Summary Plan Description

Transcription

1 Summary Plan Description Taylor Companies 401(k) and Profit Sharing Plans January 2016

2 TABLE OF CONTENTS Page ADMINISTRATIVE INFORMATION... 1 INTRODUCTION... 2 TOPIC 1 - DEFINITIONS... 3 Account... 3 Annual Additions... 3 Board of Directors... 3 Break in Service... 3 Compensation... 3 Elective Deferral Contributions... 3 Employer... 3 Forfeiture... 3 Hours of Service... 3 Normal Retirement Age... 4 Participant... 4 Plan Administrator... 4 Plan Year... 4 Transfer Contributions... 4 Trust Fund... 4 Trustee... 4 USERRA... 4 Valuation Date... 4 Year of Service... 5 TOPIC 2 - PARTICIPATION IN THE PLAN... 5 Eligibility... 5 Rehired Employees... 5 TOPIC 3 - CONTRIBUTIONS... 6 Participant Accounts... 6 Pre-tax Elective Deferral Contributions... 6 Roth Elective Deferral Contributions... 7 Making Elective Deferral Contributions... 7 Catch-Up Contributions... 8 Employer Matching Contributions... 8 Employer Profit Sharing Contributions... 8 Allocation of Employer Profit Sharing Contributions... 9 Rollover Contributions/Transfer From Qualified Plan... 9 Allocation of Contributions Under USERRA... 9 TOPIC 4 CONTRIBUTION LIMITS TOPIC 5 - INVESTMENT OF YOUR ACCOUNT Separate Accounts i

3 Investment Direction by Participants Fees and Expenses TOPIC 6 - VESTING OF CONTRIBUTIONS Your Vested Benefits Full Vesting Forfeitures Restoration of Your Account Upon Being Rehired TOPIC 7 - PARENTAL ABSENCE PROVISIONS TOPIC 8 - DISTRIBUTIONS Methods of Distribution Normal Time of Distribution Distribution After Death Withdrawals of Rollover Contributions Withdrawals After Age 59½ Anti-Assignment TOPIC 9 - HARDSHIP DISTRIBUTIONS TOPIC 10 - DIRECT ROLLOVERS OF DISTRIBUTIONS TOPIC 11 - BENEFICIARY DESIGNATION TOPIC 12 - LOANS TO PARTICIPANTS TOPIC 13 - TOP-HEAVY PLAN PROVISIONS TOPIC 14 - CLAIMS Claim Procedure Claim Review Procedure Special Rules Applicable to Disability Claims TOPIC 15 - MISCELLANEOUS Federal Pension Benefit Insurance Terms and Conditions of Employment Plan Changes and Termination Interpretation of Plan Terms Controlling Law TOPIC 16 - ERISA RIGHTS Receive Information About Your Plan s Benefits Prudent Actions by Plan Fiduciaries Enforce Your Rights Assistance With Your Questions TOPIC 17 SPECIAL RULES FOR STANDARD REGISTER EMPLOYEES ii

4 ADMINISTRATIVE INFORMATION Name of Plan: Sponsor/Employer: Taylor Companies 401(k) and Profit Sharing Plans Taylor Corporation 1725 Roe Crest Drive Post Office Box 3728 North Mankato, MN Employer ID Number: Plan Number: 002 Plan Type: Service of Legal Process: Plan Administrator: Account Access: Trustee: Plan Year: This Plan is a qualified defined contribution retirement plan, specifically a profit sharing plan with a qualified cash or deferred arrangement. The Plan is also intended to constitute an ERISA Section 404(c) Plan. The designated agent for the service of legal process is the Plan Administrator. The Trustee may also have legal process served on it. Taylor Corporation 1725 Roe Crest Drive Post Office Box 3728 North Mankato, MN Bank of America Merrill Lynch Retirement Services Bank of America, N.A Merrill Lynch Drive Pennington, NJ The consecutive twelve-month period which begins on January 1 and ends on the subsequent December 31. 1

5 INTRODUCTION Taylor Corporation initially adopted a Profit Sharing Plan in A separate 401(k) Plan was established in In 2004 the separate plans were merged to form this single plan, known as the Taylor Companies 401(k) and Profit Sharing Plans (the Plan ). This summary describes the provisions of the Plan as in effect on January 1, The purpose of the booklet is to summarize the provisions of the Plan and show how those provisions apply to you as a Participant. Many questions arise in connection with the operation of a plan and this summary addresses those questions which arise most frequently. If a situation arises which is not covered by this summary, the Plan Administrator should be contacted. In addition to Taylor Corporation, the sponsoring employer, a number of other businesses have adopted the Plan for the benefit of their eligible employees. The Plan Administrator can provide a complete list of the other adopting businesses. Unless otherwise indicated by the context, the term Employer will include these other adopting businesses. Please read this summary completely. Many provisions in the Plan relate to one another. Reading a single paragraph or section will not explain the relationships. You and your beneficiary may examine all documents and records relating to the Plan. The Plan, Trust Agreement and any amendments are available for inspection at the office of the Plan Administrator and may be examined during regular business hours or by appointment. This summary does not alter the Plan or the Trust Agreement. The Plan document (which is more detailed than the summary) is the one that controls all of the rights of Participants and beneficiaries. The actual text of the Plan and any amendment made to the Plan shall control in all instances. 2

