement goals. To get started, log on to Fidelity NetBenefitsSM steady payouts from your Plan account which can last for life.* at With Income+, Financial Engines manages your Plan account with www.netbenefits.com and click Get Personalized Help from a strategy seeking to generate income in retirement. You may elect Financial Engines. to receive monthly payouts from your Plan account and can make Advisory services, including Professional Management and Online additional ad-hoc withdrawals as needed. However, any ad-hoc Advice, are provided only by Financial Engines Advisors L.L.C., a withdrawals will result in a reduction of your regularly scheduled federally registered investment advisor. Financial Engines does not payouts. Additional information on Professional Management, guarantee future results. Advisory services may include a fee. including the Income+ feature, is available in the Financial Engines For specific fee information, please refer to the applicable Program Terms and Conditions, which you can request from Financial Engines Terms and Conditions or the annual Financial Engines. participant fee disclosure notice.

* With optional out-of-plan annuity purchase by age 85.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-12 HOW YOUR ACCOUNT BALANCE CAN GROW

Examples The chart below shows the projected total Plan account balance (including the Company Matching Contributions* but no other Company contributions) for an employee who earns $25,000 per year over a period of 10, 20, 30 and 40 years. For these examples, we are assuming investment earnings of 5% per year and a constant employee investment rate of 3%, 4%, 5%, 6% and 10% of pay.

Employee 3% of pay 4% of pay 5% of pay 6% of pay 10% of pay Invests ($750/yr) ($1,000/yr) ($1,250/yr) ($1,500/yr) ($2,500/yr)

10 years $18,900 $25,200 $31,400 $ 37,70 0 $50,300

20 years $49,600 $66,100 $82,700 $99,200 $132,300

30 years $99,700 $132,900 $166,100 $199,300 $265,800

40 years $181,200 $241,600 $302,000 $362,400 $483,200

Any salary increases over the employee’s working career would, of course, increase the amounts shown above. Actual investment earnings may be higher or lower than 5%.

* You must have one year of service to be eligible for Company Matching Contributions.

Your Account Statement Unless you log on to NetBenefitsSM and elect otherwise, quarterly account statements will be automatically mailed to your home. The first time you log on to NetBenefitsSM, your options will be changed so that your default method of receiving statements will be online. If you prefer, you can change your options at any time so that quarterly statements continue to be mailed to your home. In any case, an annual statement will be mailed to your home. You can view and print an account statement anytime online at www.netbenefits.com. This statement shows the current value of your Plan investments and the Company matching and other contribution investments. The statement also reports the amount that has been deposited into your Plan account (by you and the Company) since the last statement and the investment return for the period from each investment fund. You can use this statement to track the value of your investments in the Plan. In addition, you can track the value of your account 24 hours a day, 7 days a week through Fidelity’s toll-free telephone and online services. You can also track the price per share of each of the investment funds (except the FIAM Index Target Date Commingled Pool Funds and Managed Income Portfolio) in major newspapers.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-13 VESTING

“Vesting” means that you have a non-forfeitable right to your Plan account. You are immediately 100% vested in pre-tax and Roth 401(k) contributions, Company Matching Contributions, rollover deposits, and investment earnings on the foregoing types of contributions. You become 100% vested in any Company Annual Contributions described in Appendix B, and any earnings on such contributions, after three years of vesting service. You become vested in any Profit Sharing Contributions described in Appendix C, and any earnings on such contributions, in accordance with the following schedule:

Number of Years of Vesting Service Percentage of Account Vested Less than 1 full year 0% 1 full year 33% 2 full years 67% 3 or more full years 100%

If applicable, your BMG Plan Profit Sharing Account and BMG • The date you take a distribution of your entire vested interest in Frozen Matched Account transferred from the BMG 401(k) Savings your account; or Plan will vest under a five-year graded vesting schedule, which • The date you incur a Five-Year Break. provides for 20% vesting after each year of vesting service and full vesting after five years of vesting service. Any amounts forfeited due to a distribution prior to a Five-Year Break will be restored if you return to employment before incurring Regardless of service, you will become fully vested in the a Five-Year Break. foregoing amounts upon your death or total disability during employment. You will also become fully vested if you reach your normal retirement date while employed by the Company. Five-Year Break Your normal retirement date is your 65th birthday if you were participating in the Random House, Inc. Incentive Investment A Five-Year Break is a break in service lasting at least five years. Plan on December 31, 2009, in the BMG 401(k) Savings Plan A break in service is the period beginning on the earliest of the on December 31, 2013, or in The Pearson Retirement Plan on following dates and ending on your return to work: December 31, 2013. Otherwise, your normal retirement date is the • The date you terminate employment for any reason; later of (i) your 65th birthday, or (ii) the earlier of (A) the date you • The second anniversary of a parental leave, which is a leave of complete three years of vesting service or (B) the fifth anniversary absence because of pregnancy, childbirth, or adoption, or to of the date you commenced participation in the Plan. Your normal take care of a child immediately following birth or adoption; retirement date under this rule will be your 65th birthday unless you are hired after your 62nd birthday, in which case it will be the • The latest date on which you may return from protected military date you complete three years of vesting service. leave; or You earn one year of vesting service for twelve months of • The first anniversary of an absence for any reason other than employment with the Company or any of its affiliates or those described above. subsidiaries that are owned at least 20% by the either the Your prior years of vesting service will be restored upon Company or any of its parent companies (including those that re-employment if any of the following conditions apply: have not adopted the Plan). If you were employed by the Penguin Random House Group (see Appendix C) on January 1, 2014, your • If you terminate employment after acquiring any vested interest past service with Pearson plc or any or its subsidiaries is also in employer contributions; counted. Employment as a “leased employee” as defined under • You made pre-tax or Roth 401(k) contributions prior to your the Internal Revenue Code is also treated as employment with the termination; or Company if you are later hired as an employee of the Company • You return to work before a Five-Year Break. or an affiliate. Employment as a part-time employee or as a temporary employee continues to count as employment with the If any of the above conditions applies, your prior years of vesting Company if you are subsequently hired as a full-time employee. service will be restored upon re-employment. For example, assume you made pre-tax 401(k) contributions for two years, For this purpose, any absence or employment gap that lasts fewer quit, and were re-employed six years later. Because the second than twelve months is treated as continuous employment. Any condition applies, your prior years of vesting service would other nonconsecutive periods of employment are aggregated, be restored. In that case, you would fully vest in Profit Sharing except as described below following a Five-Year Break. Contributions or Company Annual Contributions, if any, made If you terminate employment before completing three years of to your account after earning one additional year of vesting vesting service, your nonvested Company Annual Contribution or service. Moreover, your prior years of vesting service would count Profit Sharing Contribution account balance, if any, will be forfeited in applying the contribution allocation schedules set forth in upon the earlier of: Appendix B, if applicable.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-14 ROLLOVERS FROM OTHER PLANS

You may roll over eligible distributions from other qualified retirement plans, such as 401(k) plans, defined benefit plans, 403(a) retirement plans, 403(b) annuity contracts, certain governmental 457(b) plans or IRAs, to this Plan. Your rollover may include any after-tax balance distributed from such plan or contract, and may include any “Roth” 401(k) balance, but not a Roth IRA balance. You can even roll over a qualified distribution from a defined benefit pension plan maintained by a Bertelsmann affiliated company after you retire. The rollover must occur within sixty (60) days of the distribution from the other qualified plan and the administrator of that plan must provide documentation of the other plan’s tax qualified status. Note that the taxable portion of any distribution that is not rolled over directly (as described in the next paragraph) is subject to mandatory 20% federal income tax withholding. You will need to make up from your other assets the amount withheld in order to roll over your entire account balance and avoid tax on the amount withheld. Alternatively, you can avoid the 20% federal income tax withholding by electing that a direct rollover be made from such plan or contract without receiving a distribution. You can obtain information regarding how to roll over qualified money into the Plan by contacting Fidelity online or by phone. A rollover form is also included in the enrollment guide that is mailed to your home when Fidelity is first notified that you are an eligible employee. Or, your Benefits Department can provide you with the necessary forms and additional information. You will always be 100% vested in your rollover account. Your rollover account will be subject to the Plan’s rules for loans, withdrawals and distributions explained in the following sections. PLAN PAYMENTS

Timing of Plan Payments Payment Methods

Your Plan account can be paid to you upon retirement, attainment When the value of your Plan account becomes payable upon of age 59½ (while still employed), total disability*, or termination of termination of employment with the Company and all affiliates employment with the Company and all affiliates of the Company. of the Company, you (or your beneficiary) will have a choice of Under limited circumstances, some portions of your Plan account payment methods as explained below. The value of your Plan may also be available for payment to you as a taxable withdrawal account includes your pre-tax contributions, your Roth 401(k) while you are still employed by the Company. In addition, you contributions, the Company Matching Contributions, the vested may borrow from your Plan account as described in the “Loans” amount of any other Company contributions, your rollover section. contributions, any vested investment gains (or losses), and any other monies that you have invested in the Plan. * Total disability is defined as (i) eligibility for disability benefits under a long-term disability plan maintained by the Company or satisfying the requirements for disability benefits under the Social Security Act or (ii) if If the value is more than $1,000 you were a participant in the G + J USA Group Inc. Retirement Savings If the total value of your Plan account is more than $1,000, you (or Plan on December 31, 2014, you are determined to be disabled by a your beneficiary) will have the following choices on how to receive physician chosen by the Plan Administrator. the money: In the event of your death, the value of your Plan account will 1. A single payment (“lump sum”) become payable to your beneficiary. If you are married, your 2. Annual installments over a period of up to your life expectancy spouse is automatically your beneficiary. However, you may or the joint life expectancy of you and your spouse designate someone else as your beneficiary with your spouse's written, notarized consent. If you are unmarried, you may name 3. Partial distributions, in any amount and at any time and with any person as your beneficiary. such frequency as you elect from time to time Your beneficiary designation, if provided in writing, will be effective 4. Roll over of funds to another qualified plan, IRA, 403(b) annuity only if made on the appropriate forms and filed in the manner contract or certain governmental 457(b) plans directed by your Benefits Department. You can request a form by 5. Deferred payment phone or from your Benefits Department. You can also designate If you choose to defer payment, the money will remain in the Plan a beneficiary online atwww.netbenefits.com . If you have not and will be invested as you direct. designated a beneficiary, or if your beneficiary fails to survive you and you have not named a contingent beneficiary, the Plan If you do not choose a payment method, the payment of your Plan will deem your surviving spouse to be your beneficiary if you are account balance will automatically be deferred until you reach age married. If you are not married, the Plan will deem your estate to 70½ (in accordance with Minimum Required Distributions Rules) be your beneficiary. or die—whichever comes first. If you choose to receive your Plan account balance prior to age 70½, payment will be made as soon For this purpose, your “spouse” means the person (regardless of as possible after Fidelity receives the request. his or her sex) to whom you are married, as determined for federal income tax purposes pursuant to the state or foreign law under Please note that an annual account maintenance fee may be which your marriage has been legally recognized at the date of the deducted from the account of terminated participants on a determination. quarterly basis. Currently, this maintenance fee is covered by

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-15 offsets and/or payments that may be attributable to the annual If you make a partial prepayment of a loan, your payroll-based loan operating expenses of one or more of the Plan’s designated payments will continue in the same amount, but your loan will be investment options. However, the Company at any time, without fully paid sooner than originally scheduled. prior notice, may deduct this fee directly from the account of Upon termination of employment, you or your beneficiary may terminated participants. repay any outstanding loan balance. You may also elect to continue making loan payments via direct coupon. You must leave If the value is $1,000 or less your money in the Plan in order to continue loan payments. If loan If the total value of your Plan account is $1,000 or less, the Plan payments are not made as scheduled, your loan is defaulted, and will pay the amount in a single payment as soon as possible after your outstanding loan balance becomes a taxable distribution and the end of the quarter following your termination of employment is reported as such to the IRS. with the Company. You may elect, within this time frame, to have If you are on an approved leave of absence (other than for the balance of your account paid to you as an immediate lump qualified military leave described below), your loan payments will sum subject to tax withholding, or paid as a direct rollover to an be suspended for the duration of your absence up to one year, IRA, another qualified plan, 403(a) retirement plan, 403(b) annuity and then will be re-amortized when you return to work so it will contract or certain governmental 457(b) plans. be repaid over the original term. However, the original loan ending date may be extended but not beyond the maximum term allowed. Loans If you have defaulted on a previous loan from the Plan, you cannot take out a new loan until you repay the defaulted loan (with You can borrow money from your Plan account (other than accrued interest). any balance in your Company Annual Contribution Account). The minimum amount you may borrow at one time is $1,000. Military Leave Rules The maximum amount that you may borrow at one time is the lesser of (a) 50% of the vested value of your Plan account, or Loan repayments will be suspended while you are on a qualified (b) $50,000, reduced by your highest outstanding loan balance military leave. When you return from your leave, your loan term will over the preceding twelve (12) months. While Company Annual be extended by the time you were on leave. Contributions (and the earnings on those contributions) cannot be Interest on your loan will continue to accrue while you are on a used as a source for a loan, these amounts are used to determine qualified military leave regardless of the length of the leave. The the maximum amount of a loan available from other accounts in interest rate charged on any loan while you are on military leave the Plan. will be the lesser of the rate in effect at the time you took the loan Effective January 1, 2017, you may only have one loan outstanding or 6% and will be effective for the duration of your leave. Upon at any time (unless you have two outstanding loans on December your return to work, the interest rate will revert to the original rate 31, 2016, in which case you may continue to have two loans that was in effect prior to your leave. outstanding until such time as you repay one of the loans in full). If you want to initiate a new loan, but you already have one or Withdrawals Not Due to Hardship more loans outstanding, you would need to repay the outstanding loan(s) to get a new loan. Upon final receipt of payment, there is a While you continue your employment with the Company, you may fifteen (15) day delay before a new loan can be initiated. make an in-service withdrawal from the Plan once per calendar All loans must be repaid, with interest, within five years—unless year, as follows: you use the money to purchase your primary residence, in which • After you reach age 59½ (excluding any amounts attributable to case a repayment period up to ten years may be elected. If you Company Annual Contributions described in Appendix B), or, are applying for a primary residence loan, you will be required to • From your rollover account and your non-Roth after-tax provide proof of purchase of your primary residence. account, if applicable. If you apply for a loan, you will be given complete information Notwithstanding the above, if you were a participant in the BMG about the interest rate that applies before the loan transaction is 401(k) Savings Plan on December 31, 2013 or the G + J USA completed. Inquiries regarding loan amounts, loan applications Group Inc. Retirement Savings Plan on December 31, 2014, you and loan prepayments are handled directly with Fidelity via a are eligible to receive an unlimited number of non-hardship in- toll-free number at 1-866-733-1170 or logging on to NetBenefitsSM service withdrawals under the Plan during a calendar year. at www.netbenefits.com. There is a $50.00 non-refundable loan application fee. This fee will be deducted directly from your Also notwithstanding the above, if you were a participant in individual Plan account. The Pearson Retirement Plan on December 31, 2013, you are eligible to receive an unlimited number of non-hardship in-service The loan interest rate will be equal to the current prime lending rate withdrawals under the Plan during a calendar year with respect (as published in the Wall Street Journal on the last business day of to the portion of your accounts under the Plan attributable to your the quarter prior to the quarter in which you take the loan) plus 1%. accounts under The Pearson Retirement Plan as of December 31, The interest rate is fixed for the term of the loan. Loan repayment 2013. will be handled via convenient automatic payroll deduction. All repayments will be credited in accordance with your investment Please note that there is a $20 processing fee deducted for all elections then in effect. You can prepay a loan in full at any time. non-hardship in-service withdrawals. Partial loan prepayments are also permitted.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-16 Hardship Withdrawals Also note that the withdrawals of amounts that are available solely because you incur a financial hardship are not eligible for While you continue your employment with the Company, you may “rollover” into another qualified plan, IRA, 403(b) annuity contract make an in-service withdrawal from the Plan in the event of a or governmental 457(b) plan. financial hardship (as defined below) once per calendar, limited to: • Your rollover account and your non-Roth after-tax account, Qualified Reservist Distribution if applicable; If you are ordered or called to active duty (because you are a • Vested amounts attributable to Profit Sharing Contributions member of a reserve component) for a period of more than 179 described in Appendix C; days or for an indefinite period, at any time during the period • Vested amounts attributable to Company Matching beginning on the date of the order or call and ending at the close Contributions made prior to January 1, 2002 (January 1, 1999 of your period of active duty, you can elect a distribution of all or with respect to transfers from the Random House Inc. Incentive any portion of your account attributable to pre-tax contributions Investment Plan); and and Roth 401(k) contributions. You cannot repay such a • Your pre-tax or Roth 401(k) contributions, excluding earnings distribution to the Plan. thereon after 1988. Company Matching Contributions made after January 1, Distributions While Performing Service in the 2002 (January 1, 1999 with respect to matching contributions transferred from the Random House Inc. Incentive Investment Uniformed Services Plan) are considered to be “safe-harbor” contributions, and are If you are performing service in the uniformed services while on not available for withdrawal due to hardship. In addition, Company active duty for a period of more than thirty days, you will have Annual Contributions described in Appendix B are not eligible for the option of requesting a distribution from the Plan of all or any hardship withdrawal. You may withdraw your own contributions, portion of your account attributable to pre-tax contributions and but not any earnings on those contributions after December 31, Roth 401(k) contributions. If you take such a distribution, you 1988. will be suspended from making pre-tax contributions, catch-up A "financial hardship" means an immediate and substantial need contributions and Roth 401(k) contributions for a period of six that cannot be met from other sources and that arises from any months following the date of the distribution. You cannot repay one of the following: such a distribution to the Plan. • Medical expenses for you, your spouse, or dependents (to the extent that such expenses are deductible from your taxes Minimum Required Distributions (without regard to the 7.5% threshold) and are not reimbursable under any employer-sponsored health plan); Any benefit payable to an active participant (other than a 5% • Post-secondary school (e.g., college) tuition payments and owner) who attains age 70½ will begin no later than April 1st related educational fees, and room and board expenses, over following the later of the calendar year in which the participant the next 12 months for you, your spouse or your dependents; (i) attains 70½, or (ii) terminates service with the Company and its affiliates. • Purchase of a principal residence for you; Please note that there is a $25 processing fee deducted for all • To prevent eviction from or foreclosure on the mortgage for your Minimum Required Distributions. principal residence; • Payments for burial or funeral expenses for your parent, spouse, children, or dependents; or In-Plan Roth Conversions

