Summary Plan Description. Precision Castparts Corp. 401(k) Retirement Savings Plan. for Employees of

Transcription

1 Summary Plan Description of Precision Castparts Corp. 401(k) Retirement Savings Plan for Employees of PCC Structurals, Inc. (Portland Area Operations and PCC-Schlosser Operations) This summary describes Plan features for the Business Units identified above. If you are not employed at one of these Business Units, please contact your local Human Resources Department for your Business Unit s summary. Administrative Committee Precision Castparts Corp. 401(k) Retirement Savings Plan April 1, 2013

2 Plan Highlights Planning for your future is a challenge, but with the Precision Castparts Corp. 401(k) Retirement Savings Plan, retirement savings can be both convenient and profitable. The Plan offers you these advantages: You choose how much to save, from 1 percent to 75 percent of your eligible pay, or 100 percent of a bonus (less applicable withholding), through convenient elective deferrals of pay from your paychecks. Lower maximum percentages apply to Highly Compensated Employees for contributions other than Catch-up Contributions. Your contributions, or a portion thereof, are matched by your Employer. If you are not eligible to participate in the Precision Castparts Retirement Plan, your Employer supplements your savings with Employer Discretionary Contributions. You may save on taxes because contributions are not subject to current federal and, in most cases, state income taxes. Also, investment earnings on your Plan Accounts are not taxed until your Plan benefit is paid to you. You choose how to invest your Accounts among the investment funds offered. You may borrow or withdraw from your Accounts (subject to certain conditions and terms). You have easy access to Account information via Internet and telephone. The Plan is designed to help you accumulate savings for retirement and achieve your future financial goals. It is one of the few ways you can set aside savings for the future without having to pay current federal and, in most cases, state income taxes on the money you are saving and the earnings from the investments in your Accounts. The Plan s Administrative Committee has contracted with Fidelity to provide administrative and record-keeping services for the Plan. You can access information about your Account as well as request certain transactions and materials about the Plan from Fidelity at or online at or ask your local Human Resources Department. (Note: In the following Summary Plan Description, defined terms appear in bold type where the term is defined. Otherwise they are capitalized.) Esta libreta contiene un resumen en Inglés de sus derechos y beneficios del plan bajo el Precision Castparts Corp. 401(k) Retirement Saving Plan. Si usted tiene dificultad para entender cualquier parte de esta libreta, porfavor contacte a Fidelity al y un representante que habla Español podrá asistirle.

3 TABLE OF CONTENTS 1. Introduction What is the Precision Castparts Corp. 401(k) Retirement Savings Plan? Who is the Plan Sponsor and how is my Employer related? What documents govern the Plan? Eligibility and Enrollment When will I become eligible to participate in the Plan? Am I a Qualified Employee? How do I enroll in the Plan? Your Contributions What pay is included in Compensation? Elective Contributions... 4 Page (a) How do I participate in Elective Contributions?... 4 (b) What are the tax consequences of Elective Contributions?... 4 (c) How often can I change my contribution election?... 4 (d) What if I stop electing contributions and want to start again? What is the maximum I may contribute?... 5 (a) What is the maximum percentage of Compensation I may elect to have contributed to the Plan?... 5 (b) Who are Highly Compensated Employees?... 5 (c) Why are HCEs subject to lower maximum percentages?... 5 (d) What is the maximum dollar amount for Elective Contributions?... 5 (e) What is the maximum dollar amount for Elective Contributions if I am at least age 50? Employer Matching and Employer Discretionary Contributions What are Matching Contributions? What are Employer Discretionary Contributions? Contributions for Periods of Covered Military Leave How can I make up Elective Contributions for the USERRA Leave period? Will my Employer match my Make-up Elective Contributions for the USERRA Leave?... 7 i

4 5.3 Will I receive an Employer Discretionary Contribution for the USERRA Leave period? How are my Compensation and service determined for the USERRA Leave period? Annual Contribution Limits Participant Accounts Will I have separate Accounts under the Plan? When do my Accounts become vested? What is a Year of Service? What happens to an Account that is not fully vested? Will I be taxed on amounts held in my Accounts under the Plan? What fees and expenses will be charged to my Accounts? Investing Your Accounts How are my Accounts invested? How do I designate my investment choices? Does the Plan have a default investment alternative? Rollovers and Transfers Between Plans If I have received a distribution from another plan, can I roll it over to the Plan? Can I transfer my account from a different plan directly to the Plan? If I leave, can I transfer the amount distributable to me to another plan or IRA? What is an Eligible Rollover Distribution? What is an Eligible Retirement Plan? Retirement Benefits When can I retire and what will I receive then? How do I apply for benefits? When will my benefit be paid? What happens when I reach my Required Beginning Date? Death Benefits What happens if I die before I receive my full benefit? Who will my beneficiary be? If I die, can my beneficiary roll over the death benefit? ii

