FEDERATED DEPARTMENT STORES, INC. Pinnacle Long Term Disability Plan

CN011

38344 09-05 Printed in U.S.A.

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EXECUTIVE GROUP LONG TERM DISABILITY PLAN SUMMARY

(Also See Certificate Following This Summary And the Supplement For Your Division)

Federated is pleased to offer eligible executives this Executive Group Long Term Disability (LTD) Plan which provides income protection against a disabling illness or injury that prevents you from working for an extended period of time. These introductory pages provide a brief description of the plan. The actual plan certificate begins on page 8 of this booklet which provides more detailed provisions of the plan. If there is a discrepancy between these introductory pages and the Certificate, the Certificate will govern. ELIGIBILITY You are eligible to join the plan if you: • work a regular full-time schedule; • have completed six consecutive months of Benefits

Eligible Service; and • are employed as a full-time executive employee.

Your coverage will become effective the first of the month coincident with or following six months of service provided you enroll as instructed by Federated HR Services prior to your eligibility date. If you are not at work on the date you would otherwise become insured, you will become insured on the date you return to full-time work for one complete work day. If you do not enroll prior to your eligibility date, you may enroll during any annual enrollment or within 31 days of a qualified change in family status. BENEFIT WAITING PERIOD When you become disabled, you must satisfy the benefit waiting period of 26 weeks of continuous disability before benefits will be paid to you. MONTHLY BENEFIT Pinnacle (Low) Option: you will receive 40% of your monthly basic earnings. The maximum monthly benefit is $20,000. Pinnacle Plus (High) Option: you will receive 60% of the first $25,000 of monthly basic earnings plus 40% of your monthly basic earnings in excess of $25,000 up to $50,000. The maximum monthly benefit is $25,000. Monthly Benefits (at the 60% level) for any month will be reduced to 50% of your Basic Earnings after a claimant's receipt of benefits for five years. If you switch from low option to high option at annual enrollment or within 31 days of a qualified change in family status, the increase in benefit will not be effective until 8 months after the election effective date. If you receive other benefits such as Social Security, Worker's Compensation, federal, state or local government benefits, benefits payable under this plan will be reduced by the amount of other income.

MAXIMUM BENEFIT DURATION Benefits will be payable to the earliest of the following dates: • the date you cease to be totally disabled; • your 65th birthday if you become disabled prior to age

60; • the end of the period indicated below if you become

disabled on or after your 60th birthday; Age At Disability Maximum Duration

of Benefits mmmm61 mm54 months mmmm62 mm48 months mmmm63 mm42 months mmmm64 mm36 months mmmm65 mm30 months mmmm66 mm24 months mmmm67 mm18 months mmmm68 mm15 months mmmm69 or over mm12 months TERMINATION OF COVERAGE Your coverage will terminate on the earliest of the following: • the date you cease to be in a class of eligible employees; • the last day for which you have made the required

contributions for coverage; • the date the policy is canceled; • last day worked.

CONVERSION If you are covered for Long Term Disability benefits for 12 months or more and terminate employment, you may be able to convert to a different long term disability policy and be billed for your premium by the insurance carrier. You may apply for conversion coverage without providing evidence of your good health within 31 days of the date your group coverage terminates. If your coverage ends, you should contact Federated HR Services immediately if you are interested in conversion. COST OF COVERAGE The cost for Long Term Disability coverage depends on the option you elect and your income. As your earnings increase, so does your benefit, and therefore, your premium contribution.

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TABLE OF CONTENTS Page

Certification ................................................................................................................................................... 8 The Schedule ............................................................................................................................................... 10 How to File Your Claim................................................................................................................................ 11 Provisions...................................................................................................................................................... 11 Eligibility — Effective Date ............................................................................................................................. 11 Long Term Disability Insurance...................................................................................................................... 12 Long Term Disability Conversion Privilege..................................................................................................... 13 Payment of Benefits....................................................................................................................................... 14 Termination of Insurance ............................................................................................................................... 14 Summary Plan Description ............................................................................................................................ 15 Definitions...................................................................................................................................................... 17

