SUMMARY PLAN DESCRIPTION FOR PETROLEUM HELICOPTERS, INC. 401(k) RETIREMENT PLAN

Transcription

1 SUMMARY PLAN DESCRIPTION FOR PETROLEUM HELICOPTERS, INC. 401(k) RETIREMENT PLAN 1

2 PETROLEUM HELICOPTERS, INC. 401(k) RETIREMENT PLAN TABLE OF CONTENTS 1. INTRODUCTION WHAT IS THE PLAN AND HOW DOES IT WORK? PARTICIPATION IN THE PLAN CONTRIBUTIONS TO THE PLAN SHOULD YOU MAKE 401(k) CONTRIBUTIONS? RESTRICTIONS AND LIMITS THAT APPLY TO CONTRIBUTIONS ROLLOVERS OR TRANSFERS FROM OTHER PLANS INVESTMENT OF PLAN CONTRIBUTIONS HOW YOUR BENEFITS BECOME VESTED HOW SERVICE IS CALCULATED WITHDRAWAL OF CONTRIBUTIONS WHILE STILL EMPLOYED PARTICIPANT LOANS - BORROWING FROM YOUR ACCOUNT DISTRIBUTION OF BENEFITS AFTER TERMINATION OF EMPLOYMENT TAX CONSEQUENCES OF A DISTRIBUTION FROM THE PLAN CLAIMS REVIEW PROCEDURE OTHER IMPORTANT INFORMATION YOU SHOULD KNOW STATEMENT OF ERISA RIGHTS

3 PETROLEUM HELICOPTERS, INC. 401(k) RETIREMENT PLAN SUMMARY PLAN DESCRIPTION (2002 Restatement) 1. INTRODUCTION This booklet summarizes the most important provisions of the Petroleum Helicopters, Inc. 401(k) Retirement Plan (the Plan) and the terms and conditions that apply to benefits provided under the Plan. The Plan is intended to provide you with benefits for your retirement. It is administered by Petroleum Helicopters, Inc. pursuant to a written Plan document. This booklet is intended as a summary only. It describes the Plan as amended to comply with recent changes in the law as provided in several recent legislative acts that are collectively referred to as GUST. The Plan document is the only document used to determine your right to a benefit and to resolve other questions arising under the Plan. You may request a copy of the Plan document from the Plan Administrator. In any conflict between the Plan document and this booklet, the Plan document will control. Throughout this Summary, Petroleum Helicopters, Inc. and/or any affiliated employer that participates in the Plan are referred to collectively as the Employer. Please read this Summary carefully. Any questions you may have should be directed to Aren Chaisson in the Human Resources Department at (337) between the hours of 8:00 a.m. and 5:00 p.m. 2. WHAT IS THE PLAN AND HOW DOES IT WORK? The Plan provides written guidelines under which Participants earn benefits and are entitled to payment of those benefits. This section describes the Plan in brief. The sections that follow provide more detail. Eligibility If you are an eligible employee of Petroleum Helicopters, Inc. or any affiliated employer that participates in the Plan, you may become a Participant on the first day of the calendar month that coincides with or follows the date your employment commences. Leased employees and nonresident aliens are not eligible to participate. 3

4 Employee Contributions Employer Contributions Your Account Vesting Service Payment of Benefits You can elect to make pretax contributions to the Plan in a whole percentage of your total annual pay from the Employer (up to certain limits prescribed by law). These are called 401(k) Contributions. The Employer will match your 401(k) Contributions, two dollars for every one dollar of 401(k) Contributions you contribute to the Plan, up to 3% of your annual base pay (see Section 4). These contributions are called Employer Matching Contributions. In addition, the Employer may choose to make additional matching contributions called Discretionary Matching Contributions on your behalf in any year. Contributions made to the Plan by you or on your behalf will be credited to your Account. Your Account will be divided into subaccounts called your 401(k) Contribution Account and your Employer Matching Contribution Account. If you roll over or transfer any amounts from another qualified plan or IRA into this Plan, that money will be kept in a Rollover Account. You may elect to invest your Account in various investment options offered under the Plan. The value of your Account will be adjusted for gains and losses on your investments. Your 401(k) Contributions and any amounts in your Rollover Account are always fully vested. You earn an interest in Employer contributions made on your behalf under the vesting schedule shown in Section 9. Your service is counted for purposes of determining the vested percentage of your benefits under an elapsed time method described in Section 10. Generally, you earn a Year of Service for each 12-month period, beginning on your hire date and each anniversary thereof, during which you are employed with the Employer. Payment of your Account under the Plan will be made in a single lump sum after your employment terminates. Under certain circumstances, you may take a loan from the Plan or make a hardship withdrawal from your Account while you are still employed. You may also make a withdrawal any time after reaching age 59½. 4

