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1 Qualified Retirement Plan SUMMARY PLAN DESCRIPTION /13
3 Qualified Retirement Plan and Trust Summary Plan Description TABLE OF CONTENTS INTRODUCTION... iii DEFINITIONS... 1 Beneficiary... 1 Catch-up Contributions... 1 Compensation... 1 Core Funds... 1 Differential Military Pay... 1 Direct Rollover... 1 Early Retirement Age... 1 Elective Deferrals... 1 Eligible Retirement Plan... 1 Eligible Rollover Distribution... 1 Employee... 1 Employer... 1 Employer Contribution... 1 Enrollment/Change Form... 1 Entry Dates... 1 Forfeitures... 1 General Information Sheet... 1 Hours of Service... 1 Individual Account... 1 Individual Retirement Account (IRA)... 1 Key Employee... 1 Loan Disclosure... 1 Matching Contribution... 1 Nondeductible Employee Contributions... 1 Nonelective Contributions... 1 Normal Retirement Age... 1 Outside Plan Investment... 1 Participant... 1 Plan... 2 Plan Administrator... 2 Plan Year... 2 Pretax Elective Deferrals... 2 Qualified Distribution... 2 Qualified Joint and Survivor Annuity (QJSA)... 2 Related Employer... 2 Required Beginning Date... 2 Roth Elective Deferrals... 2 Self-Directed Brokerage Account (SDBA)... 2 Taxable Wage Base... 2 SECTION THREE: CONTRIBUTIONS TO THE PLAN... 3 Contributions to 401(k) Plans... 3 Contributions to Profit Sharing and Money Purchase Pension Plans. 6 Limitations on Contributions and Allocations... 7 SECTION FOUR: VESTING AND FORFEITURES... 7 How Your Vested Amount is Determined... 7 What Happens to Nonvested Amounts... 7 Break in Service Situations... 8 SECTION FIVE: DISTRIBUTION OF BENEFITS, CLAIMS PROCEDURE AND LOANS... 8 Benefit Eligibility... 8 Distribution of Benefits... 9 Restrictions or Penalties on Distributions Payouts to Your Beneficiaries What to do to Receive Benefits How to File a Claim Borrowing From the Plan SECTION SIX: DEFINITIONS SECTION SEVEN: MISCELLANEOUS Self-Direction of Investments Plan Administration and Management Plan Termination SECTION EIGHT: RIGHTS UNDER ERISA Rights and Protections to Participants Under the Employee Retirement Income Security Act SECTION NINE: LOAN DISCLOSURE AND BASIC LOAN AGREEMENT SECTION TEN: PARTICIPANT DISTRIBUTION NOTICE AND SPECIAL TAX NOTICE REGARDING PLAN DISBURSEMENTS SECTION ONE: EFFECTIVE DATE... 2 SECTION TWO: ELIGIBILITY AND PARTICIPATION... 2 Eligibility Requirements... 2 When You Can Participate in the Plan... 2 How to Continue Plan Participation... 2 i
5 Qualified Retirement Plan and Trust Summary Plan Description INTRODUCTION Your Employer has adopted an employee benefit plan designed to help you meet your financial needs during your retirement years. To become a Participant in the Plan, you must meet the Plan s eligibility requirements. Once you become a Participant, the Plan Administrator (your Employer) will maintain an Individual Account for you. Minimally each Plan Year, your account will be adjusted to reflect contributions, gains, losses, etc. The percentage of your account to which you will be entitled when you terminate employment depends on the Plan s vesting schedule. These features are explained further in the following pages. The actual Plan is a complex legal document that has been written in the manner required by the Internal Revenue Service (IRS) and is referred to as the Basic Plan Document. This document is called a Summary Plan Description (SPD) and explains and summarizes the important features of the Basic Plan Document. The SPD includes this document along with the General Information Sheet, which highlights information unique to the Plan that your Employer has adopted. Refer to the top of the General Information Sheet to determine whether your Plan is a 401(k) (including simplified 401(k)), profit sharing, or money purchase pension plan. If your Plan is a 401(k) plan, you may elect to reduce your annual taxable income by deferring a portion of your Compensation into the Plan as Elective Deferrals. If your Plan is a profit sharing or money purchase pension plan, your Employer will make all contributions to the Plan. As you read the SPD, you will need to refer to the General Information Sheet to understand how your Plan works. You should consult the Basic Plan Document for technical and detailed Plan provisions. The legal operation of the Plan is controlled by the Basic Plan Document and not this SPD. The Plan sequence number, which identifies the number of qualified plans the Employer currently maintains or has previously maintained, may be found in the General Information Sheet. If at any time you have specific questions about the Plan as it applies to you, bring them to the attention of the Plan Administrator whose address and telephone number appear in the General Information Sheet. You also may examine the Basic Plan Document itself at a reasonable time by making arrangements with the Plan Administrator. NOTE: This Summary Plan Description is not complete if the General Information Sheet is not attached. Contact your Employer if you do not have the General Information Sheet. iii
7 Qualified Retirement Plan and Trust Summary Plan Description DEFINITIONS The following definitions are used in the text of this SPD. These words and phrases are capitalized throughout the SPD for ease of reference. Beneficiary the person(s) and/or entity(ies) that will receive all or a specified portion of your Individual Account in the event of your death. Catch-up Contributions additional Elective Deferrals, not to exceed the applicable dollar amount for a given year, made under this Plan by Participants who attain age 50 before the close of the Plan Year. Compensation the earnings paid to you by your Employer that are taken into account for purposes of the Plan. Core Funds primary investment options made available from an investment manager selected by the Employer. Differential Military Pay compensation paid while on active duty with the uniformed services that will be used for purposes of determining plan contributions. Direct Rollover a way of rolling over an Eligible Rollover Distribution from a qualified plan directly to another Eligible Retirement Plan, thereby avoiding federal income tax withholding. Early Retirement Age the age specified in the adoption agreement upon attainment of which you may become 100% vested in your Individual Account and may possibly be entitled to receive a distribution. This feature is generally not available. Elective Deferrals the dollars you put into the Plan through payroll deductions. The term Elective Deferrals shall mean Pretax Elective Deferrals and Roth Elective Deferrals. Refer to the separate definitions of these terms. Eligible Retirement Plan an eligible 457(b) plan maintained by a state governmental entity, a traditional or Roth IRA, a qualified retirement plan, a qualified annuity plan, and a 403(b) plan. Eligible Rollover Distribution any distribution to your credit which does not include the following: any distribution that is one of a series of substantially equal periodic payments; required minimum distributions; and hardship distributions. In addition, an Eligible Rollover Distribution includes a Direct Rollover of Nondeductible Employee Contributions made to a traditional IRA or qualified retirement plan, if those amounts are separately accounted for in the receiving plan. Employee any person employed by the Employer. Employer the sole-proprietorship, partnership, or corporation or other entity maintaining this Plan. Employer Contribution the amount contributed to the Plan on your behalf by your Employer. Enrollment/Change Form the agreement between you and your Employer authorizing your Employer to deduct your Elective Deferrals from your Compensation and put them into the 401(k) Plan. Your Employer may accept your authorization in electronic, telephonic, or paper formats. Entry Dates the dates on which you will enter the Plan upon satisfying the age and service requirements. Forfeitures nonvested portions of a Plan Participant s Employer Contributions that are allocated to other Plan Participants, applied to reduce Employer Contributions, or used toward administrative expenses of the Plan. General Information Sheet outlines the provisions of the Plan. You should have received a copy of the General Information Sheet along with this SPD. Hours of Service unless the adoption agreement defines otherwise, each hour for that you are paid or entitled to payment for the performance of duties for your Employer. Individual Account the contribution account established and maintained for you that is made up of all contributions made by you or on your behalf, adjusted according to any earnings or losses due to market fluctuations. Individual Retirement Account (IRA) a separate individual retirement plan established by, or on behalf of, the Participant. The IRA may be a traditional one that accepts rollovers of pretax balances or a Roth IRA that accepts rollovers of Roth Elective Deferral accounts. Key Employee an Employee who at any time during the Plan Year is an officer of the Employer having annual Compensation greater than $130,000 (indexed); a five-percent owner of the company; or a one-percent owner of the company with annual Compensation exceeding $150,000. Loan Disclosure the form that outlines the loan program available under your Plan. Your Plan offers a loan program, and a copy of the Loan Disclosure is included in this SPD. Matching Contribution a contribution made by your Employer to the 401(k) plan on your behalf based upon your Elective Deferrals made to the Plan. Nondeductible Employee Contributions generally not permitted. A contribution that you make to a plan on an after-tax basis. These contributions do not include Roth Elective Deferrals and may only be made to 401(k) plans and certain 403(b) plans. Nonelective Contributions a contribution made by your Employer on your behalf in lieu of a Matching Contribution. These contributions may only be made as Safe Harbor cash or deferred arrangement (CODA) Contributions or to SIMPLE 401(k) plans. Normal Retirement Age the age specified in the General Information Sheet and is generally age 65. If no age is specified, the Normal Retirement Age is 59½. Upon attaining the specified age, you will become 100% vested in your Individual Account and may be entitled to a distribution. Outside Plan Investment investment option maintained outside of those offered through Paychex and is outside the scope of your Core Funds. Participant an Employee who has met the eligibility requirements, has entered the Plan, and has become eligible to make or receive a contribution to his or her Individual Account. Qualified Retirement Plan and Trust Summary Plan Description Page 1 of 26 Rev. 02/13