5 12. Disability Benefits When am I considered to have a Disability? What happens if my employment ends because of Disability? Benefits After Termination of Employment How much will I receive if I terminate employment before Normal Retirement Age? When will termination benefits be paid? How will payment be made? What is an Automatic Direct Rollover? How will my distribution be taxed? What happens if I am rehired? Participant Loans Can I borrow money from my Accounts? How can I apply for a loan? How much can I borrow? How many loans can I have? Will I pay a fee for a loan? What will the loan terms be? May I suspend my loan payments during a non-userra Leave? May I suspend my loan payments during a USERRA Leave? How is a loan secured, and what happens if I default on a loan? How does the loan and its repayment affect my Accounts and investments? Withdrawals During Employment What can I withdraw while working if I am age 59½ or older? What can I withdraw while working if I am younger than age 59½? What is Financial Hardship? If I am on USERRA Leave, may I take a withdrawal? How do I apply for a withdrawal? How are withdrawals taxed? Transferring Employment Between PCC Business Units Transfer Between Adopting Employers Transfer to a Nonparticipating Business Unit iii

6 17. Plan Administration Claims Procedure How do I file for benefits? What happens if my claim is denied? May I appeal an adverse determination? Is the Administrative Committee s decision binding? Assignment of Benefits; Qualified Domestic Relations Order Amendment and Termination IRS Approval Statement of ERISA Rights Formal Information Name and Type of Plan; Plan Number Plan Year Plan Sponsor and Lead Participating Employer Other Participating Employers Administrative Committee Investment Committee Agent for Service of Process Trustee/Custodian of Automatic Rollover IRAs Fidelity Contact Information Local Human Resources Department Contact Information iv

7 1. Introduction 1.1 What is the Precision Castparts Corp. 401(k) Retirement Savings Plan? The Precision Castparts Corp. 401(k) Retirement Savings Plan (the Plan or the PCC Plan ) is a tax-qualified retirement plan designed to enable you to accumulate funds through pre-tax contributions (called Elective Contributions ) and tax deferred earnings for a more financially secure future. Your Employer provides you with an incentive to save by providing additional Employer Matching Contributions. In addition, whether or not you make Elective Contributions, your Employer makes a supplementary Employer Discretionary Contribution for Participants who were hired or rehired on or after July 1, 2012 and are not eligible to participate in the Precision Castparts Corp. Retirement Plan. Contributions are deposited in separate Accounts held in trust for you under a trust agreement (the Trust ) between PCC and Fidelity Management Trust Company (the Trustee ). Investment earnings accumulate on a tax-deferred basis until your Accounts are distributed after you retire or otherwise qualify for a distribution. You choose how to invest your Accounts by choosing among a selection of several investment funds. For more information about your Accounts, see Section Who is the Plan Sponsor and how is my Employer related? Precision Castparts Corp. ( PCC ) is the Plan Sponsor and any Affiliate approved by PCC may adopt the Plan for its employees. An Affiliate is a business owned by PCC. A Business Unit is an Affiliate, subsidiary, division or other business component of PCC that has adopted the Plan under a Business Unit Participation Statement ( BUPS ) that sets forth any special provisions that apply for that Business Unit. For a list of Business Units that have adopted the Plan, see Section Employer, as used in this Summary Plan Description ( SPD ), means PCC and any adopting Business Unit. This SPD describes Plan features for the Portland, Oregon area operations and PCC-Schlosser operations of PCC Structurals, Inc. If you are not employed at one of these Business Units, please contact your local Human Resources Department for your Business Unit s SPD. 1.3 What documents govern the Plan? The Plan was established in 1991 and has been amended from time to time to make administrative and operational changes and to comply with changes in applicable law. To provide benefits for employees across Business Units in a more efficient and cost-effective manner, PCC has consolidated the 401(k) plans of its Affiliates into the PCC Plan. Other Affiliates 401(k) plans within the PCC family of companies (the Prior Plans ) merged or will be merged into the Plan. For employees of the Business Units listed on the cover of this SPD, the term Prior Plans includes the Precision Castparts Corp. 401(k) Retirement Savings Plan as it existed before the 2007 Restatement. Certain provisions of the Prior Plans continue to apply to accounts transferred or carried forward from the Prior Plans to the PCC Plan. 1