6 TOPIC 1 - DEFINITIONS Many terms used in this summary may be new to you and it is important that you understand these terms and how they are used in the operation of the Plan. Account - A separate Account is established for you under the Plan to keep track of your (i) Pre-tax Elective Deferral Contributions, (ii) Roth Elective Deferral Contributions, (iii) Matching Contributions, (iv) Employer Profit Sharing Contributions, (v) pre-1987 Voluntary Employee Contributions, (vi) Rollover Contributions or amounts which the Plan permit to be transferred to your Account from another plan, (vii) Qualified Non-elective Contributions, (viii) Qualified Matching Contributions, (ix) Catch-Up Contributions, and (x) Transfer Contributions if any, allocated to your Account and any earnings of losses thereon. Annual Additions - The sum of all employee contributions and employer contributions made during the Plan Year to your Accounts in the Plan. Board of Directors - The Board of Directors of Taylor Corporation. less. Break in Service - A Plan Year in which you have completed 500 Hours of Service, or Compensation - The total amount paid to you by the Employer during a Plan Year for services rendered to the Employer that is required to be reported on your Form W-2 for income tax purposes. Compensation includes salary, wages, overtime, bonuses, commissions, noncash compensation, Elective Deferral Contributions and any amounts you contribute to a cafeteria plan or transportation expense reimbursement plan, if the Employer sponsors one. Compensation does not include expense reimbursements, fringe benefits (cash and non-cash), moving expenses, amounts paid under a deferred compensation plan, severance pay, welfare benefits, Employer Contributions to this or any other pension, profit sharing, or annuity plan, or amounts paid to you while you are not a Participant. The maximum Compensation taken into account for Participants is $265,000 and is adjusted from time to time by the Internal Revenue Service to reflect changes in the cost of living. If you become a Participant on a date other than the first day of the Plan Year, your Compensation for that Plan Year will be limited to that portion paid to you while you were a Participant. Elective Deferral Contributions - Contribution made by the Employer according to your written Elective Deferral Agreement to defer a portion of your salary into the 401(k) portion of the Plan. Elective Deferrals may be pre-tax or after-tax (Roth Elective Deferrals), as you elect. Employer - Taylor Corporation and any successor entity thereto who adopts the Plan. Employer shall also include wholly-owned U.S. subsidiaries of Taylor Corporation, unless otherwise determined by the Board of Directors. Forfeiture - The portion of your Account which, upon the occurrence of certain events, may be used to offset Employer contributions or pay Plan administrative expenses. (See Vesting of Contributions ). Hours of Service - Hours of Service are used for a number of purposes in the Plan. You are credited with an Hour of Service in the following circumstances: (a) Each hour you work for which you are paid or will be paid. 3

7 (b) Each hour for which you are paid or entitled to payment for a period of time during which you performed no duties due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence; however, no more than 501 Hours of Service will be credited to you for the Plan Year during which you perform no duties. (c) Each hour for which back pay is awarded or agreed to by the Employer for which you have not already been paid. You will not be credited with an Hour of Service if you are receiving payments under a workers compensation plan, unemployment or other programs required by law. (d) For purposes of determining a one-year Break in Service, you may be credited with certain hours up to a maximum of 501 hours, while you are performing no duties due to a Parental Absence. A Parental Absence is a leave of absence from work due to: (1) your pregnancy; (2) the birth of your child; (3) the placement of a child with you in connection with your adoption of the child; or (4) your absence to care for a child for a period beginning immediately after its birth or placement. The Plan Administrator may require written certification from you (including a physician s statement) that the leave qualifies as a Parental Absence. (e) Each hour for which you are entitled in accordance with your rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Normal Retirement Age - Your Normal Retirement Age is age 65. Participant - A Participant is any present or former employee who is or may be eligible to receive any type of benefit from the Plan. (See Participation in the Plan ). Plan Administrator - Taylor Corporation will be the Plan Administrator, unless a person or committee is appointed by the Board of Directors to act on behalf of the Employer. Plan Year - A consecutive twelve month period which begins each January 1 and ends on the subsequent December 31. Transfer Contributions - Benefits which were merged into the Plan from an employer s former qualified plan. Trust Fund - All of the assets of the Plan held by the Trustee at any time under the Trust Agreement. Trustee - The person, persons or entity appointed by the Board of Directors of the Sponsor to administer the Trust Fund and to manage assets of the Plan under the terms of the Trust Agreement. USERRA ( Uniformed Services Employment and Reemployment Rights Act ) - An Eligible Employee or Participant will be credited with Employer contributions, benefits, and services if on qualified military service leave as defined under Section 414(u) of the Internal Revenue Code. Valuation Date - The last day of each Plan Year and every other day on which the New York Stock Exchange is open for business. 4