8 Plan the retirement plan your Employer has set up. The Plan is controlled by a legal document containing many technical and detailed provisions. The Plan Administrator has a copy of the Plan document. Plan Administrator the Employer. The Plan Administrator is responsible for directly administering the Plan. Plan Year the 12-consecutive-month period upon which the Plan is maintained. Pretax Elective Deferrals the dollars you put into the Plan through pretax payroll deductions. Qualified Distribution a distribution of Roth Elective Deferral account balances where the participant satisfies the requirements of attaining age 59½, death or disability, and completion of the 5-year participation period. Qualified Joint and Survivor Annuity (QJSA) a lifetime annuity payment to a Participant who separates from service. When the Participant dies, periodic payments will continue to a surviving spouse in a percentage specified in the General Information Sheet. A Plan Participant may waive the QJSA form of distribution and elect an alternative form of distribution. Profit sharing or 401(k) plans that are subject to the Retirement Equity Act (REA) Safe Harbor provisions will pay your benefits under the Plan in a form other than an annuity. Refer to the General Information Sheet to determine if your Plan is subject to the REA Safe Harbor provisions. Related Employer an Employer that has ownership in common with the Employer establishing this Plan. Required Beginning Date the date distribution of benefits is generally required to commence. The date is no later than April 1 of the calendar year following the year you attain age 70½ or, if later, April 1 of the calendar year following the year in which you retire. However, if you own more than 5% of your Employer, distributions are required to commence no later than April 1 of the calendar year following the year you attain age 70½. Roth Elective Deferrals the dollars you put into the Plan through post-tax payroll deductions. The Roth Elective Deferral may not be an option available to your Plan. Self-Directed Brokerage Account (SDBA) an investment option that enables the Participant to select investments outside the scope of your Core Funds. It allows you to invest in a broader range of investments, including additional mutual funds, stocks, and bonds. The SDBA is available in Plans in which the Plan Administrator has elected this as an investment option. It may not be an investment option available to your Plan. Taxable Wage Base the base salary amount, as indexed annually by the Social Security Administration, upon which the Employer s Social Security obligation is determined. SECTION ONE: EFFECTIVE DATE In general, your Employer selects the Effective Date of this Plan. Refer to your General Information Sheet to determine what the Effective Date is. SECTION TWO: ELIGIBILITY AND PARTICIPATION Part 1. Part 2. Part 3. What are the eligibility requirements of the Plan? Employees Eligible to Participate The Plan may require or permit your Employer to exclude certain classifications of Employees from participation. Refer to the General Information Sheet to determine if any Employee classifications have been excluded from participation in your Plan. Age and Service Requirements To be eligible to participate in the Plan, you may be required to reach a certain age and/or complete a certain number of years of service for your Employer. Under some circumstances, you may be given credit for years of service with predecessor employers. Refer to the General Information Sheet for minimum age and service requirements. Replacement Plan If this is restatement of a prior Plan with the same Employer, in which you were a Participant, you will automatically participate. After I meet the eligibility requirements, when do I actually become a Participant in the Plan? During each Plan Year there are generally at least two Entry Dates upon which you can begin participation. The Plan Entry Dates for your Plan are indicated in the General Information Sheet. After you have met the eligibility requirements, you will enter the Plan and thus become a Participant on the applicable Entry Date. Once I am a Plan Participant, what must I do to continue to participate in the Plan? You will continue to participate in the Plan while you are still employed by the Employer, even if you have a break in eligibility service. A break in service is a 12-consecutive-month period during which you fail to work more than the minimum number of Hours of Service. Unless otherwise stated in the General Information Sheet, this is 500 hours. However, no break in service will occur if the reason you did not work more than 500 hours was because of certain absences due to birth of a child, pregnancy or adoption of children, military service or other service during a national emergency during which your re-employment under a federal or state law is protected and you do, in fact, return to your employment within the time required by law. If you had met the eligibility requirements and were a Participant in the Plan before terminating employment or having a break in eligibility service, and are later rehired, you will enter the Plan immediately. Qualified Retirement Plan and Trust Summary Plan Description Page 2 of 26 Rev. 02/13
9 Subsection I. Contributions to 401(k) Plans SECTION THREE: CONTRIBUTIONS TO THE PLAN You are generally allowed to make Pretax Elective Deferrals to the Plan through payroll deductions. Refer to the General Information Sheet to determine if you are permitted to make Roth Elective Deferrals. Your Employer may also make various contributions to the Plan on your behalf. These may include the following: Matching Contributions these contributions match a percentage of your Elective Deferrals and Catch-up Contributions made to the Plan. Employer Profit Sharing Contributions these contributions are discretionary. Your entitlement to an Employer Profit Sharing Contribution is not dependent upon making Elective Deferrals. Nonelective Contributions in lieu of Matching Contributions, your Employer may make these contributions. Nonelective Contributions may only be made as Safe Harbor CODA Contributions or to SIMPLE 401(k) Plans. Qualified Nonelective Contributions and Qualified Matching Contributions these contributions may be made by your Employer to satisfy special nondiscrimination rules that apply to the Plan. These contributions are fully vested when made and are subject to the same restrictions on withdrawals applicable to Elective Deferrals. These types of contributions are available under a 401(k) Plan at the Employer s discretion. Nondeductible Employee Contributions some 401(k) plans allow Participants to make after-tax contributions to the Plan that accrue earnings on a tax-deferred basis. These contributions are called Nondeductible Employee Contributions. Refer to the General Information Sheet to determine the types of contributions available under your Plan. Part 1. Elective Deferrals The General Information Sheet provides specific information about Elective Deferrals unique to your Plan. A. How do I make Elective Deferrals? If you wish to make Elective Deferrals and the Plan permits it, you must complete and sign an Enrollment/Change Form or follow another Deferrals election process provided to you by your employer. Once you become eligible to participate in the Plan, the Employer will provide you with instructions. Information is also available in the Fee Disclosure for Participants document. EXAMPLE: Your Compensation is $15,000. You wish to make an Elective Deferral to the Plan and sign an Enrollment/Change Form authorizing an Elective Deferral of 5% of your Compensation. As a result, your Employer will pay you $14,250 as gross taxable income and will deposit your 5% Elective Deferral ($750) into the Plan for you. You may change the amount or percentage of your pay that you are putting into the Plan as often as specified in the General Information Sheet or in the Enrollment/Change Form. If you want to change the amount or percentage of your Elective Deferral, you must execute a new Enrollment/Change Form and return it to your Plan Administrator at least 30 days before the change will take effect, or a lesser number of days if the Plan Administrator permits or notify your Employer of your desire to change your Deferral rate using another method approved by your Employer (i.e., internet, telephone voice response system). NOTE: If the Plan elects to follow the Safe Harbor CODA Contribution provisions, a notice from the Employer will be provided to you if you are a Participant. This notice will be provided at least 30 days, but no more than 90 days, before the beginning of the Plan Year. The notice will also be provided within 90 days prior to and no later than the day you first become a Participant. Once you have received the notice, you have 30 days to make or modify an Elective Deferral election. This election period is in addition to any other election period allowed by the Employer to modify or discontinue Elective Deferrals. Automatic Elective Deferrals If your Plan provides for automatic Elective Deferrals, your Elective Deferrals will be considered Pretax Elective Deferrals unless your Employer has designated that they will be Roth Elective Deferrals. Refer to the General Information Sheet or Enrollment/Change Form to determine if your Employer may make payroll deductions without you completing and signing the Enrollment/Change Form. B. How much may I defer each year? The Internal Revenue Code (IRC) limits the maximum amount you may put into the Plan during each of your tax years. Most people pay income tax on a calendar-year basis. The deferral limit for 2010 is $16,500 and $17,000 for This limit may be adjusted periodically by the Internal Revenue Service (IRS) for increases in cost-of-living. This limit applies to all Elective Deferrals you make during your tax year to any 401(k) plans maintained by your present or former employers. Your Plan may also limit the amount of the Elective Deferrals you may make. Refer to the General Information Sheet to determine what that limit is. Elective Deferrals you make to a SIMPLE 401(k) plan are subject to a different dollar limit. The SIMPLE 401(k) deferral limit for 2010 is $11,500. The $11,500 limit will be adjusted periodically by the IRS for increases in cost-of-living. C. May I stop making Elective Deferrals? Yes, you may stop making Elective Deferrals by executing an Enrollment/Change Form, which your Employer will provide or follow another Deferrals election process provided to you by your employer. You are permitted to stop making Elective Deferrals at any time. Your General Information Sheet provides additional information about making Elective Deferrals to your Plan. If you stop your Elective Deferrals, you may begin putting money in the Plan again at any time. D. What if I defer more than the maximum amount allowed? If you put too much money into the Plan through Elective Deferrals, the excess amount and any earnings you may have received on the excess must be taken out of the Plan by April 15 of the year following the year the money went into the Plan. You are responsible for notifying your Employer of the excess Elective Deferral by the date specified in the General Information Sheet. Any contributions in Qualified Retirement Plan and Trust Summary Plan Description Page 3 of 26 Rev. 02/13