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7 NOT1V3 M

NOTICE CONNECTICUT GENERAL CLAIM OFFICES We are here to serve you... As our certificateholder, your satisfaction is very important to us. Should you have a valid claim, we fully expect to provide a fair settlement in a timely fashion. This notice is to advise you that should any complaints arise regarding your insurance, you may contact the following: LONG TERM DISABILITY INSURANCE

CIGNA Companies Special Benefits Division One Chatham Center, 5th Floor Pittsburgh, PA 15219 Tel: 1-800-238-2125

GM6000 C2 8 CER5

Home Office: Bloomfield, Connecticut Mailing Address: Hartford, Connecticut 06152

CONNECTICUT GENERAL LIFE INSURANCE COMPANY a CIGNA company (called CG) certifies that it insures certain Employees for the benefits provided by the following policy(s):

POLICYHOLDER: FEDERATED DEPARTMENT STORES, INC.

GROUP POLICY(S) — COVERAGE 0475954-07 LONG TERM DISABILITY PINNACLE 0475954-08 LONG TERM DISABILITY PINNACLE PLUS

CERTIFCATE DATE: July 1, 2005

This certificate describes the main features of the insurance. It does not waive or alter any of the terms of the policy(s). If questions arise, the policy(s) will govern. This certificate takes the place of any other issued to you on a prior date which described the insurance.

Corporate Secretary

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Explanation of Terms

You will find terms starting with capital letters throughout your certificate. To help you understand your benefits, most of these terms are defined in the Definitions section of your certificate.

THE SCHEDULE The Schedule is a brief outline of your maximum benefits which may be payable under your insurance. For a full

description of each benefit, refer to the appropriate section listed in the Table of Contents.

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THE SCHEDULE

LONG TERM DISABILITY INSURANCE For You

Long Term Disability Insurance provides monthly payments if you should become Totally Disabled due to Injury or Sickness. You will qualify for the Monthly Benefit after you have completed the Benefit Waiting Period. Benefit Waiting Period

The Benefit Waiting Period is a period of continuous Total Disability that extends the greater of 26 weeks or the end of your salary continuation.

A period of Total Disability will be considered continuous even if you temporarily return to work for up to a total of 30 days during that Benefit Waiting Period. The Benefit Waiting Period will be extended by the number of days you temporarily return to work. Monthly Benefit - Pinnacle (Low Option)

The Monthly Benefit for any month is 40% of your Monthly Basic Earnings up to $50,000 covered earnings at the time you become Totally Disabled, rounded to the nearer dollar up to $20,000, and reduced by the amount of all Other Benefits for that month. Monthly Benefit - Pinnacle Plus (High Option)

The Monthly Benefit for any month is 60% of your Monthly Basic Earnings up to $25,000 covered earnings plus 40% of Monthly Basic Earnings in excess of $25,000 up to $50,000 covered earnings at the time you become Totally Disabled, rounded to the nearer dollar up to $25,000, and reduced by the amount of all Other Benefits for that month.

Monthly Benefits (at the 60% level) for any month will be reduced to 50% of your Basic Earnings after a claimant's receipt of benefits for five years.

The Monthly Benefit will not be less than $100, regardless of any reductions shown in this Schedule.

Monthly Benefits for Total Disability periods of less than one month will be prorated. Rehabilitation Benefit

The Monthly Benefit for any month during which you engage in Rehabilitative Work will be reduced by 50% of the amount which you earn through that Rehabilitative Work during that month. The Rehabilitation Benefit will continue until the earlier of the following dates:

• the date you cease to be engaged in Rehabilitative Work;

• the date Monthly Benefits are no longer payable. From time to time CG will review your status and may

require an account of your earnings and proof of your continued Total Disability. Changes in Basic Earnings

Basic Earnings are determined initially on the date you become insured. A change in the amount of Basic Earnings will be considered effective on a date after the Change in Basic Earnings. If you are not in Active Service on that day, no increase in Basic Earnings will be considered effective until you return to Active Service for one full day. In no event will an increase in your Basic Earnings be considered effective if it occurs:

• between separate periods of Total Disability which are considered one period under the Successive Periods of Disability provision; or

• during a Benefit Waiting Period. Other Benefits

Benefits payable under the plan will be reduced by amounts received by other benefits as described below.