8 Year of Service - A consecutive 12-month period during which you have received Compensation for at least 1,000 Hours of Service. A Year of Service is used to determine eligibility, vesting and whether you are entitled to share in the Employer s contribution. You will be credited with all Hours of Service completed with the Employer or any member of the Employer s controlled group. A controlled group is a group of employers related by ownership as specified by the Internal Revenue Code. Eligibility TOPIC 2 - PARTICIPATION IN THE PLAN Employees who are eligible to participate in the Plan are called Participants. You will become a Participant in the 401(k) portion of the Plan on your first day of employment with the Employer. You will become a Participant in the Employer Matching portion of the Plan on the January 1 or July 1 next following the date you complete six months of employment with the Employer. Finally, you will become a Participant in the Profit Sharing portion of the Plan on the January 1, April 1, July 1, or October 1 next following the date you complete one Year of Service. For each portion of the Plan, you must also have reached age 21 to become a Participant (or you will reach age 21 by the December 31st of the Plan Year in which you become a Participant). The following classifications of employees are not allowed to participate in the Plan: Non-resident aliens; Employees who are covered by a collective bargaining agreement which does not provide for their inclusion in the Plan; Workers who have signed an employment agreement, which states that they are not eligible to participate in the Plan; Independent contractors; Workers whose residence is located outside the United States; Home worker, special arrangement, temporary or seasonal employees (except that employees who complete 1,000 Hours of Service as described below will be eligible to participate); or Leased employees. If you do not complete 1,000 Hours of Service for which you have been compensated during the initial 12-month period of your employment, the second or subsequent 12-month period to determine your eligibility will be the Plan Year which begins after your first day of work. Rehired Employees Generally, if you terminate employment after becoming a Participant in some or all portions of the Plan, upon being rehired in an eligible classification of employment, you resume 5

9 participation in those parts of the Plan in which you were a Participant when your employment terminated on the date you first perform an Hour of Service after your rehire. Participant Accounts TOPIC 3 - CONTRIBUTIONS When you become a Participant in the Plan, the Trustee will set up an Account in your name. The purpose of the Account is to keep track of your interest in the Plan (contributions, plus gains or losses on those contributions). Separate subaccounts of your Account will be maintained as necessary, the most common of which are: Pre-tax Elective Deferral Contributions; Roth Elective Deferral Contributions; Catch-Up Contributions; Employer Matching Contributions; Employer Profit Sharing Contributions; and Rollover Contributions. Less common subaccounts include: Pre-1987 Voluntary Employee Contributions; Qualified Non-elective Contributions; Qualified Matching Contributions; and Transfer Contributions. Pre-tax Elective Deferral Contributions The Plan allows eligible Employees to participate in a cash or deferred arrangement (also known as a 401(k) option). After you have satisfied the eligibility requirements, you may enter into an Elective Deferral Agreement (the Agreement ) as soon as administratively feasible thereafter. Under this arrangement, the Employer will make a contribution to your Pre-tax Elective Deferral Account from each payroll period during the Plan Year equal to the amount specified in your Elective Deferral Agreement. If you elect to participate in the 401(k) portion of the Plan, you agree under the terms of the Agreement to defer (or reduce) your Compensation each payroll period by the percentage you elect. This amount will be contributed to your Account under the Plan. If you are an eligible Employee hired on or after January 1, 2007 and you do not submit an Elective Deferral Agreement when first eligible to do so, the Plan Administrator will begin making Pre-tax Elective Deferral Contributions on your behalf without authorization from you. The amount of your automatic Pre-tax Elective Deferral Contributions will be 1% of your 6

10 Compensation each pay period. Automatic payroll deductions will continue at that rate until you request to increase, decrease or discontinue Pre-tax Elective Deferral Contributions. If you do not request any changes, each year, usually in March, the percentage of your Compensation automatically contributed to the Plan will be increased by 1%, up to a maximum of 10% of your Compensation. Before such automatic payroll deductions first begin, the Plan Administrator will notify you of this automatic enrollment feature, and will offer you the opportunity to elect some other percentage of your Compensation to contribute as an Elective Deferral Contribution each pay period, or to elect not to contribute to the Plan. All Pre-tax Elective Contributions deducted from Compensation under the automatic enrollment rules will be invested in the qualified default investment fund selected by the Plan Administrator until such time you make another investment election (see Topic 5). Roth Elective Deferral Contributions In addition to Pre-tax Elective Contributions, you may make Roth Elective Deferral Contributions to the Plan through regular payroll deductions, in an amount you authorize and equal to a percentage of your Compensation. Roth Elective Deferral Contributions are withheld from your compensation after federal, state and local income taxes, and you cannot deduct your Roth Elective Deferral Contributions on your tax return. While you won't get an upfront tax benefit like you do with Pre-tax Elective Deferrals, withdrawals from your Roth Elective Deferral Contributions Account (including any earnings) taken after you reach age 59½, die or become disabled will not be subject to income tax, provided five years or more have passed since you first made Roth Elective Deferral Contributions. Deciding whether you should make Pre-tax Elective or after-tax Roth Elective Deferral Contributions will depend on your individual circumstances, future tax rates and rules, and the relative value of deferred taxation of both contributions and any earnings (Pre-tax Elective Deferral Contributions) as compared to current taxation of contributions and no taxation of any earnings (Roth Elective Deferral Contributions). Unlike a Roth IRA, you cannot elect to recharacterize Roth Elective Deferral Contributions as pre-tax Elective Deferral Contributions at any time. You should carefully consider these and other factors before deciding to make Roth Elective Deferral Contributions. Making Elective Deferral Contributions Whether you elect to make Pre-Tax Elective Deferral Contributions, Roth Elective Deferral Contributions, or a combination of both, you may defer an amount from 0% to 100% of your Compensation, in whole percentage points, up to the maximum deferral amount announced by the Internal Revenue Service applicable for the Plan Year. The deferral limit is $18,000 in 2016, and is subject to change each year, based on the cost-of-living adjustment. An Agreement made pursuant to the Plan is subject to the following rules: 1. The Agreement will apply towards each payroll period following the date the Agreement is in effect and on file with the Employer and will remain in effect until revised or revoked. The Agreement may be made in writing or by telephone or internet transmission, as authorized by the Plan Administrator. 2. The Agreement may be revised. A revision to your Agreement will become effective as soon as administratively feasible immediately following the date your revised Agreement is accepted by the Plan Administrator. 7