10 excess of the IRC limits will be taxable income for the year in which you put the excess into the Plan. If the excess is not removed from the Plan by April 15, you will have to pay additional income tax. EXAMPLE: In 2010, you make an excess contribution of $100 and have $10 of earnings on the excess. You remove $110 by April 15, The $110 will be reported on a Form 1099R and you will pay income tax on that amount. You must sign a form to claim a return of any excess amounts that you put into the Plan. Your Employer will furnish the form to you, and you must return it to your Employer by the date specified in the General Information Sheet. E. May highly compensated Participants contribute the maximum amount? Highly compensated employees making Elective Deferrals may be subject to additional limitations on Elective Deferral amounts contributed to the Plan for each Plan Year. The IRC and tax rules define highly compensated employee for these purposes. Highly compensated employees making Elective Deferrals are limited in the percent of the Compensation that they may defer based on the average percent of Compensation deferred by the non-highly compensated group of employees during the Plan Year. If these limits apply to you, your Plan Administrator will give you additional information. The additional limitations described above do not apply to SIMPLE 401(k) plans or plans meeting the Safe Harbor CODA Contribution requirements. F. Are Catch-up Contributions available under the Plan? Unless otherwise indicated in the General Information Sheet, all Employees who are eligible to make Elective Deferrals under your Plan and who have attained age 50 before the close of the Plan Year are eligible to make Catch-up Contributions, not to exceed the applicable dollar amount for the year. In addition, certain limits, as required by law, must be met prior to being eligible to make a Catch-up Contribution. The primary limit you must meet is the annual deferral amount permitted by the IRS. For 2011, this limit is $16,500 and for 2012 it is $17,000. If you are eligible for, and elect to make, a Catch-up Contribution in 2011, you will be required to first make a $16,500 salary deferral. However, you will not be required to make the maximum annual deferral amount permitted by the IRS if the Plan limits salary deferrals to a percentage of your annual Compensation that is less than the IRS limit. Finally, if you are a highly compensated employee, the Catch-up Contribution you are eligible to make may be limited by other limits set by the IRC. See your Plan Administrator for additional information. Part 2. Employer Matching Contributions Your Plan may provide for Matching Contributions. If so, the General Information Sheet provides specific information about Matching Contributions unique to your Plan. A. What must I do to share in an Employer Matching Contribution? You may receive Matching Contributions if you make Elective Deferrals, and/or Catch-up Contributions to the Plan. To share in the Matching Contribution, you must be a qualifying contributing Participant in the Plan. Some plans require that you work a minimum number of hours or require you to be working for the Employer on the last day of the Plan Year to share in the Matching Contribution. Refer to the General Information Sheet to determine if a minimum number of hours worked requirement applies to your Plan. Plans may waive hourly and/or last day requirements under certain circumstances such as death, disability, etc. Refer to the General Information Sheet to determine if and when such requirements are waived. The amount of your Matching Contribution will be based upon the formula described in the General Information Sheet. EXAMPLE: Your annual Compensation is $15,000. You agree to make an Elective Deferral of 10% of your Compensation. Under the terms of the Plan, assume your Employer has selected a Matching Contribution formula that will match your Elective Deferrals on the basis of 50% for each percentage you contribute. For the Plan Year, your Elective Deferral will be $1,500 and the Matching Contribution will be $750. B. Are highly compensated Participants eligible to receive Matching Contributions? Yes. However, additional limitations may exist on the Matching Contribution amounts. The IRC and tax rules define highly compensated employee for these purposes. If these limits apply to you, your Plan Administrator will provide additional information about them. The additional limitations described above do not apply to SIMPLE 401(k) plans or plans meeting the Safe Harbor CODA Contribution requirements. Part 3. Employer Contributions Unless your Plan is a SIMPLE 401(k) plan, your Employer will decide each Plan Year whether to make a contribution based on your Compensation to the Plan, unless a more detailed method of determining the amount of an Employer Contribution is specified in the General Information Sheet. This contribution is also referred to as a profit sharing contribution. A. What must I do to share in the Employer Contribution? To share in the Employer Contribution, you must be a Participant in the Plan. Some plans require that you work a minimum number of hours or be working for the Employer on the last day of the Plan Year to share in the Employer Contribution. Refer to the General Information Sheet to determine if this applies in your Plan. Plans may waive hourly and/or last day requirements under certain circumstances such as death, disability, etc. Refer to the General Information Sheet to determine if and when the minimum Hours of Service and/or last day requirements may be waived. If the Plan is top-heavy and an Employer Contribution is made, you may be eligible to receive a portion of the contribution, even if you fail to work the required number of Hours of Service, as long as you are a Participant and you are employed on the last day of the Plan Year. B. What portion of the Employer Contribution will be allocated to my Individual Account? How the Employer Contribution is allocated to your Individual Account depends on the allocation formula selected by your Employer. Refer to the General Information Sheet to determine which of the following formulas will be used. Qualified Retirement Plan and Trust Summary Plan Description Page 4 of 26 Rev. 02/13
11 Pro Rata Allocation if this Plan allocates contributions on a pro rata basis and a contribution is made, you will receive a pro rata portion of the contribution equal to the ratio of your Compensation to the Compensation of all Participants. EXAMPLE: Assume you are one of 10 Participants in the Plan and your Compensation is $10,000. Assume further the Compensation of all Participants when added together equals $100,000. The ratio of your Compensation ($10,000) to that of all Participants ($100,000) is 1/10. Therefore, 1/10 of the contribution made by your Employer to the Plan will be allocated to your account (that is, $10,000). Flat Dollar Allocation if this Plan allocates contributions on a flat dollar basis, each Participant in the Plan will receive the same contribution dollar amount. Integrated Allocation if this Plan uses an integrated allocation formula, the contribution your Employer makes will consist of two parts: a base contribution and an excess contribution. The base contribution will be a percentage of your Compensation up to the integration level. The excess contribution will be a percentage of your Compensation above the integration level. The integration level is the Social Security Taxable Wage Base for the year unless otherwise specified in the General Information Sheet. Age-Weighted Allocation if this Plan allocates contributions on an age-weighted basis, the contribution will be allocated among the accounts of Participants according to a formula that, in addition to Compensation, takes into account the ages of Participants. As a result, older Participants generally receive a greater contribution relative to that of younger Participants. The particular formula used to allocate the contribution in your Plan assumes various facts as a prerequisite to making specific allocations to the Individual Accounts of Participants. Consult your Plan Administrator for such assumptions unique to your Plan. New Comparability Allocation if this Plan uses a new comparability allocation formula, your Employer has designated two or more allocation groups for this Plan. Each allocation group contains a designated class of Employees. In years that the Employer makes a contribution, a contribution will be made for each allocation group. Your Employer may contribute a different percentage of Compensation for each group. Refer to the General Information Sheet for a description of the allocation groups. Part 4. Nondeductible Employee Contributions Your Plan does not allow Nondeductible (after-tax) Employee Contributions. Part 5. Rollover/Transfer Contributions Your Plan may allow you to make rollover and/or transfer contributions to this Plan. Your Plan may also allow you to make rollover contributions to another Roth Elective Deferral account from an Eligible Retirement Plan other than a Roth IRA. Refer to the General Information Sheet to determine if these contributions can be made under your Plan. A. Are rollovers and transfers subject to a vesting schedule? No. You are always 100% vested in your rollover and/or transfer contributions. B. When may I withdraw rollover and transfer contributions? Unless stated otherwise in the General Information Sheet, rollover and transfer contributions will generally be subject to the Plan s provisions regarding timing of distributions (the provisions are described in this section of this SPD and the Distributions section of the General Information Sheet). However, assets transferred from a money purchase pension plan to this Plan may not be distributed before your retirement, death, disability, severance from employment, or prior to Plan termination. Part 6. Nonelective Contributions If your Plan is a SIMPLE 401(k) plan, or elects the Safe Harbor CODA Contribution provisions, your Employer must make either a Matching Contribution or a Nonelective Contribution. Your Employer will notify you before the beginning of each Plan Year as to which type of contribution will be made. A. What must I do to share in the Nonelective Contribution? To share in the Nonelective Contribution, you must have satisfied the Plan s eligibility requirements, entered the Plan, and earned a minimum amount of Compensation during the year. Refer to the General Information Sheet to determine the Compensation requirements. In addition, a Safe Harbor CODA plan may limit the contribution to non-highly compensated participants (NHCE). Refer to the General Information Sheet to determine if the Plan limits contributions to NHCEs. B. What portion of the Nonelective Contributions will be allocated to my account? If your Plan is a SIMPLE 401(k) and you are eligible to receive a Nonelective Contribution, you will receive a contribution equal to 2% of your Compensation. If your 401(k) Plan elects the Safe Harbor CODA Contribution provisions and you are eligible to receive a Nonelective Contribution, you will receive a contribution equal to at least 3% of your Compensation. Refer to the General Information Sheet for the exact contribution that will be made on your behalf. Part 7. Military Service A. If I am reemployed by my Employer after completing military service, am I entitled to make-up contributions? Yes. If your Plan permits Deferrals, you may also have the option of making up missed employee contributions and receiving a Matching Contribution, if applicable, on these contributions. Please discuss these options with your Plan Administrator. B. If I die or become Disabled during military service, will the time I was providing military service be considered for determining whether I will receive employer contributions? If you die or become disabled during military service, the time while providing military service will be included for determining whether you are entitled to employer contributions. You will be treated as if you had been reemployed on the day before your death or disability and terminated on the day of death or disability to determine your Plan contributions. Qualified Retirement Plan and Trust Summary Plan Description Page 5 of 26 Rev. 02/13
