Summary Plan Description. of the ANESTHESIA PRACTICE CONSULTANTS, P.C. SAVINGS AND RETIREMENT PLAN

Transcription

1 Summary Plan Description of the ANESTHESIA PRACTICE CONSULTANTS, P.C. SAVINGS AND RETIREMENT PLAN January 2014

2 TO OUR EMPLOYEES Anesthesia Practice Consultants, P.C. (the Company ) maintains the Anesthesia Practice Consultants, P.C. Savings and Retirement Plan so that you and other employees may save for retirement on a tax-favored basis. The benefits provided under the Plan are in addition to Social Security. The Plan was established as of January 1, 1999, and has periodically been amended. This document is called a Summary Plan Description. Its purpose is to explain your rights under the Plan. It is based upon the Plan provisions in effect on January 1, You should carefully read this Summary Plan Description and keep it for future reference. You are responsible for decisions affecting your participation in the Plan. These decisions include the amount of your contributions and the manner in which your accounts will be invested. No one can make these decisions for you. Because these decisions will affect the amount of your retirement benefits, you should carefully review this Summary Plan Description. Each reference in this Summary Plan Description to the Company includes the following: Anesthesia Medical Consultants, P.C., West Michigan Anesthesia, P.C. and AMC Mobile Anesthesia, P.C. This Summary Plan Description has been prepared as accurately as possible. It outlines the Plan, which is a complex and technical legal document. In the event of any difference between the Summary Plan Description and the Plan, the terms of the Plan will control. If you have any questions regarding the Plan or this Summary Plan Description, you should contact Deb Lang or Mary VanSkiver. ANESTHESIA PRACTICE CONSULTANTS, P.C. January 2014

3 TABLE OF CONTENTS Page OVERVIEW OF THE PLAN...1 KEY DEFINITIONS TO ASSIST YOUR UNDERSTANDING OF THE PLAN...2 HOW TO BECOME A PARTICIPANT IN THE PLAN...3 PAY DEFERRAL CONTRIBUTIONS...3 How to Make Pay Deferral Contributions...3 Benefits of Deferring Compensation Under the Plan...5 Dollar Limit on Pay Deferrals...5 COMPANY MATCHING CONTRIBUTIONS...6 COMPANY SAFE HARBOR CONTRIBUTIONS...7 COMPANY NONELECTIVE CONTRIBUTIONS...7 ROLLOVERS...8 VESTED INTEREST IN YOUR ACCOUNTS...8 INVESTMENT OF YOUR ACCOUNTS...8 VALUATION AND ADJUSTMENT OF YOUR ACCOUNTS...9 Contributions...9 Distributions...9 Investment Results...9 Fees and Expenses...10 WHEN BENEFITS ARE DISTRIBUTED...10 WITHDRAWALS DURING EMPLOYMENT...11 WITHDRAWALS AFTER YOU REACH AGE 59½...11 FINANCIAL HARDSHIP WITHDRAWALS...11 Reasons for Hardship Withdrawals...11 Additional Requirements for Hardship Withdrawals...12 Amount of Your Hardship Withdrawal...13 Tax on Hardship Withdrawal...13 WITHDRAWALS FROM YOUR ROLLOVER ACCOUNT i-

4 Page WITHDRAWALS FROM YOUR NONELECTIVE CONTRIBUTION ACCOUNT AND MATCHING CONTRIBUTION ACCOUNT AFTER FIVE YEARS OF PARTICIPATION...13 DISTRIBUTION OF BENEFITS UPON TERMINATION OF EMPLOYMENT FOR A REASON OTHER THAN DEATH...14 FORM OF DISTRIBUTION OF BENEFITS...14 Automatic Forms of Distribution...14 Waiver of Automatic Forms of Distribution...15 Alternative Forms of Distribution...15 Exception if Amount is $1,000 or Less...15 DISTRIBUTION OF BENEFITS UPON DEATH...16 Designation of Beneficiary...16 Death Before Benefit Payments Begin...16 Death After Benefit Payments Begin...17 Tax on Distribution...17 TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS...17 Income Tax on All Distributions General Rules...17 Excise Tax on Certain Early Distributions...18 Distributions from Your Roth 401(k) Account Special Rules...18 OTHER RULES THAT APPLY TO THE CASH-OUT OF SMALL BENEFITS...19 LOANS FROM THE PLAN...19 APPEAL PROCEDURE...20 REEMPLOYMENT AFTER TERMINATION OF EMPLOYMENT...21 REEMPLOYMENT AFTER QUALIFIED MILITARY SERVICE...21 Withdrawals While Performing Qualified Military Service...22 Rights After Reemployment...22 Loans from the Plan...22 Death During Qualified Military Service...22 ASSIGNMENT OF BENEFITS/QUALIFIED DOMESTIC RELATIONS ORDER...22 BENEFITS ARE NOT INSURED...23 ADMINISTRATION...23 TERMINATION OR AMENDMENT OF THE PLAN ii-

5 Page YOUR RIGHTS AS A PARTICIPANT...23 Plan Information and Benefits...24 Plan Fiduciaries...24 Enforcement of Rights...24 Assistance with Your Questions...25 OTHER BASIC INFORMATION ABOUT YOUR RETIREMENT PLAN...26 APPENDIX A iii-