11 3. The Agreement may be revoked or revised by the Employer if such revocation or revision is necessary to satisfy the rules and regulations under the Internal Revenue Code relating to 401(k) arrangements. 4. If you receive a hardship distribution as described in Topic 9, the Agreement will be suspended according to the rules for hardship distributions. You may enter into a new Agreement after six (6) months of suspension. The new Agreement will become effective as soon as administratively feasible following the execution of a new Agreement. Catch-Up Contributions If you are a Participant who is eligible to make Elective Deferral Contributions under the Plan who has attained or will attain age 50 before the close of the Plan Year, and whose Elective Deferral Contributions have been limited by a statutory or plan limitation, you will be eligible to make Catch-Up Contributions to the 401(k) portion of the Plan, up to the maximum permitted by law ($6,000 in 2016, and subject to annual adjustment). These Catch-Up Contributions are in addition to the overall IRS salary deferral limit for elective deferrals. Catch- Up Contributions may be designated as either Pre-Tax Elective Deferral Contributions, Roth Elective Deferral Contributions, or a combination of both. Employer Matching Contributions The Employer may make Matching Contributions to the Plan. The amount of the Employer Matching Contribution is currently 50% of the first 4% of Compensation that each Participant elects to contribute to the Plan as an Elective Deferral Contribution (either Pre-tax or Roth) each payroll period. In its discretion, the Employer may change prospectively the percentage of the match or the percentage of the Compensation matched. If, at the end of the Plan Year, your total Matching Contributions are less than the Matching Contribution that could have been credited on an annualized basis, an additional trueup Matching Contribution will be made. The formula used to calculate the true-up contribution compares the Matching Contributions actually made during the Plan Year with the amount that would have been made if a single calculation were made for the entire Plan Year. If the latter amount is greater than the Matching Contribution actually made, the difference will be contributed to your account. A true-up Matching Contribution shall be provided at the end of the Plan Year only to those Participants who made Elective Deferral Contributions equal to at least 1% of their Compensation for the Plan Year and were employed by the Employer on the last business day of the Plan Year. Employer Profit Sharing Contributions Each Plan Year the Employer may contribute to the Profit Sharing portion of the Plan an amount, if any, which the Board of Directors will determine in its sole discretion based on the profitability of each individual company. The amount of this Employer Profit Sharing Contribution may vary from year to year and may be omitted for any year. 8

12 Allocation of Employer Profit Sharing Contributions The Employer Profit Sharing Contribution will be divided among Participants eligible to share in the contribution for the Plan Year. Your share of the contribution will be based on the ratio your Compensation bears to the total Compensation received by other eligible Participants. Only those eligible Participants (see Topic 2) who were credited with a Year of Service for the Plan Year and who were employed by the Employer or an affiliate of the Employer on the last day of the Plan Year will be eligible to receive a share of the Employer Profit Sharing Contribution. If you retire on or after age 65, die or become disabled during the Plan Year, you will receive a share of the Employer Profit Sharing Contribution even though you are not employed on the last day of the Plan Year and even if you were not credited with a Year of Service for such Plan Year. If you are eligible to participate in the Plan and you transfer employment during a Plan Year from one affiliate of the Employer to another, are credited with at least 1,000 Hours of Service and are employed by an affiliate on the last day of the Plan Year, you will share in the Profit Sharing Contribution made by each participating employer you worked for based on the Compensation you earned with that employer. However, any Compensation paid after you cease being an eligible Participant or by an affiliate other than a participating employer is not counted in your Compensation. Rollover Contributions/Transfer From Qualified Plan You are permitted to rollover certain cash distributions from other eligible retirement plans into the Plan. Eligible retirement plans include other qualified plans, individual retirement accounts ( lra ), 403(b) plans and annuities and non-federal governmental deferred compensation plans under Section 457(b) of the Code. The Plan Administrator will advise you about the conditions which must be satisfied before a Rollover Contribution, paid directly to you, from another eligible retirement plan (as described above) will be accepted by the Trustee. All Rollover Contributions will be placed in your Rollover Contribution Account. Your interest in your Rollover Contribution Account, adjusted to reflect all earnings, losses and expenses, is always 100% vested. In addition, the Plan Administrator may allow the Trustee to accept a direct rollover of your benefit distribution transferred from another eligible retirement plan (as described above), paid directly to the Plan, after you become employed by the Employer. You may be requested to provide information to the Plan Administrator relating to your distribution from these other plans to determine whether it is qualified as a direct rollover. Any transferred amount will be maintained in your Rollover Contribution Account, adjusted to reflect all earnings, losses and expenses. Allocation of Contributions Under USERRA Employer contributions during a Participant s USERRA leave will be allocated in accordance with the requirements of USERRA. 9