12 Subsection II. Contributions to Profit Sharing and Money Purchase Pension Plans Part 1. Part 2. Part 3. Part 4. Part 5. Part 6. What are the sources of Plan contributions? All contributions will be Employer Contributions made by your Employer. You may also make rollover and/or transfer contributions to the Plan. How will the amount of the Employer Contribution be determined? If this is a profit sharing plan, your Employer will decide whether or not to make a contribution based on your Compensation to the Plan during the applicable computation period. Generally, total contributions to a profit sharing plan will not exceed 25% of Participants Compensation each year. If this is a money purchase pension plan, your Employer will contribute the percentage of Compensation or amount specified in the General Information Sheet. Contributions to a money purchase pension plan can range from 0% to 25% of a Participants Compensation each year. What must I do to share in the Employer Contribution? To share in the Employer Contribution, you must be a Participant in the Plan. Some plans require that you work a minimum number of hours or be working on the last day of the Plan Year to share in the Employer Contribution. Refer to the General Information Sheet to determine if either of these applies in your Plan. NOTE: If the Employer has established a standardized Plan and you are employed on the last day of the Plan Year, you are not required to work a minimum number of hours to receive an Employer Contribution, regardless of whether or not a minimum number of hours worked requirement is specified on your General Information Sheet. Plans may waive hourly and/or last day requirements under certain circumstances such as death, disability, etc. Refer to the General Information Sheet to determine if and when the minimum Hours of Service and/or last day requirements are waived. If the Plan is top-heavy and an Employer Contribution is made, you may be eligible to receive a portion of the contribution, even if you fail to work the required number of Hours of Service, as long as you are a Participant and you are employed on the last day of the Plan Year. What portion of the Employer Contribution will be allocated to my Individual Account? How the Employer Contribution is allocated to your Individual Account depends on the allocation formula selected by your Employer. Refer to the General Information Sheet to determine which of the following formulas will be used. Pro Rata Allocation if this Plan allocates contributions on a pro rata basis and a contribution is made, you will receive a pro rata portion of the contribution equal to the ratio of your Compensation to the Compensation of all Participants. EXAMPLE: Assume you are one of 10 Participants in the Plan and your Compensation is $10,000. Assume further the Compensation of all Participants when added together equals $100,000. The ratio of your Compensation ($10,000) to that of all Participants ($100,000) is 1/10. Therefore, 1/10 of the contribution made by your Employer to the Plan will be allocated to your account (that is, $10,000). Flat Dollar Allocation if this Plan allocates contributions on a flat dollar basis, each Participant in the Plan will receive the same contribution dollar amount. Integrated Allocation if this Plan uses an integrated allocation formula, the contribution your Employer makes will consist of two parts: a base contribution and an excess contribution. The base contribution will be a percentage of your Compensation up to the integration level. The excess contribution will be a percentage of your Compensation above the integration level. The integration level is the Social Security Taxable Wage Base for the year unless otherwise specified in the General Information Sheet. Age-Weighted Allocation if this Plan allocates contributions on an age-weighted basis, the contribution will be allocated among the accounts of Participants according to a formula that, in addition to Compensation, takes into account the ages of Participants. As a result, older Participants generally receive a greater contribution relative to that of younger Participants. The particular formula used to allocate the contribution in your Plan assumes various facts as a prerequisite to making specific allocations to the Individual Accounts of Participants. Consult your Plan Administrator for such assumptions unique to your Plan. New Comparability Allocation if this plan uses a new comparability allocation formula, your Employer has designated two or more allocation groups for this Plan. Each allocation group contains a designated class of Employees. In years that the Employer makes a contribution, a contribution will be made for each allocation group. Your Employer may contribute a different percentage of Compensation for each group. Refer to the General Information Sheet for a description of the allocation groups. What is meant by my Compensation? The definition of Compensation for Plan purposes can vary for many reasons. For example, federal law may require use of one definition of Compensation for nondiscrimination testing and another for contribution allocation purposes. In general, the amount of your earnings from your Employer taken into account under the Plan is all earnings reported to you on Form W-2. In the event your Compensation exceeds an annual limit imposed by the IRC, only the amount of Compensation up to that limit will be counted as Compensation under the Plan. For 2010 this limit is $245,000 and will be adjusted periodically by the IRS for increases in cost of living. See your Plan Administrator for the current year s limit on Compensation. Refer to the General Information Sheet to determine whether a more specific definition of Compensation is provided under the Plan. Differential military pay received from your Employer while you are on active duty with the uniformed services for a period of more than 30 days, will be considered additional Compensation paid to you for purposes of determining Plan contributions. Where does the contribution made on my behalf go? The Employer makes the contribution to a trust fund where all dollars are held for the benefit of the Participants. The Employer must establish and maintain an Individual Account for each Participant. The Individual Account is used to track each Participant s share in the total trust fund. Qualified Retirement Plan and Trust Summary Plan Description Page 6 of 26 Rev. 02/13
13 Part 7. Rollover/Transfer Contributions Your Plan allows you to make rollover and/or transfer contributions. The Plan may accept rollover contributions and/or Direct Rollovers of distributions from an Eligible Retirement Plan. A. Are rollovers and transfers subject to a vesting schedule? No. You are always 100% vested in your rollover and/or transfer contributions. B. When may I withdraw rollover and transfer contributions? Unless stated otherwise in the General Information Sheet, rollover and transfer contributions will generally be subject to the Plan s provisions regarding the timing of distributions (the provisions are described in this section of this SPD and the Distribution portion of the General Information Sheet). However, assets transferred from a money purchase pension plan to this Plan may not be distributed before your retirement, death, disability, severance from employment, or prior to Plan termination. Subsection III. Limitations on Contributions and Allocations Part 1. Do any limits apply to the amount that may be allocated to my Individual Account for any Plan Year? Yes. The amount that may be allocated to your Individual Account for any year is subject to IRC provisions limiting your allocation amount to the lesser of $42,000 (indexed) or 100% of your Compensation paid to you by your Employer for a given year. The limit for 2010 is $49,000 and will be adjusted periodically by the IRS for increases in the cost of living. See your Plan Administrator for the current year s limit amount. SECTION FOUR: VESTING AND FORFEITURES Part 1. Part 2. Part 3. Part 4. Part 5. When I request my benefits, will I receive the full value of my account(s) established under the Plan? It depends upon the reason you are receiving the distribution and your vested percentage in your contributions. Your distribution will be the full value of your Individual Account (that is, you will be 100% vested) if your Plan is a SIMPLE 401(k) Plan, you reach Normal Retirement Age, or your Employer terminates the Plan or completely discontinues contributions to the Plan. In addition, unless indicated otherwise in the General Information Sheet, your Individual Account will become 100% vested if you die, become disabled (as defined by the Plan, the disability is expected to minimally last for 12 continuous months or until death), satisfy the Early Retirement Age requirements, or attain Normal Retirement Age. However, if you terminate employment, and thus become eligible for a distribution from the Plan, your distribution will only be the vested amount in your Individual Account. How is my vested amount determined? Your vested amount is determined by multiplying a percentage from a vesting schedule by the total value of your Individual Account. The vesting schedule determines how rapidly your money becomes nonforfeitable based upon your years of service. EXAMPLE: Assume you have $10,000 in your Individual Account and you terminate employment when you are 40% vested. Your