8 This SPD reflects the Plan as amended and restated through April 1, 2013, and it supersedes any prior SPD you may have received for the Plan. The SPD describes many key terms of the Plan as currently in effect, along with related policies of the Administrative Committee. The Administrative Committee is the Plan Administrator and named fiduciary for the Plan. Please read this SPD carefully and keep it in a safe place for future reference. You are encouraged to review it with your family and your financial advisor. The SPD is intended only as a summary of the Plan. We have tried to make this SPD as concise and easy to understand as possible, so some details are not explained as fully here as they are in the official Plan and Trust documents. These documents are available for viewing on request by contacting your local Human Resources Department. If there are differences between this SPD and the official documents, the official documents will control. 2. Eligibility and Enrollment 2.1 When will I become eligible to participate in the Plan? You will become eligible to begin participation in Elective Contributions, Matching Contributions and Employer Discretionary Contributions with the first pay period that you are employed as a Qualified Employee of a participating Business Unit or as soon as administratively practicable after you are established within the PCC payroll system. You are eligible for Employer Discretionary Contributions only if you were first hired or rehired on or after July 1, 2012, and you are not eligible to participate in the Precision Castparts Corp. Retirement Plan. 2.2 Am I a Qualified Employee? You are a Qualified Employee if you are an employee at the Portland, Oregon area operations or PCC-Schlosser operations of PCC Structurals, Inc. unless you are one of the following: An employee covered by a collective bargaining agreement that does not provide for participation in the Plan. A leased employee on the payroll of an outside firm. A nonresident alien with no U.S.-source earned income. An employee of any nonparticipating Affiliate or an employer not owned by PCC (such as an independent contractor). For purposes of Employer Discretionary Contributions only, an employee who is eligible to participant in the Precision Castparts Corp. Retirement Plan. 2

9 Generally, workers (such as independent contractors) who do not receive compensation reported on IRS Form W-2 by PCC or a Business Unit are not considered to be employees. 2.3 How do I enroll in the Plan? The Administrative Committee has appointed Fidelity Investments ( Fidelity ) to handle the day-to-day administration of the Plan through its Internet and telephone services. To start participating in Elective and Matching Contributions, you must enroll in the Plan to make your contribution and investment elections and beneficiary designations. Log on to NetBenefits SM at or call the Fidelity Retirement Benefits Line at (Spanish at ) to enroll in the Plan. The first time you call the Fidelity Retirement Benefits Line or log on to NetBenefits SM you will need to set up your username and password. Be sure to remember your password; you will need it each time you call or log on. You may change your password as often as you like. If you do not start participating in Elective Contributions when you are first eligible, you can start later by making a timely election for a later pay period if you are then a Qualified Employee. Your eligibility to participate in Elective, Matching and Employer Discretionary Contributions will continue as long as you remain a Qualified Employee of a participating Business Unit. 3. Your Contributions 3.1 What pay is included in Compensation? For purposes of determining Elective, Matching and Employer Discretionary Contributions, Compensation means pay reportable on IRS Form W-2 (including wages or salary and bonuses), adjusted as follows: Elective Contributions and amounts set aside from your pay under a qualified welfare benefit plan or under a qualified transportation fringe benefit program are included. Amounts realized from the exercise of a nonqualified stock option or from the lapse of restrictions on restricted property, reimbursements, expense allowances, fringe benefits, moving expenses, severance or disability pay and other deferred compensation and welfare benefits are excluded. Compensation counted for any participant is limited yearly by law. This limit may be adjusted yearly because of legally authorized cost-of-living changes. For 2013, the limit is $255,000. In the first year of participation, Compensation is counted for the partial year after you first become eligible to participate. 3

10 3.2 Elective Contributions (a) How do I participate in Elective Contributions? Participation in Elective Contributions is voluntary. You may elect to have a whole-number percentage of your Compensation contributed from your paychecks to the Plan. You must make separate elections for regular paychecks and for bonuses. You may choose the percentages you wish to have contributed up to the maximums allowed under the Plan. The amount of your contribution will be deferred from your pay and deposited in your Pretax Employee Deferral Account, your Pretax Bonus Deferral Account or your Pretax Catch-up Deferral Account, as applicable. All of your Pretax Accounts are aggregated in the summary reports from Fidelity. (b) What are the tax consequences of Elective Contributions? When you designate an Elective Contribution percentage, your pay reportable on IRS Form W-2 for income tax purposes is reduced by the amount that is contributed to the Plan. For purposes of Social Security and federal unemployment insurance taxes and benefits, your taxable pay is not reduced. Any investment earnings on your Elective Contributions are not currently taxable to you or reportable as income when credited to your Accounts. The amount of your Elective Contributions and related investment earnings do not become taxable until the year they are distributed from the Plan as a benefit after your retirement, death, Disability or other termination of employment. Because of the tax-deferred nature of Elective Contributions, the Internal Revenue Service ( IRS ) restricts your access to your Elective Contribution during employment before age 59½ and imposes a penalty tax on distributions taken before age 59½ and not rolled over. See Section 13.5 for more information. (c) How often can I change my contribution election? Once you start participation, you can prospectively suspend contributions or change to a different contribution rate at any time. To change your contribution election, log on to NetBenefits SM at or call the Fidelity Retirement Benefits Line at (Spanish at ). The election procedures may be changed from time to time. If they are changed, Plan participants will be notified. Please note there is an administrative delay required to process any election changes due to the need to coordinate payroll withholdings with Fidelity s recordkeeping system. (d) What if I stop electing contributions and want to start again? If you voluntarily suspend participation in Elective Contributions, you can start again by making a timely election for a later pay period if you are then a Qualified Employee. 4