5 The Trust Plan Accounting All contributions made to your Account are deposited in a trust fund established for the exclusive benefit of Participants. The plan year, the annual accounting period of the Plan, is the calendar year. Plan assets are valued on each business day of the year. 3. PARTICIPATION IN THE PLAN New Employees Rehired Employees You will be eligible to participate in the Plan on the first day of the calendar month (the entry date) which coincides with or immediately follows your date of employment with the Employer, provided you are employed on that date. However, leased employees (i.e., certain individuals working at an Employer location who are not on the Employer s payroll) and employees who are nonresident aliens receiving no earned income from sources inside the United States are not eligible to participate in the Plan. Once you become a Participant, if your employment with the Employer terminates and you are later rehired, you will be eligible to participate in the Plan on the date you are reemployed. 4. CONTRIBUTIONS TO THE PLAN The 401(k) Retirement Plan provides for three types of contributions, 401(k) Contributions, Employer Matching Contributions and Discretionary Matching Contributions. In addition, forfeitures from the Accounts of Participants who terminated employment prior to becoming fully vested are credited to the Accounts of Participants employed at the end of each plan year (December 31 st ). The contributions and forfeitures and how they are allocated to your Account are described below: 5

6 401(k) Contributions Special Election for Bonuses and Vacation Pay You may make 401(k) Contributions on a before-tax basis to the Plan. For pay periods on and after July 1, 2002, you may choose to have up to 90% of your total annual pay contributed to the Plan through regular payroll deductions, so long as your contributions do not exceed the dollar limits set by the IRS ($11,000 for 2002; see Section 6) 1. The 401(k) Contributions you make to the Plan will be held for you in a 401(k) Contribution Account. For purposes of determining the amount of your 401(k) Contributions under the Plan, the term total annual pay means all regular, basic compensation paid to you by the Employer, including regular bonuses, overtime pay and certain amounts on which you do not pay tax such as amounts paid through the PHI Flexible Benefit Plan. Total annual pay does not include purchases and other extra or special compensation such as safety awards, severance pay and one-time relocation bonuses. Effective January 1, 2002, any pay that you receive while actively employed for incentive bonuses and cash payments for frozen vacation bank time will be included for this purpose. Effective March 1, 2003, any pay that you receive from the Employer while on leave of absence for military service will also be counted. Other limits on your contributions are imposed by the Internal Revenue Service, which restricts the total amount of before-tax contributions that can be credited to your Account in any plan year. (See Section 6.) You can make a separate election to defer up to 100% of any bonuses paid to you in 2003 and later years, and accrued vacation payments made in lieu of time off in 2002 and later years. However, your total contributions for any year are subject to the limitations described in Section 6. 1 Prior to July 1, 2002, the maximum percentage of pre-tax contribution that you could make to the Plan was 18%. 6

7 Changing Your 401(k) Contribution Catch-Up Contributions Employer Matching Contributions Effective the first day of any calendar month, you may increase or decrease the amount of your 401(k) Contributions. If you elect to stop making 401(k) Contributions altogether, the change will be effective as of the next payroll date following the date that MFS receives your election. To make changes in the amount of your 401(k) Contributions, or to start or stop making contributions, call MFS (Massachusetts Financial Services) at between 8:00 a.m. and 9:00 p.m. Eastern Time. Starting in 2002, if you are at least 50 years old you will be able to make contributions that exceed the limits described under 401(k) Contributions and Restrictions and Limits that Apply to Contributions. For calendar year 2003, the additional catch-up amount is limited to $2,000. This limit will increase to $3,000 for calendar year 2004, $4,000 for calendar year 2005 and $5,000 for calendar year 2006 and thereafter. The Plan Administrator can provide more information about making catch-up contributions if you are interested. The Employer will match your 401(k) Contributions by contributing two dollars for every one dollar that you contribute, up to a maximum 401(k) Contribution of 3% of your base pay on a payroll period basis. This means that if you contribute 3% of base pay, the Employer match will be 6%. If you contribute 2% of base pay, the Employer will contribute 4%. If you contribute more than 3%, the Employer match stops at the first 3% of base pay. For example, if you contribute 4%, the Employer match will still be 6% of base pay. The Employer Matching Contributions that the Employer makes on your behalf every two weeks will be held for you in an Employer Matching Contribution Account. 7

8 Base Pay Discretionary Matching Contributions Forfeitures For purposes of determining the Employer Matching Contributions under the Plan, the term base pay means all regular, basic compensation paid to you by the Employer, except that the following types of pay are excluded for this purpose: all bonuses, overtime pay, commissions, vacation purchases and other extra or special compensation such as safety awards, severance pay and one-time relocation bonuses and payment for any accrued vacation included in your final paycheck upon your termination of employment. However, effective January 1, 2002, any pay you receive while actively employed for incentive bonuses and cash payments for frozen vacation bank time will be included when calculating Matching Contributions. Effective March 1, 2003, any pay that you receive from the Employer while on leave of absence for military service will also be counted. In any plan year, the Employer may make Discretionary Matching Contributions to the Plan. The Board of Directors will decide whether to make a contribution for a year and the amount of any such contribution. The amount contributed by the Employer will be divided among Participants in proportion to each Participant s total 401(k) Contributions for the year, not just the first 3%. This means that you may get additional funds that match all your 401(k) Contributions. Any Discretionary Matching Contributions allocated to you will be added to your Employer Matching Contribution Account. Any forfeitures that become available during the year will be divided among the Participants who are still employed on the last day of the year in proportion to their total 401(k) Contributions for the year. If any forfeitures are allocated to you, they will be added to your Employer Matching Contribution Account. 5. SHOULD YOU MAKE 401(K) CONTRIBUTIONS? 8