vested amount would be $4,000 (.40 x $10,000). The vested amount of your Individual Account will depend upon the types of contributions made to your account. All Elective Deferrals and Qualified Nonelective contributions are 100% vested at all times. Refer to the General Information Sheet to determine the vesting schedule that applies to this Plan. If your Employer Matching Contribution is subject to a vesting schedule, your vested benefit is determined by multiplying a percentage from the Plan s vesting schedule by the total amount of the Matching Contributions that have been contributed on your behalf. For Employer Contributions, your vested amount is determined by multiplying a percentage from the Plan s vesting schedule by the total amount of the Employer Contributions contributed on your behalf. The vesting schedule for your Matching Contributions and Employer Contributions determines how fast your money becomes nonforfeitable based upon your years of service. EXAMPLE: You have received $5,000 in Matching Contributions and you are 50% vested. Upon distribution, the vested amount that you will receive is $2,500 and the remaining $2,500 will be forfeited. For SIMPLE 401(k) plans, the Matching Contributions and Nonelective Contributions are 100% vested at all times. For 401(k) plans with Safe Harbor CODA Contributions, the Safe Harbor basic or enhanced Matching Contributions and Safe Harbor Nonelective Contributions are 100% vested at all times. For 401(k) plan with Automatic Enrollment Safe Harbor CODA Contributions, the Safe Harbor match and Nonelective contributions must be fully vested within 2 years. Which vesting schedule will be used to determine my vested benefit? You will become vested according to the vesting schedule(s) selected in the General Information Sheet. If your Plan is a 401(k) plan, different vesting schedules may apply to Matching Contributions and Employer Profit Sharing Contributions. What years of service are counted for vesting purposes? All of your years of service with your Employer are counted for the purpose of determining your vested percentage unless otherwise indicated in the General Information Sheet. Your Plan may also credit years of service with predecessor Employers. If I am not 100% vested and I receive a distribution after terminating employment, what happens to the dollars I leave in the Plan? If you are not 100% vested and receive a distribution, the dollars left in the Plan are called Forfeitures. Nonvested dollars are forfeited after the terminated Participant receives a distribution of a vested benefit. Forfeitures may be used to reduce Employer contributions or allocated to the remaining Participants. Refer to the General Information Sheet to determine how Forfeitures will be applied in your Plan. In addition, your Employer may use forfeitures to pay the administrative expenses of the Plan. Qualified Retirement Plan and Trust Summary Plan Description Page 7 of 26 Rev. 02/13
14 Part 6. Part 7. What happens if I return to work after receiving a distribution of my vested benefit? A former Participant who returns to work for the Employer before incurring five consecutive one-year breaks in service may recapture the forfeited benefit. Generally, your forfeited benefit will be restored immediately by your Employer if you have not incurred five consecutive one-year breaks in service and if you pay back to the Plan the distribution that you received. What happens if I quit my job and incur a break in service and then return? When do I participate again? The answer to these questions depends upon whether you were eligible to participate in the plan at the time of the break in service. If you were eligible: You will participate immediately following your date of reemployment. Your vesting years of service accumulated prior to the time you incurred a break in service will be counted in determining your vested interest unless the number of consecutive one-year breaks in service exceeds five. Years of vesting service accrued after a five year break in service will be disregarded when determining the vested interest of amounts contributed prior to the five consecutive Breaks in Vesting Service. If you were not eligible: Any eligibility service incurred prior to the break in service will not be taken into account. SECTION FIVE: DISTRIBUTION OF BENEFITS, CLAIMS PROCEDURE AND LOANS Part 1. When may I withdraw money from the Plan? Certain events must occur before you may withdraw money from the Plan. Benefits may be withdrawn if any of the following occur: A. Termination of employment after attaining Normal Retirement Age Normal Retirement Age under the Plan is specified in the General Information Sheet. B. Termination of employment after satisfying any Early Retirement Age Requirement The Early Retirement Age conditions, if applicable, are specified in the General Information Sheet. C. Termination of the Plan by your Employer. D. Termination of employment before attaining Normal Retirement Age. E. If your Plan is a 401(k) plan, there are several other circumstances under which you may withdraw Elective Deferrals your Plan may also allow you to take Elective Deferrals out of the Plan upon attainment of age 59½ or if you have a severe financial hardship. Generally, the only financial needs that are considered to meet the financial hardship requirements are deductible medical expenses for you (or your immediate family or primary Beneficiary), purchase of your principal residence, payment of tuition and related educational fees for the next 12 months of post-secondary education for you (or your immediate family or primary Beneficiary), to prevent eviction from your home or foreclosure upon your principal residence, funeral expenses paid by you (or your primary Beneficiary) for your (or your primary Beneficiary s) parents, spouse, children, or dependents, and certain repairs of damage to your principal residence. See your Plan Administrator to determine if any other financial needs meet the financial hardship requirements under your Plan. A hardship distribution cannot exceed the amount of your immediate and heavy financial need. To qualify for a hardship distribution, you must have obtained all distributions and all nontaxable loans from all Plans maintained by your Employer. Your Elective Deferrals will be suspended for six months after receipt of a hardship distribution. Hardship distributions are subject to a 10% penalty tax if received before you reach age 59½. F. Nonelective and basic or enhanced Matching Contributions under the Safe Harbor CODA Contribution provisions these contributions are subject to the same distribution restrictions as Elective Deferrals, except the Safe Harbor CODA Contributions specified here may not be distributed under the hardship distribution provisions. Part 2. What are the distribution rules that apply to the Roth Elective Deferral balances? The entire amount of the Roth Elective Deferral Account, including investment earnings, will be distributed to you tax-free if the qualified distribution rule is satisfied. A distribution is qualified if both of the following criteria are satisfied: 1. the distribution occurs after a five-taxable-year ( five-year ) period of participation. The five-year period begins on the first day of your taxable year in which you first made Roth Elective Deferrals to the Plan and ends when five consecutive taxable years have passed. For example, if your first Roth Elective Deferral is made on February 1, 2007, the five-year period begins January 1, 2007 and you may not receive a qualified distribution before January 1, and 2. at least one of the following events has occurred: employee attains age 59½, death of the participant, or long-term disability. Part 3. May I take a payout from the Plan under any other circumstances? Refer to your General Information Sheet to determine if in-service withdrawals are permitted under your Plan. If so, under certain circumstances, you may take a payout of all or a portion of your vested benefits. The amount that you may withdraw may depend upon the length of time that you have participated in the Plan and the reason for the withdrawal. See your Plan Administrator for further information on in-service withdrawals. The Distribution section of your General Information Sheet will list any additional circumstances under which you may take distributions. May I take a distribution from the Plan if I am an active-duty member of the armed forces? If you are on active duty in the uniformed services for a period of more than 30 days, you may elect to take a distribution of your Elective Deferrals from the Plan while you are on active duty without severing from employment with your Employer. However, if you Qualified Retirement Plan and Trust Summary Plan Description Page 8 of 26 Rev. 02/13
15 choose to take distributions under this provision, you will not be permitted to make Elective Deferrals or Nondeductible Employee Contributions to the Plan during the six-month period beginning on the date of the distribution. Does the Plan offer any special relief to me if I was affected by the Midwestern storms, tornados and flooding that occurred in 2008? Your Plan provides for tax-favored withdrawals, repayments, and loans from the Plan if you suffered economic losses as a result of the Midwestern storms, tornados and flooding. A Midwestern disaster area is an area for which a major disaster was declared by the President during the period beginning on May 20, 2008, and ending on July 31, 2008, in the state of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, or Wisconsin, as a result of severe storms, tornadoes, or flooding that occurred on the applicable disaster date. See Tables 1 and 2 of IRS Publication 4492-B for a list of the counties included in the Midwestern disaster areas. Please speak to your Plan Administrator for details. Part 4. How will my benefits be paid to me? In addition to the information provided in this section, read the Participant Distribution Notice and Special Tax Notice Regarding Plan Distribution contained in Section Ten. A. Payments from the Plan that are Eligible Rollover Distributions may be taken in two ways. You may have all or any portion of your Eligible Rollover Distribution either (1) paid in a Direct Rollover to an Individual Retirement Account (IRA) or another Eligible Retirement Plan, or (2) paid to you. Roth Elective Deferrals and the associated earnings, however, may not be rolled over to a traditional IRA, but may be rolled over to a Roth IRA. If you choose to have your Plan benefits paid to you, you will receive only 80% of the payment because the Plan Administrator is required to withhold 20% of the payment and send it to the IRS as income tax withholding to be credited against your taxes. Also, additional income tax may be withheld if the state you reside in requires the withholding. Contained within this SPD is a Qualified Retirement Plan Distribution Notice. This