13 TOPIC 4 CONTRIBUTION LIMITS The Internal Revenue Code limits the total contributions that you may have added to your accounts in all defined contribution plans maintained by your Employer. The sum of all Employer contributions made on your behalf and all employee contributions other than Catch- Up Contributions, made for a Plan Year are known as Annual Additions. The Annual Additions limit is equal to the lesser of: $53,000 (in 2016, and may be adjusted for annual cost of living increases); or 100% of your Compensation. Separate from the Annual Additions limit, your Elective Deferral Contributions may be limited below the percentage you have selected due to legal requirements regarding overall participation levels. You will be notified as soon as possible if a limit applies. If, however, the limit is exceeded at the end of the year, the Employer may refund excess Elective Deferral Contributions, together with earnings, to highly paid Participants as prescribed by law. Any amount refunded is included in the Participant s taxable Compensation. Under certain circumstances, the Employer may also contribute an additional amount to selected Participants to eliminate the excess. Separate Accounts TOPIC 5 - INVESTMENT OF YOUR ACCOUNT All of the money contributed to the Plan by Participants and the Employer shall be put into a Trust maintained by the Trustee. Participant and Employer Contributions will be delivered to the Trustee within the time prescribed by federal law. The assets of the Trust are not mixed with the assets of the Employer. Once in the Trust, the assets are used to provide benefits to Plan Participants and their beneficiaries, and are separate and apart from the assets of the Employer. The Trustee of the Plan (or other recordkeeper designated by the Employer) will create and maintain a separate account for you and for each Plan Participant. Each Participant s account will be separately credited with the amount of each different type of contribution made to the Plan and any gain or loss. Investment Direction by Participants Under the Plan you may direct the investment of your Account. The Plan Administrator will inform you of the available investment funds and will notify you of any changes to the investment funds available to you. The Plan Administrator will inform you of the manner and the established rules for directing the investment of your Account. In the event you do not make an investment designation, your Account will be invested in the fund(s) designated by the Plan Administrator as the Plan s qualified default investment alternative. 10

14 Each fund is managed with the intent of realizing gains on the investments, which will increase their value. Of course, there is no guarantee that any fund will always be successful. Your accounts will increase (or decrease) in value as the shares of each investment fund in your accounts increase (or decrease) in value. No guarantee is made as to the rate of return, if any, that will be achieved. Investments in certain funds may also involve some risk to the principal of your account, and to the extent that such risk materializes in losses, the principal amount of your account is subject to reduction. The Trustee will continue to hold all investments according to your current investment designation until you make a change to your investment designation. You may make a separate designation for amounts currently in your Account and for future amounts not yet contributed to your Account. This Plan is intended to constitute a plan described in Section 404(c) of the Employee Retirement Income Security Act, and Title 29 of the Code of Federal Regulations, Section c-1. This means that the investment selections and investment information offered to Participants under the Plan are intended to provide Participants with the ability to exercise independent control over the assets in their Account. When you, as a Participant, exercise control over all or a portion of your Account, the fiduciaries of the Plan are relieved from liability for any losses that are the direct and necessary result of your investment instructions. All Plan Participants will automatically be provided with certain information regarding the Plan s investment options. The following information will not be provided automatically but is available upon request: (a) Copies of prospectuses (or, alternatively, any short-form or summary prospectus, the form of which has been approved by the Securities and Exchange Commission) for the disclosure of information to investors by entities registered under either the Securities Act of 1933 or the Investment Company Act of 1940, or similar documents relating to designated investment alternatives that are provided by entities that are not registered under either of these Acts; (b) Copies of any financial statements or reports, such as statements of additional information and shareholder reports, and of any other similar materials relating to the plan s designated investment alternatives, to the extent such materials are provided to the Plan; (c) A statement of the value of a share or unit of each designated investment alternative as well as the date of the valuation; and (d) A list of the assets comprising the portfolio of each designated investment alternative which constitute plan assets within the meaning of 29 CFR and the value of each such asset (or the proportion of the investment which it comprises). Fees and Expenses Your Account balance will determine the amount of retirement income you will receive from the Plan. While contributions to your Account and investment earnings increase your 11