1. any amounts which you or your dependents receive because of your disability under: a. any group or franchise insurance or similar plan for

persons in a group; b. the Canada and Quebec Pension Plans; c. any local, state, provincial or federal government

disability plan or retirement plan or law; d. any salary or wage continuance plan of the

Employer; e. the Jones Act or any workers' compensation,

occupational disease or similar law including all permanent as well as temporary disability benefits;

f. any work loss provision in the mandatory part of any "no-fault" auto insurance policy;

2. any disability or Old Age benefits, under the Federal Social Security Act, which you receive (or are assumed to receive*) on your own behalf;

3. any disability or Old Age benefits, under the Federal Social Security Act, which you receive (or are assumed to receive*) on behalf of your dependents or which your dependents receive (or are assumed to receive*) on account of your receipt (or assumed receipt*) of such benefits.

*See the Assumed Receipt of Social Security Benefits provision. Assumed Receipt of Social Security Benefits

If you are covered under the Federal Social Security Act for disability or Old Age benefits for yourself and your Dependents, you will be assumed to be receiving such benefits. These assumed benefits will be in an amount CG estimates you and your Dependents are eligible to receive. This assumption will not be made if you give CG proof that:

• you have applied for these benefits; and • payments were denied.

However, if payments for disability were denied solely because the disability was not expected to last at least 12 consecutive months, you will be assumed to be receiving such benefits after your disability has continued for 12 consecutive months. This assumption will not be made if you give CG proof that:

• you have reapplied for benefits; and • payments were again denied.

Increases in Other Benefits CG will not consider any cost of living increase in any

Other Benefits which is effective after: • the first payment of such Other Benefit becomes

due; and • Monthly Benefits become payable.

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Recovery of Overpayments If the Monthly Benefit for any month is overpaid by CG,

CG will have the right to recover the amount overpaid by either of the following methods:

• a deduction of the overpaid amount from any future payments by CG;

• a lump sum repayment by the Employee of the overpaid amount.

Lump Sum Payments Any Other Benefits paid in a lump sum (except as shown

below) will be deemed to be paid in monthly amounts prorated over the time for which the sum was paid. If no such time is stated, the lump sum will be prorated monthly over your expected life span. CG will determine that expected life span.

Lump Sum Payments under: • the Jones Act or any workers' compensation or

similar law (which includes benefits paid under a Compromise and Release) will be deemed to be paid monthly:

• at the rate stated in the award; or • at the rate paid prior to the lump sum (if no

rate is stated in the award); or • at the maximum rate set by the law (if no rate

is stated and you did not receive a periodic award).

HOW TO FILE YOUR CLAIM The prompt filing of any required claim form will result in

faster payment of your claim. You may get the required claim forms from Federated

HR Services. All claim forms should be completed by you and your Physician. Completed claim forms should be filed with Federated HR Services. When to File Your Claim

The claim form should be filed early to be sure you will receive the benefits while you are out of work and need them most. DO NOT WAIT UNTIL YOUR RETURN TO WORK TO REPORT YOUR DISABILITY. IF YOUR CLAIM IS FILED MORE THAN 24 MONTHS AFTER THE DATE OF YOUR DISABILITY, YOUR CLAIM WILL BE DENIED. CLAIM REMINDERS:

• BE SURE TO USE YOUR SOCIAL SECURITY AND ACCOUNT NUMBER WHEN YOU FILE CG'S CLAIM FORMS, OR WHEN YOU CALL YOUR CG CLAIM OFFICE. YOUR ACCOUNT NUMBER IS 0475954.

• PROMPT FILING OF ANY REQUIRED CLAIM FORMS RESULTS IN FASTER PAYMENT OF YOUR CLAIMS.

WARNING: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit is guilty of a crime and may be subject to fines and confinement in prison.