11 3.3 What is the maximum I may contribute? (a) What is the maximum percentage of Compensation I may elect to have contributed to the Plan? The maximum Elective Contribution that you may elect is 75 percent of Compensation for a regular paycheck and 100 percent of a bonus (less applicable tax withholding). If you are a Highly Compensated Employee, you are limited to 7 percent of Compensation, determined on a year-to-date basis for Elective Contributions. Except as required to comply with Annual Contribution Limits (see Section 6), any changes in the minimum or maximum percentages will be announced to participants and applied prospectively. (b) Who are Highly Compensated Employees? In general, Highly Compensated Employees (or HCEs ) are employees who were paid at least a certain dollar amount in the prior year. For example, employees who were paid at least $115,000 in 2012 are considered HCEs for the 2013 Plan Year. This dollar amount may be adjusted yearly by the IRS for cost-of-living changes. (c) Why are HCEs subject to lower maximum percentages? HCEs are subject to lower maximum percentages because certain contributions under 401(k) plans are not legally permitted to discriminate in favor of HCEs. The average Elective, Matching and Employer Discretionary Contributions for HCEs as a percentage of Compensation cannot exceed the average for the other Planeligible employees except by small amounts specified by law. If the contributions for HCEs are too high, the excess contributions will be distributed under special rules. (d) What is the maximum dollar amount for Elective Contributions? Section 402(g) of the Internal Revenue Code ( IRC ) limits an individual s Elective Contributions to a set dollar amount on a calendar-year basis. The limit for 2013 is $17,500. The limit may be increased from year to year by cost-of-living adjustments authorized by applicable law. This limit applies to all pretax deferrals that you make under any 401(k) plan or other similar arrangement during the taxable year. For example, if you participate in more than one plan, you must not exceed the annual limitation even if the plans are maintained by different employers. (e) What is the maximum dollar amount for Elective Contributions if I am at least age 50? If you are at least age 50 or will reach age 50 by the end of the calendar year, you will be eligible to make special additional pre-tax contributions for the year called Catch-up Contributions. Catch-up Contributions are not matchable. Generally, Catch-up Contributions may be made in a calendar year only if regular limits that apply to Elective Contributions have been or are expected to be reached in the year. You must 5

12 make a separate election to make Catch-up Contributions. The limit on Catch-up Contributions for 2013 is $5,500, and the IRS may adjust this limit from year to year. 4. Employer Matching and Employer Discretionary Contributions 4.1 What are Matching Contributions? For each calendar quarter, your Employer will make a Matching Contribution for you equal to 50 percent of your Elective Contributions up to 5 percent of your Compensation (pay and bonuses). The Matching Contribution will be calculated and deposited into your Account within a reasonable time after the end of each calendar quarter. Expressed another way, the maximum total Matching Contribution you may receive is 2½ percent of your Compensation (50% x 5% = 2½%). Elective Contributions above 5 percent of your Compensation in a year will not be matched. Catch-up Contributions are not matchable and are disregarded in figuring Matching Contributions. Your Employer may change or suspend the Matching Contribution program at any time. If your Employer does so, you will be notified of the changes. 4.2 What are Employer Discretionary Contributions? If you were hired or rehired on or after July 1, 2012 and are not eligible to participate in the Precision Castparts Corp. Retirement Plan, your Employer will make an Employer Discretionary Contribution for you equal to 1.5 percent of your Compensation for each Plan Year while you are eligible. Compensation taken into account for a new participant for the Plan Year of initial eligibility with the Employer will be based only on Compensation from your Employer for the partial year after participation starts. Compensation from an Affiliate that did not offer Employer Contributions prior to your date of eligibility with this Employer will not be considered. Your Employer Discretionary Contribution for each Plan Year will be deposited to your Employer Discretionary Contribution Account when it is paid to the Trust by your Employer. Your Employer may make portions of the contribution from time to time during the Plan Year or after the Plan Year within the time allowed for purposes of corporate income tax deductions. The amount of the Employer Discretionary Contribution will stay in effect until changed by an authorized officer of PCC or PCC Structurals, Inc., acting on behalf of Employer. 5. Contributions for Periods of Covered Military Leave If you return to work after a period of military service with reemployment rights protected by the Uniformed Services Employment and Reemployment Rights Act ( USERRA ), you may participate in Plan contributions with respect to the qualifying covered leave time ( USERRA Leave ) as described below. 6