6 OVERVIEW OF THE PLAN The Plan is a type of retirement plan known as a profit-sharing 401(k) plan. Four types of contributions may be made to the Plan: You may contribute part of your current compensation instead of receiving it in your paychecks. These contributions are called pay deferral contributions. Your pay deferral contributions may be made on either a pre-tax or after-tax basis as explained in the PAY DEFERRAL CONTRIBUTIONS section. The Company will make a safe harbor contribution for each plan year. The Company may make a nonelective contribution each plan year. The Company may make matching contributions for you based upon the amount of your pay deferral contributions to the Plan. Your pay deferrals and the Company contributions made for you are credited to accounts in your name. Any amounts you roll over to the Plan from another retirement plan are also credited to your accounts (see the ROLLOVERS section). Your accounts are invested with the other Participants accounts in certain investment funds or may be segregated for investment purposes (see the Investment of Your Accounts section). The amount in your accounts will change based upon the increase or decrease in value of the investment funds in which your accounts are invested and the increase or decrease in the assets held in your segregated accounts. Your benefits from the Plan are the amounts in your accounts. When you leave the Company or become eligible for benefit payments, you will receive the full amount owed to you from your accounts. The amount in your accounts will depend on the amount of your pay deferrals, the amount of Company contributions made on your behalf, the amount you roll over to the Plan, and the investment performance of the investment funds in which your accounts are invested or the investment performance of your segregated accounts. You will not be taxed on the contributions to the Plan (other than your Roth 401(k) deferrals), nor on the investment earnings credited to your accounts, until these amounts are actually distributed to you from your accounts. You can further delay taxes by rolling over the taxable portion of your distribution to a traditional IRA or another employer s eligible retirement plan. Earnings on your Roth 401(k) contributions will not be subject to income taxes if you satisfy certain distribution requirements. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information, including special rules that apply to distributions from your Roth 401(k) account. Fifth Third Bank provides the investment funds for the Plan. Fifth Third Bank can be contacted by calling (8:30am to 7:00pm Eastern Time) or by accessing its website at retire.53.com.

7 KEY DEFINITIONS TO ASSIST YOUR UNDERSTANDING OF THE PLAN The Plan uses a number of terms to describe your rights and benefits. Here are some of the more important terms: Compensation means amounts paid to you through the Company s payroll system that are reported as taxable income on IRS Form W-2. These amounts are included in your compensation even after you terminate employment as long as they are paid within 2½ months after you terminate (or before the end of the plan year in which you terminate, if later). However, the following special rules apply: Your pay deferral contributions under the Plan are counted. Your pay reduction contributions under a flexible benefits plan are counted. Any pay you earned before you became eligible to participate in the Plan is not counted. Reimbursements and expense allowances are not counted. Severance pay is not counted. Long term disability premiums paid by the Company and deferred compensation payments are not counted. Under federal law, compensation in excess of a specific dollar limit in effect for a plan year is not counted. Hours of service are hours of employment with the Company that are counted for purposes of eligibility to participate in the Plan. An hour of service includes: Each hour that you work and for which you are paid. Overtime hours are credited based on the number of hours actually worked, not the number of hours paid. Vacations, holidays and other hours that you do not work but for which you receive pay. No more than 501 hours can be credited under this provision for a single continuous period of absence. Each hour for which you receive back pay. You will not receive credit for more than 501 hours for a time period that you would not have been scheduled to work. Each hour of work you miss as a result of military service, provided you return to the Company while your rehire rights are protected by law. -2-

8 Pay deferrals are contributions to the Plan that you make from your compensation. These contributions are generally made on a pre-tax basis and are sometimes called 401(k) contributions. You may choose to make these contributions on an after-tax basis. The after-tax pay deferrals are called Roth 401(k) contributions. Plan year is the fiscal year of the Plan, which is January 1 through December 31. HOW TO BECOME A PARTICIPANT IN THE PLAN If you are an eligible employee, you begin to participate in the Plan on the first day of any calendar quarter after you attain age 21 and complete one year of employment with the Company. A year of employment is the 12-consecutive-month period beginning on your hire date. But if you do not have at least 1,000 hours of service during that period, you receive credit for a year of employment in the first plan year during which you have at least 1,000 hours of service. You will be credited with a year of employment on the day you complete your 1,000 th hour of service during the relevant 12-consecutive month period. Fifth Third Bank will send you a Personal Identification Number ( PIN ) letter after you become eligible for the Plan. You should enroll by using this PIN to access the website or Retirement Response Line to complete your enrollment and beneficiary information for the Plan. This PIN will allow you to enroll in the Plan and to conduct transactions with Fifth Third Bank relating to your accounts. PAY DEFERRAL CONTRIBUTIONS How to Make Pay Deferral Contributions General Rules After you become a participant, you may elect to contribute a portion of your compensation to the Plan. These contributions are called pay deferrals. Your pay deferrals are subtracted from your paycheck each payday. To make pay deferral contributions to the Plan, unless you are a physician, you must use your PIN to access the website or Retirement Response Line to elect the percentage or amount you wish to contribute per pay period. Physicians must make their elections using paper forms available from the Finance Department. If you elect to make pay deferrals, your pay deferrals may not exceed 80% of your compensation for the year. Your total pay deferrals during a calendar year also may not exceed the dollar limit described in the Dollar Limit on Pay Deferrals subsection below. -3-