• Expenses for the repair of damage to your principal residence You can elect an In-Plan Roth Conversion with respect to any that would qualify for the casualty deduction (determined amounts in your account: without regard to whether the loss exceeds 10% of your adjusted gross income). • That are attributable to non-Roth contributions; and There is no specified minimum or maximum hardship withdrawal • That, if withdrawn or paid to you, would be eligible to be rolled amount; however, the withdrawal amount cannot exceed the over to an eligible employer plan or an IRA. Please call the amount that is needed to meet the financial hardship plus any Fidelity Customer Service Center to confirm available amounts. penalty or income tax withholding that may be applicable. Following an In-Plan Roth Conversion, the amounts that you You must exhaust your loan eligibility before you can apply for a converted will be held in an In-Plan Roth Conversion Account hardship withdrawal. To receive a financial hardship withdrawal, under the Plan. You will be able to elect withdrawals and you must apply in writing to the Plan Administrator, who will distributions of any amounts (including earnings) in this In-Plan evaluate your request, require supporting documentation and Roth Conversion Account to the same extent as you could have determine whether you qualify for a withdrawal. You must certify elected with respect to those amounts prior to the In-Plan Roth that your hardship cannot be satisfied through any other sources Conversion. reasonably available to you. You will have to pay taxes, outside of the transaction or directly to the government, on any amounts you converted in an In-Plan Roth Conversion in the year in which you make the In-Plan Roth THE BERTELSMANN 401(K) SAVINGS PLAN | 10-17 Conversion. Tax Considerations employer's qualified plan, IRA, 403(a) plan, 403(b) annuity or 457(b) plan without a distribution to you. The following summarizes some basic tax considerations Federal tax law currently permits other exceptions to the 10% concerning Plan distributions. It is for informational purposes additional income tax. Keep in mind, however, the tax law changes only and is not intended as tax advice. It is also not intended to from time to time. Before you decide how to receive your Plan be a complete discussion of all applicable tax consequences. distribution or whether to make a withdrawal, you should consult Therefore, you should consult your own tax advisor before making with a tax advisor of your own choosing. any elections under the Plan. In order for a Roth distribution to be entirely non-taxable, it must When deciding whether and how much to invest under the Plan, be a “qualified distribution.” A qualified distribution is one that is you should be aware of several considerations. As mentioned, the made at least five years after the first Roth contribution is made, Plan offers certain tax advantages because it is intended to be a and is after you are at least age 59½ or are disabled or die. If the long-term retirement savings program. Roth distribution is not a qualified distribution, only the portion Plan payments (other than loans and certain Roth 401(k) account of the distribution attributable to your own contributions (rather distributions) are recognized as income for federal income tax than earnings on such contributions) is non-taxable. The portion purposes in the year received. The Internal Revenue Service also of the distribution attributable to earnings is taxable and may also imposes an additional penalty tax of 10%—above the ordinary be subject to the 10% additional income tax. If your entire Roth income tax otherwise payable—on the value of most withdrawals IRA account is not distributed, the distribution will be allocated or Plan payments received before age 59½. between both contributions and earning on a prorated basis. Exceptions to this 10% additional tax rule include payments following termination of employment after reaching age 55 or Armed Forces resulting from total disability or death. The 10% tax is also waived Different rules may apply to withdrawals by employees who serve if you make a financial hardship withdrawal to pay for deductible as active-duty reservists in the U.S. Armed forces. Please check medical expenses or to pay someone else under a Qualified with Fidelity at 1-866-733-1170 to determine if you fall into this Domestic Relations Order (as defined in the General Information category. section of this SPD) in the event of divorce. The 10% additional income tax also will not apply and federal income tax will be deferred with respect to your distribution if you How to Apply for Benefits "roll over" the taxable portion of your Plan account to another To receive a Plan payment, you or your beneficiary must contact company's tax-qualified plan, an IRA, a 403(a) plan, a 403(b) Fidelity by phone at 1-866-733-1170 or log on to NetBenefitsSM annuity contract or certain governmental 457(b) plans within at www.netbenefits.com. In some cases, you will be asked to 60 days of your Plan distribution. Most distributions made on provide additional information and data, such as a copy of your or after January 1, 1993 are subject to 20% federal income tax birth certificate or other proof of age. withholding unless directly rolled over by the trustee into another

PLAN FLEXIBILITY

The Plan allows you to manage your investments to suit your needs. You may make any of these changes 24 hours a day, 7 days a week by calling Fidelity at 1-866-733-1170 or logging on to NetBenefitsSM at www.netbenefits.com. • Change the percentage of your Covered Earnings that you contribute — You can increase or decrease the percentage of your Covered Earnings that you contribute at any time. The change will become effective with the first paycheck issued after notification is received by the Payroll Department from Fidelity. • Change the type of your contributions — You can change the type of contributions you are making to the Plan on a prospective basis from pre-tax contributions to Roth contributions or from Roth contributions to pre-tax contributions. You cannot change any contributions already made to the Plan. • Stop contributing to the Plan — You can discontinue your Plan contributions at any time. Your payroll deductions will stop as of the first paycheck issued after notification of your change is received by the Payroll Department from Fidelity. You can resume contributions at any time as of the first paycheck issued after notification is received by the Payroll Department from Fidelity. • Change your future investment allocation — You can change the investment mix for your future Plan contributions as of any business day. Changing your future contributions will not affect the assets already invested in your account. • Change your current investment mix — You can exchange between or among the funds offered by the Plan at any time. Transaction requests received before the close of the New York Stock Exchange, typically 4:00 p.m. Eastern Time, on any business day will be processed that day. Transaction requests received after the NYSE closes or on holidays or weekends will be processed on the following business day.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-18 ONLINE AND TOLL-FREE TELEPHONE SERVICES

The Plan offers three ways to access information about your account and/or to make certain changes to your account: • NetBenefitsSM (online access) • Voice Response System (VRS) • Participant Service Representative

1. NetBenefits SM (online access) at 2. Voice Response System (VRS) www.netbenefits.com 1-866-733-1170

NetBenefitsSM features: An automated phone service is available 24 hours a day. You • Interactive retirement planning tools and learning resources and can use any touch-tone phone to enroll in the Plan, change your calculators (retirement savings; take-home pay; financial); contribution percentage, stop or start your payroll contributions, or change the investment fund(s) in which your future contributions • View updated account information; are to be deposited. You may also transfer your current account • View the amount available for a loan, and initiate a new loan; balances between the various investment funds available under the Plan. The VRS also enables you to: • View Plan and fund information (including performance and research) on each investment option; • Check your account balance and current investment information; fund transfers, loans withdrawals or contributions; • Access online educational workshops; • Review your account history; • View and update your email address; • Review the investment objective, performance, and current • View and update beneficiary information; price of your investment funds; • View and update banking and tax withholding information if you • Find out the amount available for a loan. Model or request a will be receiving distributions; and loan or distribution from your account (if available); and • Initiate a withdrawal or distribution, if eligible. • Hearing impaired customers can use a Video Relay System (VRS) to communicate with Fidelity associates. • Fidelity also offers a separate call-in number for the hearing impaired, which allows a teletypewrite (TTY) phone to be used to communicate through text with a CSA. A customer can also use a relay agent who can call Fidelity on the customer's behalf.

3. Participant Service Representative 1-866-733-1170

• Speak to a Participant Service Representative from 8:30 a.m. to 12:00 a.m. (midnight) Eastern Time on any business day that the New York Stock Exchange is open for business.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-19 OTHER IMPORTANT INFORMATION

ERISA Rights Additional information about your rights under the Plan can be found in the “General Information – Retirement Income Program” section.

Loss of Benefits Although you are immediately 100% vested in your own contributions and the Company Matching Contributions made to your account, benefits may be lost due to adverse investment experience, the operation of limitations presently or hereafter imposed under the applicable laws, the imposition of income, penalty or excise taxes on such benefits, and the application of a “qualified domestic relations order” (as defined in the “General Information” section). In addition, Company Annual and Profit Sharing Contributions may be forfeited if you terminate employment before they are fully vested under the rules described in Appendices B and C.

Effect on Other Benefits By investing in the Plan on a pre-tax basis, you are reducing your taxable income, which in turn reduces your current federal income taxes. The decrease in your taxable income has no effect on your pay-related Company benefits. For example, your life insurance, disability coverage and pension benefit will be based on your pay before any of your contributions are deducted. Your Social Security taxes and benefits will also not be affected.

Non-Discrimination Testing The IRS requires that a tax-advantaged savings plan meet a complex test to assure a fair level of participation in the plan by employees at all compensation levels. However, because of the level of Company Matching Contributions, immediate vesting and other beneficial features, the Plan is intended to qualify for a “safe harbor” exemption from the IRS testing requirements for all contributions made after the first year of service. If, for any reason, the Plan did not qualify for this exemption, it could be necessary to adjust and/or refund the pre-tax and Roth contributions made by higher-paid employees downward to a level considered fair under the law. If such an adjustment becomes necessary, all affected employees would be notified accordingly.

Federal Pension Benefit Insurance As a matter of law, the Plan is not eligible for insurance coverage with the Pension Benefit Guaranty Corporation (PBGC). Accordingly, benefits under the Plan are not guaranteed by the PBGC.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-20 APPENDIX A

Participating Affiliates

Bertelsmann Group Active Participating Affiliates Advance Practice Strategies, Inc. AHC Media, LLC Arvato Digital Services LLC Arvato Entertainment LLC Arvato Systems North America, Inc. Bertelsmann, Inc. BMG Rights Management (US) LLC Care Management Technologies, Inc. FremantleMedia Latin America, Inc. FremantleMedia North America, Inc. Prestel Publishing LLC Red Brown Venture, LLC RediLearning, Corp. Relias Learning, LLC Rise Records, Inc. RTL NY, Inc. RTL AdConnect, Inc. Stern Magazine Corp. Straightaway Health Careers, Inc. StyleHaul, Inc. This is Hit, Inc. WhiteCloud Analytics, Inc.

Penguin Random House Group Active Participating Affiliates Golden Treasures LLC Penguin Random House Foundation, Inc. Penguin Random House LLC Random House Children's Entertainment LLC Smashing Ideas LLC

You are not in the eligible class (as described on page 10-2) if you are not a current employee of an entity listed above. However, you may be a participant if you have a Plan account due to your employment (now or in the past) with a former participating company (inactive, dissolved, merged or sold) that previously participated in the Plan (as reflected in Chapter 8 of this SPD).

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-21 APPENDIX B

Company Annual Contribution

Bertelsmann, Inc. Arvato Systems North America, Inc. FremantleMedia Latin America, Inc. FremantleMedia North America, Inc. RTL NY, Inc.

Company Annual Contribution Eligible employees of Bertelsmann, Inc. and the participating affiliates listed above receive an additional annual Company contribution to their 401(k) account. In order to be eligible to share in the allocation for this contribution, you must still be an active employee (or on an approved leave of absence) on December 31st of the year for which the contribution is made, unless you left employment due to your death, disability, retirement or involuntary termination on account of layoff, job elimination or reduction in force. Effective for plan years beginning on and after January 1, 2015, no Company Annual Contributions will be made on behalf of otherwise eligible employees of Bertelsmann, Inc. or Arvato Systems North America, Inc. who are highly compensated employees for the plan year for which the contribution would be made. An employee is a highly compensated employee for a plan year (and will not receive the Company Annual Contribution for the plan year) if the employee’s compensation earned in the plan year preceding the year in which the contribution is to be made exceeded a limit set by the IRS each year. For 2017, an employee was considered to be a highly compensated employee if the employee earned more than $120,000 in 2016. Based on IRS cost of living indexing, an employee will be a highly compensated employee for 2018 if the employee earned more than $120,000 in 2017.

How the Company Annual Contribution Is Calculated Subject to the preceding paragraph, each year that you meet the above allocation eligibility requirements, the Company will add a contribution to your account. The amount is equal to a percentage of your Covered Earnings for the year, and it is based on your age and years of service as of December 31st of each year. Years of service are determined in the same manner as vesting service (see page 10- 14). For example, assume you are age 36 on December 31, 2017 and have worked at the Company for seven years. As the table below shows, the Company will contribute 1.3% of your Covered Earnings to the Plan. So, if you earn $45,000 a year, the Company will contribute $585 to your account—and that is in addition to the Company Matching Contributions!

Less than 10 years of Between 10 and 19 years of More than 20 years of Age as of December 31 service service service

Under 30 1.0% of Covered Earnings 1.0% of Covered Earnings --

Between 30 and 39 1.3% of Covered Earnings 1.3% of Covered Earnings 1.3% of Covered Earnings

Between 40 and 49 1.7% of Covered Earnings 2.0% of Covered Earnings 2.3% of Covered Earnings

Between 50 and 59 2.0% of Covered Earnings 2.3% of Covered Earnings 2.7% of Covered Earnings

60 and Over 2.3% of Covered Earnings 2.7% of Covered Earnings 3.0% of Covered Earnings

The contribution for each year is expected to be made during the first quarter of the immediately following year but in no event will it be made later than the due date for the Company’s federal income tax return. The Company makes the contribution to your Company Annual Contribution Account automatically. You do not need to make contributions from your own pay to receive the additional Company contribution. If you do not already have an account in the Plan or if you do not have any investment direction set up with Fidelity, the Company Annual Contributions will be automatically invested in the FIAM Index Target Date Fund that matches your expected retirement date according to the chart on page 10-4, unless you give Fidelity other investment instructions.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-22 APPENDIX C

Penguin Random House Group Profit Sharing Contribution

Penguin Random House LLC Random House Children’s Entertainment LLC Smashing Ideas LLC Golden Treasures LLC

Eligible employees of the participating affiliates listed above (referred to in this Appendix C as the “Penguin Random House Group”) may receive a Profit Sharing Contribution under the Plan. See Appendix A for members of the Penguin Random House Group.

Eligible Employees You will be eligible to share in the Profit Sharing Contribution for any plan year if: • You are eligible to make pre-tax or Roth 401(k) contributions to the Plan; • You meet the annual allocation criteria set forth below; and • You satisfy one of the following service requirements: º You were hired or rehired on or before the January 1 (or the first business day) of the plan year for which the Profit Sharing Contribution is made; º You were rehired and earned a year of service* on or before the July 1 of the plan year for which the Profit Sharing Contribution is made; or º You were rehired at any time during the plan year for which the Profit Sharing Contribution is made, but you had previously become eligible for Profit Sharing Contributions at the time of your earlier termination. * For part-time and temporary employees, a year of service is satisfied if you worked at least 1,000 hours during the 12-month period following your date of hire or rehire (as applicable) or within any plan year thereafter. For all other employees, a year of service is earned in the same manner as vesting service (see page 10-14).

Annual Allocation Criteria You are eligible to share in a Profit Sharing Contribution, if any, for a plan year only if: • You worked at least 1,000 hours during the plan year; and • You are an eligible employee of the Penguin Random House Group on the last day of the plan year. The “last day” requirement is waived in the case of death, disability or approved leave of absence.

THE BERTELSMANN 401(K) SAVINGS PLAN | 10-23 11 The Bertelsmann Pension Account Plan CONTENTS

...... Page

Plan Highlights ...... 11-1

Eligibility...... 11-2

Cost...... 11-2

How Your Benefit Is Calculated at Retirement ...... 11-2

Your Pension Account Balance ...... 11-3

• Credits to Your Pension Account Balance Prior to Your Freeze Date...... 11-3

• Covered Earnings...... 11-3

• Your Initial Pension Account Balance...... 11-3

Social Security Retirement Benefits...... 11-4

Normal Retirement...... 11-4

Early Retirement ...... 11-4

Deferred Retirement...... 11-4

Normal Payment Methods...... 11-5

• For Unmarried Employees...... 11-5

• For Married Employees ...... 11-5

Optional Payment Methods...... 11-6

• Life Annuity Option for Married Employees...... 11-6

• Joint and Survivor (J&S) Annuity Option...... 11-6

• Guaranteed Period Options...... 11-7

• Lump-Sum Payment ...... 11-7

• If You Return to Employment...... 11-8

Vesting...... 11-8

• Severance Date and Period of Severance ...... 11-8

• Benefit Amount...... 11-8

• Forfeiture of Benefits ...... 11-9

• Lump-Sum “Cash-Out” of Small Benefits...... 11-9

• Re-Employment...... 11-10

Pre-Retirement Spouse’s Benefit...... 11-10

How to Apply for Benefits...... 11-10

Tax Considerations ...... 11-10

Limitations on Benefits ...... 11-11

PBGC Insurance...... 11-12

PENSION CONTENTS

...... Page

Pension Plan Termination ...... 11-12

Other Important Information...... 11-13

Appendix A – Participating Affiliates...... 11-14

Appendix B – Bertelsmann Pension Account Plan Accruals ...... 11-15

Appendix C – Random House, Inc. Pension Account Plan Accruals ...... 11-18

Appendix D – BMG Pension Account Plan Accruals...... 11-20

Appendix E – Provisions Regarding Former Golden Books Plan Participants...... 11-23

This Summary Plan Description (SPD) is merely a summary of the terms of the Plan. In the event of a conflict between the actual terms of the Plan and this summary, the terms of the Plan shall control. The Company reserves the right to unilaterally amend, modify or terminate the Plan in its sole discretion at any time for any reason.

PENSION PLAN HIGHLIGHTS

Eligible employees of the Participating Companies listed in Appendix A participate in the Bertelsmann Pension Account Plan (the “Plan”). The Plan offers you the security of guaranteed monthly income during retirement. If you are eligible, you automatically become a Plan member, and the Company pays the full cost of your Plan membership. Your Plan benefits are in addition to Social Security retirement benefits, your payment(s) from the 401(k) Savings Plan, and any benefits to which you may be entitled under the Employee Retirement Plan of Doubleday & Company, Inc. (which was terminated as of December 31, 1986). The Plan was established effective January 1, 1987 and was substantially modified as of January 1, 1993. The Plan was amended and restated effective as of December 31, 2009, and effective December 31, 2009, the Random House, Inc. Pension Account Plan was merged into the Plan. The Plan was most recently amended and restated effective as of January 1, 2014. The Plan is a “frozen plan”. This means that the amount of your benefit earned under the Plan is frozen as of the “Freeze Date” applicable to your Participating Company and will not increase after the Freeze Date even if you continue working for a Participating Company. If you do continue to work for a Participating Company or any other company that is a Bertelsmann affiliate (determined on the basis of at least 20% ownership), however, your continued service will still count toward the vesting of your benefit under the Plan and eligibility for Early Retirement benefits from the Plan. The “Freeze Date” applicable to each Participating Company is listed in Appendix A. The following table summarizes the main features of the Plan as of January 1, 2018:

Here’s What The Plan Does for You Through These Features

Provides you with guaranteed retirement income Your annual pension benefit is based on your Pension Account balance at retirement.

Costs you nothing The Company pays the entire cost of the Plan.

Gives you a choice of retirement dates You can retire on or after your normal retirement date (age 65) or you can retire with a reduced benefit as early as age 55 (with five or more years of service).

Lets you choose your form of payment You can choose a lifetime monthly benefit or a lump-sum payment (depending on the actuarial value of the lump sum and your age at termination) at retirement (provided you obtain your spouse’s written consent if you are married). Alternatively, you may choose a reduced lifetime benefit for yourself and a survivor income benefit for a beneficiary after your death (if you are married, a survivor benefit is normally payable to your spouse).

Provides benefits even if you leave before retirement After completing five years of service with the Company, you have a non-forfeitable right to a benefit from the Plan, which can be paid to you when you reach age 55 (even if your employment has terminated). This right is called “vesting.”

Can provide your spouse with income in the event of your death After you complete five years of service, your spouse (if married before retirement at least one year) will receive benefits from the Plan if you die before retirement.

PENSION | 11-1 ELIGIBILITY COST

No new employees will join the Plan after the Freeze Date The Company pays the entire cost of the Plan. (see Appendix A) applicable to each Participating Company. As a regular, full-time employee of a Participating Company (see Appendix A) or as a part-time employee of a Participating HOW YOUR BENEFIT IS Company scheduled to work at least 20 hours per week (1,000 hours per year) hired prior to the Freeze Date applicable to the CALCULATED AT RETIREMENT Participating Company, you were eligible to participate in the Plan upon hire or at the end of any applicable employment probationary No additional benefits will accrue in the Plan after the Freeze period (if it ended prior to the Freeze Date) imposed by the Date (see Appendix A) applicable to each Participating Company, as set forth in its employee handbook, provided that: Company. • You were not in a class of employees eligible to participate As a Plan member, you have a Pension Account balance that in another defined benefit plan sponsored by a Bertelsmann is credited by the Company based on your Covered Earnings affiliate company, or any other retirement plan established under while employed. The amount of benefit accrual credited by the the laws of a foreign country. Company each year prior to your Freeze Date was based on your Covered Earnings while employed. This plan design is known • You were not a "leased employee” as described under the as a career average pension plan. The cumulative amount of Internal Revenue Code and you were not classified by the this benefit accrual is tracked by a number called your Pension Company as an independent contractor, freelancer or other Account balance. There are no further benefit accruals credited by similar classification that is not on the payroll of the Company. the Company to your Pension Account after your Freeze Date. • If you were covered by a collective bargaining agreement of any If you retire at age 65, you will receive an annual benefit equal to kind, it provides for your membership in this Plan. one-tenth of your Pension Account balance at retirement. Annual • You were not a nonresident alien with no income from the benefits are paid in monthly installments or, if you terminate Company earned for services performed in the U.S. employment at age 55 or later (with a minimum of five years of If you were hired as a part-time employee, temporary employee or service), you may elect to receive a lump sum or other optional on-call employee scheduled to work less than 20 hours per week benefit form (provided you obtain your spouse’s written consent if (1,000 hours per year), you became a Plan member as of the first you are married). payroll period following the completion of 1,000 hours of service Reduced benefits can be elected upon retirement as early as age in your first 12 consecutive months of employment. If you did not 55 (with a minimum of five years of service) and/or survivor benefit meet the 1,000-hour requirement in this period, you became a coverage can be provided, subject to a reduction in your lifetime Plan member as of the first payroll period following the completion monthly benefit. of at least 1,000 hours in any Plan Year (January 1 – December 31). Once you became a Plan member, you received benefit credits retroactively back to the beginning of the 1,000-hour computation period. For determining Plan eligibility, you earned an hour of service for every hour in which you were directly or indirectly paid, or entitled to payment, by the Company for the performance of duties. Hours were credited for the month in which the duties were performed. Hours were also credited for periods in which no duties were performed due to vacation, holidays or leaves of absence due to disability, layoff, jury duty or military service, but not to exceed 501 hours. However, any hours that were awarded for back pay were allocated to the month or months that were involved in the back- pay award.