13 5.1 How can I make up Elective Contributions for the USERRA Leave period? You will have the right to make Elective and Catch-up Contributions attributable to pay you would have received but for USERRA Leave. Such contributions ( USERRA Make-up Contributions ) must be made up after you return from leave and before the earlier of the following: The fifth anniversary of reemployment. The last day of a period that is three times the period of USERRA Leave. If you wish to make USERRA Make-up Contributions, contact your local Human Resources Department. 5.2 Will my Employer match my Make-up Elective Contributions for the USERRA Leave? You will receive a Matching Contribution on any USERRA Make-up Contributions other than any USERRA Make-up Contributions above 5 percent of Compensation and any Catch-up Contributions, which are not matchable. The Matching Contribution will be allocated as though you had made Elective Contributions during the period of USERRA Leave to which the USERRA Make-up Contributions relate. Any contributions made for a period of USERRA Leave will be allocated to your Accounts without any interim adjustment for earnings. Reemployment after USERRA Leave under the terms provided in USERRA is a precondition of eligibility for the protections offered by USERRA. If you do not return to work promptly after USERRA Leave, either because you choose not to or because you are not eligible for the rehire protection offered by USERRA, you will not qualify for USERRA Make-up Contributions or related Matching Contributions. 5.3 Will I receive an Employer Discretionary Contribution for the USERRA Leave period? If you are otherwise eligible, you will receive an Employer Discretionary Contribution for a period of USERRA Leave when you return to work with Employer. The amount of the contribution will be determined separately with respect to each Plan Year during which you were absent on USERRA Leave. The amount of the additional Employer Discretionary Contribution will be equal to the contribution that would have been made for you if you had not been absent and will be based on Compensation as described in Section How are my Compensation and service determined for the USERRA Leave period? If you have a USERRA Leave, your Compensation and service will be imputed at the rate you would have been paid and would have worked if you had not been absent. If the 7

14 Compensation amount is not reasonably certain, it will be based on your average annual Compensation during the 12 months immediately before the USERRA Leave began, or all such months if fewer than Annual Contribution Limits Annual Contribution Limits include the dollar limits on Elective Contributions and Catch-up Contributions described in Sections 3.3(d) and 3.3(e) and the Annual Addition Limit. Annual Addition Limit means the limit under federal law on the amount that may be added to your Accounts for a Plan Year (the calendar year) and includes all contributions under this Plan and any contributions made for you under any other plan maintained by an Affiliate or Business Unit of PCC. The Annual Addition Limit is the lesser of the following: $40,000 (plus any authorized cost-of-living adjustments). For 2013 the limit is $51, percent of your total W-2 pay for the year, adjusted in accordance with applicable regulations. 7. Participant Accounts 7.1 Will I have separate Accounts under the Plan? You will have separate Accounts for receiving each type of contribution made under the Plan. Accounts attributable to amounts transferred into this Plan from another plan are known as Transferred Accounts. 7.2 When do my Accounts become vested? Vesting is a term used to describe the portion of your Accounts that you own. Your balance, consisting of your contributions and earnings thereon, in each of the following Accounts (as applicable), is fully vested at all times: Pretax Employee Deferral Pretax Bonus Deferral Pretax Catch-up Deferral Rollover After-Tax Rollover Prior Employer Prior Employer (QJSA) Your Employer Discretionary Contribution Account and your Matching Contribution Account, if any, become vested based upon your completed Years of Service as follows: Years of Service Vested Percentage Less than 1 0 percent 1 but less than 2 33 percent 2 but less than 3 67 percent 3 or more 100 percent 8

15 Regardless of your Years of Service, any unvested Accounts become fully vested if, while you are employed by Employer, you reach Normal Retirement Age, terminate employment due to Disability or die. For determining vesting, a participant who dies while on USERRA Leave shall be treated as having first resumed employment with Employer and then terminated on account of death. Special vesting may apply to your Transferred Accounts, if any. Contact your local Human Resources Department for more details if you think this may apply to you. 7.3 What is a Year of Service? A Year of Service for vesting is the completion of 12 months of service measured from your hire date and each anniversary of your hire date. However, if you are absent from work for any period of less than 12 months, you also receive credit for the period of absence. A Break in Service occurs on the fifth anniversary (sixth anniversary if absence from employment is due to Parental Leave) of the date your employment ended. Parental Leave is an absence because of pregnancy, birth of your child or care following birth, or adoption or placement for adoption pursuant to applicable law or Employer policy. If you were employed by a business when it was acquired by PCC or an Affiliate, your pre-acquisition service may count for vesting. If you have questions about pre-acquisition service credit or the vesting percentage reported to you by Fidelity, please contact your local Human Resources Department. 7.4 What happens to an Account that is not fully vested? Following termination of employment, you will forfeit the unvested portion of your Accounts when the first of the following occurs: You terminate employment with no vested Account balances. You receive a complete distribution of the vested portion of your Account balances. You have a Break in Service. Forfeited amounts may be used to restore Accounts for employees who are rehired, to reduce Matching or Employer Discretionary Contributions or to pay Plan expenses. 7.5 Will I be taxed on amounts held in my Accounts under the Plan? Elective, Catch-up, Matching and Employer Discretionary Contributions are not taxable to you when deposited in the Plan, and you do not report them as income on your tax return while the funds are held for you under the Plan. Likewise, investment earnings are not taxable to you or reportable as income while the funds are held for you under the Plan. Any payment of benefits to you from the Plan, except After-Tax Contributions (if applicable), will be taxable when you receive the distribution unless you defer taxation by rolling the funds over as described in Section