GM6000 CI 5 V-3 CLA12V2 M

PROVISIONS Notice of Claim

Written notice of claim must be given to CG within six months after the occurrence or start of the loss of wages due to disability on which claim is based. If notice is not given in that time, the claim will not be invalidated or reduced if it is shown that written notice was given as soon as was reasonably possible. The claim will be invalidated if written notice is provided later than 24 months from the date of disability on which the claim would be based. Claim Forms

When CG receives the notice of claim, it will give to the claimant, or to the Policyholder for the claimant, the claim forms which it uses for filing proof of loss of wages due to disability. If the claimant does not get these claim forms within 15 days after CG receives notice of claim, he will be considered to meet the proof of loss of wages due to disability requirements of the policy if he submits written proof of loss of wages due to disability within 90 days after the date of loss of wages due to disability. This proof must describe the occurrence, character and extent of the loss for which claim is made. Proof of Loss

Written proof of loss of wages due to disability must be given to CG within 90 days after the date claim is made. If written proof of loss of wages due to disability is not given in that time, the claim will not be invalidated nor reduced if it is shown that written proof of loss of wages due to disability was given as soon as was reasonably possible. Upon request, written proof of continued Total Disability and of regular attendance of a physician must be given to CG within 30 days of such request. Physical Examination

CG, at its own expense, will have the right to examine any person for whom claim is pending or being paid as often as it may reasonably require. Legal Actions

No action at law or in equity will be brought to recover on the policy until at least 60 days after proof of loss of wages due to disability has been filed with CG. No action will be brought at all unless brought within 3 years after the time within which proof of loss of wages due to disability is required. GM6000 P 1 V-11 PRO12M

ELIGIBILITY - EFFECTIVE DATE You will become eligible for insurance on the day you

complete the Eligibility Waiting Period if: • you are in a Class of Eligible Employees; and • you are an regular, full-time Employee; and • you normally work at least the number of hours

as required by your Employer. If you were previously insured and your insurance

ceased at your request, or you did not enroll when you were first eligible, you may enroll during a future annual enrollment period or within 31 days of a qualified change in family status. If your insurance ceased because you were no longer employed in a Class of Eligible Employees, you are not required to satisfy any Waiting Period if you again become a member of a Class of Eligible Employees within 60 days after your insurance ceased.

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Eligibility Waiting Period The Eligibility Waiting Period ends the first day of the month coincident with or following 6 consecutive months of Benefits Eligible Service. Benefits Eligible Service is defined by your Division. If you switch from low option to high option at annual enrollment or within 31 days of a family status change, the increase in benefits will not become effective until 8 months after the election effective date. Classes of Eligible Employees

Each Full Time Executive Employee with Base Earnings of more then $150,000 who satisfied the Eligibility Waiting Period.

GM6000 EL 1 V-19 ELI1 M Employee Insurance

This Plan is offered to you as an Employee. To be insured, you will have to pay all of the cost. Effective Date of Your Insurance

If you enroll when you first become eligible, you will become insured on the date you become eligible when you enroll as instructed by Federated HR Services, as long as you have satisfied the Eligibility Waiting Period. If you elect this coverage during an annual enrollment period as instructed by Federated HR Services, you will become insured on the July 1 immediately following the annual enrollment period. If you elect this coverage within 31 days of a qualified change in family status by enrolling as instructed by Federated HR Services, your coverage will become effective on the day of your qualified change in family status.

If you are not in Active Service on the date you would otherwise become insured, you will become insured on the date you return to Active Service.

If you are enrolled in the Foundation option, and your Basic Earnings are changed to exceed $150,000, you will automatically be enrolled in the Pinnacle option effective with your salary change. If you are enrolled in the Foundation Plus option and your Basic Earnings are changed to exceed $150,000, you will automatically be enrolled in the Pinnacle Plus option effective with your salary change. GM6000 EF 1 ELI7V22 M

LONG TERM DISABILITY INSURANCE Monthly Benefits

CG will begin paying Monthly Benefits in amounts determined from The Schedule when it receives due proof that:

• you became Totally Disabled while insured for this Long Term Disability Insurance; and

• your Total Disability has continued for a period longer than the Benefit Waiting Period shown in The Schedule.

You will be considered Totally Disabled if, because of an Injury or Sickness, you are unable to perform all the essential duties of your occupation, and you are under the care of a licensed Physician. Duration of Monthly Benefits

CG will stop paying Monthly Benefits on the earliest following date:

• the date you cease to be Totally Disabled; or • according to the schedule below.