PENSION | 11-2 YOUR PENSION ACCOUNT BALANCE

PLEASE NOTE: No additional benefits will accrue in the Plan deferred compensation or bonus arrangement with the Company after the Freeze Date (see Appendix A) applicable to each are not included in Covered Earnings. Participating Company. The Internal Revenue Code limits the amount of Covered Earnings On January 1, 2006, your accrued benefit under the Plan was that may be used for calculating Plan benefits. The IRS adjusts converted due to new IRS rules. Before January 1, 2006, the this limit each year based upon increases in the Consumer Price Plan’s benefit formula stated that you would receive a 25% Index. The IRS maximum Covered Earnings for the five-year increase in your monthly pension payments when you turn age period through 2008 were as follows: 75 and every ten years thereafter. New IRS rules prohibit such increases. To make up for this loss of future increases, you will Year Maximum Covered Earnings receive a higher payment amount when you retire. Your accrued 2008 $230,000 annual benefit as of December 31, 2005 was converted to an 2007 $225,000 increased actuarially equivalent benefit amount (multiplied by 1.1234 if you had not yet elected retirement benefits), payable 2006 $220,000 in the same form at the same time but without any automatic 2005 $210,000 payment increase in the future. Your Pension Account balance as 2004 $205,000 of January 1, 2006 includes this actuarial conversion.

Credits to Your Pension Account Balance Prior Your Initial Pension Account Balance to Your Freeze Date Bertelsmann Pension Account Plan

If you were a Plan member in the Bertelsmann Pension If you were actively employed by the Company or a Participating Account Plan on December 31, 2009, beginning January Company and were a member of the Plan on December 31, 1992, 1, 1993 (or upon your subsequent eligibility for the Plan), the you had an initial Pension Account balance on January 1, 1993 Company credited your Pension Account balance with an amount based on your accrued benefit determined under the Plan as in equal to 5% of your Covered Earnings until your retirement, effect on that date. Please see Appendix B for a description of the termination of employment, or your Freeze Date (see Appendix A), calculation of your initial Pension Account balance as determined whichever was earlier. under the Plan and how the Plan works. If you were a Plan member in the Random House, Inc. Former Random House, Inc. Pension Account Plan Pension Account Plan on December 31, 2009, beginning July 1, 1998 (or upon your subsequent eligibility for the Plan), Random If you were actively employed by Random House, Inc. or a House credited your Pension Account balance with an amount Participating Company under the Random House, Inc. Pension equal to 6% of your Covered Earnings until your retirement, Account Plan and were a member of the Random House, Inc. termination of employment, or your Freeze Date (see Appendix A), Pension Account Plan on June 30, 1998, you had an initial whichever was earlier. Pension Account balance on July 1, 1998 based on your accrued benefit determined under the Plan as in effect on that date. Please see Appendix C for a description of the calculation of your initial Covered Earnings Pension Account balance as determined under the Random House, Inc. Pension Account Plan and how the Plan works. As used throughout this Summary, the term "Covered Earnings" includes your base salary or wages paid while you were a Plan member and any overtime pay, shift differential, sales incentives, Note Regarding Former Golden Books Plan Participants commissions, bonuses, vacation or holiday pay and non-insured The benefits of former employees of Golden Books Family sick pay, prior to your contributions, if any, to the Bertelsmann Entertainment, Inc. and its affiliates include benefits they accrued, or Random House 401(k) Plan or the Signature Select Benefits if any, under the terms of the Golden Books Retirement Plan for Plan, such as pre-tax deductions for health plan coverage and Hourly Employees. Certain provisions relating to these benefits transportation fringe benefits. and their payment, in particular Early Retirement, which continue Covered Earnings do not include any other Company to be determined under the terms of the Golden Books Plan, are contributions to or resulting from your benefit plans – including explained in Appendix E. this Plan and plans such as the Medical or Dental Plans or any imputed income as a result of your Group Life Insurance protection. Earnings also do not include any otherwise eligible earnings payments that are not paid as of, or within two weeks (i.e., within a normal payroll cycle) after, termination provided such amounts would have been payable to you in the ordinary course of your employment. Severance payments paid to you following your termination of employment or deferrals under any non-qualified

PENSION | 11-3 SOCIAL SECURITY EARLY RETIREMENT

RETIREMENT BENEFITS If you are at least age 55 and you have completed at least five Years of Service, you may elect Early Retirement as of the first Benefits from the Plan are paid entirely in addition to Social day of any month between your 55th and 65th birthdays. If you Security retirement benefits. retire early (before age 65), you may elect to begin receiving your Social Security provides retirement benefits to you and your pension benefits as of your early retirement date, your normal eligible spouse based on earnings covered under the Social retirement date (age 65) or the first day of any month in between. Security law. Full Social Security retirement benefits (based on If you retire early and elect to start receiving benefits before your your Social Security covered earnings) start at your Social Security normal retirement date (age 65), your benefit will be lower because normal retirement age. Your spouse is eligible for an additional you will receive benefits for a longer period of time. To determine 50% of your benefit – or a benefit based on his or her own Social your annual early retirement benefit under the Plan, divide your Security covered earnings, if greater – when he or she reaches Pension Account balance as of your early retirement date by the Social Security normal retirement age. Please note that Social number of years* between: Security's normal retirement age for individuals born after 1937 (a) the date as of which your pension benefits commence gradually increases from 65 to 67. Ultimately, for employees born after 1959, full Social Security benefits will not become payable and until age 67. However, reduced benefits are available before (b) the first day of the month following your 75th birthday normal retirement age (as early as age 62). * Fractions of whole years are prorated by months. Your actual Social Security entitlement will depend upon your salary history throughout your working career, any gaps in Social For example, if you retired at age 62 and began receiving benefits Security coverage, your age at retirement, your spouse's age and immediately, your annual benefit for each of the 13 years from employment history, and other relevant factors. ages 62 to 75 would be equal to your Pension Account balance as of your early retirement date (age 62) divided by 13. Please remember that Social Security benefits are not paid automatically. You must apply for them. To get more information If you retired at age 55 and began receiving benefits immediately, about the Social Security law and your personal status under it, your annual benefit for each of the 20 years from ages 55 to 75 contact your local Social Security office or visit Social Security’s would be equal to your Pension Account balance as of your early website at www.ssa.gov. retirement date (age 55) divided by 20. This is equivalent to a 50% reduction for early retirement at age 55. See Appendix E for special Early Retirement provisions for former NORMAL RETIREMENT Golden Books Plan participants.

Under the Plan, your Normal Retirement Date is your 65th birthday. This is when you qualify for the full benefit that you have accrued DEFERRED RETIREMENT (earned) under the Plan, subject to adjustment based upon the payment date and method that you elect. If you keep working for the Company after your normal retirement date (age 65) and before your Freeze Date, you continue to receive credits to your Pension Account balance until you actually retire or your Freeze Date, whichever occurs first. Your Plan benefit payments will start as of the first day of the month after your actual retirement date (or sooner if required by IRS regulations). If your employment has already terminated, you may also elect to begin receiving your pension benefits as of a date following your Normal Retirement Date and prior to the April 1st following the year in which you attain age 70½, subject to adjustment to reflect the delayed payment. Your deferred retirement benefit is equal to 1/10 of your Pension Account balance as of your Deferred Retirement Date or your Freeze Date, whichever occurred first. For any period after your normal retirement date when you are not receiving your retirement benefits because you continue to work after your normal retirement date, you will experience what the U.S. Department of Labor considers a “suspension of benefits.” If this applies to you, the Company will provide you with a written notice explaining the suspension of benefits and the Plan provisions it is based on.

PENSION | 11-4 retirement benefit would be reduced by 4%. So, if your annual NORMAL PAYMENT METHODS benefit payable at 65 was $10,000, you would receive $9,600 per year under the Qualified Joint and Survivor Annuity. Then, The Plan provides flexibility by offering several different methods in the event of your death, your surviving spouse would receive under which you can receive your Plan benefits. However, unless $4,800 per year (50% of $9,600) for the rest of his or her life. you elect an optional form of payment, you will be paid under the • The reduction in your benefit would be different if your spouse Plan’s normal form of payment, based on your marital status when is more than five years older or younger than you (as shown you retire. in the chart on the next page). For example, if your spouse is six years younger than you, your retirement benefit would be For Unmarried Employees reduced by 4.3%. Or if your spouse is six years older than you, your retirement benefit would be reduced by 3.7%. Further The Plan’s normal form of payment for an unmarried employee information on these and the Plan's other factors that apply to is a Life Annuity. Under this payment method, your benefit is you is available through your Benefits Department. payable for your lifetime. However, no benefits are payable after • If your spouse were to die before your Plan payments began, your death. this payment form would be automatically canceled and you would receive your Plan benefit in the Life Annuity form For Married Employees (described above) unless you remarried or elected another form of payment before retirement. If your spouse were to die after If you retire and are married when Plan benefits begin, the normal you have begun receiving Plan benefits, you would continue form of payment is the Qualified Joint and Survivor Annuity. to receive your reduced benefit for the rest of your life and no Under this payment method, your monthly pension is reduced further benefits would be paid to anyone after your death. so that, after your death, 50% of your reduced Plan benefit is For this purpose, your “spouse” means the person to whom you continued to your surviving spouse for the rest of his or her life. are married at the time your benefits commence, as determined • The reduction in your benefit is based on the difference for federal income tax purposes pursuant to the state or foreign between your age and the age of your spouse. For example, if law under which your marriage was legally recognized at the date you and your spouse are within five years of the same age, your of determination.

PENSION | 11-5 OPTIONAL PAYMENT METHODS

The Plan permits you to elect an optional form of payment at retirement, instead of the normal payment method. You may elect a payment option by filing the appropriate forms with your Benefits Department within the required filing period, before you begin receiving Plan benefits. However, if you are married, you will need yourspouse's written consent, witnessed by a notary public, in order to elect an optional method of payment (described below) other than the 50%, 75%, or 100% Joint and Survivor Annuity with your spouse as your beneficiary. For this purpose, your “spouse” means the person to whom you are married at the time your benefits commence, as determined for federal income tax purposes pursuant to the state or foreign law under which your marriage was legally recognized at the date of determination. You may, at any time within the 90-day period before benefits begin, revoke your election to receive an optional form of payment.

Life Annuity Option for Married Employees

This option for married employees is the same as the Life Annuity, which is the normal form of payment for unmarried employees. Under this payment method, you receive unreduced monthly benefits for life, but no benefits are paid to your spouse – or to anyone else – after your death. Spousal consent is required.

Joint and Survivor (J&S) Annuity Option

This option is similar to the Qualified Joint and Survivor Annuity, which is the normal form of payment for married employees. However, under this option, you may (with your spouse's consent if you are married) name anyone as your beneficiary to receive Plan benefits after your death. You may choose 50%, 75% or 100% of your reduced monthly benefit to become payable to your beneficiary – for his or her lifetime – after your death. Of course, an unmarried employee may also elect the Joint and Survivor Annuity with any individual named as beneficiary. The amount by which your Plan benefit is reduced depends on the percentage you elect to have continued after your death: the greater the percentage you choose, the greater the reduction of your lifetime benefit. In addition, your monthly Plan benefit is adjusted to reflect the ages of you and your beneficiary as shown in the chart below. To determine your reduced annual benefit under the 50%, 75%, or 100% Joint and Survivor Annuity options, multiply your annual benefit as of your pension benefit commencement date by the applicable factor shown in the chart below.

. If Your Beneficiary Is: 50% J&S: 75% J&S: 100% J&S: 9 years younger .948 .884 .816 8 years younger .951 .888 .822 7 years younger .954 .892 .828 6 years younger .957 .896 .834 0 – 5 years younger .960 .900 .840 0 – 5 years older .960 .900 .840 6 years older .963 .904 .846 7 years older .966 .908 .852 8 years older .969 .912 .858 9 years older .972 .916 .864

If your spouse (or other designated beneficiary) is 10 or more years older or younger than you, please contact your Benefits Department to determine the appropriate reduction. If you elect an option that provides payments to a person who is much younger than you (other than your spouse), the value of the lifetime pension payable to you must equal more than 50% of the total value of the benefits payable (as determined by the Plan actuary).

PENSION | 11-6 Guaranteed Period Options

Under this option, you receive reduced retirement income for life, with payments guaranteed, in any event, for 5, 10 or 15 years, as you choose. If you were to die before the guarantee period is over, your reduced benefits would continue to be paid to your designated beneficiary for the remainder of the guarantee period. You may (with your spouse's consent if you are married) elect anyone you wish as your beneficiary, and you may change your beneficiary designation at any time before Plan payments begin, although a designation will only be effective if received prior to your death. If your beneficiary should die after you do and during the guarantee period, the value of any remaining benefits will be paid to a contingent beneficiary designated by you. If you did not designate a contingent beneficiary, the beneficiary will be your surviving spouse or, in the case of no surviving spouse, your estate. To determine your reduced annual benefit under the 5-year, 10-year or 15-year Guaranteed Period Option, multiply your annual benefit as of your pension benefit commencement date by the applicable factor shown in the chart below. . Your Age as of Your Last 5-Year Guaranteed Period 10-Year Guaranteed Period 15-Year Guaranteed Period Birthday Preceding the Option Option Option Start of Pension Payments

55 .992 .972 .940

56 .991 .969 .930

57 .990 .966 .920

58 .989 .963 .910

59 .988 .959 .900

60 .987 .954 .890

61 .986 .949 .880

62 .984 .943 .870

63 .982 .937 .860

64 .980 .929 .850

65 .977 .921 .840

Contact your Benefits Department for the applicable factors after age 65.

Lump-Sum Payment*

Under this option, you would receive a one-time payment of your Plan accrued benefit as of your retirement date. This payment would be the actuarial equivalent of your Pension Account balance based on your age at the time of retirement and the actuarial interest and mortality factors in effect as of the January 1st preceding the date on which your lump-sum payment is calculated. This means that the actual lump-sum amount that you receive may be significantly more or less than the dollar amount credited to your Pension Account balance at retirement. To determine the lump-sum present value of your Pension Account balance at retirement, multiply your Pension Account balance by the factor that corresponds to your age as of your retirement date. Factors are prorated by months between whole years of age:

Age Factor Age Factor Age Factor 55 0.89728 59 1.07771 63 1.30614 56 0.93975 60 1.12758 64 1.36862 57 0.98394 61 1.18581 65 1.43280 58 1.02988 62 1.24527

* See the section “Lump-Sum “Cash Out” of Small Benefits” and “Vesting” for more information.

PENSION | 11-7 These factors apply only to payments that are made during 2017. New factors are determined as of each January 1st. Please contact your Benefits Department for details. If you elect this form of payment, you (and/or your beneficiary) will not be eligible to receive any future benefits from the Plan. This form of payment will be automatically applied if the lump-sum present value of your Pension Account balance at retirement is $1,000 or less.

If You Return to Employment

If you return to employment after you start receiving your Plan benefits, if you elected to receive your Plan benefits as a monthly annuity, your monthly payments will continue during your period of re-employment. If you elected a lump-sum payment when you retired, the lump sum represented full and final payment under the Plan and there would be no further benefits due you. VESTING

You become fully vested in your Plan benefits when you complete If your Severance Date is due to any of the reasons in clause (i) fiveYears of Service (or reach age 65, if sooner). above and if you return to work and complete an hour of service "Vesting" refers to your non-forfeitable right to Plan benefits if you within 12 months after your Severance Date, your Period of terminate employment or die before retirement. Severance will be included in your Years of Service. Your Period of Severance is the period beginning on your Severance Date and Your “vesting” status also determines your eligibility for normal ending on the date you are once again credited with an hour of retirement, early retirement and the pre-retirement surviving service. spouse's benefit. A special rule applies if you take a parental leave due to “Years of Service” for vesting purposes generally means all your pregnancy, the birth or adoption of a child, or childcare service with the Company, plus any service you may have with immediately following birth or adoption. any other company that is a Bertelsmann affiliate (determined on the basis of at least 20% ownership). Years of Service generally There is also a separate rule for members who are absent due also includes continuous full-time service with any current affiliate to military service. For more information on your protected rights company prior to its acquisition by Bertelsmann. under USERRA, you should contact your Benefits Department. Effective January 1, 2006, Years of Service generally means your period of employment, commencing on your date of hire and Benefit Amount ending on your Severance Date.1 Notwithstanding the foregoing, if you were not fully vested in your If you terminate employment after you are vested, your annual Plan benefits on July 1, 2013 and you were employed by Penguin benefit will be equal to 1/10 of your Pension Account balance as Random House LLC or one of its subsidiaries on July 1, 2013 (or, if of your termination of employment, commencing as of the first later, on your delayed employee transfer date), you became 100% day of the month after your 65th birthday. You may elect to begin vested in your Plan benefits on July 1, 2013 (or, if later, on your receiving your pension benefits as of a date following your Normal delayed employee transfer date). Retirement Date andprior to April 1st following the year in which you attain age 70½ (on which date your pension benefits will Note: Although benefit accruals are frozen under the Plan, years automatically begin), subject to adjustment to reflect the delayed of service will continue to accrue for vesting purposes. payment. If you terminate employment before age 55 with a vested benefit, Severance Date and Period of Severance generally you may elect to receive reduced benefits starting on Your Severance Date is the earlier of (i) the date on which you quit, the first day of any month between ages 55 and 65. The amount retire, are discharged or die, or (ii) the first anniversary that you are of the reduction will depend on how many months before age 65 absent from employment with the Company (with or without pay) you elect to begin receiving benefits (as described in the Early for any reason other than quitting, retirement, discharge or death Retirement section) in the form of an annuity option. (such as, vacation, holiday, sickness, disability, layoff or leave of absence).

1 The manner of calculating service for vesting purposes was changed from an “hours of service” method to an “elapsed time” method, effective as of January 1, 2006. In addition, effective as of January 1, 2006, the “hours of service” method of calculation was simplified for purposes of determining Years of Service for regular full-time employees and part-time employees scheduled to work less than 20 hours per week prior to the effective date of the change. The change from hours of service to elapsed time resulted in a transition period for your employment anniversary year that included January 1, 2006 to ensure you did not lose any Years of Service as a result of the change. Please contact your Benefits Department for your Years of Service for periods prior to the change including the transition period. If your employment terminated prior to January 1, 2006, your Years of Service are calculated under the old “hours of service” method, which required you to complete 1,000 hours of service during the year to receive credit for a Year of Service. If your employment terminates on or after January 1, 2006, your Years of Service prior to January 1, 2006 will be calculated under the old “hours of service” method as simplified and your Years of Vesting Service after January 1, 2006 will be calculated using the “elapsed time” method described above. This change does not affect the method for counting hours of service for eligibility purposes under “Eligibility” above.