9 Unless you elect otherwise, if you become a participant on or after January 1, 2014 and are not a physician licensed to practice medicine in the State of Michigan, you will automatically make pay deferrals equal to 5% of your compensation. These pay deferrals will be made on a pre-tax basis. You must make an election if you do not want to defer any portion of your compensation or if you want to defer an amount other than 5% of your compensation. You must also make an election if you want to make your pay deferral contributions on an after-tax basis. You must make your election through the website or Retirement Response Line. Pre-Tax or After-Tax Pay Deferrals You may choose whether to make your pay deferral contributions on a pre-tax or after-tax basis or a combination of both. You must make your decision before the pay deferral contributions are made. If you choose to make your pay deferrals on a pre-tax basis ( pre-tax pay deferrals ), you will not pay any income tax on your pay deferrals or their investment earnings until you eventually receive a distribution from the Plan. If you choose to make your pay deferral contributions on an after-tax basis ( Roth 401(k) contributions or after-tax pay deferrals ), you will pay income taxes on your pay deferrals when they are paid to the Plan, but you will not pay any income tax on your pay deferrals when they are distributed to you. Further, if you receive your distribution after you attain age 59½ and after the first day of the year that includes the fifth anniversary of the date you first made Roth 401(k) contributions to the Plan, you will not pay any income tax on the earnings relating to your Roth 401(k) contributions. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information. You should consult your tax advisor to determine which type of pay deferral contribution is likely to be better for you. The Finance Department also has additional information available upon request to help you understand the pros and cons of each alternative. Changing Your Election You may change your pay deferral election at any time. The change may relate to the amount of your contribution, or to whether your contribution will be a pre-tax or after-tax pay deferral. If you are not a physician, in order to change or stop your pay deferrals, you must use your PIN to access the website or Retirement Response Line to elect the percentage or amount you wish to contribute per pay period. If you are a physician, you must use the paper form provided by the Finance Department to change or stop your pay deferrals. -4-

10 Crediting of Your Pay Deferrals Your pay deferrals are credited to your pay deferral account. Your Roth 401(k) contributions are credited to a separate Roth 401(k) contribution account. Benefits of Deferring Compensation Under the Plan The benefits of deferring compensation under the Plan are as follows: Your pre-tax pay deferral contributions are not subject to current income taxes. As a result, your current taxable income will be reduced. Your Roth 401(k) contributions will not be subject to income taxes at the time of distribution. As a result, your future taxable income will be reduced. The amount contributed to the Plan is generally invested on a tax-deferred basis. This means you will not pay income tax on the investment earnings that are added to your accounts. You will pay income taxes on investment earnings only when you receive your benefits from the Plan. As a result, this tax deferral permits a much more rapid accumulation of funds for your retirement. A qualified distribution from your Roth 401(k) account is not taxable. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information. The Company may make a matching contribution each calendar quarter based upon the amount of your pay deferrals. See the COMPANY MATCHING CONTRIBUTIONS section for more information. You may be eligible for a tax credit of between 10% and 50% of your contribution if your adjusted gross income is less than $59,000 (if you are married) or $29,500 (if you are unmarried). The maximum contribution eligible for the credit is $2,000. You should consult with your tax adviser to determine if you are eligible for the credit and the amount of the credit. If you are eligible for the maximum credit, your $2,000 contribution could entitle you to a tax credit of $1,000 in addition to a $2,000 reduction in your taxable income. Dollar Limit on Pay Deferrals Federal law limits the amount of your pay deferrals in a calendar year. The following dollar limit applies: Year Dollar Limit 2013 $17,500-5-

11 In addition, if you are at least age 50 by the end of a calendar year, you may make catchup pay deferral contributions during the calendar year. The following dollar limit applies to the catch-up pay deferral contributions: Year Dollar Limit 2013 $5,500 Therefore, if you are at least age 50 by the end of 2013, you may make pay deferral contributions in an amount up to $23,000 ($17,500 + $5,500) in These dollar amounts may be further increased after 2013 for increases in the cost of living. If your pay deferrals exceed the dollar limit in one calendar year (January 1 through December 31), the excess amount will be included in your taxable income for the year of the deferral. The excess amount will also be taxed again in the year it is distributed to you if it is not withdrawn by April 15 of the following year. To receive a distribution before April 15, your distribution request must be made by March 1. The Company will attempt to prevent your pay deferral contributions to the Plan from exceeding the dollar limit. But if you also participate in another tax-deferred savings plan sponsored by another employer (such as another 401(k) plan or a 403(b) taxsheltered annuity), the dollar limit applies to your total pay deferral contributions to these plans. You will need to monitor the total contributions if you make pay deferral contributions to more than one plan. COMPANY MATCHING CONTRIBUTIONS If you are not a physician who is licensed to practice medicine in the State of Michigan, in order to give you an incentive to defer a portion of your compensation, the Company will make matching contributions each calendar quarter based upon the amount of your pay deferrals. The Company will contribute $1 for each $1 of your pay deferrals. But no matching contributions will be made with regard to pay deferral contributions that exceed 5% of your compensation for a calendar quarter. Therefore, the maximum matching contribution is 5% of your compensation during any calendar year. The amount of the matching contribution is the same regardless of whether you make pre-tax pay deferrals, Roth 401(k) contributions, or a combination of the two types of pay deferral contributions. The matching contribution is calculated based upon the total of your pay deferral contributions. Although matching contributions will be made whether your pay deferral contributions are pre-tax pay deferrals or Roth 401(k) contributions, the matching contribution will always be made on a pre-tax basis and will only become taxable to you when it is distributed to you. The Company will make a catch-up matching contribution at the end of a calendar quarter in limited circumstances. This additional contribution will be generally made if your pay deferrals are more than 5% of your compensation in some calendar quarters, but less than 5% of your -6-