16 7.6 What fees and expenses will be charged to my Accounts? Plan fees and expenses include asset-based fees that cover investment management expenses and certain administrative expenses of the Plan as a whole, and individual fees and expenses that are associated with a transaction or service you may select. Administrative expenses may include services such as Internet account access, record keeping, accounting, legal and trustee services, and systems such as the telephone voice response system. Charges for administrative expenses, to the extent not paid by PCC or offset by asset-based fees as described below, may be allocated to your Accounts on a pro rata basis. Your share of the charges will be based on the value of your Accounts compared to the value of the Plan as a whole. Asset-based fees reflect an investment option s total annual operating expenses and include management and other fees and expenses. Typically, asset-based fees are reflected as a percentage of assets invested in the option and are often referred to as an expense ratio. Asset-based fees are deducted from an investment option s assets, thereby reducing its investment return. Fee levels can vary widely among investment options, depending in part on the type of investment, its management (including whether it is active or passive), and the risks and complexities of the investment option s strategy. There is not necessarily a correlation between fees and investment performance, and fees are just one component to consider when determining which investment options are right for you. Fees for an investment fund are deducted from your investment return for that fund. Some investment funds have fee structures that impose higher fees than other investment funds, and these fees are disclosed in the fund s prospectus. You should carefully consider the fee structure of each investment fund when making investment decisions. In its revenue sharing agreement with PCC, Fidelity agrees to offset some of the fees it charges for administrative services by a portion of the asset-based fees earned by Fidelity from the investment funds selected by Plan participants. This revenue sharing arrangement may cause higher-fee investment funds to provide for relatively more of the general administrative expenses than is provided for by lower-fee investment funds. Detailed plan-level expense and fee information is contained in a separate annual notice, a copy of which is available on request online or by contacting the Fidelity Retirement Benefits Line at (Spanish at ). Fees for individual participant services, such as participant loan fees, will be charged directly to your Account if you use the individual service. Fees are charged for loans (see Section 14.5), in-service withdrawals (see Section 15), MRD payments (see Section 10.4), and processing a QDRO (see Section 19). You may also incur short-term redemption fees, commissions, and similar expenses in connection with the transactions associated with your investment choices. If any such fees are actually deducted from your Account, your quarterly benefit statement will specify the dollar amount of actual charges for individual fees during the preceding quarter. 10

17 8. Investing Your Accounts 8.1 How are my Accounts invested? Your Accounts will be pooled with the accounts of other Plan participants for investment in funds selected by an Investment Committee appointed by the chief executive officer of PCC. If you borrow from the Plan as described in Section 14, the loan will be held as a separate investment for your Accounts. You are allowed to select among a broad range of available investment funds for investment of your Accounts. The enrollment kit provided by Fidelity provides information about investment selection procedures and other considerations relating to investments. You should keep the enrollment kit with this SPD, including any updates you may receive from time to time. 8.2 How do I designate my investment choices? You may make investment changes in your Accounts online through NetBenefits SM at or by calling the Fidelity Retirement Benefits Line at (Spanish at ). The minimum amount you may transfer from one investment alternative to another is $250, or 100 percent of your interest in an investment alternative, if less than $250. The Plan is intended to comply with section 404(c) of the Employee Retirement Income Security Act of 1974 ( ERISA ) and related guidance, including U.S. Department of Labor regulations section c-1. Under the Plan, you have the responsibility for selecting the funds in which your Accounts will be invested. Plan fiduciaries are not responsible for the direct and necessary results of your investment instructions. The Administrative Committee and Investment Committee do not play any part in allocating your Accounts among the different investment funds. No Plan fiduciary or other person connected with the Plan has any obligation or authority to provide investment advice to you or your beneficiaries. The information that is provided to assist you in your investment decisions should not be considered investment advice. Participants have a right to receive on request the following information relating to available investment alternatives: Information concerning the value of shares or units held in the various investment alternatives. Information concerning the value of each fund, and the past and current investment performance of the fund. A description of each fund s annual operating expenses. Copies of the prospectuses, financial statements and reports on the funds and of any other such materials relating to the funds. 11