15 retirement income, investment losses and fees and expenses paid by the Plan reduce the growth in your Account. Plan fees and expenses generally fall into three categories: Plan Administration Fees. The day-to-day operation of the Plan involves expenses for basic administrative services such as Plan record keeping, accounting, legal and trustee services that are necessary for administering the Plan as a whole. In some instances, the costs of administrative services will be covered by investment fees that are deducted directly from investment returns. Otherwise, if administrative costs are separately charged, they will be borne either by the Employer or charged directly against the assets of the Plan. When paid directly by the Plan, administrative fees are either allocated among individual Accounts in proportion to each Account balance (i.e., Participants with larger account balances pay more of the allocated expenses) or passed through as a flat fee against each Participant s Account. Investment Fees. Fees for investment management and other investment-related services generally are assessed as a percentage of assets invested and are often deducted directly from investment returns. Your net total return is your return after these fees have been deducted. Individual Service Fees. In addition to overall administrative expenses, there may be individual service fees associated with optional features offered under the Plan. Individual service fees are charged separately to the accounts of individuals who choose to take advantage of a particular Plan feature. For example, individual service fees may be charged to a participant for taking a loan from the Plan. If you have questions about the fees and expenses charged to the Plan, contact the Plan Administrator. Your Vested Benefits TOPIC 6 - VESTING OF CONTRIBUTIONS To vest means to own. The amount of benefits you receive from the Plan depends upon your vested interest in your Account balance. Full Vesting You are always 100% vested in the portion of your Account attributable to (i) Pre-tax and Roth Elective Deferral Contributions, (ii) Rollover Contributions or amounts which the Plan permits to be transferred to your Account from another plan, (iii) Qualified Nonelective Contributions; (iv) Qualified Matching Contributions, and (v) Catch-Up Contributions. You will be 100% vested in your Account attributable to your Matching Contributions and Profit Sharing Contributions upon the occurrence of any of the following circumstances: Attainment of Normal Retirement Age while employed; 12

16 Termination of employment because of your incapacity on account of bodily injury or physical or mental disease which has been determined under the Social Security or Railroad Retirement Act to entitle you to disability benefits; Death while employed; Termination of the Plan; or Completion of three (3) or more Plan Years during which you have received pay for 1,000 or more Hours of Service. If you terminate employment before the occurrence of any of the above circumstances, you will not be vested in the portion of your Account attributable to Matching Contributions and Profit Sharing Contributions. Forfeitures The portion of your Account which is not vested is forfeitable. A Forfeiture of your nonvested Account balance will occur if you terminate employment while you are less than 100% vested and incur five consecutive one year Breaks in Service or if you have received, or are deemed to have received a lump sum distribution of your vested Account prior to a period of five consecutive one year Breaks in Service. Forfeitures of Employer Matching Contributions will be used to pay administrative expenses of the Plan or offset the amount of Employer Matching Contributions made by the Employer to the Plan. Profit Sharing forfeitures will be used to pay administrative expenses of the Plan or offset the amount of Employer Matching and/or Profit Sharing Contributions made by the Employer to the Plan. Restoration of Your Account Upon Being Rehired If a portion of your Account is forfeited and you are reemployed with the Employer before incurring five (5) consecutive Breaks in Service, the amount otherwise forfeited will be restored to your Account if you repay within five (5) years of reemployment the amount that was previously distributed to you, if any. If all of the conditions for restoration are met, then your Account will be restored with the amount of the Forfeiture and the repaid amount. TOPIC 7 - PARENTAL ABSENCE PROVISIONS Under some circumstances you will not incur a Break in Service for the first twelve (12) months you are absent from employment by reason of a Parental Absence. If you are absent due to a Parental Absence, then you will not incur a Break in Service for the twelve (12) months immediately following the commencement of your Parental Absence. This provision is designed only to prevent you from incurring a Break in Service. 13

17 For example, Anne Brown, a Participant in the Plan, takes an unpaid leave because of the birth of her child beginning April 1, The Employer will credit Anne with service for the period until the first anniversary of her Parental Absence (until April 1, 2017), so that she does not have a Break in Service in the 2016 Plan Year. If she does not return to employment by April 1, 2018 (the second anniversary of her absence) she will be considered a terminated employee for purposes of crediting service under the Plan. The Plan Administrator cannot give you credit for a Parental Absence unless you advise the Plan Administrator that your absence from work was a Parental Absence, and the number of days for which there was such an absence. Methods of Distribution TOPIC 8 - DISTRIBUTIONS Your benefits will be paid as a lump sum distribution. Normal Time of Distribution The payment of benefits generally will be made as soon as administratively feasible after your retirement or your termination of employment with the Employer. For distributions prior to your Normal Retirement Age, death, or disability, you must provide the Plan Administrator with a formal request before a distribution will be made to you, except where the value of a distribution of your total Account is less than or equal to $5,000. Any Account valued at $5,000 or less can be distributed by the Trustee without the Participant s consent. If your total Account is $5,000 or less when you terminate employment, the following rules will apply: $1,000 to $5,000: If your total Account is $5,000 or less but more than $1,000, the Plan Administrator will distribute your Account and your lump sum payment will be rolled over directly to an IRA established in your name by the Plan Administrator. Prior to the rollover you have the option of having your lump sum paid in cash directly to you, or rolled over to an IRA or retirement plan of your choice. If an IRA is established in your name by the Plan Administrator, your IRA will be invested in an investment option designed to preserve your principal account balance, provide a reasonable rate of return, and maintain liquidity. Fees and expenses charged for the establishment and maintenance of your IRA will be paid directly from your IRA. Additional information concerning the Plan s cash-out procedures following termination of employment, the IRA provider selected by the Plan Administrator, and the fees and expenses charged for establishing and maintaining IRAs is available from the Plan Administrator. Payment cannot begin until 30 days after the Plan Administrator has notified you of your options for receiving payment of your account. In most cases, you may waive this requirement by electing earlier payment. $1,000 or Less: If your total Account is $1,000 or less, the Plan Administrator will distribute your Account. When determining whether your total Account exceeds $1,000, your Rollover Contributions Account is disregarded. You may be given the option of having your lump sum paid in cash directly to you, or rolled over to an IRA 14