12 compensation in other calendar quarters. The additional matching contribution will, when added to the matching contributions already made for you, put you in the same situation as if the matching contribution was calculated based upon your total pay deferrals and compensation for the plan year (that is, 100% of your pay deferrals for the plan year to the extent your pay deferrals do not exceed 5% of your compensation during the plan year). The Company may periodically change the amount of its matching contributions. You will be informed of any change. Matching contributions, including catch-up matching contributions, are made after the end of each calendar quarter. After you become a participant in the Company s matching contribution portion of the Plan, you will receive a contribution if you are employed on the last day of the calendar quarter. If matching contributions are made for you, they will be credited to your matching contribution account. COMPANY SAFE HARBOR CONTRIBUTIONS After you become a participant, the Company will make a safe harbor contribution on your behalf. The amount of the safe harbor contribution is 3% of your compensation during each plan year. Company safe harbor contributions are credited to your safe harbor contribution account. COMPANY NONELECTIVE CONTRIBUTIONS At the end of each plan year, the Company will decide on the amount of its nonelective contribution for that year. No nonelective contribution is required. After you become a participant, you will share in the Company s nonelective contribution for a plan year if you are employed by the Company at any time during the plan year. The Company s nonelective contribution is allocated to you and other eligible participants under an IRS-approved formula. The IRS-approved formula divides participants into categories. Your share of the Company s nonelective contribution is generally based on the ratio of your compensation for the plan year to the total compensation of all participants within your category sharing in the Company s nonelective contribution. For example, assume the Company contributes $24,000 for the participants who are within your category in a plan year in which your compensation is $20,000 and the total compensation of all participants who are within your category is $200,000. Your share of the Company nonelective contribution is $20,000/$200,000 (or 1 / 10 ) of $24,000, or $2,400. Your share of the Company s nonelective contribution is credited to your nonelective contribution account. -7-

13 ROLLOVERS If you are a participant or are eligible to become a participant upon satisfying the Plan s minimum age and service requirements, you may roll over to the Plan certain distributions from a former employer s retirement plan. The former employer s plan could be a qualified plan (such as a 401(k) plan), a Section 403(b) tax-sheltered annuity, or a Section 457 deferred compensation plan maintained by a governmental entity. You also may be eligible to roll over amounts received from a traditional IRA. However, no rollovers of after-tax contributions (other than Roth 401(k) contributions) are permitted. Rollovers are permitted in three situations: If you are eligible to receive an eligible rollover distribution from a former employer s plan, you may elect a direct rollover of the distribution to the Plan. If you receive an eligible rollover distribution from a former employer s plan, you may be eligible to roll over that distribution to the Plan. A distribution from another retirement plan may be rolled over only if the trustee receives the rollover within 60 days after you receive the distribution. If you receive a distribution from a traditional IRA, you may be eligible to roll over that distribution to the Plan. A distribution from a traditional IRA may be rolled over only if the trustee receives the rollover within 60 days after you receive the distribution. Any amount you roll over is credited to your rollover account. However, any Roth 401(k) contributions or Roth 403(b) contributions that you roll over are credited to your Roth rollover account. VESTED INTEREST IN YOUR ACCOUNTS You are always fully vested in the amount in your accounts. This means that you will receive the full amount in your accounts, regardless of the reason or time that you leave the Company. INVESTMENT OF YOUR ACCOUNTS You may direct the investment of your accounts in different investment funds selected by the plan administrator. The plan administrator may periodically change these investment funds. You will be informed of the investment funds that are currently available. If you do not make an investment election, your accounts will be invested in a default investment fund that the plan administrator selects. Fifth Third Bank provides the investment funds for the Plan. Fifth Third Bank can be contacted by calling (8:30 am to 7:00 pm Eastern Time) or by accessing its website at retire.53.com. -8-