Age At Disability Maximum Duration of Benefits

less than or equal to 60 mmto age 65 mmmm61 mm54 months mmmm62 mm48 months mmmm63 mm42 months mmmm64 mm36 months mmmm65 mm30 months mmmm66 mm24 months mmmm67 mm18 months mmmm68 mm15 months greater than or equal to 69 mm12 months GM6000 LTD 1 V-10 LDI121 M

Mental Illness, Alcoholism and Drug Abuse Limitation

CG will pay Monthly Benefits for no more than 24 months during your lifetime for Total Disability caused or contributed to by mental illness, alcoholism or drug abuse whether or not you are confined in a hospital. Successive Periods of Disability

Separate periods of Total Disability resulting from the same or related causes will be considered one period of Total Disability unless separated by your return to Active Service for at least 3 consecutive months.

Separate periods of Total Disability resulting from unrelated causes will be considered one period of Total Disability unless separated by your return to Active Service for at least one full day.

These provisions do not apply: • to the Benefit Waiting Period; or • when you become eligible for benefits under any

other group long term disability policy. GM6000 LTD 2 V-9 LDI5 M

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Pre-Existing Condition Limitation CG will not pay Monthly Benefits for any period of Total

Disability which results, directly or indirectly, from a Pre-existing Condition. A Pre-existing Condition is any Injury or Sickness for which you, during the 12 months prior to the most recent effective date of your insurance: (a) incurred expenses; (b) received medical treatment; (c) took prescribed drugs or medicines; or (d) consulted a licensed physician. This Pre-existing Condition Limitation will not apply in the event you do not incur expenses, receive medical treatment, take prescribed drugs or medicines, or consult a licensed physician for a 12-month period or to a period of Total Disability which begins more than 24 months after the most recent effective date of your insurance. Continuity of Coverage and Pre-Existing Condition Limitation The Pre-existing Condition Limitation will be waived, as described below, for you if you were insured on the day before the Effective Date of this Long Term Disability Insurance under a group long term disability policy: (a) sponsored by the Employer; and (b) replaced by this Long Term Disability Insurance; provided you:

• were in Active Service on the Effective Date of this Long Term Disability Insurance; and

• have fulfilled the requirements of any Pre-existing Condition Limitation of the replaced policy.

However, if you: • were in Active Service on the Effective Date of

this Long Term Disability Insurance; and • have not fulfilled the requirements of any Pre-

existing Condition Limitation of the replaced policy because the time period required prior to start of Total Disability has not been satisfied;

any portion of time which may have been satisfied under such Pre-existing Condition Limitation will be applied toward the satisfaction of the time period requirement of the Pre-existing Condition Limitation of this Long Term Disability Insurance. If Monthly Benefits are determined to be payable, they will be paid according to the provision of this Long Term Disability Insurance. GM6000 LTD2 LDI14V1 M

Disabilities Not Covered No Monthly Benefits will be paid if your Total Disability

results, directly or indirectly, from: • Injuries intentionally self-inflicted while sane or

insane; • any act or hazard of a declared or undeclared

war; • the illegal use of substances; • commission of a felony; or • during periods of incarceration.

No Monthly Benefits will be paid for a period of Total Disability when you are not under the care of a licensed physician. GM6000 LTD 3 LDI23 M

LONG TERM DISABILITY CONVERSION PRIVILEGE For You

When your Long Term Disability Insurance ceases, you may be eligible to be insured under a group policy of long term disability benefits (called Converted Insurance). Converted Insurance is only available to you if you are Entitled to Convert and apply in writing and pay the first premium for Converted Insurance to CG:

• within 31 days from the date your insurance under this policy ceases, without evidence of good health; or

• after 31 days but not more than 62 days from the date your insurance under this policy ceases, with evidence of good health.

It is your responsibility to request conversion information and apply on a timely basis. Entitled to Convert

You are Entitled to Convert your Long Term Disability Insurance only if:

• you have been insured for at least 12 consecutive months under this policy or under this and a prior policy issued to the Policyholder; and

• your insurance under this policy ceased because you were no longer in Active Service because of resignation, involuntary termination, layoff or an uninsured leave of absence.

Not Entitled to Convert You are not Entitled to Convert your Long Term

Disability Insurance if: • You are no longer in a Class of Eligible

Employees. • You are 70 years of age or more. • You are retired. • You are not in Active Service because of

disability. • This policy is canceled for any reason.