18 A list of the underlying assets of each investment fund and the value of each asset. The name of the issuer of any fixed-rate investment contract held by the fund, the term of each contract and the rate of return of each contract. To request information about investment alternatives, contact your local Human Resources Department or call the Fidelity Retirement Benefits Line at (Spanish at ). To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Diversification is the practice of spreading money among different investments to reduce portfolio risk. By picking a diversified investment mix, you may be able to limit your losses and reduce the fluctuations of your investment returns in total. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20 percent of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk. In deciding how to invest your Accounts, you should consult with your personal financial advisor and take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals and different tolerances for risk. It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals. 8.3 Does the Plan have a default investment alternative? Any contribution received by the Plan that has not been directed to a specific investment fund will be invested in the Plan s default investment alternative. The default investment alternative is the Fidelity Freedom Fund that is closest to the date you will turn age 65. If Fidelity has not been provided with your date of birth, the amount will be invested in the Freedom Income Fund. The Freedom Funds are intended to meet the requirements of the Department of Labor as qualified default investment alternatives. 9. Rollovers and Transfers Between Plans 9.1 If I have received a distribution from another plan, can I roll it over to the Plan? If you are a Qualified Employee and you have received a distribution from a taxqualified retirement plan of another employer or an Individual Retirement Account ( IRA ) that holds only amounts rolled over from one or more total distributions from other qualified plans 12

19 and related earnings, you may be able to roll over your distribution to the Plan. Amounts that have been distributed to you must be rolled over within 60 days of distribution. The Plan will not accept an Eligible Rollover Distribution that includes after-tax amounts from a source other than a qualified plan. Because the Plan does not provide for a designated Roth account program, the Plan cannot accept rollovers of Roth accounts and related earnings. 9.2 Can I transfer my account from a different plan directly to the Plan? If you have an interest as a participant in the tax-qualified retirement plan of another employer, you may be able to move your account under the other plan to this Plan by means of a direct rollover or a plan-to-plan transfer. You should contact the administrator of the other plan for information about whether you are entitled to such a distribution. 9.3 If I leave, can I transfer the amount distributable to me to another plan or IRA? If you have an amount that is distributable to you from the Plan, you may be able to transfer it to an Eligible Retirement Plan by means of a direct rollover or plan-to-plan transfer. The rules governing transfers and rollovers are complex. If you are interested in making a transfer or a rollover, call the Fidelity Retirement Benefits Line at (Spanish at ). If your vested benefit when your employment terminates is $5,000 or less (not including the portion of your Accounts attributable to rollovers and related investment earnings), your benefit will be paid as soon as reasonably possible, whether or not you apply to receive your benefits. The Automatic Direct Rollover provisions will apply. For more information about this, see Section What is an Eligible Rollover Distribution? Generally, all payments (including a note from a Plan loan to the participant) from the Plan to a participant, the spouse or Qualified Nonspouse Beneficiary of a deceased participant, or a spouse or former spouse who is an alternate payee of the participant under a Qualified Domestic Relations Order are Eligible Rollover Distributions and can be rolled over to another Eligible Retirement Plan (provided that the Eligible Retirement Plan will accept them), except the following: Payments that are part of a series of equal (or almost equal) payments that will last for the participant s life or the lives of the participant and any beneficiary, or that will be paid over a period of 10 years or more. The amount of distributions required by law to be made after a participant reaches age 70½. In-service withdrawals of Elective Contributions for hardship. Certain corrective distributions. 13