9 Benefits of Contributing Before-tax Dollars Availability of your 401(k) Contributions There are some important ways that 401(k) Contributions benefit you. You will not pay current federal or state income taxes on the amount you elect to contribute to the Plan rather than receive as salary. The Employer matches your contributions, two dollars dollar for every one dollar that you contribute, up to 3% of base pay. Your share of forfeitures is based on your total 401(k) Contributions, not limited to 3% of base pay. If the Employer decides to make a Discretionary Matching Contribution for the year, additional matching contributions will be made on your behalf based on the total amount of your 401(k) Contributions.. 401(k) Contributions are made with before-tax dollars dollars deducted from your gross pay before Federal income taxes (and, in most states, state income taxes) are computed. 401(k) Contributions are subject to Social Security taxes, however, so contributing to the Plan does not affect your Social Security benefit. You will not be able to withdraw your contributions until you terminate employment with the Employer, unless you make an approved withdrawal for financial hardship (see Section 11) or you have reached age 59½. However, you may borrow money from your Account while you are still employed (see Section 12). 9

10 Example 1 Mary s salary for the year 2002 is $40,000 and she has no other earnings. She receives a paycheck every two weeks. Mary makes 401(k) Contributions of 8% of base pay. Her contributions equal $ per pay period, or $3, for the entire year. An additional $2, (6% of her total base pay, or two times 3% of her base pay) will be added to her Account as an Employer Matching Contribution during the year. Total contributions made to Mary s Account for the year will be $5, If forfeitures arise during the year, Mary will share in them, provided she is employed on December 31 st. Her share is determined based on the full amount of her 401(k) Contributions. Example 2 John s total pay for the year 2002 is $25,600. This includes his annual base pay of $25,000, plus $600 in overtime. He receives a paycheck every two weeks. John makes 401(k) Contributions of 2% of base pay. Those contributions equal $19.23 per pay period or $ for the whole year. John earns an additional $600 in overtime pay during the year, and 2% of that, or $12.00, is contributed to the Plan as well for a total 401(k) Contribution of $ An additional $1, (4% of John s total base pay, or two times the 2% of base pay contributed to the Plan) will be added to his Account as an Employer Matching Contribution. The Employer does not match the portion of his overtime pay that John defers to the Plan. Total contributions made to John s Account for the year are $1, If forfeitures arise during the year, John will share in them provided he is employed on December 31 st. 10

11 6. RESTRICTIONS AND LIMITS THAT APPLY TO CONTRIBUTIONS Certain limits and restrictions apply to contributions made by you and on your behalf to the Plan: Limit on Amount of 401(k) Contributions Additional Limits for Highly Compensated Employees Other IRS Limitations Catch-up Contributions The Internal Revenue Code (IRC) limits the total amount that may be deferred from the salary of an individual in any calendar year. For 2003, that limit is $12,000. The limit may be increased from time to time based on a cost-of-living index. The Plan must perform tests specified by the IRC every year to make certain that the Plan does not discriminate in favor of highly compensated employees. If you are a highly compensated employee, you might have your 401(k) Contributions further restricted or returned to you based on the results of these tests. Matching Contributions made on your behalf also may be restricted. Generally, you will be considered a highly compensated employee for a plan year if you had total pay from the Employer in excess of a specific dollar amount in the preceding calendar year ($90,000 for 2003). This dollar amount is adjusted from time to time. Other IRC limits apply to total contributions made by you or on your behalf during a plan year. The Internal Revenue Code limits the amount of compensation that can be used to determine contributions allocated under the Plan. For 2003, the annual compensation limit is $200,000. This limit may be adjusted in accordance with a cost-of-living index in future years. Starting in 2002, if you are at least 50 years old you may be able to make contributions that exceed the limits described above. 7. ROLLOVERS OR TRANSFERS FROM OTHER PLANS Rollovers from Other Plans You may roll over amounts to the Plan which are distributed to you from another tax-qualified retirement plan or other qualifying retirement accounts, or have those amounts transferred directly to the Plan. Rollovers that are paid to you must be received by the Plan Administrator within 60 days of your receipt of the distribution. 11