Converted Insurance Converted Insurance will be provided under the plan of

benefits offered by CG at the time the first premium is received. A certificate under the group converted policy will be issued to you describing your benefits. The Converted Insurance will take effect on: (a) the day after your insurance under this policy ceases; or (b) in case you are required to submit evidence of good health, the day CG accepts that evidence. The premium on its effective date will be based on: (a) class of risk; (b) age; and (c) benefits.

CG or the Policyholder will give you, on request, further details of the Converted Insurance.

The conversion policy does not provide the same benefit schedule as the group policy.

GM6000 LTD12 GM6000 LTD13 LDI66 M

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PAYMENT OF BENEFITS To Whom Payable

All disability benefits that are payable will be paid to you. If you die while disability benefits remain unpaid, CG

may, at its option, make direct payment to any of your following living relatives: spouse, mother, father, child or children, brothers or sisters, or to the executors or administrators of your estate.

If any person to whom benefits are payable is a minor, or in CG's opinion, is not able to give valid receipt for any payment due him, such payment will be made to his legal guardian. However, if no request for payment has been made by his legal guardian, CG may, at its option, make payment to the person or institution appearing to have assumed his custody and support. Payment in this event will be made in monthly installments of not more than $500.

Payment in the manner described above will release CG from all liability to the extent of any payment paid. Time of Payment

Disability benefits will be paid, after receipt of the required proof, at regular intervals. GM6000 POB 8 V-7 PMT23 M

TERMINATION OF INSURANCE - EMPLOYEES Your insurance will cease on the earliest date below:

• the date you cease to be in a Class of Eligible Employees or cease to qualify for the insurance.

• the last day for which you have made any required contribution for the insurance.

• the date the policy is canceled, except payment of Monthly Benefits will not be affected by cancellation of the policy as long as your Total Disability begins while the policy is in force.

• the date your Active Service ends. Total Disability

If your Active Service ends due to Total Disability for which Monthly Benefits are or may become payable, your insurance will continue while that Total Disability continues during the Benefit Waiting Period, and thereafter, but only for as long as Monthly Benefits are payable.

If you return to Active Service in a Class of Eligible Employees as soon as Total Disability ceases, your insurance will be reinstated when you begin paying the required premium.

Premium will be waived for you while Monthly Benefits are payable for you. Continuation of Coverage During An Approved Unpaid Leave of Absence that is Not FMLA

If you cease active service (temporarily or permanently) for a reason other than a medical leave, your coverage will cease as of your last day worked. Should you return to work while still considered an employee of the Company, and within 12 months of the date you cease Active Service, your benefits will be reinstated effective the date you return to work, and you will be required to make the appropriate contributions. GM6000 TER 1 V-61 GM6000 TER 2 V-31 TRM2V1 M

REQUIREMENTS OF FAMILY AND MEDICAL LEAVE ACT OF 1993

Any provisions of the policy that provide for: (a) continuation of insurance during a leave of absence; and (b) reinstatement of insurance following a return to Active Service; are modified by the following provisions of the federal Family and Medical Leave Act of 1993, where applicable: A. Continuation of Long Term Disability Insurance During Leave

Your long term disability insurance will be continued during a leave of absence if:

• that leave qualifies as a leave of absence under the Family and Medical Leave Act of 1993; and

• you are an eligible Employee under the terms of that Act.

The cost of your long term disability insurance during such leave must be paid entirely by you. B. Reinstatement of Canceled Insurance Following Leave

Upon your return to Active Service following a leave of absence that qualifies under the Family and Medical Leave Act of 1993, any canceled long term disability insurance will be reinstated as of the date of your return.

You will not be required to satisfy any Eligibility or Benefit Waiting Period or the requirements of any Pre-existing Condition Limitation to the extent that they had been satisfied prior to the start of such leave of absence.

You may obtain detailed information about the Family and Medical Leave Act of 1993 from your Employer.