20 Some of these exceptions generally do not apply to benefits payable under the Plan because the Plan does not generally provide for installment or annuity payments. However, those exceptions could apply to a benefit you might receive from another plan, from a Transferred Account or from one or more withdrawals from this Plan. An Eligible Rollover Distribution can be paid directly to you, in which case your benefit payment will be subject to mandatory federal income tax withholding at a rate of 20 percent. Mandatory or elective state income tax withholding also applies in some locations. In addition to income tax, there will be a 10 percent federal early distribution tax imposed if you are under age 59½ when you receive the benefit, unless an exception applies. The most common exception is for benefits paid because of termination of employment after age 55. Instead of having an Eligible Rollover Distribution paid directly to you, you can elect to have it paid by direct rollover to an Eligible Retirement Plan. A direct rollover is a payment directly from the originating plan to the Eligible Retirement Plan on your behalf. A direct rollover benefit check would be made payable to the Eligible Retirement Plan, not to you, although it could be delivered to you so you can forward it to the Eligible Retirement Plan for deposit in your Accounts. As required by federal rules, participants are given written information about how to elect a direct rollover and about rollover and other tax considerations (including the early distribution tax) when Eligible Rollover Distributions become payable. You can expect to receive this information when you qualify for an Eligible Rollover Distribution from the Plan. 9.5 What is an Eligible Retirement Plan? The following Eligible Retirement Plans may receive Eligible Rollover Distributions, but the sponsor may elect not to receive some types of or any rollovers. You should check before you elect a rollover. IRA. Roth IRA. A rollover of taxable amounts to a Roth IRA is subject to unique rules concerning taxation of the amount rolled over, and certain persons in certain years may be ineligible to roll amounts over to a Roth IRA. If you are considering a rollover to a Roth IRA you should consult a tax advisor. IRS Publications 575 and 590 include information about rollovers to Roth IRAs. The publications are available on the IRS website. Individual retirement annuity. Qualified retirement plan. Annuity contract described in IRC section 403(b) (commonly called a taxsheltered or tax-deferred annuity plan or a 403(b) plan maintained by a tax-exempt entity or qualifying educational institution). 14

21 Eligible plan under IRC section 457(b) (generally maintained by a taxexempt or governmental entity). Please note that Qualifying Nonspouse Beneficiaries may only roll over amounts to an Inherited IRA, as explained under Section Retirement Benefits 10.1 When can I retire and what will I receive then? Normal Retirement Age under the Plan is age 65. If you work longer for an Employer or an Affiliate, payment of your retirement benefits will be deferred. If your employment terminates before you reach Normal Retirement Age, you will not have to wait until Normal Retirement Age to receive your benefit, as explained in Section A withdrawal of benefits could occur during ongoing employment, as explained in Section 15. Your benefit will be the amount that is in your Accounts when you retire. The benefit will be paid in a lump sum. If you have a Transferred Account that provides installment or annuity forms of benefit, you will be provided with additional information about your benefit options and any special procedures that apply to you. If you have any questions about whether this applies to you, please contact your local Human Resources Department How do I apply for benefits? To receive benefits, you must apply after you have retired or otherwise terminated employment. To apply, call the Fidelity Retirement Benefits Line at (Spanish at ). If the total balance of your Accounts when you leave is $5,000 or less (not including the portion of your Accounts attributable to rollovers and related investment earnings), your benefit will be paid as soon as reasonably possible, whether or not you apply to receive your benefits. For more information about this, please see Section When will my benefit be paid? Your lump-sum benefit will be paid at the time you specify when you apply for benefits. Payment of your benefit will usually be made promptly after you request a distribution. More time may be required to process distributions in unusual circumstances. The following rules will apply: (a) Even if you have not applied for a distribution, your benefit will be paid in a lump-sum or MRDs (see Section 10.4) as soon as reasonably possible after the date you retire or otherwise terminate employment if either of the following applies: (i) The distributable amount is $5,000 or less (not including the portion of your Accounts attributable to rollovers and related investment earnings); or 15

22 (ii) You have reached the Required Beginning Date under (e) below. (b) If payment under (a)(i) is made before you reach Normal Retirement Age, the distribution will be paid by Automatic Direct Rollover to an IRA established in your name at a financial institution selected by the Administrative Committee, if both of the following are true: (i) The amount of your lump-sum benefit exceeds $1,000; and (ii) You do not elect to receive a distribution directly or to have it paid by direct rollover to an IRA or Eligible Retirement Plan of your choice after receiving the notice described in (c) below. (c) In connection with your benefit, you will be provided with explanations of the following, if applicable: (i) If the distributable amount is more than $5,000 (not including the portion of your Accounts attributable to rollovers and related investment earnings), your right to defer payment until the Required Beginning Date and the consequences of failing to defer payment. (ii) Your right to elect a direct rollover of your distribution from the Plan to another Eligible Retirement Plan. (iii) The applicability of the Automatic Direct Rollover payment method for required distributions greater than $1,000. (iv) The applicability of mandatory federal withholding of 20 percent of the amount distributed if a direct rollover could be elected and is not. (d) No benefit payments can be paid less than 30 days after the explanations under (c) above have been given, unless you elect to receive a distribution sooner. (e) Your benefit payments must start by the Required Beginning Date, which is the April 1 following the year in which you reach age 70½ and either of the following is true: (i) 416(i); or (ii) You are a 5 percent owner of an Employer, under IRC section Your employment with Employer has terminated What happens when I reach my Required Beginning Date? If you reach your Required Beginning Date and have not elected to receive your distribution in a lump sum or other form of benefit permitted by your Business Unit, you will automatically receive minimum required distribution ( MRD ) benefit payments annually. Prior to your first MRD, you will receive notification and a description of the MRD rules and available 16