14 Before making any investment elections, you should carefully review each investment fund s goals, performance, charges and expenses and other information in the fund s prospectus or other summary. This information is available by contacting Fifth Third Bank or by accessing its website. You may also segregate any portion of your accounts for investment purposes at any time, provided at least $500 of your accounts remains in the core investment funds. If your accounts are segregated, you may generally have your accounts invested in any type of investment that is permitted by law, so long as the investment cannot result in a loss greater than the amount invested. To segregate your accounts, you must complete the TD Ameritrade or MPTA application forms. Please contact our Fifth Third representative, Kathleen Warren, for assistance with this process. She can be reached at or at Kathleen.Warren@53.com. You may change your investment election in accordance with procedures established by the plan administrator. Your change in investment election may apply to future contributions, amounts already invested, or both. The Plan is intended to constitute a retirement plan under Section 404(c) of the Employee Retirement Income Security Act of 1974 ( ERISA ) and Title 29 of the Code of Federal Regulations (Section c-1). As a result, the fiduciaries of the Plan (the persons who are responsible for the operation of the Plan) may be relieved from liability for any losses that are the result of your investment election. See APPENDIX A for more information regarding Section 404(c) of ERISA. VALUATION AND ADJUSTMENT OF YOUR ACCOUNTS The value of your accounts is the total of your investments in each of the investment funds and your segregated accounts (if any). The following events will change the value of your accounts: Contributions Any contributions or rollovers made on your behalf are added to your accounts. Distributions If a distribution is made to you (as explained below), the account from which it is made is reduced by the amount of the distribution. Investment Results The investment funds change in value every day the national securities exchanges are open for trading. As a result, the total value of your accounts also changes that often. The investment funds may increase or decrease in value. The value of the investment funds and the assets held in your segregated accounts may increase or decrease and your accounts will be adjusted accordingly. If your active participation in the Plan ends, your accounts will still be adjusted for investment results until you receive a distribution of the full amount credited to your accounts. -9-

15 Fees and Expenses Under federal law, the plan administrator may charge certain Plan expenses to your accounts. The primary fee charged to your accounts is the asset charge relating to the investment funds in which your accounts are invested (commonly known as the mutual fund expense ratio ). The asset charge is netted against the return of the investment fund. The amount of the asset charge is not separately shown on any statement provided to you. If you want information regarding the asset charge for a specific investment fund, it is available in the information regarding the investment funds provided by Fifth Third Bank. If your accounts are segregated for investment purposes, you should contact your broker for more information regarding the fees charged to your account. Your accounts may also be charged for certain specific transactions relating to your accounts (for example, distributions and loans). The amount of the fee may be subtracted from your accounts. Here is a list of some situations in which a transaction fee may be charged to your accounts: QDRO Upon divorce, qualified domestic relations order ( QDRO ) review and processing, including notices to parties and preparation of QDRO distribution check. The Plan may charge your accounts for actual legal expenses and costs if the plan administrator consults with legal counsel regarding the qualified status of the QDRO. Loans Loan processing fee, including document preparation. Adjustment Charge Charges for certain non-standard processing, for example, the reissuance of a check. Information regarding the current charges for these transactions is available from the plan administrator. You will receive a quarterly statement that will state the total value of your accounts. You may also review your current account balances by accessing Fifth Third Bank s website at retire.53.com. WHEN BENEFITS ARE DISTRIBUTED You may receive your benefits from the Plan when you stop working for the Company. But in limited situations, you may withdraw funds from your accounts while you are working for the Company (see below). -10-

16 WITHDRAWALS DURING EMPLOYMENT Federal law limits your opportunity to withdraw funds from the Plan while you are working for the Company. Withdrawals are permitted in only four situations: If you have reached age 59½, you may withdraw funds from any of your accounts. If you have a financial hardship, you may withdraw funds from your accounts, except your safe harbor contribution account. If you have rolled amounts over to the plan from a former employer s plan, you may withdraw amounts from your rollover account. If you have been a participant for five years, you also may make withdrawals from your matching contribution account and nonelective contribution account. If you are married, you will not be allowed to withdraw funds from your accounts unless your spouse consents to the withdrawal within 180 days before the withdrawal occurs. Your spouse s consent must be witnessed by a plan representative or by a notary public. The necessary spousal consent will be included on your distribution request form. The next four sections describe in more detail the rules regarding withdrawals while working for the Company. To initiate a withdrawal while you are working for the Company, you should contact the Finance Department. WITHDRAWALS AFTER YOU REACH AGE 59½ After you reach age 59½, you may withdraw funds from your accounts even though you are still working for the Company. The minimum withdrawal is $1,000 or the total amount in your accounts, whichever is less. Any amount you withdraw is generally subject to income tax, but is not subject to a 10% excise tax. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information, including special rules that apply to withdrawals from your Roth 401(k) account. FINANCIAL HARDSHIP WITHDRAWALS Reasons for Hardship Withdrawals You may withdraw your pay deferral contributions from your pay deferral account, your pay deferral contributions from your Roth 401(k) contribution account and -11-