12 Unless you have your distribution transferred directly to this Plan, federal tax withholding may apply to your payment from the other plan or IRA. Direct Transfers from Other Plans Rollover Account Instead of having a distribution check made payable to you from another qualified plan or other qualifying retirement account and then rolling it over, you may have your benefit transferred directly to this Plan. If the check is made out to this Plan (for your benefit) instead of to you, no federal tax will be withheld. Any amounts that you roll over or have directly transferred to this Plan will be held in your Rollover Account. Amounts in your Rollover Account will always be 100% vested. 8. INVESTMENT OF PLAN CONTRIBUTIONS Contributions Are Held in Trust You Choose How Your Account is Invested How Participant- Directed Accounts Work The contributions to the Plan and earnings on the contributions are called plan assets, and they are held in trust by the MFS Heritage Trust Company as the Trustee. The Employer has reserved the right to change the Trustee. The Plan has Participant-directed accounts. This means that you, as a Participant, exercise control over the investment of the assets in your Account and are responsible for your investment decisions. You will be able to choose how your Account is invested from among a number of investment options, and you may change your investment election at any time. Gains or losses will result from your investment decisions. For additional information about the investment options or to change your investment election, you may call MFS at In order to comply with the Department of Labor Regulations issued under Section 404(c) of the Employee Retirement Income Security Act of 1974 (ERISA), the Plan must meet several requirements: The Plan must give a Participant a choice of a broad range of investment alternatives. These investment alternatives are chosen by the Employer. Following are the criteria used by the Employer in making the investment selections: 12

13 The Participant must be able to materially affect his or her potential rate of return. There must be at least three investment alternatives which, when combined, tend to minimize risk through diversification. Valuation of Your Accounts Each investment alternative must be diversified. The investment alternatives must have materially different risk and return characteristics. The value of your Accounts is determined under the daily valuation method of accounting which means that they are valued on each business day of the year (valuation dates). The net increase or decrease in the value of your Accounts will be based on the performance of the investment options you have chosen. You will be able to change your investment options at any time. The Plan Administrator will furnish additional information about the investment options offered and the manner in which they can be selected or changed. However, you have the right to request the following information, if it is not provided to you: A description of the annual operating expenses of each investment alternative (for example, investment management fees, administrative fees or transaction costs) which reduce the rate of return on your investments and the total amount of such expenses expressed as a percentage of the average value of net assets of the investment alternative; Copies of prospectuses, financial statements and reports and of any other materials relating to the investment alternatives to the extent such information is provided to the Plan; A list of assets which make up the portfolio of each investment alternative, the value of each such asset (or the proportion of the investment alternative which it comprises) and for each asset which is a fixed rate investment contract issued by a bank or insurance company, the name of the bank or insurance company, the term of the contract and the rate of return on the contract; and 13

14 Information concerning the value of shares or units in each investment alternative and the past and current investment performance. 9. HOW YOUR BENEFITS BECOME VESTED Determining Your Benefit The amount of your benefit is equal to the total value of: Your 401(k) Contribution Account, The vested portion of your Employer Matching Contribution Account, and Your Rollover Account, if any. The total value of your Account is determined as of the valuation date immediately preceding the date of your distribution. The vested portion of any contributions or forfeitures which might be credited to your Account after the amount of your distribution is determined will become payable to you as of the date allocation to your Account is made. Vesting 401(k) Contribution Account Employer Matching Contribution Account Your 401(k) Contribution Account is always fully vested and nonforfeitable. If you terminate your employment for any reason other than your death, disability or retirement at your Normal Retirement Age, your vested interest in your Employer Matching Contribution Account will be the value of that Account times a percentage determined as follows 2 : 2 If your employment terminated before January 1, 1999, a different vesting schedule applied. You may contact the Plan Administrator if you need more information about that schedule. 14

15 Rollover Account Termination Due to Death, Disability, or Retirement Years of Service % Vested 1 0% 2 25% 3 50% 4 75% 5 100% Any amounts in your Rollover Account are always fully vested and nonforfeitable. If your employment is terminated on account of your death or disability, or after you reach your Normal Retirement Age, the entire balance of your Employer Matching Contribution Account is fully vested and nonforfeitable. [See Section 13.] 10. HOW SERVICE IS CALCULATED Your service is calculated under an elapsed time method described below. Year of Service You earn one Year of Service for the 12-month period of employment beginning on the date you are hired and each 12- month period of employment beginning on an anniversary of that date, provided that you worked at least one hour during the period. If you terminate employment with the Employer more than six months after the most recent anniversary of your hire date, you will be credited with a Year of Service for that year. Example1: Bob is hired on June 1, 2001 and is still working for the Employer on May 31, Bob will be credited with one Year of Service, regardless of the number of hours he actually worked during that year. Example 2: Susan was hired on October 1, 1998, and as of October 1, 2002 she has earned four Years of Service. She quits working for the Employer on July 15, Even though she did not complete her fifth year of employment, she is credited with five Years of Service when she leaves. 15

