CONCENTRA OPERATING CORPORATION. 401(k) AND PROFIT SHARING PLAN SUMMARY PLAN DESCRIPTION. April 2013

Transcription

1 CONCENTRA OPERATING CORPORATION 401(k) AND PROFIT SHARING PLAN SUMMARY PLAN DESCRIPTION April

2 TABLE OF CONTENTS INTRODUCTION... 1 SUMMARY... 2 GLOSSARY OF TERMS... 3 BASIC PLAN INFORMATION... 6 SECTION 1 OVERVIEW OF THE PLAN... 8 SECTION 2 PARTICIPATION... 9 SECTION 3 EMPLOYEE CONTRIBUTIONS SECTION 4 EMPLOYER CONTRIBUTIONS SECTION 5 ACCOUNT BALANCE AND INVESTMENTS SECTION 6 FEES SECTION 7 VESTING SECTION 8 LOANS SECTION 9 IN-SERVICE WITHDRAWALS SECTION 10 DISTRIBUTION OF BENEFITS FOLLOWING RETIREMENT OR OTHER TERMINATIONS OF EMPLOYMENT SECTION 11 DISTRIBUTIONS OF BENEFITS UPON DEATH SECTION 12 FORM OF PAYMENT OF BENEFITS SECTION 13 LIMITS ON ASSIGNING PLAN BENEFITS SECTION 14 ADMINISTRATION OF THE PLAN SECTION 15 QUALIFIED MILITARY SERVICE SECTION 16 BENEFITS ARE NOT INSURED SECTION 17 CLAIMS PROCEDURES SECTION 18 DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS SECTION 19 RECOVERY OF OVERPAYMENTS SECTION 20 TAX TREATMENT OF PLAN DISTRIBUTIONS SECTION 21 YOUR RIGHTS UNDER ERISA APPENDIX A APPENDIX B ii

3 INTRODUCTION The Concentra Operating Corporation 401(k) and Profit Sharing Plan (the Plan ) offers you an opportunity to defer a portion of your Compensation that would otherwise be subject to current income taxes and contribute that amount to the Plan on a before-tax basis and in doing so defer taxation until the contribution is distributed to you. Alternatively, you may defer a portion of your Compensation as a designated Roth contribution and have taxes withheld from your pay. Roth contributions have the opportunity to grow tax free in the Plan and may be distributed to you tax free including any investment earnings. You may also combine both before-tax contributions and Roth contributions in any proportion you chose up to the Plan s limits. If you chose to defer a portion of your Compensation by making Pretax Contributions or Roth Contributions, the Company will make a Matching Contribution of a portion of the amount that you contribute, up to certain limits. Subject to the rules described in this document, the Plan is generally open to employees of Concentra Operating Corporation ( Concentra ) and the Concentra affiliates and Professional Associations that have adopted the Plan. This document is called a Summary Plan Description or SPD. Its primary purpose is to provide you with a simple explanation of the most important features of the complex and technical legal provisions set forth in the official Plan document. It also contains important updates and Plan changes from previous SPDs. We urge you to read this SPD carefully and to acquaint your family or beneficiaries with its contents. Although this summary describes many important provisions of the Plan, this SPD may not answer all of your questions. If, after reading this SPD, you still have any questions about the Plan, please contact the Plan Recordkeeper. You should retain a copy of the SPD for future reference. This SPD does not replace or change the terms of the applicable official Plan document. If there is any conflict or inconsistency between the terms of the official Plan document and this SPD or a matter is discussed in less detail in this SPD, the Plan document will control in all cases. The operation of the Plan and the benefits to which you (or your beneficiaries) may be entitled will be governed solely by the terms of the applicable Plan document and the interpretations of the Plan Administrator and/or its duly authorized designee(s). No other individuals have any authority to interpret the Plan (or other applicable documents) or to make any promises to you about what the documents mean or what your benefits from the Plan will be. The complete Plan document and certain related documents are available for inspection by you, your beneficiaries, or your legal representative upon request at the offices of the Company. From time to time, application is made to the Internal Revenue Service ( IRS ) for a ruling that the Plan is qualified under the Internal Revenue Code. Changes to the Plan may be required by the applicable governmental authority or may be made by the Company. You will be informed of important changes. While the Company intends to maintain the Plan indefinitely, the Company reserves the right to change or end the Plan (or any of its benefits) at any time in its sole and absolute discretion. However, you will always be entitled to your vested benefit from your Plan. Upon termination of the Plan, all assets of the Trust will be distributed to the Plan s participants and beneficiaries. Nothing contained in this Summary Plan Description creates or is intended to create a contract of employment between any employee and the Company. Nothing in the Plan or this summary gives any person the right to be employed by the Company nor does it impede or restrict the Company s right to discharge an employee at any time. As used in this Summary, the terms you or your mean an employee who has met the eligibility requirements to participate in the Plan; mere receipt of this Summary does not mean that you meet these requirements or that these requirements have been waived. 1