notice contains information about your options at the time of distribution. This information will, among other things, define what an Eligible Rollover Distribution is. B. If your vested Individual Account (that is, the amount of money in the Plan you are entitled to) is no more than $5,000, your benefits will be paid, either directly to you in a single lump-sum payment, or as a Direct Rollover to a traditional IRA (Roth Elective Deferrals and their earnings may be rolled over to a Roth IRA). If this amount does not qualify as an Eligible Rollover Distribution or the amount is $1,000 or less, your benefits will be paid directly to you. When determining the current value of your vested Individual Account, prior rollover contributions in the Individual Account may be disregarded. Please refer to the General Information Sheet. C. If your vested Individual Account is in excess of $1,000, but no more than $5,000, you may request that your benefits be paid directly to you in a single lump sum payment; or as a Direct Rollover to an IRA of your choosing, or another Eligible Retirement Plan. When determining the vested value of your Individual Account, prior rollover contributions may be disregarded. If you fail to make one of these elections, your benefits will be distributed as an Automatic Rollover. An Automatic Rollover is generally one made to an IRA chosen by the Plan Administrator. Refer to Section Ten: Qualified Retirement Plan Distribution Notice for additional information on the Automatic Rollover requirement. i. If your benefit is distributed as an Automatic Rollover, the IRA will be invested in an investment product that is designed to preserve principal and provide a reasonable rate of return and liquidity, such as a money market or stable value fund. ii. The setup fee for the IRA will be paid out of your vested Individual Account. Once the IRA is established, any other fees or expenses may be charged against your IRA by the IRA provider. iii. If you have questions about Automatic Rollover to an IRA, contact the Plan Administrator. D. If your Plan is a profit sharing or 401(k) plan subject to the Retirement Equity Act (REA) Safe Harbor provisions, payouts of your benefits under the Plan will be made in a form other than an annuity. Refer to the General Information Sheet to determine if your Plan is subject to the REA Safe Harbor provisions. E. If your Plan is not subject to the REA Safe Harbor provisions and your vested Individual Account balance is more than $5,000, your payouts will be in the form of an annuity, unless the annuity option is waived. An annuity will provide you with a series of periodic payments, usually monthly. The annuity must be purchased from an insurance company. The size of the payments you receive from the annuity will depend upon many factors, including the value of your vested Individual Account balance. i. If you are married, the annuity will provide monthly payments for as long as you or your spouse lives. This type of annuity is called a Qualified Joint and Survivor Annuity. If you die before your spouse, the monthly payments to your spouse will be a percentage of the payments you had been receiving before your death. Refer to the General Information Sheet to determine the survivor annuity percentage. ii. If you are not married, the type of annuity you will receive will provide you with monthly payments for as long as you live. iii. If you do not want an annuity payout, you may choose other types of payments. To waive the annuity option, you must fill out and sign a waiver form. If you are married, your spouse must consent to and sign the waiver form in the presence of a Notary Public. You and your spouse may sign the waiver form any time within 90 days of the start of your payments. EXAMPLE: Bill wants to start receiving money on March 31, He and his spouse may sign the waiver form any time from January 1 through March 31, Bill may now take his money in another form of payment, such as a single lump sum payment. F. Contributions made to the Plan by you or on your behalf may be used to purchase units in various investment funds. The value of these funds can change daily. Because the value of your units can change daily, the value shown on your statement(s) will generally be different than the actual amount you receive for a payout. Part 5. Once I become eligible to receive benefits, when will they be distributed to me? If you terminate employment and the vested value of your Individual Account (including rollovers) is no more than $5,000, the Plan Administrator may direct that your benefits be paid as soon as administratively practicable. Generally, if the balance is between $1,000 Qualified Retirement Plan and Trust Summary Plan Description Page 9 of 26 Rev. 02/13
16 Part 6. Part 7. and $5,000, and the employer directs the balance to be paid, and you have not provided distribution instructions, the balance will be distributed to an Individual Retirement Account established in your name. If the vested value of your Individual Account is more than $5,000, your benefits will not be paid until you submit a written request to the Plan Administrator for payment. The Plan Administrator will provide you with the proper request forms. Once the Plan Administrator has received a completed request, payment will be made as soon as administratively practicable. If the value of your Individual Account includes a balance in the Self-Directed Brokerage Account, the entire SDBA fund must be transferred to the Core Funds before a distribution may be processed. Even if I am eligible to receive benefits, must I have my benefit distributed from the Plan? If the vested value of your Individual Account exceeds $5,000, your benefit will not be distributed until you request payment from the Plan Administrator. Your benefit could be left in the Plan until you retire. However, you must begin taking required minimum distributions at age 70½ if you are a more than 5% owner. Refer to Part 7 below for additional information about minimum distributions. What are required Minimum Distributions? The tax laws and regulations require you to start taking minimum distributions from the Plan by April 1 of the year following the year in which you turn 70½ years of age, if you are considered to own more than 5% of your Employer. If you own 5% or less of your Employer, you must begin taking minimum distributions from the Plan by April 1 of the year following the year you turn 70½ years of age, or, if later, April 1 of the year following the year in which you retire. Minimum distributions must continue every December 31 thereafter. In general, the amount of the annual minimum distribution is determined by dividing the balance in your Individual Account by a life expectancy factor. The life expectancy factor is published by the IRS. If I am over age 70½ and would ordinarily be required to take a distribution for 2009 or if I die and my beneficiary would ordinarily be required to take a distribution for 2009, is the distribution for 2009 optional? Yes. Unless directed otherwise, your Employer will retain the amount that would have been required to be distributed for 2009 within the Plan. If my beneficiary must take a distribution under the five-year rule described in my Summary Plan Description, does 2009 count toward determining the deadline for receiving a distribution? If your beneficiary is using the five-year rule for distributions, 2009 does not count toward determining the end of the five-year period. For example, if you died in 2007, your beneficiary will have until December 31, 2013, instead of December 31, 2012, to deplete your account under the Plan. If I am married and the spousal consent rules apply to the Plan, will my spouse have to provide consent if I will not receive a 2009 required payment or provide consent to begin payments again in 2010? Your spouse s consent may be required to either stop required payments for 2009, begin payments again in 2010, or both. You may check the Summary Plan Description previously provided to you to determine if the spousal consent rules apply to the Plan and, if so, your Plan Administrator can tell you whether spousal consent is needed to stop and/or re-start required distributions. If I receive a 2009 required distribution, may I roll over my money into another retirement plan? You may choose to rollover your distribution to another eligible retirement arrangement. Contact your Plan Administrator for the documentation and procedures that apply to rollovers. Part 8. Do any restrictions or penalties apply on distributions? Yes. If you receive a distribution before reaching age 59½, you must pay an additional early withdrawal 10% penalty tax on the portion of the distribution that is included in income. There are limited exceptions to the 10% early distribution penalty. Your tax advisor can tell you if one of the exceptions applies to your distribution. Part 9. What happens to my benefits if I die? A. Your Beneficiary will receive the total value of your Individual Account when you die. If you are married, your spouse will automatically be your Beneficiary. To choose another Beneficiary, you must sign a written form listing a nonspouse Beneficiary. Your spouse must give written consent to this in the presence of a Notary Public or authorized Plan representative. NOTE: Contact your Plan Administrator if you wish to choose a nonspouse Beneficiary. B. If the vested value of your Individual Account is no more than $5,000, your nonspouse Beneficiary will receive a lump sum payment of the entire amount unless the Beneficiary elects to have the distribution directly rolled into an IRA that is established as an inherited IRA. If your Beneficiary is your spouse, or otherwise qualifies as a recipient, an Eligible Rollover Distribution that exceeds $1,000, but does not exceed $5,000, will be directly rolled into a traditional IRA (Roth Elective Deferrals and their earnings will be directly rolled into a Roth IRA), unless the Adoption Agreement specifies otherwise or you direct the Plan Administrator otherwise. C. If your Plan is a profit sharing plan or 401(k) plan and is subject to the Retirement Equity Act (REA) Safe Harbor provisions and the value of your Individual Account is greater than $5,000, your Beneficiary will receive a payout(s) in one of the following forms of distribution: lump sum, installment payments, or applied to purchase an annuity contract. Refer to the General Information Sheet to determine if any of the preceding forms are unavailable. D. If the value of your Individual Account is greater than $5,000 and your Plan is not subject to the Retirement Equity Act (REA) Safe Harbor provisions, your Beneficiary will receive the money in periodic payments from an insurance company, unless a special form is signed. These periodic payments will usually be made on a monthly basis for as long as your Beneficiary lives. EXAMPLE: Clarence, age 38, signs the waiver form. Mildred, his wife, signs the waiver form in the presence of a Notary Public. Clarence dies two years later. Mildred now has a choice of payments. She can, for example, take all the money in a single lump sum and roll it into her traditional IRA. Qualified Retirement Plan and Trust Summary Plan Description Page 10 of 26 Rev. 02/13