16 Severance from Service Breaks in Service Reemployment before a Break in Service Severance from Service generally means the date on which you quit, retire, die or are discharged from employment with the Employer. If you are absent from employment for another reason (such as a leave of absence), you do not have a Severance from Service until the first anniversary of the first day of your absence, provided that you do not perform any work for the Employer during that 12-month period. However, the following exceptions apply: Maternity or Paternity Leaves. If you are absent from work because of your pregnancy, the birth of your child or adoption or placement of a child in your home for adoption, or for purposes of caring for a child immediately following birth, adoption or placement for adoption, you do not incur a Severance from Service until the second anniversary of the beginning of your absence from work. You will be credited with service for the first 12 months of your absence, but the second 12 months of a maternity or paternity leave will not be counted as service, nor will it be counted as a Break in Service. Military Leaves. Your period of absence may be counted as service under the Plan if you leave the Employer to perform qualified military service and return to work after your military service is completed. Special rules may give you additional credit for service and other benefits if you are absent for military service. Please contact the Plan Administrator if you would like more information about how a military leave of absence could affect your Plan participation. You have a Break in Service if you do not perform any work for the Employer for 12 months following a Severance from Service. Each 12-month period thereafter during which you do not return to work is counted as a Break in Service. If you perform even one hour of service for the Employer during that 12-month period, you will not have a Break in Service. If your employment terminates and you are reemployed before you incur a Break in Service, you will not be considered to have had a Severance from Service. Your service will be counted as if you had not been absent from work. 16

17 For Example, if your employment terminates on December 15, 2002 and you do not perform any work for the Employer by December 14, 2003, you have a Break in Service. However, if you come back to work on or before December 15, 2003, you will not have a Break in Service. Reemployment after a Break in Service Calculation of Service Prior to 1998 If you have a Severance from Service after you earn a vested right to any portion of Employer contributions made on your behalf, and you are later reemployed, your previous Years of Service will be counted for vesting purposes after you return to work for the Employer. If you have a Severance from Service before you earn any vested right to Employer contributions made on your behalf, and you are reemployed after you have at least one Break in Service (but fewer than five), the Years of Service you earned previously will be counted in determining the vested portion of your Employer contributions after you return to work. If you incur five or more consecutive Breaks in Service, your previous service will be disregarded if you are later rehired. Prior to 1998, you earned a Year of Service for each 12 months in which you worked at least 1,000 hours for the Employer, and a Break in Service was a 12-month period in which you earned fewer than 501 hours of service. All service that you earned up to 1998 will be included for purposes of the Plan. 11. WITHDRAWAL OF CONTRIBUTIONS WHILE STILL EMPLOYED Hardship Withdrawals You may make a withdrawal from your 401(k) Contribution Account while you are still employed if you have a financial hardship as defined by the IRS. You may not withdraw any portion of your Employer Matching Contribution Account, or earnings credited to your 401(k) Contributions Account after December 31, You must take a loan from the plan if you are eligible for a loan before applying for a hardship. Hardship withdrawals will be permitted only if: the distribution is necessary in light of your immediate and heavy financial need, 17

18 the amount does not exceed the amount required to meet the financial need, and you have obtained all distributions and all nontaxable loans currently available under the Plan. The only financial needs that will be considered immediate and heavy are: medical expenses incurred for yourself, your spouse, children or dependents which are deductible under rules specified in the Internal Revenue Code; costs directly related to the purchase of your principal residence (not including mortgage payments); tuition, room and board, and related educational fees for the next 12 months of post-secondary education for yourself, your spouse, children or dependents; payments necessary to prevent your eviction from, or the foreclosure on your principal residence; or any other financial need considered immediate and heavy under IRS regulations, rulings, notices or other applicable documents. If you receive a hardship distribution, you cannot make 401(k) Contributions to the Plan for 6 months after you make the withdrawal. (Prior to January 1, 2002, the suspension period was 12 months.) Your contributions will automatically stop on the next payroll date following the date your withdrawal is processed by MFS. No rollovers Withdrawals after Age 59½ Withdrawals from Rollover Account Hardship distributions are not eligible to be rolled over to an IRA or to another tax-qualified retirement plan. After you attain age 59½, you may elect to withdraw all or a portion of the vested value of your Account in accordance with procedures established by the Plan Administrator, even if you are still working. You may withdraw all or any portion of your Rollover Account at any time, in accordance with the procedures established by the Plan Administrator. 18

19 You should contact the Plan Administrator if you want more information about these options. 12. PARTICIPANT LOANS - BORROWING FROM YOUR ACCOUNT You may apply for a loan from the Plan for any reason in accordance with the procedures established by the Plan Administrator. Plan loans will be made available to all Participants on a uniform and non-discriminatory basis. The Plan Administrator has appointed MFS to review and approve loan applications and administer loans under the Plan. The Plan Administrator has established a written loan program which explains these requirements in more detail. You may request a copy of the loan program from the Plan Administrator. Generally, the rules for loans include the following: Applying for a Loan To apply for a loan, you may call MFS at , and you will receive information about the amount that is available to borrow. If necessary, MFS may request that you provide additional information before determining whether or not you qualify for a loan. If your loan is approved, MFS will send you a promissory note and an amortization schedule. Your endorsement of the loan check represents your agreement to the terms of the promissory note. Source of Funds The source of funds for the loan is your vested Account. Your investments will be sold to provide the money for the loan. All payments of principal and interest made by you on a loan will be credited to your Account. Interest Rate Fees Amount of Loan The interest rate applied to all loans will be determined by MFS as of the beginning of each month and is usually equal to the Prime Rate, as published in the Wall Street Journal, plus 2%. Your Account will be charged a loan origination fee to cover the cost of processing your loan application. In addition, an administration fee may be charged to your Account for each year during which your loan has an outstanding balance. All loans are secured by your vested Account. The amount of the loan, however, is limited by the rules under the Internal Revenue Code. Any loan is limited to the lesser of: $50,000; or 19