18 or retirement plan of your choice. If you make no choice, your lump sum will be paid in cash directly to you, less applicable tax withholding. If you are a five-percent (5%) owner, the date on which distributions to you must begin (your required beginning date ) is April 1 of the calendar year following the calendar year in which you attain age 70½, even if you are still actively employed by the Employer. If you are not a five-percent (5%) owner, your required beginning date is April 1 following the end of the Plan Year in which you terminate employment or attain age 70½, whichever is later. Distribution After Death Payment of your vested Account balance to your beneficiary will be made as soon as administratively feasible following your death, unless the beneficiary otherwise elects. Distribution must be made no later than 5 years after your death. However, if the beneficiary is your spouse, the distribution can be deferred until December 31 of the calendar year in which you would have attained age 70½ if you had lived. Your beneficiary may be eligible to make a rollover to an IRA. Withdrawals of Rollover Contributions If you have made Rollover Contributions to the Plan, all or part of such contributions (including earnings on such contributions) may be withdrawn at any time, even while you remain employed. Withdrawals After Age 59½ You may withdraw part or all of your vested interest in the Plan at any time after you have attained age 59½. The withdrawal will not affect your continued participation in the Plan. Anti-Assignment Except in the case of a qualified domestic relations order you may not assign any interest you may have in your benefit until received, except as expressly provided in the Plan, and any interest you may have under the Plan may not be legally attached. The Plan Administrator may be required by law to recognize obligations you incur as a result of a domestic relations order which it determines to be qualified (a QDRO ). If a QDRO is received by the Plan Administrator and is determined to be a QDRO, all or a portion of your interest in the Plan may be assigned to a spouse, former spouse, child or other dependent pursuant to the QDRO. The provisions of the Plan document and rules issued by the Plan Administrator shall control if the Plan Administrator determines that a QDRO applies to your interest in the Plan. TOPIC 9 - HARDSHIP DISTRIBUTIONS Although the benefits provided to you under the Plan are intended to provide you with funds to supplement your retirement income, the Employer recognizes there are situations which arise for which you have a need for money from your Account before you retire or terminate your employment. Therefore, the Plan provides for the distribution of a portion of your 15

19 Account attributable only to your Elective Deferral Contributions upon circumstances of financial hardship. Hardship distributions can be made from your Elective Deferral Contributions, but not from any income earned by those contributions. After receiving your written request for a hardship distribution, the Plan Administrator must approve the distribution if it qualifies under rules for administration of hardship distributions. Such hardships which would qualify for a hardship distribution include: Anticipated or actual medical expenses for you, your spouse, your dependents or your primary Plan beneficiary; The purchase (other than mortgage payments) of a principal residence for yourself; The payment of tuition and education related expenses for the next 12 months of post secondary education for yourself, your spouse, your dependents or your primary Plan beneficiary; The need to prevent eviction from, or foreclosure on the mortgage of, your principal residence; Payments for burial or funeral expenses for your deceased parent, spouse, children, other dependents or your primary Plan beneficiary; or Expenses for the repair of damage to your principal residence that would qualify for the casualty deduction under the tax code. You are urged to consider other sources of funds before making a request for a distribution prior to termination of employment. Each request for a hardship distribution will be determined on its own merits and judged in a uniform and nondiscriminatory manner. A hardship distribution will be made from your Account only if you certify and agree that all of the following conditions are satisfied: The distribution requested is not in excess of the amount of your immediate and heavy financial need; You have obtained all distributions other than hardship distributions, and all nontaxable loans currently available under all plans maintained by your Employer; and Your Elective Deferral Contributions will be suspended for at least six (6) months after your receipt of the hardship distribution. Hardship distributions of Pre-tax Elective Deferral Contributions are taxable to you in the year of distribution. Hardship distributions of Roth Elective Deferral Contributions may or may not be taxable to you in the year of distribution, depending on your age and whether five years have passed since you first made Roth Elective Deferral Contributions. All hardship distributions also are subject to an additional 10% excise tax, unless you are age 59½ or older when you take the distribution, or the amount withdrawn is deductible as a medical expense for the year of 16