17 amounts from your matching contribution account, nonelective contribution account and rollover account if you have a financial hardship while working for the Company. You will be considered to have a hardship only if you have one or more of the following financial needs: Uninsured medical expenses previously incurred by you, your spouse or your dependents, or expenses necessary for these persons to obtain medical care. Costs directly related to the purchase of your principal residence (excluding your mortgage payments). Tuition, related educational fees and room-and-board expenses for the next 12 months of post-secondary education for you, your spouse, your children or your dependents. Payments necessary to prevent eviction from your principal residence or foreclosure on the mortgage of your principal residence. Burial or funeral expenses that you must pay because of the death of your parent, spouse, child or dependent. The cost to repair damage to your personal residence caused by a casualty (as defined in the Internal Revenue Code), such as a flood or tornado. Additional Requirements for Hardship Withdrawals Even if you have one of these financial needs, you may receive a financial hardship withdrawal only if the following additional requirements are satisfied: You have obtained all available distributions and loans from the Plan and any other Company retirement plan in which you are a participant. You suspend pay deferral contributions for at least six months after the withdrawal. (You may resume making pay deferral contributions as of any pay period after the suspension period. You must use your PIN to access the website or Retirement Response Line to elect the percentage or amount you wish to contribute per pay period after your suspension has expired.) You may be required to pay a processing fee when you obtain a hardship distribution. You will be notified of the fee amount when you apply for the distribution. The fee will automatically be deducted from your accounts. -12-

18 Amount of Your Hardship Withdrawal Assuming you satisfy all these requirements, you may receive a hardship withdrawal. The amount of your withdrawal must be at least $1,000, but may not exceed either of the following limits: The amount you need to satisfy your financial need. Your financial need will include amounts necessary to pay any income taxes or excise taxes relating to the withdrawal. The sum of your pay deferrals and the amount in your nonelective contribution account and rollover account. Investment earnings credited to your pay deferral account and Roth 401(k) contribution account may not be withdrawn. Tax on Hardship Withdrawal Any amount that you withdraw (other than your Roth 401(k) contributions) is generally subject to income tax and may also be subject to a 10% excise tax. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information. WITHDRAWALS FROM YOUR ROLLOVER ACCOUNT You may withdraw amounts from your rollover account by following the procedures for withdrawals established by the plan administrator. The minimum withdrawal from your rollover account is $1,000 or the entire amount credited to your rollover account, whichever is less. The amount withdrawn from your rollover account is generally subject to income tax and may also be subject to a 10% excise tax. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information, including special rules that apply to withdrawals from your Roth rollover account. WITHDRAWALS FROM YOUR NONELECTIVE CONTRIBUTION ACCOUNT AND MATCHING CONTRIBUTION ACCOUNT AFTER FIVE YEARS OF PARTICIPATION You may withdraw amounts credited to your nonelective contribution account and matching contribution account by completing a Distribution/Direct Rollover Request Form available on the website or requested through the Retirement Response Line and submitting the completed form to the plan administer. No withdrawal may be made from your nonelective contribution account or matching contribution accounts until you have completed at least five years of service with the Company. -13-

19 The amount withdrawn from your nonelective contribution or matching contribution account is subject to income tax and may also be subject to a 10% excise tax. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information. DISTRIBUTION OF BENEFITS UPON TERMINATION OF EMPLOYMENT FOR A REASON OTHER THAN DEATH You are entitled to the amount in your accounts if you leave the Company for any reason. If your account balances are over $1,000, you have the option of requesting a distribution of benefits or maintaining your accounts in the Plan. Your benefits will be paid as soon as administratively feasible after you request the distribution. Federal law, however, requires that you must begin to receive your benefits by the April 1 after the calendar year in which you attain age 70½. If your account balances are $1,000 or less, you do not have the option of maintaining your accounts in the Plan. Your benefits will be distributed to you in a single lump sum payment as soon as administratively feasible after your termination of employment. The amount distributed will be the amount realized from selling your interest in the investment funds and your segregated accounts. The distribution will also include the amount of any contribution made by you or on your behalf after your interest in the investment funds or segregated accounts is sold. The amount distributed is generally subject to income tax and may also be subject to a 10% excise tax. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information, including special rules that apply to distributions from your Roth 401(k) account. FORM OF DISTRIBUTION OF BENEFITS Automatic Forms of Distribution Unless you elect an alternative form of payment, the Plan provides for the following automatic forms of distribution: If you are married when your benefits begin, the amount in your accounts will be used to purchase a joint and survivor annuity from an insurance company. This form of benefit pays a monthly benefit to you for your life, and after your death, 50% of your benefit to your surviving spouse for his or her life. If you are unmarried, the amount in your accounts will be used to purchase a single life annuity from an insurance company. This form of benefit -14-

20 pays a monthly benefit to you for your life. No benefits are paid after your death. Waiver of Automatic Forms of Distribution You may waive the automatic form of distribution and elect an alternative form of benefit payment. However, if you are married, your election of an alternative form is effective only if your spouse consents in writing to the waiver of the joint and survivor annuity within 180 days before your benefit payments begin. Your spouse s consent must be witnessed by a plan representative or by a notary public. Alternative Forms of Distribution If you (and your spouse, if you are married) waive the automatic form of payment, there are four alternative forms in which payments may be made. You may elect the alternative form of payment you prefer. The five alternative forms of payment are as follows: A single lump sum payment. If your accounts are segregated for investment purposes as described in the INVESTMENT OF YOUR ACCOUNTS section, you may receive an in-kind lump sum distribution of all or a portion of the investments credited to your segregated account, provided you are receiving a distribution of your entire account and you indicate which investments you wish to receive inkind. Payments in roughly equal annual or monthly installments for a specific number of years. The specific number of years for which the payments will last cannot exceed either your life expectancy or the joint life expectancy of you and your beneficiary. A combination of a single lump sum payment and annual or monthly installments. If you are married, monthly payments in the form of a single life annuity for your life. No payments are made after your death. Partial payments in the amounts you determine. Exception if Amount is $1,000 or Less If your account balances are $1,000 or less, the amount in your accounts will be paid to you or your beneficiary in a single lump sum payment. You do not have a choice regarding the form of payment. See the OTHER RULES THAT APPLY TO THE CASH-OUT OF SMALL BENEFITS section for more information. -15-