17 Part 10. Part 11. Part 12. Part 13. Part 14. Part 15. Part 16. If your Beneficiary is not your spouse and you want to give your Beneficiary a choice as to how he or she wants to receive the money, you must sign a special form. This form must also be signed by your spouse in the presence of a Notary Public. If you are under age 35 when you sign this form, you must sign a new form once you reach age 35. NOTE: Contact your Plan Administrator if you wish to preserve the option of taking payouts in a form other than an annuity. Are there any circumstances under which I may lose, be denied, or have anticipated benefits reduced under the Plan? Loss, denial, or reduction of anticipated benefits may occur if you terminate employment before becoming fully vested or if all or a portion of your benefit is set aside for an alternate payee under a qualified domestic relations order (QDRO). (Participants and Beneficiaries may obtain, without charge, a copy of a description of the Plan s procedures governing QDRO determinations from the Plan Administrator.) You may also lose your benefit if the Plan cannot locate you when a benefit becomes payable to you. Do I or does my Beneficiary have to do anything to start receiving benefits when I retire or die? Yes. You, or if you die, your Beneficiary, must file a written request for benefits with the Plan Administrator or follow other procedures defined by your Employer for processing distributions. What should I do if I do not receive a benefit to which I believe I am entitled? You may file a claim with the Plan Administrator. How do I file a claim? You may claim a benefit to which you think you are entitled by filing a written request with the Plan Administrator. The claim must set forth the reasons you believe you are eligible to receive benefits and authorize the Plan Administrator to conduct such examinations and take such steps as may be necessary to evaluate the claim. What if my claim is denied? If your claim is denied, the Plan Administrator will provide you or your Beneficiary with a written notice of the denial within 90 days of the date your claim was filed. This notice will give you the specific reasons for the denial, the specific provisions of the Plan upon which the denial is based, and an explanation of the procedures for appeal. May I appeal the decision of the Plan Administrator? Yes. You or your Beneficiary will have 60 days from receipt of the notice of denial in which to make written application for review by the Plan Administrator. You may request that the review be in the nature of a hearing. You may be represented by an attorney if you so desire. The Plan Administrator will issue a written decision on this review within 60 days after receipt of the application for review. May I borrow money from the Plan? Unless stated otherwise in the General Information Sheet, the Plan does permit loans to Participants. If so, under certain circumstances, you are eligible to borrow a portion of your vested Individual Account. If loans are available under your Plan, refer to the Loan Disclosure in Section Nine of this SPD for more information. In addition to the information provided in this section, read the Loan Disclosure contained in Section Nine and the Qualified Retirement Plan Distribution Notice in Section Ten. SECTION SIX: DEFINITIONS Unless modified in the Definitions section of the General Information Sheet, words used in the Plan with initial capital letters shall, for the purposes of this Plan, have the meanings set forth in the section in the beginning of this SPD titled Definitions. SECTION SEVEN: MISCELLANEOUS Part 1. Part 2. May I direct the investment of the assets in my Individual Account? Unless stated otherwise in the General Information Sheet, your Plan allows self-direction of contributions. The Plan Administrator will establish the rules and procedures that will apply to the self-direction of contributions. The Plan Administrator will also establish uniform and nondiscriminatory policies describing how and when you may provide investment directions. ERISA 404(c) permits fiduciaries of plans that allow for participant-direction of plan investments, to avoid liability for any loss associated with those investment instructions. The following guidelines must be met to satisfy the regulation. You, the participant, must: 1) be able to select from a broad range of investment alternatives; 2) have a reasonable opportunity to make an investment election and make changes at least on a quarterly basis; 3) receive disclosures required under ERISA 404(a); and 4) receive a description of the procedures for confidentiality of information regarding holding and voting of employer securities (if applicable). To satisfy the requirements of 404(a) you will receive a Fee Disclosure Statement for Participants that describes any fees and expenses paid from plan assets. It also includes general plan information such as the methods available for enrollment. If your Employer does not satisfy one or more of these requirements they will provide a separate notification. What investments are permitted under the Plan? Your Employer (or someone appointed by your Employer) will select a list of investments that will be available under the Plan. The list of Plan investments may change from time-to-time as your Employer considers appropriate investment alternatives. The Fee Disclosure Statement for Participants will include a chart that identifies all funds available for investment under the Plan. You should carefully review the chart as well as any investment prospectus or other available information before making your investment selections. Contact your Employer if you are not certain whether a particular investment is permitted under the Plan. Qualified Retirement Plan and Trust Summary Plan Description Page 11 of 26 Rev. 02/13
18 Part 3. Part 4. Part 5. Part 6. Part 7. Part 8. Part 9. Part 10. Who is responsible for the daily operations of the Plan? Unless stated otherwise in the General Information Sheet, your Employer is responsible for the day-to-day administration and management of the Plan. To ensure efficient and sound operation and management of the Plan, your Employer has the discretionary authority to appoint other persons as may be necessary to act on its behalf or assist in performing these responsibilities. Who pays for the administrative expenses related to the Plan? All reasonable expenses of administration, but not limited to those involved in retaining necessary professional assistance, may be paid from the assets of the Plan. Alternatively, the Employer may, in its discretion, pay any or all of these expenses. If an Employer does not pay these expenses, then the expenses paid using the Plan s assets will generally be allocated among the accounts of all Participants in the Plan. These expenses will be allocated either proportionally based on the value of the account balances or as an equal dollar amount based on the number of Participants in the Plan. The method of allocating the expenses depends on the nature of the expense itself. For example, certain administrative (or recordkeeping) expenses would typically be allocated proportionally to each Participant. If the Plan pays $1,000 in expenses and there are 100 Participants, your account would be charged $10 ($1,000/100) of the expense. Any expenses paid with plan assets will be identified on the Fee Disclosure Statement for Participants. Does the Employer have the authority to change provisions within the Plan? Yes, the Employer, under certain circumstances, has the authority to amend the Plan to change or eliminate provisions. The Employer may not, however, reduce accrued or protected benefits under the Plan. What happens if the Plan is terminated? The Employer expects to continue the Plan indefinitely. However, the Employer may terminate the Plan at any time by appropriate action of its managing body. In the unlikely event the Employer must terminate the Plan, you will become 100% vested in the aggregate value of your Individual Account regardless of whether or not your vesting years of service are sufficient to make you 100% vested under the vesting schedule(s). If the Plan terminates, benefits are not insured by the Pension Benefit Guaranty Corporation (PBGC). Under the law, PBGC insurance does not cover this type of plan, called a defined contribution plan. What does it mean to be missing from the Plan? The U.S. Department of Labor has issued guidance regarding the manner in which a Plan may distribute benefits to a missing Participant in a terminated Plan. Generally, the guidance requires that certain search methods are performed to locate the Participant, and if such searches fail to generate a distribution election from the Participant, the Participant shall be deemed missing. At such time, the Employer or its delegate is permitted to make a distribution using the distribution options permitted by the U.S. Department of Labor. The preferred distribution option will be to establish an individual retirement account (IRA). A Plan Participant is not deemed missing simply because a distribution notice or other Plan notice is mailed to a Plan Participant s last known address, but is returned by the post office as undeliverable, or if the Employer otherwise becomes aware that it does not have current contact information for the Plan Participant. However, when the Post Office does return any first-class mail because it is undeliverable, the missing Participant search options referred to in the previous paragraph will be initiated. What happens if I am deemed missing from the Plan? When a Plan Participant is deemed missing, the Employer or its delegate is permitted to make a distribution using the missing Participant distribution options. Who pays for the administrative expense of processing distributions? All reasonable expenses of processing distributions will be paid from the assets of your Individual Account. All fee amounts will be identified on the forms provided to you to elect your distribution option. However, there are certain expenses that will be paid just from your account. These are expenses that are specifically incurred by, or attributable to, you. For example, if you are eligible to receive a distribution of your vested account balance and you request a distribution of the balance, a distribution processing fee will apply. These additional expenses will be paid directly from your account (and not the accounts of other Participants) because they are directly attributable to your benefit under the Plan. The Plan Sponsor, from time to time, may change the manner in which expenses are allocated. The