PENSION | 11-8 Effective for distributions after 2006, if the actuarial present value If the actuarial present value of your vested benefit when you (determined as of your commencement date) of your benefit terminate employment or on any subsequent annual valuation payable at age 65 exceeds $5,000, but does not exceed $10,000, date is greater than $1,000 but not more than $5,000, the Plan you may commence payment before you attain age 55 in the Administrator will pay the value to you in a lump sum only if you following payment forms: elect to receive an immediate lump sum. Spousal consent is not • An immediate lump-sum payment equal to the present value required to make this election. amount; or If a lump-sum "cash-out" payment of small benefits as described • An actuarially equivalent annuity, as follows: under this section is made, neither you nor your spouse will be entitled to any additional benefits from the Plan based on your − If you are unmarried, in a Single Life Annuity; or service before your termination. − If you are married, in a 50% or 75% Joint and Survivor Annuity The actuarial lump-sum present value of your benefit upon with your spouse as beneficiary. termination of employment is determined by multiplying your The election of a lump sum greater than $5,000 requires spousal Pension Account balance as of your termination of employment consent. Under the current Plan terms, if the present value amount by a factor that corresponds to your age as of your termination of of your benefit later exceeds $10,000, the lump-sum payment employment. Factors will decrease if interest rates get higher. option and early commencement right will no longer be available. The "cash-out" factors change each January 1st. Sample factors You may choose another available annuity form if you wait until for terminations occurring in 2018 are shown below. you attain age 55. Age at Age at Notwithstanding the foregoing, if you were employed by Penguin Termination Lump-Sum Termination Lump-Sum Random House LLC or one of its subsidiaries on July 1, 2013 (or, if of Factor of Factor later, on your delayed employee transfer date) and you either Employment Employment (i) had reached age 55 by July 1, 2013 (or, if later, by your delayed 25 0.23004 40 0.43777 employee transfer date) and had not completed five or more Years of Service on that date or (ii) remain employed by Penguin 30 0.28499 45 0.54300 Random House LLC or one of its subsidiaries until you reach age 35 0.35315 50 0.70585 55, then you will be eligible to elect a lump-sum payment of your benefits regardless of the amount of the present value of your For example, assume that an employee terminates employment benefits. at age 35 in 2018 and his Pension Account balance as of his termination date is $13,000. The actuarial lump-sum present value Also notwithstanding the foregoing, if you were involuntarily of this employee's benefit would be determined as follows: terminated from employment with Arvato Digital Services LLC or Arvato Entertainment LLC for reasons other than cause (as $ 13,000 – Pension Account balance at termination determined in the sole discretion of your Human Resources x 0.35315 – Lump-sum factor at age 35 Department) after December 31, 2013, then you will be eligible to elect a lump-sum payment of your benefits regardless of the $4,590.95 – Actuarial lump-sum present value amount of the present value of your benefits. Since the actuarial present value of the benefit is $5,000 or less, In any event, the election of a lump sum greater than $5,000 the employee in this example could elect to receive a single will require spousal consent if you are married at the time of the lump-sum "cash-out" payment of $4,590.95 upon termination of payment. employment at age 35, rather than an annual benefit of $1,300 per year starting at age 65 (1/10 x $13,000). Since the actuarial value of the benefit is not more than $5,000, the employee (if he were Forfeiture of Benefits married) does not need to obtain his spouse’s written consent. If the employee in this example were age 45 upon termination If your employment terminates before you have completed five of employment (rather than age 35), the actuarial benefit would Years of Service and you are not otherwise fully vested, you will be greater than $5,000 ($13,000 x 0.54300 = $7,059). Since the forfeit all benefits under the Plan. actuarial value of the benefit is less than $10,000, the employee in this example could elect to receive a single lump-sum “cash-out” Lump-Sum “Cash-Out” of Small Benefits payment of $7,059 upon termination of employment at age 45, rather than an annual benefit of $1,300 per year starting at age 65 If the actuarial present value of your vested benefit when you (1/10 x $13,000); provided that, if he were married, he obtains his terminate employment or on any subsequent annual valuation date spouse’s written consent to the lump-sum “cash-out” payment. is less than $1,000 ($5,000 in the case of a surviving spouse), the Plan Administrator will automatically pay the value to you (or your surviving spouse) in a lump sum.

PENSION | 11-9 In the event the actuarial equivalent of the employee’s accrued sex marriages in your state of residence was changed to allow benefit would be greater than $10,000 and the employee same-sex marriages (unless you become legally married to that terminated prior to age 55, he could not receive a "cash-out" individual within that 12-month period). payment upon termination of employment and, instead, would be If you die after age 55 with a vested benefit and before pension entitled (if unmarried) to receive an annual benefit of 1/10 of his payments begin, your surviving spouse will receive the 50% Pension Account balance under a single Life Annuity commencing survivor benefit your spouse would have received under the at age 65. Of course, he could still choose to receive a reduced Qualified Joint and Survivor Annuity method of payment if you had annual benefit starting as early as age 55 and/or may elect a retired on the day before your death. Payment will begin as of the form of payment other than the Life Annuity (but not a lump-sum first day of the month following the date of your death. payment). If you die before age 55 with a vested benefit, your surviving spouse will receive a reduced survivor benefit calculated as if you Re-Employment had retired on the day before your death. Benefit payments will begin on the first day of the month following the date you would If you are vested when your employment terminates and you incur have reached age 55. a one-year Period of Severance, and you subsequently become re-employed, your Years of Service for vesting purposes before you left will be reinstated when you return to work provided you complete a Year of Service following your re-employment. HOW TO APPLY FOR BENEFITS If you are not vested when your employment terminates and you As you approach your normal retirement date (age 65), your incur a one-year Period of Severance, the Years of Service for Benefits Department will provide you with the necessary vesting purposes you had earned before your Period of Severance information and instructions for receiving benefits and electing will be reinstated when you return if the length of your Period payment options. If you would like to consider early retirement, of Severance is less than five years or your number of Years of you must apply to your Benefits Department at least three months Service before the break – whichever is greater. before you would like your benefits from the Plan to commence. In any case, you will not earn Years of Service for vesting purposes In case of your death before retirement, your Benefits Department during your Period of Severance. Plan membership will resume will provide information about any Plan benefits that might be when you return to work. payable upon notification from your spouse of your death.

PRE-RETIREMENT TAX CONSIDERATIONS SPOUSE’S BENEFIT The following summarizes some basic tax considerations concerning distributions from the Plan. It is for informational The Plan automatically provides benefits for your spouse if you die purposes only and is not intended as tax advice. It is also not with vested rights before your pension payments start. To qualify intended to be a complete discussion of all applicable tax for the pre-retirement spouse's benefit, you and your spouse must consequences. Therefore, you should consult your own tax have been married for at least one year before your death (or the advisor before making any elections under the Plan. individual must have been treated as your “spouse” as described in the following paragraph during the one-year period ending on Pension benefits are generally taxable as ordinary income for your date of death). These benefits will cease when your spouse federal income tax purposes. Many states also tax pension dies. No benefits will be paid under this section if your surviving benefits. However, different rules apply to lump-sum payments spouse dies before commencing receipt of benefits or if you and annuity payments. divorce your spouse before you die. Lump-Sum Payments. If you receive a lump-sum payment, the For purposes of providing the spousal death benefit, “spouse” taxable amount may be subject to special tax treatment and may means the person to whom you are married (as determined for be eligible to be rolled over to an Individual Retirement Account federal income tax purposes pursuant to the state or foreign law (IRA) or another tax-qualified employer plan. under which your marriage was legally recognized at the date Lump-sum payments are recognized as income for federal income of determination) at the time of your death. For purposes of the tax purposes in the year received. The Internal Revenue Service preceding sentence, “spouse” will include (i) the person with also imposes an additional penalty tax of 10% — above the whom you have contracted in a same-sex civil union recognized ordinary income tax otherwise payable — on the value of most under applicable state or local law and such union is evidenced in lump-sum payments received before age 59½. Exceptions to this public record, or (ii) the person with whom you have entered into 10% additional tax rule include lump-sum payments following a same-sex domestic partnership recognized under applicable termination of employment after reaching age 55 or resulting from state or local law and such domestic partnership is evidenced total disability or death. in public record. However, if you live in a state that recognizes same-sex marriage, then an individual described in clause (i) or The 10% additional income tax also will not apply and federal (ii) of the preceding sentence will only be treated as your spouse income tax will be deferred with respect to your lump-sum for 12 months after the date on which the law governing same- payment if you "rollover" your lump-sum distribution to an IRA,

PENSION | 11-10 another company’s tax qualified plan, a 403(b) annuity contract or certain governmental 457(b) plans within 60 days of your lump- LIMITATIONS ON BENEFITS sum distribution. Under IRS regulations, certain maximum benefit limitations are Lump-sum payments are subject to 20% federal income tax imposed. withholding unless directly rolled over by the trustee into another employer's qualified plan, IRA, 403(b) annuity or 457(b) plan Among the government’s rules limiting pension plan benefits is without a distribution to you. Section 415(b) of the Internal Revenue Code, which requires that the employer-provided annual benefit for an employee cannot Federal tax law currently permits other exceptions to the 10% exceed a stipulated dollar amount ($220,000 per year in 2018, additional income tax. Keep in mind, however, the tax law changes subject to adjustment based upon the retiree’s age and the from time to time. Your tax advisor can provide more information. method of payment). The IRS may increase this limit each year Annuity Payments. Like lump-sum payments, annuity payments based upon increases in the Consumer Price Index. are recognized as income for federal income tax purposes in the Any Plan member to whom this limit applied prior to the applicable year received. Federal income taxes will be withheld from your Freeze Date would have been notified accordingly. payments unless you request otherwise in writing. The amount withheld will depend on your filing status and the number of exemptions you claim. Depending on your state of residence, state and local taxes also may apply. If no income taxes are withheld from your annuity payments, or if the amount withheld is not sufficient to cover the taxes due, you may be required to file estimated taxes and you may be subject to an IRS penalty for insufficient withholding.

PENSION | 11-11 PBGC INSURANCE PENSION PLAN TERMINATION

The Pension Benefit Guaranty Corporation (PBGC), a federal If the Plan is terminated, you will have a vested, or non-forfeitable, insurance agency, insures your pension benefits under the Plan. right to the accrued benefit you have earned. The amount of your If the Plan terminates (ends) without enough money to pay all benefit, if any, will depend on Plan assets, the terms of the Plan benefits, the PBGC will step in to pay pension benefits. Most and the benefit guarantee of the PBGC. Plan assets will be shared people receive all of the pension benefits they would have received among Plan members and their beneficiaries according to ERISA under their Plan, but some people may lose certain benefits, such in the following order: as subsidized early retirement benefits. 1. Certain annuities that members have been receiving or could The PBGC guarantee generally covers: (1) normal and early have been receiving for three years prior to Plan termination retirement benefits; (2) disability benefits if you become disabled 2. Other vested benefits guaranteed by the PBGC before the Plan terminates; and (3) certain benefits for your survivors. 3. Other vested benefits The PBGC guarantee generally does not cover: (1) benefits greater 4. Remaining Plan benefits than the maximum guaranteed amount set by law for the year in If Plan assets are sufficient, you will receive your full accrued which the Plan terminates; (2) some or all benefit increases and benefit. After all benefit obligations are provided for and legal new benefits based on Plan provisions that have been in place for requirements have been met, any remaining Plan assets will revert fewer than five years at the time the Plan terminates; (3) benefits to the Company. that are not vested because you have not worked long enough for the Company; (4) benefits for which you have not met all of the requirements at the time the Plan terminates; (5) certain early retirement payments (such as supplemental benefits that stop when you become eligible for Social Security) that result in an early retirement monthly benefit greater than your monthly benefit at the Plan's normal retirement age; and (6) non-pension benefits, such as health insurance, life insurance, certain death benefits, vacation pay, and severance pay. Even if certain of your benefits are not guaranteed, you still may receive some of those benefits from the PBGC depending on how much money your Plan has and on how much the PBGC collects from employers. For more information about the PBGC and the benefits it guarantees, ask the Plan Administrator or contact the PBGC's Technical Assistance Division, 1200 K Street N.W., Suite 930, Washington, D.C. 20005-4026 or call 1-800-400-7242. TTY/TDD users may call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to 1-800-400-7242. Additional information about the PBGC's pension insurance program is available through the PBGC's website on the Internet at www.pbgc.gov.

PENSION | 11-12 OTHER IMPORTANT INFORMATION

Important information, such as how to file and appeal a claim, your rights as a Plan member and other administrative details can be found in the "General Information" chapter of this SPD.

Loss or Reduction of Benefits The following situations may result in a loss or reduction of benefits under the Plann: • If you leave the Company and all affiliates before you become vested in the Plan, you will not be eligible for any benefits. • If your spouse or same-sex domestic partner dies before you do and after you start to receive payments in the form of a Joint and Survivor Annuity, the amount of your payments will not increase. • If you are single and die after benefit payments have commenced, benefits may continue after your death only under the 5-year, 10-year and 15-year guaranteed payment options. • If you die before benefit payments have commenced and you are single, you have been married less than one year, or your same-sex domestic partner has been treated as your spouse under the Plan for less than one year at the time of your death, no benefits are payable to your survivors. • If the present value of your benefit is $1,000 or less when you leave the Company and all affiliates, it will be paid to you in a single lump sum and you will not receive any other benefits from the Plan. • An adjustment in benefits may be made if an error occurs when calculating your benefit or your age has been misstated.

PENSION | 11-13 APPENDIX A

Participating Affiliates

Bertelsmann Group Participating Affiliates*

Participating Affiliated Company Adoption Date Accrual Freeze Date

December 31, 2003 for former Arvato Arvato Digital Services LLC January 1, 2008 Services, Inc. members

March 31, 2007 for former Sonopress Arvato Entertainment LLC January 1, 2013 LLC members

Berryville Graphics, Inc. January 1, 1987 December 31, 2006

March 31, 2007 with respect to former Coral Graphic Services, Inc. January 1, 2014 Dynamic Graphic Finishing, Inc.** (Dynamic division only) members

December 31, 2008 with respect PRH Holdings, Inc. July 1, 2013 to former Random House, Inc. (and subsidiaries) members

* For the benefit formula for the Bertelsmann Group, see Appendix B.

** Dynamic Graphic Finishing, Inc. became inactive effective December 31, 2014 when it was merged into Coral Graphic Services, Inc.

Companies That Adopted the Random House, Inc. Pension Account Plan***

Participating Affiliated Company Adoption Date Accrual Freeze Date

Arvato Systems North America, Inc. October 20, 2003 December 31, 2003

Bertelsmann, Inc. January 1, 1987 December 31, 2003

FremantleMedia North America, Inc. January 1, 2003 December 31, 2003

Price Is Right Productions, Inc. January 1, 2003 December 31, 2003

Random House, Inc.**** July 1, 1998 December 31, 2008

Random House Children's Entertainment November 1, 2007 December 31, 2008 LLC

Random House Studio LLC April 28, 2005 December 31, 2008

*** For the benefit formula for the former Random House, Inc. Pension Account Plan, see Appendix C.

**** Random House, Inc. became inactive effective June 30, 2013 when it was merged into Random House LLC, which was spun off to Penguin Random House LLC as of July 1, 2013.

PENSION | 11-14 APPENDIX B

Bertelsmann Pension Account Plan Accruals

Your Initial Pension Account Balance as of January 1, 1993 If you were actively employed by the Company or another participating company in the Plan as of December 31, 1992, you had a beginning Pension Account balance as of January 1, 1993, which consisted of: (A) An amount equal to ten (10) times your Accrued Annual Benefit under the Plan as of December 31, 1992 (based on the Plan "formula" in effect until that date – see below) plus (B) An additional credit from the Company equal to 5% of your total Covered Earnings during the five-year period preceding January 1, 1993 (i.e., January 1, 1988 through December 31, 1992).

Your Accrued Annual Benefit as of December 31, 1992 Your Accrued Annual Benefit as of December 31, 1992 was equal to:

1.1% (.011) x your Final Average Compensation up to your Social Security Covered Compensation Years of Benefit Service up to 30 x + 1.67% (.0167) x your Final Average Compensation above your Social Security Covered Compensation

For purposes of the above calculation, the following definitions apply: Years of Benefit Service are your full (and partial) years of service with the Company counted from January 1, 1987 (or from the date on which your Company became a Participating Company, if later) through December 31, 1992. A full Year of Benefit Service was credited for each 12-month period during which you worked at least 1,000 hours. If you worked less than 1,000 hours in a given 12-month period, you received credit for one-twelfth (1/12) of a Year of Benefit Service for each month during which you worked at least 150 hours. Final Average Compensation means your average Covered Earnings for the highest 60 consecutive calendar months out of the last 120 calendar months through December 31, 1992. Social Security Covered Compensation means your average earnings that are subject to Social Security tax. Social Security Covered Compensation varies with the year you were born as shown on page 11-17.

PENSION | 11-15 The following example illustrates how the Plan works. Former BMG Pension Account Plan participants, please note: If you were a member in the BMG Pension Account Plan as an employee of Arvato Services, Inc. (in the Duncan, S.C. location) and your benefit was transferred to the Plan on December 30, 2004, please see Appendix D for an illustration of how your benefit was calculated in the BMG Pension Account Plan. . For this example, we will assume that you participated in the Plan from January 1, 1987 through December 31, 1992 and that your Accrued Annual Benefit as of December 31, 1992 was $2,000 per year payable at age 65. Therefore, 10 times the value of your Accrued Annual Benefit under the Plan as of December 31, 1992 was: $2,000 x 10 = $20,000

We will also assume that your total Covered Earnings from January 1, 1988 through December 31, 1992 were $150,000 (an average of $30,000 per year for five years). Therefore, you received an additional credit from the Company equal to: $150,000 x 5% = $7,500

So, in this example, your beginning Pension Account balance as of January 1, 1993 was: $20,000 + $7,500 = $27,500

Now, let's assume that you continue working for 13 more years after January 1, 1993 and, during that time, your total Covered Earnings are $481,000 (an average of $37,000 per year for 13 years). Therefore, the Company would have credited the following additional amount to your Pension Account balance during those 13 years: $481,000 x 5% = $24,050

As of January 1, 2006, but before the conversion described $27,50 0 (your beginning balance as of 1/1/93) below, your total Pension Account balance would then be: + $24,050 (credited from 1/1/1993 to 12/31/05)

$51,550

On January 1, 2006, your benefit was converted to replace the automatic increase provision. The Pension Account balance for members who had not yet retired was multiplied by the actuarial factor of 1.1234. Your Pension Account balance as of January 1, 2006, including this actuarial conversion, becomes: $51,550 x 1.1234 = $57,911

Now, let’s assume that you continue working for one more year after January 1, 2006 and, during that time, your total Covered Earnings are $45,000. Therefore, the Company would credit the following additional amount to your Pension Account balance during that year: $45,000 x 5% = $2,250

At retirement on January 1, 2007, your total Pension Account $ 57,911 (your balance as of 1/1/06) balance would then be: + $2,250 (credited from 1/1/06 to 12/31/07)

$60,161

For each year of retirement, you would receive an annual benefit 1/10 of $60,161 = $6,016.10 payable at age 65 as a Life Annuity equal to: (payable in monthly installments of $501.34)

PENSION | 11-16 Social Security Covered Social Security Covered Year of Birth Year of Birth Compensation Compensation

1923 $15,600 1942 $44,400

1924 $16,800 1943 $45,600

1925 $18,600 1944 $ 47,4 0 0

1926 $19,800 1945 $48,600

1927 $21,000 1946 $49,000

1928 $22,800 1947 $50,400

1929 $24,000 1948 $51,600

1930 $25,800 1949 $52,800

1931 $27,000 1950 $53,400

1932 $28,800 1951 $54,000

1933 $30,000 1952 $54,600

1934 $31,800 1953 $55,200

1935 $33,000 1954 $55,800

1936 $34,800 1955 $56,400

1937 $36,000 1956 $57,000

1938 $39,000 1957 $57,000

1939 $40,200 1958 $ 57,6 0 0

1940 $42,000 1959 or after $ 57,6 0 0

1941 $43,200

Notes: 1. If you were a participant in the Doubleday & Company, Inc. Retirement Plan prior to 1987, or the Time Warner/Book-of-the-Month Club Retirement Plan prior to January 1, 2001, your benefit under that Plan will be paid in addition to your benefit under the Bertelsmann Pension Account Plan. 2. “Company” in these examples is referring to the applicable Participating Company. 3. Benefit accruals under the Plan are frozen as of the applicable Freeze Date.