21 DISTRIBUTION OF BENEFITS UPON DEATH If you die, the amount in your accounts will be paid to your designated beneficiary in one of the methods described in the preceding section. Designation of Beneficiary You may appoint one or more beneficiaries by completing a beneficiary designation form. You may change your beneficiary at any time before your death by using your PIN to access the website or Retirement Response Line to update your beneficiary information for the Plan. If you have not named a beneficiary or your beneficiary predeceases you, payment will be made to your closest living family members. If you are married when you die, your spouse will be your sole primary beneficiary regardless of whom you have named in your beneficiary designation form. The only exception to this rule is if your spouse has previously given written consent to your naming a different or additional beneficiary. Your spouse s consent must be witnessed by a plan representative or by a notary public and will only apply to the specific beneficiary named in the consent. You should return completed paper beneficiary forms (not completed on-line) to the Finance Department. Death Before Benefit Payments Begin If you die before you have begun receiving your benefits, the amount in your accounts will be distributed to your designated beneficiary in one of the following two methods: If you are married, the trustee will use the amount in your accounts to purchase a preretirement survivor annuity for your surviving spouse. The annuity will pay a monthly benefit to your spouse until his or her death. This form of death benefit is automatic unless you and your spouse waive it. You may waive the annuity form of death benefit any time after the beginning of the plan year in which you reach age 35 and elect an alternative form of distribution of your benefits and/or an alternative or additional beneficiary. In order for your waiver to be valid, it must also be signed by your spouse. Your spouse s signature must be witnessed by a plan representative or by a notary public. You may revoke this waiver at any time. In addition, your spouse may waive the annuity form of death benefit after your death. In that case, your spouse would receive the amount in your accounts in a single lump sum payment. -16-

22 The trustee will pay the amount in your accounts in one of the alternative forms of distribution described in the FORM OF DISTRIBUTION OF BENEFITS section to the beneficiary you have named if either you have no surviving spouse or you and your spouse waive the annuity form of death benefit. Your beneficiary should contact the Finance Department to request payment of benefits. The amount distributed will be the amount realized from selling your interest in the investment funds and your segregated accounts. The distribution will also include the amount of any contribution made by you or on your behalf after your interest in the investment funds or segregated accounts is sold. Death After Benefit Payments Begin If you die while receiving your benefits in the form of installment payments (see the FORM OF DISTRIBUTION OF BENEFITS section), payments will continue to your beneficiary according to the same schedule of installment payments until the amount in your accounts has been completely distributed. Your beneficiary may instead choose to receive the remaining benefits in a single lump sum distribution. Tax on Distribution The amount distributed to your beneficiary is generally subject to income tax, but is not subject to a 10% excise tax. See the TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS section for more information, including special rules that apply to distributions from your Roth 401(k) account. TAX RULES THAT APPLY TO DISTRIBUTIONS OF BENEFITS This section contains a general description of the tax rules that apply to benefit distributions from the Plan. But this description is not intended as tax advice. You should consult your tax adviser for specific information regarding the tax rules that apply to you. Income Tax on All Distributions General Rules As a general rule, all distributions from the Plan are taxable income unless you elect to roll over the distribution. Also, most distributions from the Plan are subject to 20% income tax withholding unless you make a direct rollover of your distribution to an IRA or another eligible retirement plan. After you become eligible to receive a distribution of benefits, the Company will provide you with more detailed information concerning the 20% income tax withholding requirements and the mechanics of a direct rollover. -17-

23 Excise Tax on Certain Early Distributions If you receive a distribution from the Plan before age 59½, federal law imposes an excise tax equal to 10% of the taxable portion of the distribution in addition to regular income tax. The 10% excise tax is imposed unless one of the following exceptions applies: The distribution is rolled over to an IRA or another employer s eligible retirement plan as a direct rollover or the distribution is rolled over within 60 days after you receive it. The distribution is made as a result of your termination of employment after reaching at least age 55. The distribution is made as a result of your death or total disability. The distribution is used to pay deductible medical expenses (medical expenses which exceed 7½% of your adjusted gross income). The distribution is made under a qualified domestic relations order. The distribution consists of excess pay deferral amounts (see the PAY DEFERRAL CONTRIBUTIONS section). The distribution is made by purchasing an annuity for your life or the lives of you and your spouse. Distributions from Your Roth 401(k) Account Special Rules Any distribution you receive of Roth 401(k) contributions is not subject to income tax or the 10% excise tax. The tax status of investment earnings distributed from your Roth 401(k) account depends upon whether the distribution is a qualified distribution : The investment earnings are not taxable if it is a qualified distribution. The investment earnings are taxable income if it is not a qualified distribution (unless the investment earnings are rolled over). A distribution is a qualified distribution if both of the following requirements are satisfied: The distribution is made after you attain age 59½, die or become disabled; and The distribution is made after the first day of the year that includes the fifth anniversary of the date you made your first Roth 401(k) contribution to the Plan. -18-