20 Repayment Period One half of your vested Account balance. However, if you have had a loan outstanding at any time during the 12-month period immediately preceding your requested loan, the $50,000 limit will be reduced by the largest amount outstanding during that 12-month period. If you desire more information concerning this reduction, please review a copy of the loan program or contact MFS. A loan must be repaid over a period that is set at the time the loan is granted. This period must be at least one year, but not more than five years, unless your loan is for the purchase of your principal residence, in which case you may have up to ten years to repay the loan. MFS may require proof of purchase of your residence if you are requesting a longer repayment period for this reason. Repayment of your loan will be made in after-tax dollars by payroll deduction. You may pay off the entire outstanding amount of your loan in a single lump sum at any time, but you may not make a partial prepayment. Restrictions You may have only one loan outstanding at any time. Payment During Leaves of Absence; Default Termination of Employment The minimum loan amount is $1,000. You may not take out a loan that results in a total annual repayment of less than $1,000. If you are on an authorized leave of absence, you may make advance arrangements to remit monthly repayments by check to the Plan Administrator. Special loan rules may apply to an unpaid leave of absence, so you should contact the Human Resources Department if you are taking a leave of absence and have a loan outstanding from the Plan. If you fail to make any loan payment within 90 days after its due date, the loan will be considered in default and you will be notified by MFS. Upon your termination of employment, any outstanding loan will become immediately payable. 20

21 If you fail to completely repay the entire outstanding loan balance within 90 days after your employment terminates, you will be deemed to have received a distribution of your loan (including unpaid accrued interest). Any distribution that you are otherwise due from the Plan will be offset by the amount of the outstanding loan (including unpaid accrued interest). You will be responsible for any taxes and penalties imposed by the IRS on the outstanding loan balance. 13. DISTRIBUTION OF BENEFITS AFTER TERMINATION OF EMPLOYMENT Retirement Normal Retirement Payment of Benefits after Retirement Working Past Retirement Age Distributions After Age 70-½ You may retire and receive your benefit at any time on or after your Normal Retirement Date. Your Normal Retirement Date occurs when you reach age 65 and you have completed five Years of Service. Ordinarily, your benefits will be distributed soon after you retire. You must notify the Plan Administrator, in writing, at least 90 days in advance of the date on which you plan to retire and want to receive your distribution. You are not required to retire when you reach your Normal Retirement Date. If you continue to work past retirement age, you may continue to participate in the Plan under the same terms and conditions that apply to other active employees (except as described below for 5% owners who reach age 70½ while working). Unless you are a 5% owner of the Employer, as defined by IRS rules, you must begin receiving benefits not later than April 1 following the later of (i) the year in which you reach age or, or (ii) the year in which you retire. A 5% owner is required to begin receiving benefits by April 1 following the year in which he or she reaches age 70½, even if he or she is still working. The date by which your payments must begin is called your required beginning date. 21

22 If you reach your required beginning date and your benefit has not yet been distributed, the law requires that you start receiving a minimum distribution each year until your Account is paid out. The IRS has published a table that provides the period over which your benefits are to be distributed, based on your age (and, in some cases, that of your spouse) when benefits start. If you die before your required beginning date, IRS rules specify the date as of which distributions must begin to your beneficiary and the period over which payments must be made. Termination of Employment Before Retirement If your employment terminates, you may receive a distribution before your Normal Retirement Date under the following rules: Small Benefits ($5,000 or less) Benefits Valued at More than $5,000 Form of Payment Direct Rollover Applying for Benefits If the vested value of your Account is $5,000 or less, the Plan Administrator will distribute the benefits soon after you terminate employment. Your consent is not required. If the vested value of your Account is greater than $5,000, your distribution can be paid to you after you terminate employment (but before your Normal Retirement Date) only with your written consent. You have the right to wait until you reach age 70½ to receive your payment. Your benefits will be distributed in one lump sum. If payment is made directly to you, the Plan Administrator is required to withhold 20% of the distribution for Federal income taxes. After your employment terminates, you may elect to have your distribution directly rolled over to another tax-qualified retirement plan or to an IRA. If you authorize a direct rollover, no taxes will be withheld. The Plan Administrator will provide you with additional information concerning the amount of your benefits and will provide you with forms to sign in order to apply for your distribution. You will also receive complete information about how to make a direct rollover. 22