PENSION | 11-17 APPENDIX C

Random House, Inc. Pension Account Plan Accruals

Your Pension Account Balance as of July 1, 1998 If you were actively employed by Random House, Inc. or another participating company in the Random House, Inc. Pension Account Plan as of June 30, 1998, you had a beginning Pension Account balance as of July 1, 1998, which consisted of: (A) An amount from the Company equal to 5% of your total Covered Earnings during the period of July 1, 1994 through June 30, 1998 plus (B) If you were actively employed by Random House, Inc., or another participating company in the Random House, Inc. Pension Account Plan as of June 30, 1994, you had a beginning Pension Account balance as of July 1, 1994, which consisted of: (a) An amount equal to ten (10) times your Accrued Annual Benefit under the Plan as of June 30, 1994 (based on the Plan "formula" in effect until that date—see below) plus (b) An additional credit from the Company equal to 5% of your total Covered Earnings during the five-year period preceding July 1, 1994 (i.e., July 1, 1989 through June 30, 1994).

Your Accrued Benefit as of June 30, 1994 Your Accrued Annual Benefit as of June 30, 1994 was equal to:

1.0% (.01) x your Final Average Compensation up to $7,800

Years of Benefit Service up to 25 x +

1.5% (.015) x your Final Average Compensation above $7,800

plus

0.5% (.005) x your Final Average Compensation up to $7,800 Years of Benefit Service over 25 x + (max 20 years) 0.75% (.0075) x your Final Average Compensation above $7,800

For purposes of the above calculation, the following definitions apply: Years of Benefit Servicee are your full (and partial) years of service with the Company counted from December 31, 1959 onward (or, from the date on which your Company became a Participating Company, if later) through June 30, 1994. A full Year of Service was credited for each 12-month period during which you worked at least 1,000 hours. If you worked less than 1,000 hours in a given 12-month period, you received credit for one-twelfth (1/12) of a Year of Service for each month during which you worked at least 150 hours. Final Average Compensation means your average Covered Earnings for the highest 60 consecutive calendar months out of the last 120 calendar months prior to July 1, 1994.

PENSION | 11-18 The following example illustrates how the Random House, Inc. Pension Account Plan worked.

For this example, we will assume that you participated in the Plan from January 1, 1987 through June 30, 1994 and that your accrued retirement benefit as of June 30, 1994 was $2,000 per year payable at age 65. Therefore, the value of your accrued benefit under the Plan as of June 30, 1994 was: $2,000 x 10 = $20,000 We will also assume that your total Covered Earnings from July 1, 1989 through June 30, 1994 were $150,000 (an average of $30,000 per year for five years). Therefore, you received an additional credit from the Company equal to: $150,000 x 5% = $7,500 So, in this example, your beginning Pension Account balance as of July 1, 1994 was: $20,000 + $7,500 = $27,500 Let’s further assume that your total Covered Earnings from July 1, 1994 through June 30, 1998 were $130,000 (an average of $32,500 per year for four years). Therefore, for the period of July 1, 1994 through June 30, 1998, the Company credited you with: $130,000 x 5% = $6,500 So, in this example, your Pension Account balance as of July 1, 1998 was: $27,500 + $6,500 = $34,000 Now, let's assume that you continue working for 7-1/2 more years after July 1, 1998. During that time, your total Covered Earnings are $262,500 (an average of $35,000 per year for 7-1/2 years). Therefore, the Company would have credited the following additional amount to your Pension Account during those 7-1/2 years: $262,500 x 6% = $15,750

As of January 1, 2006, but before the conversion described $27,50 0 (your beginning balance as of 7/1/94) below, your total Pension Account balance would then be: $6,500 (credited at 5% from 7/1/94 to 6/30/98)

+ $15,750 (credited at 6% from 7/1/98 to 12/31/05)

$49,750 On January 1, 2006, your benefit was converted to replace the automatic increase provision. The Pension Account balance for members who had not yet retired was multiplied by the actuarial factor of 1.1234. Your Pension Account balance as of January 1, 2006, including this actuarial conversion, becomes: $49,750 x 1.1234 = $55,889 Now, let’s assume that you continue working for two more years after January 1, 2006 and, during that time, your total Covered Earnings are $80,000 (an average of $40,000 per year for two years). Therefore, the Company would credit the following additional amount to your Pension Account during that year: $80,000 x 6% = $4,800

At retirement on January 1, 2009, your total Pension Account $55,889 (your balance as of 1/1/06) balance would then be: + $4,800 (credited from 1/1/06 to 12/31/07)

$60,689

For each year of retirement, you would receive an annual benefit 1/10 of $60,689 = $6,068.90 payable at age 65 as a Life Annuity equal to: (payable in monthly installments of $505.74)

Notes: 1. If you were a participant in the Doubleday & Company, Inc. Retirement Plan prior to 1987, or the Advance Publications Retirement Plan prior to July 1, 1998, your benefit under that plan will be paid in addition to your benefit under the Random House, Inc. Pension Account Plan. 2. The benefits of former employees of Golden Books Family Entertainment, Inc. and its affiliates include benefits they accrued under the terms of the Golden Books Retirement Plan for Hourly Employees. Their benefit accruals in the Golden Books Plan were frozen on March 31, 2002 and were subsequently transferred to the Random House, Inc. Pension Account Plan after the Golden Books Plan merged into the Plan on December 31, 2002. Certain provisions relating to these benefits and their payment which continue to be determined under the terms of the Golden Books Plan provisions are explained in Appendix E. 3. “Company” in these examples is referring to the applicable Participating Company. 4. Benefit accruals under the Plan are frozen as of the applicable Freeze Date.

PENSION | 11-19 APPENDIX D

BMG Pension Account Plan Accruals

The frozen benefits of some Arvato Services, Inc. participants (Duncan, S.C. location) include benefits they accrued under the terms of the BMG Pension Account Plan while they were employees of BMG. Assets and liabilities are attributable to BMG Music Publishing NA, Inc. and Zomba Enterprises, Inc. members were spun off and transferred to the Plan effective December 30, 2004. The terms of the BMG Pension Plan accruals are explained below.

Your Frozen Pension Account Balance Earned Under the BMG Pension Account Plan Your accruals in the BMG Pension Account Plan were frozen as of December 31, 2003. Starting July 1, 1998 (or upon your subsequent eligibility for the Plan), the Company credited your Pension Account balance with an amount equal to 6% of your Covered Earnings until your retirement or termination of employment, or December 31, 2003 if earlier. Note: As of December 31, 2003, the Plan will calculate your benefit using your years of service and compensation on that date. The benefit amount will not grow after December 31, 2003. If you have not reached the required five-year vesting threshold, your service will continue to count toward meeting the vesting requirement.

Your Pension Account Balance as of July 1, 1998 If you were actively employed by the Company prior to July 1, 1998, your Pension Account balance as of that date consisted of: (A) An amount equal to 5% of your total Covered Earnings during the period January 1, 1994 through June 30, 1998 plus (B) If you were actively employed by the Company from January 1, 1994 through December 31, 1996, an additional amount equal to 1.25% (.0125) of your total Covered Earnings from January 1, 1994 until December 31, 1996 plus (C) If you were actively employed by the Company as of December 31, 1993, you had a beginning Pension Account balance as of January 1, 1994, which consisted of: (a) An amount equal to ten (10) times your Accrued Annual Benefit under the Plan as of December 31, 1993 (based on the Plan “formula” in effect until that date – see below) plus (b) An additional credit from the Company equal to 15% of your total Covered Earnings during the five-year period preceding January 1, 1994 (i.e., January 1, 1989 through December 31, 1993).

Your Accrued Annual Benefit as of December 31, 1993 If you were an active employee of the Company on December 31, 1993, your Accrued Annual Benefit under the Plan as of that date was converted into a Pension Account balance by multiplying it by ten (10).

Your Accrued Annual Benefit as of December 31, 1993 was equal to:

1.10% (.011) x your Highest Average Earnings up to your Social Security Covered Compensation Your Years of Benefit Service x + (to a maximum of 30) 1.67% (.0167) x your Highest Average Earnings above your Social Security Covered Compensation

Highest Average Earnings means your average Covered Earnings for the highest five consecutive calendar years out of the last ten calendar years before 1994. Social Security Covered Compensation means your average earnings that are subject to Social Security tax. Social Security Covered Compensation varies with the year you were born as shown in the table on the next page.

PENSION | 11-20 Social Security Covered Social Security Covered Year of Birth Year of Birth Compensation Compensation

1923 $15,600 1942 $44,400

1924 $16,800 1943 $45,600

1925 $18,600 1944 $ 47,4 0 0

1926 $19,800 1945 $48,600

1927 $21,000 1946 $49,000

1928 $22,800 1947 $50,400

1929 $24,000 1948 $51,600

1930 $25,800 1949 $52,800

1931 $27,000 1950 $53,400

1932 $28,800 1951 $54,000

1933 $30,000 1952 $54,600

1934 $31,800 1953 $55,200

1935 $33,000 1954 $55,800

1936 $34,800 1955 $56,400

1937 $36,000 1956 $57,000

1938 $39,000 1957 $57,000

1939 $40,200 1958 $ 57,6 0 0

1940 $42,000 1959 $ 57,6 0 0

1941 $43,200 or after $ 57,6 0 0

Your years of Benefit Service are your full (and partial) years of service with the Company counted from December 16, 1986 (or, from the date on which your Company became a Participating Company, if later) through December 31, 1993. A full year of Benefit Service was credited for each 12-month period during which you worked at least 1,000 hours. If you worked less than 1,000 hours in a given 12-month period, you received credit for one-twelfth (1/12) of a year of Benefit Service for each month during which you worked at least 150 hours.

PENSION | 11-21 An Example — How the Plan Works

For this example, we will assume that you participated in the Plan from January 1, 1987 through December 31, 1993 and that your accrued retirement benefit as of December 31, 1993 was $2,000 per year payable at age 65. Therefore, 10 times the value of your accrued annual benefit under the Plan as of December 31, 1993 was: $2,000 x 10 = $20,000

We will also assume that your total Covered Earnings from January 1, 1989 through December 31, 1993 were $150,000 (an average of $30,000 per year for five years). Therefore, you received an additional credit from the Company equal to: $150,000 x 15% = $22,500

So, in this example, your beginning Pension Account balance as of January 1, 1994 was: $20,000 + $22,500 = $42,500

Let’s further assume that your total Covered Earnings from January 1, 1994 through December 31, 1996 were $96,000 (an average of $32,000 per year for three years). Therefore, for the period of January 1, 1994 through December 31, 1996, the Company credited you with: $96,000 x 1.25% = $1,200

Let’s further assume that your total Covered Earnings from January 1, 1994 through June 30, 1998 were $162,000 (an average of $36,000 per year for four and a half years). Therefore, for the period of January 1, 1994 through June 30, 1998, the Company credited you with 5% of those earnings: $162,000 x 5% = $8,100

So, in this example, your Pension Account balance as of July 1, 1998 was: $42,500

$1,200

+ $8,100

$51,800

Now, let’s assume that you continue working for five and a half more years after July 1, 1998, until December 31, 2003, when new accruals to the Plan were frozen, and during that time your total Covered Earnings are $231,000 (an average of $42,000 per year for five and a half years). Therefore, the Company would have credited the following additional amount (at 6% of covered earnings) to your Pension Account balance during those five and a half years: $231,000 x 6% = $13,860

Your January 1, 2004 Pension Account balance would then be: $51,800

+ $13,860

$65,660

On December 30, 2004, your frozen accrued benefit was transferred from the BMG Pension Account Plan to the Bertelsmann Pension Account Plan: $65,660

You continue working for two more years, until January 1, 2006. You do not accrue any more benefits in the Plan since benefit accruals were frozen as of December 31, 2003. You will, however, continue to accrue service for vesting purposes for continued eligible service with the Company. On January 1, 2006, your benefit was converted to replace the automatic increase provision. The Pension Account balance for participants who had not yet retired was multiplied by the actuarial factor of 1.1234. Your Pension Account balance as of January 1, 2006, including this actuarial conversion becomes: $65,660 x 1.1234 = $73,762

If you continue working until retirement at age 65, your Pension Account balance remains the same, since no new accruals are being credited to your account. Your 1/10 of $73,762 = $7,376 benefit at normal retirement payable at age 65 as a Life Annuity would then be: (payable in monthly installments of $614.67)

Notes: If you were a participant in the Arista Records, Inc. Pension Plan on June 30, 1988, your Accrued Benefit as of December 31, 1993 is determined by adding your June 30, 1988 Arista Pension benefit to the benefit earned under the BMG Pension Account Plan from July 1, 1988 through December 31, 1993.

PENSION | 11-22 APPENDIX E

Provisions Regarding Former Golden Books Plan Participants

If you are a former employee of Golden Books Family Entertainment, Inc. and its affiliates, your benefits under the Plan include the benefits you accrued, if any, under the terms of the Golden Books Retirement Plan for Hourly Employees (the “Golden Books Plan”). Your benefit accruals in the Golden Books Plan were frozen on March 31, 2002 and your accrued benefit as of that date was subsequently transferred to the Random House, Inc. Pension Account Plan after the Golden Books Plan merged into the Plan on December 31, 2002. You can receive the portion of your benefit that you earned under the Golden Books Plan without an early retirement reduction if you are at least age 62 (instead of age 65). If you elect early retirement between the age of 55 and 62, your benefit will continue to be reduced as it was under the Golden Books Plan by 5% for each year benefits commence prior to 62. These provisions only apply to the portion of your benefit that you earned under the Golden Books Plan. The portion of your benefit you earned as a participant in the Plan will be determined in accordance with the terms of the Plan, without regard to this Appendix E.

PENSION | 11-23 12 Bertelsmann, Inc. Severance Pay Plan CONTENTS

...... Page

Introduction...... 12-1

Key Terms to Know...... 12-2

Eligibility and Participation...... 12-5

Covered Terminations...... 12-5

Severance Plan Benefits...... 12-5

What Is Not Covered ...... 12-7

When Coverage Ends...... 12-8

Other Important Information...... 12-8

Appendix A – Participating Companies...... 12-12

BERTELSMANN, INC. SEVERANCE PLAN INTRODUCTION

Bertelsmann, Inc. (“Bertelsmann”) strives to maintain stable employment however, under certain circumstances, employment terminations may occur. The purpose of this Severance Plan (the “Plan”) is to provide financial support and continuation of certain benefits, for a pre-determined time, to eligible employees of Bertelsmann and the related companies listed on Appendix A hereto (the “Company”). The Plan is effective January 1, 2019 and supersedes and replaces any prior workforce reduction, job elimination, or severance policies, programs or practices that may have been applicable to employees of the Company, its parent companies, or any predecessor of the Company or its parent companies. The Plan is intended to be an employee welfare benefit plan as defined in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This document contains the official text of the Plan and also serves as the Summary Plan Description (SPD). Benefits under the Plan are determined by the terms of this Plan document. Bertelsmann reserves the right, whether in an individual case or more generally, to amend, suspend, or terminate the Plan at any time, with or without advance notice. Any such amendment may cause the cessation and discontinuance of severance benefits to any person under the Plan except for participants who have executed and not rescinded a waiver and release. Participation in this Plan is provided to eligible employees and does not constitute a guarantee of employment, requires continued employment and eligibility and is subject to the terms and conditions of the plan document. After you have read this information, please contact your local Human Resources Partner if you have any questions.

BERTELSMANN, INC. SEVERANCE PLAN | 12-1 KEY TERMS TO KNOW

Here are a few important terms that are used in this Plan. Knowing what these terms mean in the context of this Plan will help you better understand how the Plan works.

Adjusted Service Date Employee Adjusted Service Date means the Hire Date adjusted forward, An Employee is an individual who is reported on the regular payroll in accordance with the Company’s rehire guidelines, to reflect of the Company as a common law employee. For purposes of the the period of time between an Employee’s separation from Plan, a Leased Employee, a Temporary Employee, an intern, or an employment and his or her re-hire date, if the Employee has been individual who is designated by the Company as an Independent employed and rehired in any of the categories set forth in the Contractor or who otherwise is paid by the Company other than definition of Rehire date below. In the case of any Employee with through its internal corporate payroll system will not be considered more than one separation from employment, the Adjusted Service an Employee. Date will be calculated on the basis of the previously adjusted service date (or equivalent), adjusted forward to reflect the period Full-Time Employee of time between the most recent separation from employment and A Full-Time Employee is an individual classified as regularly the most recent re-hire. scheduled to work 30 or more scheduled hours per week. In the event of any other separation and reemployment (i.e., one Hire Date not described in any of the categories set forth in the definition of Rehire Date), the original Hire Date shall be disregarded, the Hire Date means the date on which employment with the date of reemployment will become the Hire Date, and no Adjusted Company commenced, except that for Employees of Bertelsmann Service Date shall apply. Accounting Services, Inc. who transferred from Penguin Random House LLC on or after January 1, 2018, the following shall apply: COBRA • The Hire Date for any Employee who was actively employed by COBRA refers to a law known as the Consolidated Omnibus Penguin Group (USA) LLC, f/k/a Penguin Group (USA) Inc., or Budget Reconciliation Act of 1985 (Pub. L. 99-272, 100 Stat. 82), any of its subsidiaries (hereinafter “PG USA”) as of 11:59 p.m. on which provides certain eligible former Employees and their eligible December 31, 2013 and was continuously employed with PG dependents with the right to temporary continuation of their health USA and/or Penguin Random House LLC until their transfer to coverage, at group rates plus an administrative charge of 2%. Bertelsmann Accounting Services, Inc. on or after January 1, 2018, shall be the hire date of record by PG USA; and Committee • The Hire Date for any Employee who was actively employed For the purposes of Plan Administration, unless otherwise by Random House LLC, f/k/a Random House, Inc., or any of provided at the sole discretion of Bertelsmann, the Committee its subsidiaries (hereinafter “RHI”) as of 11:59 p.m. on June is comprised of the senior-most Human Resources Executive 30, 2013 and was continuously employed with RHI and/or supporting Bertelsmann (Chief Human Resources Officer, Penguin Random House LLC until their transfer to Bertelsmann Executive Vice President, Senior Vice President, or Vice President Accounting Services, Inc. on or after January 1, 2018, shall be to the extent the position exists) and the senior-most Legal Affairs the hire date of record by RHI. Executive supporting Bertelsmann (General Counsel, Executive Vice President, Senior Vice President, or Vice President to the Rehire Date extent the position exists). For employees of Bertelsmann Accounting Services, Inc., Rehire Disability Date means the employee’s Rehire Date of record with Penguin Random House, LLC or, if later, the date on which a former A Disability is a physical or mental condition causing an employee of RHI, PG USA, Penguin Random House LLC, or the Employee’s inability to substantially perform the essential functions Company becomes reemployed by the Company on or after of his or her job with the Company, despite, if applicable, the January 1, 2018 with a break of service of five (5) years or less. provision of such reasonable accommodations as may be required by law, including a condition entitling an Employee to benefits In the event of a break in service exceeding five (5) years, the under any disability income policy or program of the Company. original Hire Date or Rehire date, as the case may be, will be disregarded and the date of reemployment will become the Hire Eligible Employee Date of record. Also, RHI and PG USA employees transferred to Penguin Random House LLC on July 1, 2013 and January 1, An Eligible Employee is a Full-Time or Part-Time Employee who 2014, respectively, who later transfer to Bertelsmann Accounting may participate in the Severance Plan according to the Eligibility Services, Inc. on or after January 1, 2018 without a break in and Participation section of this Plan. service, are not treated as rehired employees and will not have a Rehire Date. For all other Companies, the Rehire Date means the date on which a former employee of the Company becomes reemployed by the Company, regardless of breaks in service.