24 If the investment earnings distributed from your Roth 401(k) account are taxable, the rules described above relating to rollovers and excise taxes generally apply to the taxable amount. If you want to roll over a distribution from your Roth 401(k) account, the rollover must be made to: Another employer s 401(k) plan that permits Roth 401(k) contributions; Another employer s 403(b) plan that permits Roth 403(b) contributions; or A Roth IRA. The rules that apply to your Roth 401(k) account generally also apply to your Roth rollover account. OTHER RULES THAT APPLY TO THE CASH-OUT OF SMALL BENEFITS As previously indicated, if your benefits are $1,000 or less (including amounts in your rollover account), you are required to receive a lump sum distribution of your benefits as soon as administratively feasible after your termination of employment. But you still have two choices with regard to this distribution: Receive a cash distribution (less 20% for income tax withholding); or Elect a direct rollover to a traditional IRA or another eligible retirement plan. You will be provided an election form to make this choice. If you fail to timely complete the election form and return it to the Finance Department, you will receive a cash distribution (less the 20% for income tax withholding). LOANS FROM THE PLAN You may borrow from your accounts with the plan administrator s approval. conditions apply: The following To request a loan, use your PIN to access the website or Retirement Response Line to complete a loan application form or request a form on-line. You must be actively employed by the Company at the time the loan is made. You may have only one loan outstanding at any time. The minimum loan is $1,000. The loan may not exceed the smaller of: -19-

25 50% of your account balance; or $50,000 reduced by your largest loan balance outstanding in the previous 12 months. You may select the repayment period for the loan, but the following rules apply: The loan must be for a term of at least one year. The loan must be repaid within five years unless the loan is for the purpose of buying or constructing your home. If the loan is used to buy or construct your home, the loan must be repaid within ten years. Your loan must be secured by 50% of the amount in your accounts. If you are married, your spouse must give the plan administrator written consent to the use of your accounts as security. Your spouse s consent must be witnessed by a plan representative or by a notary public. Interest will accrue on the principal balance of the loan at a reasonable rate as determined by the plan administrator. The interest rate does not change during the term of the loan, unless you enter military service (see the REEMPLOYMENT AFTER QUALIFIED MILITARY SERVICE section for more information). Any interest you pay is added to your accounts. The loan must be repaid by payroll deduction while you are employed by the Company. It is your responsibility to make sure that your loan is timely repaid. If you miss any scheduled payments, you should contact the Finance Department to pay the delinquent payment before the end of the cure period for the payment. The cure period ends on the last day of the first calendar quarter ending after the calendar quarter in which the loan payment should have been made. A failure to make payment by the end of the cure period may result in a taxable event. If you terminate employment with the Company, the remaining balance of the loan must be repaid within 60 days. If the loan is not timely repaid, the remaining balance of the loan will be treated as a taxable distribution and IRS Form 1099-R will be issued. You will be required to pay a loan application fee. You will be notified of the fee amount. The fee may automatically be deducted from your accounts. APPEAL PROCEDURE You must file an application with the plan administrator to receive your benefits from the Plan. If your application is denied, in whole or in part, the plan administrator will give you written -20-

26 notice of the denial within 90 days after your claim is received, unless special circumstances require more time for processing the claim. If more processing time is required, the plan administrator will give you written notice of the extension before the initial 90-day period is completed. The extension will not be longer than 90 days from the end of the initial period. You may make a written request to the plan administrator for a review of your denial. Your written request must be made within 60 days after the mailing date of your notice of denial or the date you receive your first benefit payment, whichever applies. You must refer to the Plan provisions on which your request is based and state the facts you believe justify a reversal or modification of the plan administrator s decision. You may examine pertinent documents and submit pertinent issues in writing. You may have an authorized representative act for you in requesting a review. The plan administrator will review its decision denying benefits within 60 days after receiving your written request. Special rules apply if you are determined to be disabled by the Social Security Administration, but you apply for a benefit under the Plan due to your total disability and your application is denied. These rules provide a longer period of time to appeal a denial of benefits (180 days instead of 60 days). Also, if you file an appeal, the plan administrator has a shorter period of time to respond (45 days instead of 90 days). More information regarding these special rules is available upon request. REEMPLOYMENT AFTER TERMINATION OF EMPLOYMENT If you leave the Company and are later reemployed by the Company, the following rules apply to you: If you were a participant in the Plan, you are eligible to participate again as of your date of reemployment. If you were not a participant, your prior service may count in determining when you become eligible to participate in the Plan, depending on how long you were gone from the Company. REEMPLOYMENT AFTER QUALIFIED MILITARY SERVICE You have special rights if you leave the Company to perform qualified military service and are reemployed by the Company while your rehire rights are protected by federal law. Qualified military service includes service with the U.S. Armed Forces, the Army National Guard and the Air National Guard when on active duty for training, inactive duty training, or full-time Guard duty. -21-