Please see the section entitled "Continuation of Coverage During An Approved Unpaid Leave of Absence that is Not FMLA" for information regarding continuation of coverage during a non-FMLA approved unpaid leave of absence. GM6000 TER5 TRM191V1 M

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SUMMARY PLAN DESCRIPTION The name of the Plan is:

Executive Group Long Term Disability Plan The name, address, ZIP code and business telephone number of the sponsor of the Plan is:

Federated Department Stores, Inc. 7 West Seventh Street, Cincinnati, OH 45202 (513) 579-7000

Employer Identification Number (EIN)

Plan Number

13-3324058 945 The name, address, ZIP code and business telephone number of the Plan Administrator is:

Employer named above The name, address and ZIP code of the person designated as agent for the service of legal process is:

Dennis Broderick, General Counsel Address noted above

The office designated to consider the appeal of denied claims is:

Pittsburgh SRO Claim Office One Chatham Center, 5th Floor Pittsburgh, PA 15219-3419

The cost of the Plan is paid in full by the Employee. The Plan's fiscal year ends on January 31. The preceding pages set forth the eligibility requirements and benefits provided for you under this Plan. Discretionary Authority The Plan Administrator delegates to CG the discretionary authority to interpret and apply Plan terms and to make factual determinations in connection with its review of claims under the Plan. When exercising this discretionary authority, CG is a plan fiduciary. Such discretionary authority is intended to include, but not limited to, the determination of the eligibility of persons desiring to enroll in or claim benefits under the Plan, the determination of whether a person is entitled to benefits under the Plan, and the computation of any and all benefit payments. The Plan Administrator also delegates to CG the discretionary authority to perform a full and fair review, as required by ERISA, of each claim denial which has been appealed by the claimant or his duly authorized representative. Plan Modification, Amendment and Termination

The Employer as Plan Sponsor reserves the right to, at any time, change or terminate benefits under the Plan, to change or terminate the eligibility of classes of employees to be covered by the Plan, to amend or eliminate any other plan term or condition, and to terminate the whole plan or any part of it. The procedure by which benefits may be changed or terminated, by which the eligibility of classes of employees may be changed or terminated, or by which part or all of the Plan may be terminated, is as follows:

"The Board of Directors of the Company has authorized the Chief Executive Officer, the right to amend or terminate the Plan, in whole or in part, at any time provided that the aggregate incremental expense to the Company is not more than $5,000,000. Such amendment or termination shall be in the form of written action approved by the Chief Executive Officer

and shall be effective on the date stated in such written action. Any documents implementing the amendment or termination may be executed by any officer of the Company or such other person given the authority by the Chief Executive Officer. The Board of Directors retains the authority for the right to amend or terminate the Plan if the projected aggregate increased expense to the Company is greater than $5,000,000."

As referred to in the above two paragraphs, "the Company" is Federated Department Stores, Inc.

No consent of any participant is required to terminate, modify, amend or change the Plan.

Termination of the Plan together with termination of the insurance policy(s) which funds the Plan benefits will have no adverse effect on any benefits to be paid under the policy(s) for any covered expenses incurred prior to the date that policy(s) terminates. Likewise, any extension of benefits under the policy(s) due to your total disability which began prior to and has continued beyond the date the policy(s) terminates will not be affected by the Plan termination. A subsequent Plan termination will not affect the extension of benefits and rights under the policy(s).

Your coverage under the Plan's insurance policy(s) will end on the earliest of the following dates:

• the date you leave Active Service; • the date you are no longer in an eligible class; • the date you cease to make timely contributions;

or • the date the policy(s) terminates.

See your Plan Administrator to determine if any extension of benefits or rights are available to you under this policy(s). No extension of benefits or rights will be available solely because the Plan terminates. Funding

The method for funding the insured parts of the Plan is for the employer to remit premiums for the insurance benefits from the contributions obtained from the Employees by payroll deduction. Claim Review Procedure

You may get claim forms and guidance for filing claims from the Plan Administrator, Federated HR Services, or from the CG claim office. Once CG has received all the information needed to make a claim determination, you will receive an explanation of the decision. This will be received by you no later than 90 days after all information needed to make a determination is received, unless special circumstances required more time. You will be notified by CG before the end of this period if more time is necessary, in which case, a decision will be made within an additional 90 days. If a claim is denied, you will be given the reason for denial in writing. You, or a person in your behalf, may ask the CG claim office for a review of the denied claim in writing within 60 days of receipt of the denial notice. This written request for review should state the reasons why you feel your claim should not have been denied. It should include any additional documents (medical or dental records, etc.) which you feel support your claim. You may also ask additional questions or make comments and you may review pertinent documents. In normal cases, you will receive the final decision within 60 days of the date your

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request for review is received. In special cases requiring a delay, you will receive notice of the final decision no later than 120 days after your request for review is received. Statement of Rights

The following statement of ERISA rights is required by Federal law and regulations:

As a person covered under this Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974. This law called ERISA, provides that all people covered by the Plan are entitled to:

• examine, without charge, all Plan documents, including insurance policies, collective bargaining agreements and copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions.