23 Forfeiture of Nonvested Amount Restoring Forfeited Amounts Death Benefits If you are not fully vested in your Employer Matching Contribution Account when you terminate employment, you will forfeit the portion that is not vested when you receive a distribution of the vested portion. If you do not receive a distribution immediately after your termination of employment, the non-vested portion of your Account will be forfeited when you have incurred five consecutive Breaks in Service (see Section 10). If the vested portion of your Employer Matching Contribution Account is zero as of the date you terminate employment, you will be deemed to have received a distribution and the non-vested portion of your Account will be forfeited as of your date of termination. If you terminate your employment and receive a distribution and then return to work before you have five consecutive Breaks in Service, you can repay the amount you received to the Plan. If you do, the amount forfeited f rom your Account will be restored (unadjusted for any gains or losses in the Trust). You have until five years from your date of reemployment to repay the distributed amount and have the forfeited portion of your Account restored. If you die before you receive your benefits from the Plan, payment will be made to your designated beneficiary. Vesting Designating a Beneficiary If you die while employed by the Employer, your Account will become 100% vested. If you die after your employment terminates but before you receive your distribution, your vested interest will be the same as it was when your employment terminated. When you become a Participant, you will be asked to designate a beneficiary to receive your Plan benefit in the event that you die before it is paid to you. All beneficiary designations must be made in writing on forms provided by the Plan Administrator. You can revoke a designation at any time by completing a new beneficiary designation, except that if you are married and your primary beneficiary is someone other than your spouse, your spouse must consent to the new designation. 23

24 Married Participants. If you are married on the date of your death, your spouse is the primary (and only) beneficiary of your interest in the Plan, unless he or she gives written consent in the presence of a Plan representative or a notary public to the designation of another beneficiary. If your spouse consents to the designation of another beneficiary and waives his or her interest in the Plan, you can designate another person to receive your benefits (primary beneficiary). At any time you can designate a contingent beneficiary to receive your benefits if your spouse or other primary beneficiary does not survive you. Unmarried Participants. If you are not married, you can designate any person you want as a primary or contingent beneficiary to receive your interest in the Plan. You may designate more than one primary or contingent beneficiary. If your marital status changes and you are married on the date of your death, your spouse will automatically be entitled to the death benefit, unless he or she waives that right as discussed above. Disability Benefits If it is determined by the Plan Administrator that you have suffered a disability while employed by the Employer, you become 100% vested in your Account and you may elect to receive a distribution of your entire interest in the Plan. Disability is determined by the Employer in accordance with uniform principles and upon the basis of medical reports and other evidence that is deemed to be necessary. In general, a disability is any physical or mental impairment which leaves you incapable of performing your usual and customary duties with the employer and which requires your termination of employment. Disability may include the permanent loss or the loss of the use of a member or function of the body, or a permanent disfigurement. Qualified Domestic Relations Orders A Qualified Domestic Relations Order (QDRO) is a judgment, decree or order relating to the provision of child support, alimony payment, or marital property rights, to a spouse, former spouse, child or other dependent, made pursuant to a state domestic relations law, which creates or recognizes the existence of an alternate payee's right to receive all or a portion of the benefits payable with respect to a Participant under a Plan. Such an order must be presented to the Plan Administrator and determined to meet the IRS criteria for a QDRO before assets are segregated for the alternate payee named in the order. Upon request to the Plan Administrator, Participants and beneficiaries can obtain without charge a copy of the Plan s procedures that govern the determination of QDROs. You will be notified if any QDRO is received with respect to your benefits under the Plan. 24

25 14. TAX CONSEQUENCES OF A DISTRIBUTION FROM THE PLAN Generally, your distribution will be subject to ordinary income tax at the time you receive it unless you roll it over or directly transfer it to another qualified retirement account. You should contact a tax advisor to learn how a distribution will impact your financial situation and to help you choose the manner in which your distribution is paid. If you receive a distribution before you reach age 59½, a 10% penalty tax applies to the amount includible in income. When you are eligible to receive a distribution from the Plan, you will receive more information about how the distribution is taxed. 15. CLAIMS REVIEW PROCEDURE Initial Denial If the Plan Administrator determines that a Participant or beneficiary s claim for benefits will be denied in whole or in part, the Plan Administrator will send a written claim denial. The claim denial will include: the specific reason or reasons for the denial; the Plan provisions that are the basis for the denial; an explanation of what other material or information is needed to complete the claim and why it is needed; an explanation of the Plan s claim review procedures; the applicable time limit for an appeal; and a statement explaining your or your beneficiary s right to file a civil action under the Employee Retirement Income Security Act of 1974, as amended ( ERISA ), if any appeal is denied by the Plan Administrator. In most cases, written notice of the denial will be sent within 90 days after the claim was filed. If special circumstances require more time, you or your beneficiary will be informed in writing (before the end of the 90-day period) of the reason for the delay and the date the Plan Administrator expects to make a decision. In no case will the extension exceed 180 days after the claim is filed. 25