following is a list of Plan expenses that may be paid directly from an individual Participant s account rather than from the accounts of all Participants: Distribution of a Participant s account in a single sum upon termination of employment, including preparation of required notices and elections, distribution check or transfer of funds by direct rollover, as appropriate, and tax reporting forms. If the Participant s account is distributable (for example, upon severance from employment) and the distribution processing fee equals or exceeds the Participant s vested account balance, the Plan may charge the processing fee against the vested account balance, resulting in the elimination of the account balance without any distribution to the Participant. Participant loan origination fee (includes processing and document preparation) and maintenance fee. Upon divorce, qualified domestic relations order ( QDRO ) review and processing, including notices to parties and preparation of QDRO distribution check. In addition, the Plan may charge the Participant s account for actual legal expenses and costs if the Plan consults with legal counsel regarding the qualified status of the order. Hardship distribution, including application processing and preparation of required notices, elections and distribution check. Non-hardship in-service distribution, including application processing and preparation of required notices, elections and distribution check. Who pays for the expenses of attempting to locate a missing Plan Participant? The expenses of attempting to locate a missing Plan Participant will be paid from the Individual Account of that Participant. Qualified Retirement Plan and Trust Summary Plan Description Page 12 of 26 Rev. 02/13
19 Part 11. Who pays for the expenses attributable to my account if it remains invested in (or is reinvested in) the Plan after I terminate employment? Expenses for the accounts of terminated vested Participants are allocated to each terminated vested Participant. Therefore, your account balance may be reduced by a monthly maintenance fee each month it remains invested in (or is reinvested in) the Plan after you terminate employment. Other charges may also apply. SECTION EIGHT: RIGHTS UNDER ERISA As a Participant in this Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan Participants shall be entitled to do the following. Receive Information About Your Plan and Benefits 1. Examine, without charge, at the Plan Administrator s office and at other specified locations, such as worksites and union halls, all Plan documents governing the Plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. 2. Obtain, upon request to the Plan Administrator, copies of documents governing the operations of the Plan, including insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description (SPD). The Plan Administrator may charge a reasonable fee for the copies. 3. 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. 4. Obtain, once a year, a statement of the total pension benefits accrued and the nonforfeitable (vested) pension benefits (if any) or the earliest date on which benefits will become nonforfeitable (vested). The Plan may require a written request for this statement, but it must provide the statement free of charge. Prudent Actions by Plan Fiduciaries In addition to creating Plan Participants rights, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your Plan are called fiduciaries of the Plan, and they have a duty to act prudently and in the interest of you and other Plan Participants and Beneficiaries. No one, including your Employer, your union, or any other person, may fire you or in any way discriminate against you to prevent you from obtaining a pension benefit or exercising your ERISA rights. Enforce Your Rights 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 any denial, all within certain time schedules. Under ERISA, there are steps you may take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the Plan s decision, or lack thereof, concerning the qualified status of a domestic relations order or a medical child support order, you may 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. 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 are successful, the court may order the person you have sued to pay the costs and fees. If you lose, the court may order you to pay these costs and fees (for example, if the court finds your claim is frivolous). Assistance with Your Questions If you have any questions about your plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration. Further, if this Plan is maintained by more than one Employer, you may obtain a complete list of all such Employers by making a written request to the Plan Administrator. Qualified Retirement Plan and Trust Summary Plan Description Page 13 of 26 Rev. 02/13
20 SECTION NINE: LOAN DISCLOSURE AND BASIC LOAN AGREEMENT Loan Disclosure As a Participant in the qualified retirement plan adopted by your Employer, you may be able to borrow a portion of your pretax vested account balance. The Roth Elective Deferral balance will not be used to issue any amount of the requested loan. If the requested loan amount exceeds the amount available in the pretax vested account balance, the loan will be limited to the pretax vested account balance. If the pretax vested account balance is zero, no loan will be issued. The loan program adopted by your Employer is available on a uniform basis to all Plan Participants that meet the loan qualification requirements. For additional information about the loan program available under your Employer s Plan, contact the loan program administrator listed below. Loan Program Administrator the person responsible for administering your loan program is listed below: Paychex Retirement Services 1175 John Street West Henrietta, NY The phone number to initiate your loan process is This toll-free number will require you to use your personal identification number (PIN) Loan Application Procedure to apply for a loan under this Plan, you must follow the procedure(s) listed below: You may model and request a loan by calling the toll-free Paychex Retirement Services Information Line or by visiting the Paychex Online Retirement Services website. Complete the Loan Application form and return it to the Loan Program Administrator. Additional documentation for the purchase of a primary residence will be required. Incomplete paperwork may result in a delay in issuing the loan. Pay any required loan application processing fees. Limitations on Types of Loans you are not required to provide the reason you are requesting a loan if you agree to a repayment period of 4.5 years (54 months). If you wish to extend the repayment period, the loan will be restricted to the purchase of a primary residence. Additional documentation for the purchase of a primary residence is required. Loan Approval Standards decisions approving or denying loans from this Plan will be based on the value of your vested Individual Account balance. Loan Principal Limitations loans from this Plan shall be in a minimum amount of $1,000. This means you need a $2,000 vested balance and $1,000 available in your pretax account balance at the time your loan is requested. The maximum amount of an outstanding loan cannot exceed the lesser of 95% of one-half the vested account balance or 95% of the total vested account balance excluding the Roth Elective Deferral balance. Under no event will the loan amount exceed $50,000. The $50,000 is reduced by the highest outstanding loan balance during the one-year period ending on the day before the date the loan agreement becomes effective. Core Funds Required for Loan Request loans from this Plan shall only be requested and paid from the vested balance of the pretax Core Funds. The Roth funds shall not be available. A vested balance in the Self-Directed Brokerage Account or an Outside Plan Investment is not available for loan issuance. Loan Processing Fee upon signing all requested loan documents, you will agree to pay a loan processing fee of $150* ($300* for a principal residence loan). This fee is applicable regardless of the repayment period. The fee will be deducted from the check that is mailed to you. For example, if you request a $1,000 loan, you will receive a check in the amount of $850. Your repayment schedule will be for a total loan amount of $1,000 plus applicable interest. *This loan fee amount is subject to change without notice. The amount of the fee will be communicated to you at the time that you initiate the loan request. Interest Calculation interest rate on loans from this Plan will be computed on the basis of the prime rate plus 1%. Your loan rate will be determined on the date you request your loan and will not change for the duration of the loan repayment period. The applicable interest rate will be subject to periodic adjustment. It will change if the prime rate changes on the first business day of the month, as published in the Wall Street Journal. Collateral Pledge depending on the amount of your loan request, no more than fifty percent (50%) of your vested account balance will be pledged as security for repayment of all loans under this program. All loans must be secured by adequate security sufficient to prevent the loss of Plan assets. Security in addition to a Participant s pledge of his or her vested account balance is not required, provided the present value of the account pledged does not exceed 50% of the total vested balance and is equal to the loan amount on the date the loan originates. Loan Payment Requirements you will agree to repay your loan on a per-payroll basis. Your loan paperwork will reflect a payment schedule that corresponds to your payroll frequency. For example, if you are paid weekly, you will generally make 52 payments a year. If you are paid biweekly, you will generally make 26 payments a year. Limitation on Number of Loans you are limited to one outstanding loan at any one time. To qualify for another loan, you must first pay the outstanding balance on the existing loan. You (or your Employer) must contact the loan program administrator to determine the outstanding balance. (The only payment option available is a money order or certified check. A personal check will not be accepted.) It will take approximately two weeks after the loan program administrator receives your loan repayment before you may initiate a new loan by calling the loan program administrator s phone number. Participants Prohibited From Taking a Loan prior to January 1, 2002, owner-employees and some of their family members were prohibited from receiving a loan from the Plan. The individuals were: a sole proprietor, a 5% shareholder in a sub-chapter S corporation, or a partner with an ownership interest of at least 10%. As of January 1, 2002 these individuals are no longer prohibited from receiving a loan. Qualified Retirement Plan and Trust Summary Plan Description Page 14 of 26 Rev. 02/13