• obtain copies of all Plan documents and other Plan information by writing to the Plan Administrator and asking for them. The Administrator may make a reasonable charge for the copies.

• receive a summary of the Plan's annual financial report if the Plan covers 100 or more people. The Plan Administrator is required by law to furnish each person under the Plan with a copy of this summary financial report.

In addition to creating rights for persons covered by the Plan, ERISA imposes duties upon the people who are responsible for the operation of the benefit portion of the Plan. The people who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in your interest and in the interest of the other people covered by the Plan and beneficiaries.

The law provides that no one may fire you or otherwise discriminate against you in any way to prevent you from getting a benefit or exercising your rights under ERISA. The law provides that if your claim for a benefit is denied in whole or in part, you will receive a written notice, explaining why your claim was denied. You have the right to have your claim reviewed and reconsidered.

Under ERISA, there are steps you can take to enforce your rights. For instance, if you request copies of documents from the Plan and do not receive them within 30 days, you may file suit in federal court. In such a case, the court may require the Plan Administrator to provide the documents and pay up to $110 a day until you receive them, unless they were not sent because of reasons 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 suit in a state or federal court. If it should happen that the people who operate the Plan misuse the Plan's money or if you are discriminated against for asserting your rights, you may ask the U.S. Department of Labor for help, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If your suit is successful, the court may order the person you have sued to pay costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim frivolous.

If you have any questions about your rights under ERISA, you should get in touch with the nearest Area

Office of the U.S. Labor-Management Services Administration of the Department of Labor.

If you have any questions about your Plan, you should see your Plan Administrator. GM6000 ERI3V1

CG will provide administrative services of the following nature: Claim Administration; Cost Containment; Financial; Banking and Billing Administration.

Benefits provided under this certificate are fully guaranteed by CG.

This certificate is issued by: Connecticut General Life Insurance Company 900 Cottage Grove Road Hartford, CT 06152

If you have questions about this statement or about your rights under ERISA, you should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210. ERISA-12 ERI8

17

DEFINITIONS Active Service

You will be considered in Active Service: • on any of your Employer's scheduled work days if

you are performing the regular duties of your work on a full-time basis on that day either at your Employer's place of business or at some location to which you are required to travel for your Employer's business.

• on a day which is not one of your Employer's scheduled work days if you were in Active Service on the preceding scheduled work day.

Basic Earnings The term Basic Earnings means your rate of pay (not

reduced by any deferred salary) reported by the Employer. It does not include overtime, bonus, additional compensation or pay for more than a full-time scheduled work week. Employee

The term Employee means a regular, full-time employee of the Employer. The term does not include employees who are part-time or temporary or who normally work less than the number of hours as required by the Employer. Employer

The term Employer means the Policyholder and the following Affiliated Employers and operating divisions: Bloomingdale's Bloomingdale's Direct FACS Group FDS Bank Federated Corporate Services Federated Logistics & Operations Federated Systems Group First Automated Systems & Technology (FAST) Macy's Central Macys.com Macy's Corporate Marketing (Advertex) Macy's East Macy's Florida Macy's Home Store Macy's Merchandising Group Macy's Northwest Macy's Puerto Rico Macy's West Injury

The term Injury means an accidental bodily injury. Rehabilitative Work

You will be considered engaged in Rehabilitative Work if: (a) while Totally Disabled you return to any work for wage or profit; and (b) that work is approved by CG. Sickness

The term Sickness means a physical or mental illness. It also includes pregnancy.

Total Disability or Totally Disabled (For Long Term Disability Insurance)

You will be considered Totally Disabled only if, because of Injury or Sickness, you are unable to perform all the essential duties of your occupation, and you are under the care of a licensed Physician.