26 Appeal If you or your beneficiary disagree with a decision made regarding a claim under the Plan, you or your beneficiary may file a written appeal of the decision to the Plan Administrator and be given a full and fair review. You or your beneficiary may be represented by another person, who may be but is not required to be, an attorney. However, you will be responsible for paying the fees and expenses of your representative. The appeal must be filed within 60 days after the date you receive the claim denial, or the right to appeal will be lost. The appeal should include your or your beneficiary s name, address, Social Security number, the reason(s) you or your beneficiary believes that the denial is incorrect, and should include any additional information or documents you or your beneficiary believe to be relevant. Upon request, you or your beneficiary will be provided, free of charge, reasonable access to, and copies of, all documents, records and other information relating to your claim. The Plan Administrator will reconsider the claim that is appealed taking into account all comments, documents, records, and other submitted information, without regard to whether such information was submitted or considered in the initial benefit determination. The Plan Administrator will send you or your beneficiary the final decision in writing. In most cases, written notice of the final decision will be made within 60 days of the date the appeal was filed. If special circumstances require more time, you or your Beneficiary will be informed in writing, before the end of the 60- day period, of the reason for the delay and provided with the date when decision will be made. In no case will the extension exceed 120 days after the appeal is filed. If the appeal is denied, the decision will include: The specific reason or reasons for the denial. The Plan provisions that are the basis for the denial. A statement that you are entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to your claim for benefits. 26

27 A statement explaining your right to file a civil action under ERISA. 16. OTHER IMPORTANT INFORMATION YOU SHOULD KNOW Name of the Plan Petroleum Helicopters, Inc. 401(k) Retirement Plan Plan Identification Number Plan Sponsor 002 Employer Identification Number of Plan Sponsor (EIN) Employers Who Have Adopted the Plan Plan Administration Petroleum Helicopters, Inc. P. O. Box Lafayette, LA (337) Petroleum Helicopters, Inc. International Helicopter Transport, Inc. Evangeline Airmotive, Inc. Acadian Composites, Limited Liability Co. Air Evac Services, Inc. PHI Aeromedical Services, Inc. The Plan is administered by the Plan Administrative Committee appointed by Petroleum Helicopters, Inc. (the Plan Administrator). The Plan Administrative Committee makes all determinations as to the right of any person to benefits under the Plan and will determine all questions arising out of the administration and interpretation of the Plan. The Plan Administrator is the agent for service of legal process. The address and telephone number of the Plan Administrator is Plan Administrative Committee, c/o Petroleum Helicopters, Inc. at the address shown above. 27

28 Plan Year Trustee The Plan's annual accounting period (the plan year) is the calendar year. The assets of the Plan are held in a Trust. The Trustee is: MFS Heritage Trust Company 500 Boylston Street 6th Floor Boston, Massachusetts Service of process can also be made on the Trustee. Because the Plan is a defined contribution plan, benefits under the Plan are not guaranteed or insured. Additional rules may apply to the provision of any benefit, and the terms of this Summary Plan Description are not intended to enlarge or expand the benefits which are available under the Plan. In the event of a conflict between the terms of the Plan and the terms of this Summary Plan Description, the terms of the Plan, not this Summary Plan Description, will determine your right to receive a benefit. A copy of the Plan can be obtained from the Plan Administrator, and the Plan and related documents can be reviewed at the office of Petroleum Helicopters, Inc. during normal business hours. Amendment and Termination: Although Petroleum Helicopters, Inc. intends to maintain the Plan indefinitely for the benefit of its employees, it retains the right to amend or terminate the Plan at any time and under any circumstances. The Plan can be amended by resolution of the Board of Directors of Petroleum Helicopters, Inc., or by the signing of an amendment to the Plan by an officer of Petroleum Helicopters, so long as that action is later ratified by the Board of Directors. The Board of Directors of Petroleum Helicopters, Inc. can terminate the Plan at any time and under any circumstances by written notice to the Trustee. No amendment or termination will reduce your benefits. If Petroleum Helicopters, Inc. terminates the Plan, or completely stops making contributions to the Plan, your Employer Matching Contribution Account will automatically become fully vested and nonforfeitable. Participants will be notified if any of these events occurs. 28

29 17. STATEMENT OF ERISA RIGHTS As a Participant in the Petroleum Helicopters, Inc. 401(k) Retirement Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Participants will be entitled to: Receive Information About Your Plan and Benefits Examine, without charge, at the Employer's office and at other specified locations, such as work sites and union halls, all documents governing the Plan, including insurance contracts, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration (formerly the Pension and Welfare Benefit Administration). Obtain, upon written request to the Employer, copies of documents governing the operation of the Plan, including insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The Employer may make a reasonable charge for the copies. Receive a summary of the Plan's annual financial report. The Employer is required by law to furnish each Participant with a copy of this summary annual report. Obtain a statement telling you whether you have a right to receive a benefit at Normal Retirement Age (age 65) and if so, what your benefits would be at Normal Retirement Age if you stop working under the Plan now. If you do not have a right to a pension, the statement will tell you how many more years you have to work to get a right to a pension. This statement must be requested in writing and is not required to be given more than once every twelve (12) months. The Plan must provide the statement free of charge. Prudent Actions by Plan Fiduciaries In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your Plan, called fiduciaries of the Plan, have a duty to do so prudently and in the interest of you and other Plan Participants and beneficiaries. No one, including your Employer, your union or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA. 29