BERTELSMANN, INC. SEVERANCE PLAN | 12-2 Independent Contractor Without Cause An Independent Contractor is an individual (including, but not Without Cause means permanent termination from the Company, limited to, a consultant) who is engaged directly by the Company as determined in the sole discretion of the Committee, as a result of: to perform services for the Company other than as a common law • Lack of work; employee and who is paid by the Company, either of its parents, a joint venture partner of any of the foregoing, or any affiliate • Reduction in force; or subsidiary of the Company, other than through its internal • Discontinuance of a department or operation; corporate payroll system.. • Organizational realignment; Leased Employee • Position elimination; A Leased Employee is an individual performing services for the • Sale of the Company or of a business, branch, division, Company for whom the direct payor of compensation with respect operation or subsidiary of the Company or the sale of all or to the performance of services for the Company is any outside substantially all of the assets thereof, in either event in which entity, including but not limited to a payroll service, professional the Employee is not offered comparable employment with the employer organization or temporary employment agency, rather purchaser; than the Company’s internal corporate payroll system. • Outsourcing of services to a service provider or vendor in Part-Time Employee which the Employee is not offered employment (whether comparable or otherwise) with such service provider or A Part-Time Employee is an individual classified as regularly vendor; scheduled to work 20 or more scheduled hours per week. • Location, facility or plant closing; or Participant • An Employee’s demonstrated insufficient aptitude for A Participant is an Employee who has met and continues to meet continued employment by the Company, not attributable to the eligibility and participation requirements according to this Plan. any willful cause or lack of effort.

Severance Benefit For avoidance of doubt: Without Cause shall not include an A Severance Benefit is pay and benefits payable in accordance Employee’s termination of employment with the Company, as with the Severance Plan Benefits section of this Plan. determined in the sole discretion of the Committee, in connection with his or her: Severance Payment 1. Failure to perform faithfully and diligently his or her duties for A Severance Payment is the monetary component of a Severance the Company; Benefit. 2. Unsatisfactory or poor work performance, attributable to willful cause or lack of effort; Temporary Employee 3. Neglect of duty; A Temporary Employee is an individual whose period of employment with the Company is for a seasonal or other limited 4. Violation of Company rules or policies, including its Code period of time or who is otherwise designated as a temporary of Conduct, Time Off and Leave Policies and any employee employee by the Company. handbook that may be adopted by the Company; 5. Tardiness or absenteeism; Weekly Base Compensation 6. Intimidating, threatening or violent conduct, including fighting; For exempt employees, a Participant’s Weekly Base Compensation is the annual base salary divided by 52. For non- 7. Reporting for work while under the influence of alcohol, or exempt employees, a Participant’s Weekly Base Compensation drugs not taken under the direction of a licensed physician; is the regularly hourly rate of pay multiplied by the Participant’s 8. Sale or use of alcohol or drugs on Company premises, with regular assigned hours of work during a workweek, up to a the exception of alcohol consumption associated with a maximum of 40 hours. Weekly Base Compensation does not Company sanctioned event at which alcohol is served; include compensation attributable to overtime pay, bonus, commissions, shift differentials, reimbursements, or other 9. Engaging in harassing or inappropriate conduct; allowances or contributions to any other employee benefit plan. It 10. Conviction of or plea of guilty or no contest to (or accepting is determined immediately preceding the Participant’s termination deferred adjudication of) a felony or any other crime that, in the date. judgment of the Committee, renders the Employee unsuitable for employment with the Company;

BERTELSMANN, INC. SEVERANCE PLAN | 12-3 11. Causing the Company to commit a violation of any federal, Year of Service state or local law or regulation; A Year of Service is a 12 consecutive-month period, beginning 12. Misconduct, including without limitation dishonesty, on the Hire Date or Adjusted Service Date, as reflected in each insubordination, misappropriation of confidential information, Company’s Human Resources records, and each subsequent engaging in a conflict of interest, breach of a confidentiality anniversary of such Hire Date or Adjusted Service Date. agreement, theft, breach of a duty of loyalty to the Company, or failure to comply with applicable laws or governmental regulations with respect to the Company, the operations of any affiliate of the Company, or the Employee’s own actions; 13. Other conduct contrary to the interests of the Company; 14. Failure to return from an approved leave of absence; or 15. Lay-off that is expected to be short term.

BERTELSMANN, INC. SEVERANCE PLAN | 12-4 ELIGIBILITY AND PARTICIPATION

An Employee is eligible to participate in the Plan if he or she Contractor to full time Employee, and no period during which is an exempt or non-exempt salaried or hourly employee of the individual was characterized by the Company as an Bertelsmann or one of the companies listed in Appendix A, each Independent Contractor shall be taken into account in the of which is included in the definition of Company under this Plan: calculation of severance An individual who falls into any one or more of the following • Intern, or categories is not eligible to participate in the Plan: • Employee who at the time of termination of employment enters • Temporary Employee into or has entered into a written employment agreement (whether or not it provides for severance benefits) or separate • Employees regularly scheduled to work less than 20 hours per severance agreement, plan or arrangement with the Company, week any of its parents, joint venture partner of any of the foregoing, • Leased Employee or any affiliate or subsidiary of the Company or of any successor • Employee subject to a collective bargaining agreement company, or any Employee who is eligible for severance or termination pay or benefits pursuant to any agreement, including • Individual designated by the Company as an independent an employment agreement, with the Company, any of its contractor or consultant, regardless of whether such individual parents, a joint venture partner of the foregoing, or any affiliate is subsequently re-characterized as having been an Employee or subsidiary of the Company or of any successor company during the period he or she was performing services for the unless (i) such agreement specifically provides that the Company. In the event that an Independent Contractor is Employee will be eligible to receive benefits under this Plan or subsequently hired or re-characterized as a regular, full time under any predecessor plan of one of the Company’s parents or Employee, any severance calculation will be based on the (ii) otherwise determined by the Company in its sole discretion. date of such rehire or re-characterization from Independent

Plan participation is automatic for any Eligible Employee; no enrollment is necessary.

COVERED TERMINATIONS

If a Participant’s employment is involuntarily terminated by the o An effective general release of all claims or liabilities of any Company Without Cause, the Participant will be entitled to a kind against the Company, its parents, joint venture partners Severance Benefit, provided that: of the Company and its parents, subsidiary and affiliated companies and each of their respective directors, officers, • Participant remains employed as an Eligible Employee until employees and shareholders, and, as applicable and to the the termination date determined by the Company in its sole extent permitted by law, discretion, and o Provisions relating to, among other things, confidentiality, • Within the time period specified, Participant signs an Agreement cooperation, non-disparagement, return of company and General Release provided by the Company that includes, property, non-solicitation and eligibility for re-employment. without limitation:

A Participant who terminates employment with the Company before a Company-determined termination date is not eligible to receive a Severance Benefit.

SEVERANCE PLAN BENEFITS

If a Participant is entitled to a Severance Benefit, the amount will be based upon length of actual service according to Participant’s Hire Date or Adjusted Service Date, using the following guidelines: Base Benefit 6 Years of Service plus an additional 8 months of credited service would be entitled to receive Severance Benefits based All Participants entitled to a Severance Benefit will receive a Base on 7 Years of Service). Please note: Participants with less than Benefit equal to the following: one Year of Service up to the date of termination are rounded up • 2 weeks of Participant’s Weekly Base Compensation for each to one (1) Year of Service. Year of Service up to a maximum Base Benefit of eighteen (18) months of Participant’s Weekly Base Compensation. Supplementary Benefit • Partial Years of Service up to the date of termination in excess of An Eligible Employee with the title of Director, Senior Director, six (6) months are rounded up to the next higher Year of Service Executive Director, (or such position that the Committee, at (For example: A Participant who is terminated after completing its sole discretion, deems to be equal to the level of Director,

BERTELSMANN, INC. SEVERANCE PLAN | 12-5 Senior Director, or Executive Director) will receive an additional Additional Benefits Supplementary Benefit equal to the following: The Company may, in its sole discretion, pay an additional cash • Thirteen (13) weeks of Participant’s Weekly Base severance amount to any one or more Participants. This additional Compensation.* severance will be payable as a lump sum payment, and is not An Eligible Employee with the title of Vice President, Senior Vice eligible for salary continuation or benefits subsidy. A Participant’s President or Executive Vice President (or such position that the right to any additional amount of severance under this Plan Committee, at its sole discretion, deems to be equal to the level of shall be determined in accordance with the terms of any written Vice President, Senior Vice President or Executive Vice President) document which specifies the amount and time of such additional will receive an additional Supplementary Benefit equal to the lump sum payment and is addressed to the Participant from the following: senior-most Bertelsmann Human Resources Executive (Chief • Twenty-six (26) weeks of Participant’s Weekly Base Human Resources Officer, Executive Vice President, Senior Vice Compensation.* President, or Vice President to the extent the position exists). No other Employee of the Company is authorized to grant additional A Participant may elect either one of the following options with severance pay. regard to payment of the Severance Benefit, provided that such election is made on the form provided by Human Resources and Reduction, Offset or Termination of Benefits such election is received by Human Resources prior to the date the Participant signs the Agreement and General Release required Unless the Committee, in its sole discretion, provides otherwise in under “Covered Terminations” above: writing, in the event that the Company provides paid leave to an • One time, lump sum payment; or Employee instead of advance notice of his or her termination of employment in accordance with the requirements of the Worker • Salary continuation Adjustment and Retraining Notification Act (or other similar federal A Participant who elects salary continuation as the payment option or state statute), then the amount of such Employee’s Severance may elect COBRA continuation coverage in accordance with Benefit will be reduced (but not below zero) by the amount of pay applicable law at a reduced (company-subsidized) rate during the received by the Employee during the period of paid leave. Any period of time the Base Benefit is paid (the “Base Benefit Period), such leave will be counted in determining the Employee’s Years of as follows: The Company will pay a portion of the COBRA premium Service. equal to the Company share of the applicable premium for active The Company reserves the right to offset any Severance Benefit employee coverage and the Participant will pay the Participant by any advance or other monies an Employee owes to the share of the applicable active employee rate plus the applicable Company to the extent allowed by applicable law. COBRA administrative charge of 2%. After expiration of the Base Benefit Period, the Participant will be responsible for paying the In the event a Participant discloses to any unauthorized person full monthly premium, including the 2% administrative charge, for information relating to the business of the Company which is the remainder of any coverage period available under COBRA. confidential or breaches any contract or employment agreement Premiums during the Base Benefit Period will be based on with or violates any legal obligation to the Company, or if the applicable active employee rates in effect at the applicable time. Company acting in good faith determines that it has a claim against a Participant that relates back directly or indirectly to his A Participant who elects a one time, lump sum payment as the employment with the Company, the Committee shall have the payment option may elect COBRA continuation coverage in right to suspend payment to or for the benefit of the Participant accordance with applicable law at the full COBRA rate without under the Plan and/or to offset the benefit otherwise payable to reduction by the company subsidy, as follows: The Participant the Participant under the Plan and /or to require the repayment to will pay the full monthly COBRA premium rate, including the 2% the Company (i.e., to claw back) any benefits already paid to the administrative charge, for the entire period of COBRA continuation extent deemed necessary to satisfy any debt or other amount that coverage. the Committee, acting in good faith, determines is owed by the Participant to the Company to the extent allowed by applicable law. Maximum Base and Supplementary Benefit

In no instance will the total of the Base Benefit and the Payment of Base Benefit and Supplementary Benefit Supplementary Benefit, if any, exceed two (2) times the lesser of A Participant may elect between receiving the total of the Base (i) the Participant’s annual compensation for the preceding Benefit and any Supplementary Benefit as a one-time, lump sum calendar year, or (ii) the tax-qualified plan compensation limit payment or as salary continuation payable in accordance with the (2 x $275,000, or $550,000, for 2018). The payment of all cash Company’s regular payroll practices, less applicable federal, state Severance Benefits must be completed no later than December 31 and local taxes and other required deductions, provided that such of the second calendar year following the year of the Participant’s election is made on the form provided by Human Resources and termination. Each payment of the cash Severance Payments made such election is received by Human Resources prior to the date through salary continuation is treated as a separate payment for the Participant signs the Agreement and General Release required purposes of the short term deferral exemption under Section 409A under “Covered Terminations” above. of the Internal Revenue Code.

* Eligible Employees of Arvato Systems North America, Inc. with the title of Director, Senior Director, Executive Director, (or such position that the Committee, at its sole discretion, deems to be equal to the level of Director, Senior Director, or Executive Director) or with the title of Vice President, Senior Vice President or Executive Vice President (or such position that the Committee, at its sole discretion, deems to be equal to the level of Vice President, Senior Vice President or Executive Vice President) are not eligible for the Supplementary Benefit.

BERTELSMANN, INC. SEVERANCE PLAN | 12-6 Death Benefits (or payment for rendering of services as set forth above), the Participant shall reimburse the Company for the amount of If a Participant who has elected to receive the Base Benefit and Severance Payments previously paid that exceeds the Weekly the Supplementary Benefit, if any, as salary continuation dies Base Compensation multiplied by the number of weeks between before the last of such payments has been made, the unpaid the Participant’s Termination Date and the date of re-employment portion of such Base Benefit and Supplementary Benefit, if any or engagement. A former Employee is required to notify the (not including any company-subsidized COBRA continuation senior-most Bertelsmann Human Resources Executive (Chief coverage), will be paid in a lump sum to the beneficiary (or Human Resources Officer, Executive Vice President, Senior Vice beneficiaries) designated by the Participant on a form provided President, or Vice President to the extent the position exists) or by Human Resources. Unsubsidized COBRA coverage will be the senior-most Human Resources Executive of a Participating available in accordance with applicable law to any dependents Company (Chief Human Resources Officer, Executive Vice receiving medical coverage on the date of the Participant’s death, President, Senior Vice President, or Vice President to the at their own expense. extent the position exists) immediately upon accepting any offer of employment or engagement (including but not limited to Re-employment by the Company employment as a Leased Employee, Independent Contractor, In the event a Participant who is receiving or has received a Part-Time Employee, or Temporary Employee), or any other offer Severance Benefit becomes re-employed or engaged (including of payment in connection with the rendering of services from the as a Leased Employee, Independent Contractor, Part-Time Company, either of its parents, any joint venture partner of any of Employee, or Temporary Employee) during the period of time the foregoing, or any affiliate or subsidiary of the Company or from the Severance Benefit would be paid as salary continuation any successor to the Company. (whether actually paid as salary continuation or in a single In the event a Participant who is receiving or has received a sum) (the “Severance Benefit Period”) by the Company, any of Severance Benefit becomes re-employed as an Eligible Employee its parents, a joint venture partner of any of the foregoing, or after the completion of their Severance Benefit Period by the any affiliate or subsidiary of the Company or of any successor Company and their employment subsequently is involuntarily company, he or she will forfeit the right to receive any further terminated by the Company Without Cause, their Years of Service Severance Benefits effective as of the date the re-employment for Severance Benefits will be calculated based on their Rehire (or rendering of services) commences. If the Severance Payment Date. was paid in a single sum, then as a condition of re-employment

WHAT IS NOT COVERED

Except as may be provided in any written employment agreement between any Employee and the Company, an Employee will not be entitled to any Severance Benefits under this Plan if: • He or she voluntarily resigns, retires, or otherwise terminates employment with the Company; • His or her separation from services is due to death or Disability; • His or her employment is terminated by the Company for any reason other than Without Cause; • He or she is not an Eligible Employee at the time of separation from service; • He or she is not working because operations have been limited, interrupted or suspended due to a strike, work stoppage or slowdown, lockout, civil disturbance or other circumstance beyond the Company’s control; • He or she (i) is offered and accepts employment (whether comparable or otherwise) or (ii) is offered but does not accept comparable employment, in each case with a third-party employer to which the operations of the Company in which such employee was engaged have been transferred as a result of the termination of a contractual relationship, an acquisition of such operations by such third-party employer or for any other reason approved by the Committee; • He or she (i) is offered and accepts employment (whether comparable or otherwise) or (ii) is offered but does not accept comparable employment, in either case with the purchaser, in connection with the sale or transfer of the Company or of a business, branch, division, operation or subsidiary or the sale of all or substantially all of the assets thereof; • He or she (i) is offered and accepts employment (whether comparable or otherwise) or (ii) is offered but does not accept comparable employment, in either case with the Company, any of the Company’s parents, with a joint venture partner of the Company or any of its parents, or with any affiliate or subsidiary of the Company (including in connection with a transaction described in the previous bullet where he or she does not accept employment or is not offered comparable employment with the purchaser); or • He or she fails to timely sign and return the Agreement and General Release or, if applicable, revokes the Release within the time period specified therein.

BERTELSMANN, INC. SEVERANCE PLAN | 12-7 WHEN COVERAGE ENDS

Coverage under the Plan ends on the earlier of the date when: • The Employee no longer meets the Plan’s eligibility and participation requirements, including as a result of the Company’s amendment of the Plan or a change in the Employee’s employment status, or • Bertelsmann discontinues the Plan or the Company that employs the Employee discontinues participation in the Plan.

OTHER IMPORTANT INFORMATION

ThisName section of Plan:provides important administrative informationBertelsmann, concerning Inc. Severance the Plan. Pay Plan

Plan Number: 501

Type of Plan: The Plan is an employee welfare benefit plan.

Plan Sponsor: Bertelsmann, Inc. 1745 Broadway New York, NY 10019

Plan Administrator Severance Plan Committee c/o Human Resources Bertelsmann, Inc. 1745 Broadway New York, NY 10019

Employer Identification Number: 95-2949493

Plan Year: January 1 through December 31

Agent For Service of Legal Process: Chief Legal Counsel c/o Bertelsmann, Inc. 1745 Broadway New York, NY 10019 Service of legal process may also be made upon the Plan Administrator.

Plan Funding: Benefits under the Plan are paid from the general assets of the Company. No assets of the Company will be segregated from other assets for purposes of the Plan. Benefits under the Plan are unsecured.

Plan Administration The Committee shall be the Plan “Administrator” within the The Committee shall have all discretionary powers necessary to meaning of section 3(16) of ERISA and shall have the overall carry out its duties and the provisions of the Plan, including but responsibility for the operation of the Plan. Any member of not limited to, the absolute discretionary authority to interpret or the Committee may resign at any time by giving notice to the construe the Plan, to resolve ambiguities, to make determination Company. Any resignation shall take effect on the date of receipt of questions of eligibility, participation and benefits and all other of such notice or at any later date specified in the notice. No related or incidental matters. The Committee’s decisions will member of the Committee shall receive any compensation for be conclusive and final, subject to review or correction only to his or her services as a member of the Committee. A majority of the extent that such a decision, determination or construction the members of the Committee shall constitute a quorum for the is shown by clear and convincing evidence to be arbitrary and transaction of business. All resolutions or other actions taken by capricious. the Committee shall require the written approval or affirmative vote The Committee may delegate some or all of its authority under the of a majority of the members of the Committee. Plan to any person or persons provided that any such delegation is in writing.