20 distribution. A hardship distribution is not allowed to be a direct rollover to an IRA or another qualified retirement plan. TOPIC 10 - DIRECT ROLLOVERS OF DISTRIBUTIONS You may elect to have an eligible distribution from the Plan transferred directly to another eligible retirement plan. Eligible retirement plans include other qualified plans, individual retirement accounts ( IRA ), 403(b) plans and annuities, and eligible governmental deferred compensation plans under Section 457(b) of the Code (provided such eligible retirement plan accepts rollover contributions). If you do not elect a direct rollover of an eligible distribution, a federal income tax will be mandatorily withheld from your distribution payment at a rate of 20%, plus an excise tax may apply if the distribution is considered an early distribution. Even if you do not elect a direct rollover of your distribution you may still roll over a distribution from the Plan which is paid to you, to an IRA or an eligible retirement plan. However, a rollover must be made within 60 days from the date you receive it. This distribution will be subject to the 20% withholding however, since the rollover was not made directly from the Plan. If your distribution includes Roth Elective Deferral Contributions, the taxation of the Roth deferrals depends on whether or not the distribution is a qualified distribution. For a distribution of Roth deferrals to be a qualified distribution, you must have satisfied two requirements: (1) the distribution must occur on or after the date you attain age 59½, on or after the date of your death, or on account of your being disabled; and (2) the distribution must occur after the end of the 5th calendar year beginning with the first calendar year for which you made Roth Elective Deferrals to the Plan. If the distribution of Roth deferrals is a qualified distribution, then neither the deferrals nor the earnings distributed on the deferrals will be taxable to you. If the distribution is not a qualified distribution, then the portion of the distribution representing your Roth deferrals will not be taxable to you, but the portion of the distribution representing earnings on the Roth deferrals will be taxable to you in the year you receive the distribution, unless you elect a direct rollover as described above, or within 60 days following receipt, you roll over the distribution to a Roth IRA, or you roll over the earnings on the Roth deferrals to a qualified plan or to a 403(b) plan. You will be provided with a Special Tax Notice from the Plan Administrator at least 30 days prior to the date on which you receive an eligible rollover distribution. You may elect to waive the 30 day period between the receipt of your notice and the date of distribution. TOPIC 11 - BENEFICIARY DESIGNATION The Plan provides that if you are married when you die, your surviving spouse is the beneficiary of your benefits under the Plan. IF YOU DESIGNATE SOMEONE OTHER THAN YOUR SURVIVING SPOUSE AS YOUR BENEFICIARY, YOUR SURVIVING SPOUSE MUST CONSENT TO YOUR BENEFICIARY DESIGNATION and your spouse s consent must be witnessed by a notary public. It is important for you to remember that if you make a beneficiary designation and thereafter get married, your new spouse automatically becomes the beneficiary unless your new spouse consents to another beneficiary. IF YOU DESIGNATED SOMEONE OTHER THAN YOUR SPOUSE AS YOUR BENEFICIARY WITHOUT YOUR SPOUSE S CONSENT, THE DESIGNATION WILL NOT BE VALID. 17

21 The Plan Administrator will provide a method for beneficiary designation and spousal consent. A completed beneficiary designation must be returned to the Trustee in order to be effective. Changes can be made online via Beneficiary designations may be changed at any time, but a new online designation must be completed each time. IT IS YOUR RESPONSIBILITY TO KEEP BENEFICIARY DESIGNATIONS CURRENT. TOPIC 12 - LOANS TO PARTICIPANTS You may, under certain circumstances, borrow from the vested portion of your Account. Application for a loan can be made by contacting Merrill Lynch at or via A loan from the Plan is subject to a reasonable interest rate calculated as one percentage point above the prime rate as reported in the Wall Street Journal, to be adjusted at the beginning of each month. When added to the amount of any outstanding loans, a loan may not exceed the greater of fifty percent (50%) of your Account balance under all plans of the Employer, and is limited to $50,000. This $50,000 limitation is offset by your highest outstanding loan balance from the Plan during the preceding twelve (12) month period. A loan request will not be approved if it is for an amount less than $500. You may not have more than two loans outstanding at any time. Any loan must be repaid within five (5) years unless the loan is a home loan as defined in the Plan Document which must be repaid within fifteen (15) years. Participants on a qualified military leave of absence during the period of loan repayment must repay the loan within five (5) or (15) years, plus the period of your military leave of absence. You must make the required payments by payroll deduction while you are currently employed by the Employer. Loan payments may be suspended during a period of qualified military service, in which case the loan payment amounts following your return to employment following your period of qualified military service may be different than the amounts you were repaying prior to the military service, so as to take into account the interest that accrued on your loan during your period of qualified military service. The outstanding balance of your loan will be treated as a Segregated Investment Account and earnings or losses will be allocated accordingly. A processing fee will be charged for each new loan requested. A loan will be secured by your vested Account balance. In the event that you default in the repayment of the loan, the unpaid loan balance plus interest may be deducted from any payment or distribution of your Account to which you or your Beneficiary are entitled. The remaining balance on your loan at the time you default will be deemed a distribution to you and will be includable in your taxable income for that year. The outstanding portion of any loans will become due and payable at the time of your termination from the Employer. In most if not all situations, interest will not be deductible from your taxable income. 18