BERTELSMANN, INC. SEVERANCE PLAN | 12-8 Claims Procedure Employment Rights If the Committee determines that a Participant is entitled to a Nothing in the Plan shall be deemed to give any person any right Severance Benefit, the Company will provide the Severance to remain in the employ of the Company or to affect the right of the Benefit to the Participant in accordance with this Plan and the Company to terminate the employment of any person at any time, Participant will not have to file a claim. If the Participant disagrees with or Without Cause. with the Committee’s determination of eligibility for a Severance Benefit or the amount of the Severance Benefit, the Participant Severability may file a written claim for benefits with the Committee. If any provision of the Plan is held invalid or unenforceable, its The Participant must file a claim for a Severance Benefit no later invalidity or unenforceability will not affect any other provisions of than one year after the date Participant’s employment with the the Plan, and the Plan will be construed and enforced as if such Company terminates. Any claim not made within that time period provision had not been included in this document. is waived. The Participant must exhaust the claim procedures described in this section prior to pursuing any other remedy. Taxes The Committee will review the Participant’s claim pursuant to its To the extent required by law, the Company will withhold taxes discretionary authority to administer and interpret the Plan and to from any Severance Benefit payable hereunder. The Company determine eligibility for Severance Benefits. The Committee will makes no representations concerning the tax treatment under notify the Participant in writing of its decision within 90 days of federal, state or local laws about any Severance Benefit paid receiving the Participant’s claim. If special circumstances require under the Plan. The Participant should consult with his or her own an extension of time (not to exceed an additional 90 days) for accountant or tax advisor in this regard. processing any claim, the Committee will so notify the Participant in writing prior to the expiration of the initial 90-day period. No Assignment; Binding Effect If a claim for Severance Benefits is denied (in whole or part), the No Participant or his or her estate has the right to alienate, assign, written notice of denial will state the reason for the denial, the commute or otherwise encumber any benefit under this Plan for pertinent Plan provision(s) upon which the denial is based, any any purpose whatsoever and, except to the extent prohibited additional information that may be needed (including the reason by applicable law, any attempt to do so will be disregarded such additional information is needed) and the steps that may be completely as null and void. The provisions of this Plan are binding taken to obtain further review of the Participant’s claim. on each Participant and former Participant, as well as such The Participant or Participant’s authorized representative may individuals’ respective estates and the Company. review all documents related to any denial of benefits. If the Participant disagrees with the Committee’s decision, Participant Governing Law has 60 days from the receipt of the original denial to appeal. The To the extent not preempted by ERISA or other federal law, the appeal should be in writing and sent to: Plan will be construed and enforced in accordance with the laws Bertelsmann, Inc. Severance Plan Committee of the State of New York. 1745 Broadway New York, NY 10019 Statement of ERISA Rights Attention: Corporate Benefits Participants in the Plan are entitled to certain rights and No later than 60 days after receiving the appeal, the Committee protections under ERISA. ERISA provides that all Plan Participants will notify the Participant in writing of its final decision on the claim. shall be entitled to: If special circumstances require an extension, the Participant will • Examine without charge, at the Committee’s office and at other be so notified in writing. The written notice will state the reason for specified locations, such as work sites, all documents governing the Committee’s final decision and the pertinent Plan provision(s) the Plan. If the Plan is required to file an annual report (Form upon which it is based. 5500 series), the Participant can obtain a copy of the latest No action at law or in equity may be brought in court on a claim annual report from the Committee or at the Public Disclosure for benefits under this Plan after the later of one year from the date Room of the Employee Benefits Security Administration. of the decision on review (or if no decision is furnished within 120 • Obtain copies of all Plan documents and other information days of receipt of the request for review, one year after the 120th governing the operation of the Plan upon written request to the day after receipt of the request for review). Failure to file suit within Committee. The Committee may make a reasonable charge for this time period shall extinguish any right to benefits under the copies. Plan. In addition to creating rights for Plan participants, ERISA Amendment and Termination of the Plan imposes certain duties upon the people who are responsible for the operation of employee benefit plans. The people who Bertelsmann reserves the right to amend, modify or discontinue all operate the Plan, called “fiduciaries” of the Plan, have a duty to or any part of the Plan for any reason at any time and without prior do so prudently and in the interest of all Plan participants and notice and any such action shall apply to existing as well as future beneficiaries. No one, including the Participant’s employer, may Employees. terminate any Participant’s employment or otherwise discriminate against the Participant in any way to prevent the Participant from obtaining a benefit or exercising any of Participant’s rights under BERTELSMANN, INC. SEVERANCE PLAN | 12-9 ERISA. If a Participant’s claim for a benefit is denied in whole or in part, The court will decide who should pay court costs and legal fees. If the Participant must receive a written explanation of the reason the Participant is successful, the court may order the person the for the denial. The Participant has the right to have the Committee Participant has sued to pay the costs and fees. If the Participant review and reconsider the claim. Under ERISA, there are steps loses, the court may order the Participant to pay these costs and the Participant can take to enforce these rights. For instance, if fees, for example, if it finds the claim frivolous. a Participant requests materials from the Committee and does If you are the Participant and you have any questions about the not receive them within 30 days, the Participant may file suit in a Plan, you should contact the Committee. If you have any questions federal court. In such a case, the court may require the Committee about this statement or about your rights under ERISA, you should to provide the materials and pay the Participant up to $110 a day contact the nearest office of the Employee Benefits Security until the Participant receives the materials, unless the materials Administration, U.S. Department of Labor, listed in your telephone were not sent because of reasons beyond the control of the directory, or you may write to the Division of Technical Assistance Committee. and Inquiries, Employee Benefits Security Administration, U.S. If the Participant has a claim for benefits denied or ignored, in Department of Labor, 200 Constitution Avenue, N.W., Washington, whole or in part, the Participant may file suit in a state or federal DC 20210. court. If it should happen that the Plan fiduciaries misuse the Plan’s money, or if the Participant is discriminated against for asserting Participant’s rights, the Participant may seek assistance from the U.S. Department of Labor, or may file suit in a federal court.

Internal Revenue Code Section 409A Compliance with Section 409A. This Plan is intended to meet Delay of Payment to Specified Employees. If any amount the exemption for severance benefits plans, short-term deferrals, that would constitute non-exempt “deferred compensation” reimbursement arrangements and in-kind benefits and the for purposes of Section 409A would otherwise be payable COBRA exemption. Accordingly, the Plan shall be interpreted and or distributable under this Plan by reason of the Participant’s administered in a manner so that any amount payable or benefit “separation from service” at a time (i) when any shares of stock of provided hereunder shall be paid or provided in a manner and at the Company or any member of its controlled group are traded on such time and in such form that is either exempt from or compliant an “established securities market,” and (ii) during a period in which with the applicable requirements of Section 409A of the Internal the Participant is treated as a “specified employee” (as such terms Revenue Code of 1986, as amended, and applicable guidance are defined in Section 409A), then, subject to any permissible and regulations issued thereunder (“Section 409A”). Nevertheless, acceleration of payment by the Company under Section 409A, the tax treatment of the benefits provided under the Plan are not payment of such non-exempt amounts shall be accumulated warranted or guaranteed. Neither the Company nor any of its and the Participant’s right to receive payment or distribution of directors, officers, employees or advisers shall be held liable for such accumulated amounts will be delayed (without the payment any taxes, interest, penalties or other monetary amounts owed by of interest) until the earlier of the Participant’s death or the first the Participant as a result of the application of Section 409A. day of the seventh month following the Participant’s “separation from service”. For purposes of this Plan, the term “specified Payments Upon Termination of Employment. Notwithstanding employee” has the meaning given such term in Section 409A, anything in this Plan to the contrary, to the extent that any provided, however, that the Company’s “specified employees” amount or benefit that would constitute non-exempt “deferred and its application of the six-month delay rule shall be determined compensation” for purposes of Section 409A would otherwise be in accordance with rules adopted by the Company, which shall payable or distributable hereunder by reason of the Participant’s be applied consistently with respect to all nonqualified deferred termination of employment, such amount or benefit will not be compensation arrangements of the Company and all members of payable or distributable to the Participant by reason of such its controlled group, including this Plan. circumstance unless (i) the circumstances giving rise to such termination of employment meet any description or definition of Treatment of Installment Payments. Each payment of “separation from service” in Section 409A (without giving effect to Severance Benefits, without limitation, each installment payment any elective provisions that may be available under such definition), and each payment or reimbursement of premiums for continued or (ii) the payment or distribution of such amount or benefit would medical, dental or life insurance coverage, shall be considered a be exempt from the application of Section 409A by reason of separate payment. the short-term deferral exemption or otherwise. This provision Timing of Reimbursements and In-Kind Benefits. If the does not prohibit the vesting of any amount upon a termination Participant is entitled to be paid or reimbursed for any taxable of employment, however defined. If this provision prevents the expenses and such payments or reimbursements are includible payment or distribution of any amount or benefit, such payment in the Participant’s federal gross taxable income, the amount of or distribution shall be made on the date, if any, on which an event such expenses reimbursable in any one calendar year shall not occurs that constitutes a Section 409A-compliant “separation affect the amount reimbursable in any other calendar year, and the from service.” reimbursement of an eligible expense must be made no later than

BERTELSMANN, INC. SEVERANCE PLAN | 12-10 December 31 of the year after the year in which the expense Timing of Release of Claims. Except for payments that are was incurred. No right of Executive to reimbursement of expenses exempt from Section 409A, whenever a payment or benefit is shall be subject to liquidation or exchange for another benefit. conditioned on the Participant’s execution and non-revocation Any payment or reimbursement of expenses shall be for expenses of a release of claims, such release must be executed and all incurred during the Participant’s lifetime (or during a shorter period revocation periods shall have expired within 60 days after the of time specified in this Plan). date of termination; failing which such payment or benefit shall be forfeited. Subject to the Delay of Payment to Specified Employees described above, such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the date of termination provided such release has been executed and such revocation periods shall have expired.

BERTELSMANN, INC. SEVERANCE PLAN | 12-11 APPENDIX A

PARTICIPATING COMPANIES

• Bertelsmann Accountings Services, Inc. • Arvato Systems North America, Inc.

BERTELSMANN, INC. SEVERANCE PLAN | 12-12 13 BMG Rights Management (US) LLC Severance Pay Plan

Summary Plan Description and Plan Document

Amended and restated as of January 1, 2018 CONTENTS

...... Page

Introduction...... 13-1

Who Is Eligible...... 13-1

How to Elect to Become a Participant...... 13-3

What Are the Benefits Under the Plan ...... 13-3

When and How Severance Benefits Will Be Paid...... 13-3

Reduction, Offset or Termination of Benefits...... 13-4

Advisors ...... 13-4

ERISA Information...... 13-5

Plan Administrator...... 13-5

Claims Procedure...... 13-6

Plan Interpretation and Benefit Determination...... 13-7

Amendment and Termination...... 13-7

ERISA Rights...... 13-7

• Receive Information About Your Plan and Benefits...... 13-7

• Prudent Actions by Plan Fiduciaries...... 13-7

• Enforce Your Rights...... 13-7

• Assistance with Your Questions...... 13-8

Summary Plan Description...... 13-8

Miscellaneous...... 13-8

Internal Revenue Code Section 409A...... 13-8

Appendix A - Participating Companies...... 13-10

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN INTRODUCTION

BMG Rights Management (US) LLC (the “Plan Sponsor”) reduction, job elimination, or severance policies, programs or strives to maintain stable employment, however, under certain practices, which may have been applicable to employees of circumstances employment terminations may occur. BMG Rights the Company, its parent companies or any predecessor of the Management (US) LLC Severance Pay Plan (the “Plan”) is intended Company or its parent companies. The Plan is intended to be to provide financial support for a pre-determined time, to eligible an employee welfare benefit plan as defined in the Employee employees of the Plan Sponsor and the related companies listed Retirement Income Security Act of 1974, as amended (“ERISA”). on Appendix A hereto (the “Company”) set forth below and as This document contains the official text of the Plan and also set forth in a Separation Agreement and General Release (the serves as the Summary Plan Description (SPD). Benefits under the “Agreement”), which must be executed by the Participant as a Plan are determined by the terms of this Plan document. condition of receiving severance benefits under the Plan. The Plan Sponsor reserves the right, whether in an individual case The Plan constitutes an amendment and restatement, effective or more generally, to amend, suspend or terminate the Plan at any January 1, 2018, of the Plan, originally effective April 1, 2011, and time, with or without advance notice. Any such amendment may supersedes and terminates your participation and rights under cause the cessation and discontinuance of severance benefits any prior severance pay plan, policy and/or practice in effect to any person under the Plan except for participants who have for covered employees prior to the Effective Date (including, executed and not rescinded a waiver and release. without limitation, any policy set forth in any employee handbook) sponsored or maintained by the Company or its affiliates as well as Participation in this Plan is provided to eligible employees the original Plan in their entirety with respect to eligible employees and does not constitute a guarantee of employment, requires (global) who are terminated from employment on or after January continued employment and eligibility, and is subject to the terms 1, 2018. The terms of the original Plan will continue to apply to and conditions of the plan document. employees of the Company whose employment terminated prior After you have read this information, please contact Human to January 1, 2018. The Plan, as amended and restated, effective Resources if you have any questions. January 1, 2018, supersedes and replaces any prior workforce

WHO IS ELIGIBLE

You are eligible to participate in the Plan if, on or after the Effective (iii) being paid by or through an employee leasing company, Date, you are a regular, full-time, active employee of the Company temporary agency or other third party agency; and you have been employed by the Company for at least three (iv) classified by the Company as a temporary or leased months. employee, during the period you are so paid or classified; Notwithstanding the preceding paragraph, you are not eligible to in such a case, you will not be eligible even if you are later participate in the Plan if you are a party to a written employment retroactively reclassified as a regular common-law or other agreement, offer letter, or other agreement that: type of employee of the Company during all or any part of such period pursuant to applicable law or otherwise; (i) provides for notice or pay in lieu of notice, or severance, separation or similar post-termination payments, unless that (v) subject to a collective bargaining agreement; agreement expressly and specifically provides in writing that (vi) classified on the books as an intern; you are eligible to participate in this Plan; or (vii) enter into or have entered into a written term employment (ii) provides that the Company is required to provide 30 days or agreement (whether or not it provides for severance benefits) more advance notice to terminate the agreement; or or separate severance agreement, plan or arrangement with (iii) provides that the term of the agreement will continue after the Company, any of its parents, or an affiliate, subsidiary notice of termination of the agreement is given by the or joint venture partner, or you are eligible for severance Company for a period of time that is equal to or more than 30 or termination pay or benefits pursuant to any agreement, days; or including an employment agreement, with the Company or any of its parents, or an affiliate, subsidiary or joint venture (iv) provides for payments or benefits in lieu of payments or partner unless (a) such agreement provides that you will be benefits under this Plan. eligible to receive benefits under this Plan, or (b) otherwise In addition, notwithstanding the preceding paragraphs, you are determined by the Company in its sole discretion. not eligible to participate in the Plan if you are: In addition, you are not eligible to participate in the Plan if: (i) classified on the books of the Company as a consultant (i) you voluntarily terminate employment with the Company; or independent contractor and not as an employee of the Company at the time of any termination; (ii) you retire; (ii) classified by the Company as a part-time employee; (iii) you are terminated “for cause,” (as defined below) as determined by the Company;

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-1 (iv) you are receiving short-term disability, long-term disability, (xii) Misconduct, including without limitation dishonesty, workers’ compensation or similar or related benefits; insubordination, misappropriation of confidential information, engaging in a conflict of interest, breach of a confidentiality (v) you terminate employment with the Company while on a agreement, theft, breach of a duty of loyalty to the Company, leave of absence or your employment terminates due to your or failure to comply with applicable laws or governmental failure to return from a leave of absence; regulations with respect to the Company, the operations of (vi) you are not working because operations have been any affiliate of the Company, or your own actions; limited, interrupted or suspended because of a strike, work (xiii) Other conduct contrary to the interests of the Company; or stoppage, slowdown, lockout or other labor dispute, a civil disturbance, a natural disaster, or any circumstances beyond (xiv) any act or omission by you resulting or intended to result in the Company’s control; personal gain at the expense of the Company (or its affiliates). (vii) you are on a lay-off for a period that is expected to be short If you are terminated from employment and it is subsequently term; determined that, by virtue of conduct or circumstances, arising either before or after the termination, you engaged in conduct that (viii) your employment terminates due to your death or disability, would have constituted cause for termination, the termination will or death occurs after termination without your having signed be deemed to have been for cause and you will not be eligible for the Agreement; or benefits under the Plan. (In such circumstances, if Plan benefits (ix) for any other reason the Plan Administrator determines that have already been paid, the Company will be entitled to recover the payment of benefits is, under all the circumstances at the any such benefits.) time, not appropriate. The determination of whether your discharge or other separation “For cause” means any one of the following: from employment is for cause shall be made by the Company, in (i) Failure to perform faithfully and diligently his or her duties for its sole and absolute discretion, and such determination shall be the Company; conclusive and binding on the Plan and you. (ii) Unsatisfactory or poor work performance, attributable to You also are not eligible to participate if: (i) you are offered willful cause or lack of effort; a comparable position with the Company, an affiliate, or an acquiring company at substantially the same or greater base (iii) Neglect of duty; salary, whether or not you accept the position; or (ii) you are hired (iv) Violation of Company rules or policies, including its Code by the Company, an affiliate, or an acquiring company regardless of Conduct, Time Off and Leave Policies and any employee of whether such employment is comparable. If you are offered, handbook that may be adopted by the Company; but do not accept such a comparable position after you sign (v) Tardiness or absenteeism; this Agreement, the Company’s obligation to pay any remaining Severance Payments under this Plan will cease as of the date (vi) Intimidating, threatening or violent conduct, including fighting; that the comparable position would have commenced. If you are (vii) Reporting for work while under the influence of alcohol, or hired by the Company, an affiliate, or an acquiring company in any drugs not taken under the direction of a licensed physician; position after you sign the Agreement, the Company’s obligation to pay any remaining Severance Payments will cease as of your (viii) Sale or use of alcohol or drugs on Company premises, with start date. the exception of alcohol consumption associated with a Company-sanctioned event at which alcohol is served; Lastly, you are not eligible to participate if you are terminated under otherwise eligible circumstances, if the Company offers (in (ix) Engaging in harassing or inappropriate conduct; its sole discretion) and you accept a different written severance or (x) Conviction of or plea of guilty or no contest to (or accepting other post-termination payment arrangement, in a signed writing, deferred adjudication of) a felony or any other crime that, in in which case you shall only be entitled to whatever pay and the judgment of the Company, renders you unsuitable for benefits are specified in that written agreement. employment with the Company; (xi) Causing the Company to commit a violation of any federal, state or local law or regulation;

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-2 HOW TO ELECT TO BECOME A PARTICIPANT

If you are eligible to participate in the Plan, you may elect to Americans with Disabilities Act, the Family and Medical Leave Act, become a participant by returning a signed and dated Agreement the Age Discrimination in Employment Act, and similar laws of any in the form provided to you by the Company, within the time period other state, city or locality). and in the manner specified in the Agreement. You will not become a participant in and will have no rights The Agreement (in a form acceptable to the Plan Administrator, in under the Plan until you execute and return the Agreement in its sole and absolute discretion) will include, among other things, a accordance with the procedure set forth in the Agreement and, provision that you release and discharge the Company and related if applicable, any revocation period provided in the Agreement entities (as well as any third party for whom you provide services has ended without your having revoked the Agreement (that date on the Company’s behalf) from all claims and liabilities, including referred to as your “Release Effective Date”). all claims relating to your employment with the Company and/or Whether you choose to participate in the Plan is entirely voluntary. the termination of your employment, including without limitation, all The decision whether to participate is yours alone. No one from claims under the common law and all statutory claims (including the Company is permitted to advise you as to what decision you without limitation Title VII of the Civil Rights Act of 1964, the should make.

WHAT ARE THE BENEFITS UNDER THE PLAN

If you become a participant in the Plan, you will be entitled to example, if you terminate from the Company and are entitled to receive severance pay (“Severance Pay”) as follows: Severance Pay after completing Years of Service of three years and two months, you would receive Severance Pay equal to three (a) A minimum of two Weeks of Base Pay; Years of Service. However, if you terminate from the Company and (b) An additional one Week of Base Pay for every Year of Service are entitled to Severance Pay after completing Years of Service of in excess of one Year of Service. three years and seven months, you would receive Severance Pay For the purposes of severance pay, a “Week of Base Pay” is equal to four Years of Service. your Annual Base Salary divided by 1,950 hours and multiplied by Your “Separation Date” is the date designated by the Company 37.5 hours. Your “Annual Base Salary” is defined as your annual as the date that your employment will terminate, which date may base salary at the time of your Separation Date, excluding all be changed by the Company, in its sole discretion. If you terminate bonuses, commissions, overtime pay, shift differential, non-cash employment with the Company before your Separation Date you compensation, incentive or deferred compensation, employer are not eligible for Severance Pay. contributions to employee benefit plans or any other additional If you are eligible to participate in the Plan (whether or not you compensation. choose to do so), you will not be entitled to receive any other However, Annual Base Salary includes salary reduction severance, separation, notice or termination payments on contributions made by the Company on your behalf to the account of your employment with the Company under any other Company’s (or affiliate’s) plan under Section 125, 132(f) or 401(k) of plan, policy, program or agreement, which such plans, policies, the Internal Revenue Code of 1986, as amended. programs and agreements shall be deemed superseded and A “Year of Service” is, as of your Separation Date, each amended to reflect the terms hereof. If, for any reason, you are consecutive full twelve (12) month period since your date of hire entitled to or receive any other severance, separation, notice by the Company in which you were paid by the Company for the or termination payments on account of your employment with performance of services in a capacity that qualifies you as an the Company (including, for example, any payments required to eligible employee. Partial Years of Service will not be counted be paid to you by the Company under federal or state law, but except that a period of service of at least six months as of the excluding any payment for accrued but unused vacation), your Effective Date will be rounded up to the next Year of Service. For severance pay under the Plan will be reduced by the amount of such other payments paid or payable to you.

WHEN AND HOW SEVERANCE BENEFITS WILL BE PAID

If you become a participant and you are entitled to Severance In the event that you die before receiving all of the payments due Pay under the Plan, it will be paid to you in installments consistent to you under the Plan, any remaining amounts will be paid to the with the Company’s regular payroll cycle, beginning with the first appointed administrator, executor or personal representative of practicable payroll cycle following your Release Effective Date. your estate. Your Severance Pay will be subject to income tax withholding and other applicable withholdings mandated by law.

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-3 ADDITIONAL BENEFITS

The Company may, in its sole discretion, pay an additional cash sum payment and is addressed to the Participant from the severance amount to any one or more Participants. This additional senior-most Company US Human Resources Executive (Chief severance will be payable as a lump sum. A Participant’s right Human Resources Officer, Executive Vice President, Senior to any additional amount of severance under this Plan shall be Vice President, Vice President, Senior Director, or Director to the determined in accordance with the terms of any written document extent the position exists). No other Employee of the Company is which specifies the amount and time of such additional lump authorized to grant additional severance pay.

REDUCTION, OFFSET OR TERMINATION OF BENEFITS

Unless the Committee, in its sole discretion, provides otherwise in In the event a Participant discloses to any unauthorized person writing, in the event that the Company provides paid leave to an information relating to the business of the Company which is Employee instead of advance notice of his or her termination of confidential or breaches any contract or employment agreement employment in accordance with the requirements of the Worker with or violates any legal obligation to the Company, or if the Adjustment and Retraining Notification Act (or other similar federal Company acting in good faith determines that it has a claim or state statute), then the amount of such Employee’s Severance against a Participant that relates back directly or indirectly to his Benefit will be reduced (but not below zero) by the amount of pay employment with the Company, the Committee shall have the received by the Employee during the period of paid leave. Any right to suspend payment to or for the benefit of the Participant such leave will be counted in determining the Employee’s Years of under the Plan and/or to offset the benefit otherwise payable to Service. the Participant under the Plan and /or to require the repayment to the Company (i.e., to claw back) any benefits already paid to the The Company reserves the right to offset any Severance Benefit extent deemed necessary to satisfy any debt or other amount that by any advance or other monies an Employee owes to the the Committee, acting in good faith, determines is owed by the Company to the extent allowed by applicable law. Participant to the Company to the extent allowed by applicable law.

ADVISORS

Your decision to participate in the Plan is important and should be given careful thought. You are advised to consult with an attorney of your choice before you sign the Agreement. You may also wish to consult with a tax advisor or financial consultant.

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-4 ERISA INFORMATION

The following information is required to be provided to you under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”):

Name of Plan: BMG Rights Management (US) LLC Severance Pay Plan

Plan Number: 501

Type of Plan: The Plan is an employee welfare benefit plan.

Plan Sponsor: BMG Rights Management (US) LLC 6100 Wilshire Boulevard Suite 1600 Los Angeles, CA 90048 323-658-3331

Plan Administrator: BMG Rights Management (US) LLC Severance Plan Committee c/o: Chief Financial Officer One Park Avenue New York, NY 10016

Employer Identification Number: 26-4055343

Plan Year: January 1 through December 31

Agent for Service of Legal Process: BMG Rights Management (US) LLC c/o: Chief Legal Counsel One Park Avenue New York, NY 10016 Service of legal process may also be made upon the Plan Administrator.

Plan Funding: Benefits under the Plan are paid from the general assets of the Company. No assets of the Company will be segregated from other assets for purposes of the Plan. Benefits under the Plan are unsecured.

PLAN ADMINISTRATOR

The Committee shall be the “Plan Administrator” within the For the purposes of Plan Administration, unless otherwise meaning of Section 3(16) of ERISA and shall have the overall provided at the sole discretion of the Company, the Committee responsibility for the operation of the Plan. Any member of is comprised of the senior-most US Human Resources Executive the Committee may resign at any time by giving notice to the supporting the Company (Chief Human Resources Officer, Company. Any resignation shall take effect on the date of receipt Executive Vice President, Senior Vice President, Vice President, of such notice or at any later date specified in the notice. No Senior Director, or Director to the extent the position exists), the member of the Committee shall receive any compensation for senior-most US Finance Executive supporting the Company (Chief his or her services as a member of the Committee. A majority of Financial Officer, Executive Vice President, Senior Vice President, the members of the Committee shall constitute a quorum for the Senior Director, or Director to the extent the position exists) and transaction of business. All resolutions or other actions taken by the senior-most US Legal Executive supporting the Company the Committee shall require the written approval or affirmative vote (General Counsel, Associate General Counsel, Executive Vice of a majority of the members of the Committee. President, Senior Vice President, Senior Director, or Director to the extent the position exists).

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-5 The Committee shall have all discretionary powers necessary to the extent that such a decision, determination or construction carry out its duties and the provisions of the Plan, including but is shown by clear and convincing evidence to be arbitrary and not limited to the absolute discretionary authority to interpret or capricious. construe the Plan, to resolve ambiguities, to make determination The Committee may delegate some or all of its authority under the of questions of eligibility, participation and benefits and all other Plan to any person or persons provided that any such delegation related or incidental matters. The Committee’s decisions will is in writing. be conclusive and final, subject to review or correction only to

CLAIMS PROCEDURE

If you are a participant in the Plan and become eligible for • Be provided, upon written request and free of charge, with Severance Pay and benefits under the Plan, you will automatically reasonable access to (and copies of) all documents, records, be provided with the Agreement for your review and signature. If and other information relevant to the claim; you choose to sign the Agreement and do not revoke it, you will • Submit to the Plan Administrator written comments, documents, receive the Severance Pay and benefits to which you are entitled records and other information related to the claim; and under the Plan. If you feel you have not been provided with all severance pay and benefits to which you are entitled under the • Request in your timely application for review a conference Plan, you may file a written claim with the Plan Administrator with with the reviewer to be held at the offices of the Company at respect to your rights to receive benefits from the Plan. This claim a mutually agreeable date and time (but not later than 60 days must be filed within one year after your Separation Date. Any claim after receipt of the request for review). filed after such date will be deemed untimely. The review by the Plan Administrator will be performed by the Plan You will be notified of the acceptance or denial of your claim Administrator. The review by the Plan Administrator will take into for benefits within ninety (90) days from the date the Plan account all comments, documents, records and other information Administrator receives your application. In some cases, your you submit relating to the claim. The Plan Administrator will make request may take more time to review and an additional a final written decision on a claim review, in most cases within processing period of up to ninety (90) days may be required. If that sixty (60) days after receipt of a request for a review. In some happens, you will receive a written notice of that fact, which will cases, your claim may take more time to review, and an additional also indicate the special circumstances requiring the extension processing period of up to sixty (60) days may be required. If that of time and the date by which the Plan Administrator expects happens, you will receive a written notice of that fact, which will that a determination will be made with respect to the claim. If the also indicate the special circumstances requiring the extension extension is required due to your failure to submit information of time and the date by which the Plan Administrator expects to necessary to decide the claim, the period for making the make a determination with respect to the claim. If the extension determination will be tolled from the date on which the extension is required due to your failure to submit information necessary notice is sent to you until the date on which you respond to the to decide the claim, the period for making the determination will Plan’s request for information. be tolled from the date on which the extension notice is sent to you until the earlier of the date on which you respond to the If your claim is denied in whole or in part, or any adverse benefit Plan’s request for information or the date the Plan Administrator determination is made with respect to your claim, you will be designates that the information is due. provided with a written notice setting forth the reason for the determination, along with specific references to Plan provisions on The Plan Administrator’s decision on your claim for review which the determination is based. This notice also will explain what will be communicated to you in writing. If an adverse benefit additional information is needed to evaluate the claim (and why determination is made with respect to your claim, the notice such information is necessary), together with an explanation of the will include (i) the specific reason(s) for any adverse benefit Plan’s claims review procedure and the time limits applicable to determination, with references to the specific Plan provisions on such procedure, as well as a statement of your right to bring a civil which the determination is based; (ii) a statement that you are action under Section 502(a) of ERISA following an adverse benefit entitled to receive, upon request and free of charge, reasonable determination on review. If you aren’t notified (of the denial or an access to (and copies of) all documents, records and other extension) within ninety (90) days from the date you notify the Plan information relevant to the claim; and (iii) a statement of your right Administrator, you may request a review of your application as if to bring a civil action under Section 502(a) of ERISA. your claim had been denied. The decision of the Plan Administrator (or its designee) is final and If your claim has been denied you may request that the Plan binding on all parties. Administrator review the denial. Your request must be in writing These procedures must be exhausted before you may bring a and must be made within sixty (60) days after written notification legal action seeking payment of benefits. You may not bring a legal of denial. In connection with this request, you (or your duly action seeking payment of benefits more than one year after you authorized representative) may: receive a final adverse determination on review.

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-6 PLAN INTERPRETATION AND BENEFIT DETERMINATION

The Plan is administered and operated by the Plan Administrator necessary to administer the Plan; who (along with its delegees) has the exclusive right, power and • decide questions, including legal or factual questions, relating authority, in its sole and absolute discretion, to administer, apply to the calculation and payment of benefits, and all other and interpret the Plan and any other documents and to decide all determinations made, under the Plan; factual and legal matters arising in connection with the operation or administration of the Plan. • resolve and/or clarify any factual or other ambiguities, inconsistencies and omissions arising under the Plan or other Without limiting the generality of the foregoing paragraph, the Plan documents or the Agreement; and Plan Administrator (or, where applicable, any delegee of the Plan Administrator) shall have the sole and absolute discretionary • process, and approve or deny, benefit claims and rule on any authority to: benefit exclusions. • take all actions and make all decisions (including factual All determinations made by the Plan Administrator (or, where decisions) with respect to the eligibility for, and the amount of, applicable, any duly authorized delegee of the Plan Administrator) benefits payable under the Plan; with respect to any matter arising under the Plan shall be final and binding on the Company, employee, participant, beneficiary, and • formulate, interpret and apply rules, regulations and policies all other parties affected thereby.

AMENDMENT AND TERMINATION

Nothing contained in the Plan creates an express or implied sole and absolute discretion, to terminate their participation contract with employees regarding employment or any in the Plan, in whole or in part, at any time, for any reason, benefits associated with employment. No communication by a with or without advance notice. If the Plan is terminated, representative of the Company modifies or otherwise affects the amended or modified or the Company that employs you terms of this Plan unless it is an express amendment to this Plan. terminates its participation in the Plan, your right to participate in, or receive benefits under, the Plan may be changed. No individual The Plan Sponsor reserves the right, in its sole and absolute may become entitled to additional benefits or other rights under discretion, to terminate, modify and amend the Plan in the Plan after the Plan is terminated or the individual’s employer whole or in part, at any time, for any reason, with or without terminates its participation in the Plan. advance notice. All other Companies reserve the right, in their

ERISA RIGHTS

As a participant in the Plan you are entitled to certain rights and Prudent Actions by Plan Fiduciaries protections under the Employee Retirement Income Security In addition to creating rights for Plan participants, ERISA imposes Act of 1974, as amended (“ERISA”). ERISA provides that all Plan duties upon the people who are responsible for the operation of participants shall be entitled to: the employee benefit plan. The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and Receive Information About Your Plan and Benefits in the interest of you and other Plan participants and beneficiaries. Examine, without charge, at the Plan Administrator’s office and No one, including your employer or any other person, may fire you at other specified locations, all documents governing the Plan, or otherwise discriminate against you in any way to prevent you and a copy of the latest annual report (Form 5500 Series), if any, from obtaining a welfare benefit or exercising your rights under filed by the Plan with the U.S. Department of Labor and available ERISA. at the Public Disclosure Room of the Employee Benefits Security Administration. Enforce Your Rights Obtain, upon written request to the Plan Administrator, copies of If your claim for a welfare benefit is denied or ignored, in whole documents governing the operation of the Plan, and copies of or in part, you have a right to know why this was done, to obtain the latest annual report (Form 5500 Series), if any, and updated copies of documents relating to the decision without charge, and Summary Plan Description. The Plan Administrator may make a to appeal any denial, all within certain time schedules. reasonable charge for the copies. Under ERISA, there are steps you can take to enforce the above Receive a summary of the Plan’s annual financial report (if rights. For instance, if you request a copy of Plan documents or any). The Plan Administrator is required by law to furnish each the latest annual report from the Plan and do not receive them participant with a copy of this summary annual report (if any). within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide materials

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-7 and pay you up to $110 a day until you receive the materials, Assistance with Your Questions unless the materials were not sent because of reasons beyond the If you have any questions about your Plan, you should contact the control of the Plan Administrator. If you have a claim for benefits Plan Administrator. If you have any questions about this statement which is denied or ignored, in whole or in part, you may file suit or about your rights under ERISA, or if you need assistance in in a state or federal court. If it should happen that Plan fiduciaries obtaining documents from the Plan Administrator, you should misuse the Plan’s money or if you are discriminated against for contact the nearest office of the Employee Benefits Security asserting your rights, you may seek assistance from the U.S. Administration, U.S. Department of Labor, listed in your telephone Department of Labor, or you may file suit in a federal court. The directory or the Division of Technical Assistance and Inquiries, court will decide who should pay court costs and legal fees. If Employee Benefits Security Administration, U.S. Department of you are successful the court may order the person you have sued Labor, 200 Constitution Avenue NW, Washington, D.C. 20210. to pay these costs and fees. If you lose, the court may order you You may also obtain certain publications about your rights and to pay these costs and fees, for example, if it finds your claim is responsibilities under ERISA by calling the publications hotline of frivolous. the Employee Benefits Security Administration.

SUMMARY PLAN DESCRIPTION

This document constitutes both the Plan Document and the Summary Plan Description, and will be distributed to all eligible employees of the Company in this form.

MISCELLANEOUS

The records of the Company with respect to employment history, or any officer, director or employee thereof; and in no event shall years of service, base pay and all other relevant matters shall be the terms and conditions of employment by the Company of any conclusive for all purposes of the Plan. employee be modified or in any way affected by the Plan. Nothing contained in the Plan shall be held or construed to create any The benefits payable under the Plan shall not be subject to liability upon any Company to retain any employee in its service alienation, transfer, assignment, garnishment, execution, or to terminate employment only for cause. All eligible employees attachment, pledge, bankruptcy, or levy of any kind, and any shall remain subject to discharge or discipline to the same extent attempt to cause any benefits to be so subjected shall not be as if the Plan had not been put into effect. recognized. The Plan is intended to constitute an “employee welfare benefit Neither the establishment of the Plan, nor any modification thereof, plan” under Section 3(1) of ERISA. The Plan shall be construed, nor the payment of any benefits hereunder, shall be construed as administered and governed under the laws of the State of New giving to any participant, employee (or any beneficiary of either), York, to the extent not preempted by ERISA or other federal law. or other person any legal or equitable right against the Company

INTERNAL REVENUE CODE SECTION 409A

Compliance with Section 409A. Severance Benefits under the warranted or guaranteed. Neither the Company nor any of its Plan are, to the fullest extent possible, intended to be exempt directors, officers, employees or advisers shall be held liable for from the definition of “nonqualified deferred compensation” any taxes, interest, penalties or other monetary amounts owed by in accordance with one or more of the exemptions available the Participant as a result of the application of Section 409A. under the final Treasury regulations promulgated under Section Payments upon Termination of Employment. Notwithstanding 409A of the Internal Revenue Code of 1986, as amended, and anything in this Plan to the contrary, to the extent that any related guidance from the IRS (“Section 409A”), including the amount or benefit that would constitute non-exempt “deferred exemption for severance pay, short-term deferrals, reimbursement compensation” for purposes of Section 409A would otherwise be arrangements, in-kind benefits, and the COBRA exemption, to the payable or distributable hereunder by reason of the Participant’s extent applicable. Accordingly, the Plan shall be interpreted and termination of employment, such amount or benefit will not be administered in a manner so that any amount payable or benefit payable or distributable to the Participant by reason of such provided hereunder shall be paid or provided in a manner and at circumstance unless (i) the circumstances giving rise to such such time and in such form that is either exempt from or compliant termination of employment meet any description or definition of with the applicable requirements of Section 409A. Nevertheless, “separation from service” in Section 409A (without giving effect to the tax treatment of the benefits provided under the Plan are not any elective provisions that may be available under such definition),

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-8 or (ii) the payment or distribution of such amount or benefit would Treatment of Installment Payments. Each payment of be exempt from the application of Section 409A by reason of Severance Benefits, without limitation, each installment payment the short-term deferral exemption or otherwise. This provision and each payment or reimbursement of premiums for continued does not prohibit the vesting of any amount upon a termination medical, dental or life insurance coverage, shall be considered a of employment, however defined. If this provision prevents the separate payment. payment or distribution of any amount or benefit, such payment Timing of Reimbursements and In-Kind Benefits. If the or distribution shall be made on the date, if any, on which an event Participant is entitled to be paid or reimbursed for any taxable occurs that constitutes a Section 409A-compliant “separation expenses and such payments or reimbursements are includible from service.” in the Participant’s federal gross taxable income, the amount of Delay of Payment to Specified Employees. If any amount such expenses reimbursable in any one calendar year shall not that would constitute non-exempt “deferred compensation” affect the amount reimbursable in any other calendar year, and for purposes of Section 409A would otherwise be payable the reimbursement of an eligible expense must be made no later or distributable under this Plan by reason of the Participant’s than December 31 of the year after the year in which the expense “separation from service” at a time (i) when any shares of stock of was incurred. No right of Executive to reimbursement of expenses the Company or any member of its controlled group are traded on shall be subject to liquidation or exchange for another benefit. Any an “established securities market,” and (ii) during a period in which payment or reimbursement of expenses shall be for expenses the Participant is treated as a “specified employee” (as such terms incurred during the Participant’s lifetime (or during a shorter period are defined in Section 409A), then, subject to any permissible of time specified in this Plan). acceleration of payment by the Company under Section 409A, Timing of Release of Claims. Except for payments that are payment of such non-exempt amounts shall be accumulated exempt from Section 409A, whenever a payment or benefit is and the Participant’s right to receive payment or distribution of conditioned on the Participant’s execution and non-revocation such accumulated amounts will be delayed (without the payment of a release of claims, such release must be executed and all of interest) until the earlier of the Participant’s death or the first revocation periods shall have expired within 60 days after the day of the seventh month following the Participant’s “separation date of termination; failing which such payment or benefit shall be from service”. For purposes of this Plan, the term “specified forfeited. Subject to the Delay of Payment to Specified Employees employee” has the meaning given such term in Section 409A, described above, such payment or benefit (including any provided, however, that the Company’s “specified employees” installment payments) that would have otherwise been payable and its application of the six-month delay rule shall be determined during such 60-day period shall be accumulated and paid on the in accordance with rules adopted by the Company, which shall 60th day after the date of termination provided such release has be applied consistently with respect to all nonqualified deferred been executed and such revocation periods shall have expired. compensation arrangements of the Company and all members of its controlled group, including this Plan.

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-9 APPENDIX A – PARTICIPATING COMPANIES

BMG Rights Management (US) LLC Chrysalis Music Group, Inc. BUG Music Group, Inc. This Is Hit, Inc. Red Brown Venture, LLC Rise Records, Inc.

BMG RIGHTS MANAGEMENT (US) LLC SEVERANCE PAY PLAN | 13-10