4 If, at any time, you have questions regarding your Plan benefits or you would like to review the official Plan document, please contact the Plan Recordkeeper at (800) (English), or (877) (Español). SUMMARY Below is a brief summary highlighting some of the key features of the Plan. For more information on these provisions, please review the details as explained in greater detail throughout this Summary Plan Description. This chart is not intended to be a complete summary of all of the features, limitations or restrictions that may apply to your rights and obligations under the Plan. Plan Provisions Joining the Plan Pretax Contributions Roth Contributions Catch-up Contributions Highlights You are eligible to participate in the Plan upon completing one month of employment. Upon completing this eligibility requirement, you will automatically be enrolled in the Plan for a 4% Pretax Contribution deferral beginning with next payroll period, unless you elect not to participate or to participate at a different amount. If you remain automatically enrolled, your contribution will increase to 5% after the second Plan Year ends following your enrollment and will increase to 6% after the third Plan Year ends following your enrollment, where it will remain until you elect to change it. You may elect within the one-month eligibility period to not participate in the Plan, or to participate at a different contribution percentage upon meeting eligibility. If you are automatically enrolled, you may still elect within 90 days of your automatic enrollment date to not participate in the automatic enrollment feature and have any automatic deferrals made on your behalf returned to you. Instead of being automatically enrolled at a set percentage, you may enroll yourself by electing to contribute between 0% and 35% of your compensation to the Plan before income withholding tax is applied. Contributions and any earnings they generate are not taxed until distributed to you. Your Pretax Contributions, when combined with your Roth Contributions, may not exceed 35% of your Compensation. You may change the amount of your Pretax Contributions at any time. You may elect to contribute between 0% and 35% of your compensation to the Plan after income tax withholding is applied. While contributions are made with after tax dollars, earnings on the contributions may not be taxed if certain distribution rules are followed. Your Roth Contributions, when combined with your Pretax Contributions, may not exceed 35% of your Compensation. You may change the amount of your Roth Contributions at any time. If you will have reached your 50 th birthday before the end of any Plan Year, and have maximized your Pretax and Roth Contributions, you may contribute up to an additional 35% of your Compensation, not to exceed $5,500 (or the amount periodically adjusted by the Internal Revenue Service). You may change the amount of your Catch-up Contributions at any 2

5 Plan Provisions Matching Contributions Nonelective (Profit Sharing) Contributions Rollover Contributions Deferral Limits Hardship Withdrawals Plan Loans Age 70 ½ Required Distributions Tax Treatment of Plan Distributions Rollover Distributions Highlights time. The Company will match 100% of the amount of your Pretax Contributions, Roth Contributions, and Catch-up Contributions that do not exceed 2% of your Compensation and 50% of the amount your Pretax Contributions, Roth Contribution, and Catch-up Contributions that exceed 2% but do not exceed 6% of your compensation. Nonelective Contributions, Rollover Contributions, Roth Rollover Contributions, and Roth Conversion Contributions are not matched. Each year, the Company may elect to make a Nonelective Contribution to the Plan in an amount determined by the Company to the Nonelective Contributions Account of each Participant who is an Employee on the last day of the Plan Year. Nonelective Contributions are made on an annual basis on or after the last day of the Plan Year. Participants will be informed if a Nonelective Contribution is made for any Plan Year. Nonelective Contributions are sometimes referred to as profit sharing contributions. You can contribute amounts rolled over from an IRA or another employer s plan qualified under the U.S. tax code, including Roth Rollover Contribution from Roth accounts in other plans. The total Pretax Contributions, Roth Contributions, or combination of Pretax and Roth Contributions may not exceed $17,500 for 2013, as adjusted periodically by the Internal Revenue Service. You may take a hardship withdrawal while still employed if you experience a severe financial need. After you receive a hardship withdrawal, you will be suspended from making contributions to the Plan for six months. You may elect to take a loan from your available Accounts, which you will pay back with interest through payroll deduction. Loans are deducted proportionately from all eligible Accounts and all fund investments. Once you terminate employment, the Internal Revenue Service requires that your vested Accounts must begin to be distributed to you no later than April 1 after the end of the calendar year in which you attain age 70 ½. Please refer to Tax Treatment of Plan Distributions section of this SPD for explanation of when distributions from the Plan will be taxed, or how taxes can continue to be deferred. You can make a direct rollover to an IRA or another employer s plan qualified under the U.S. tax code. GLOSSARY OF TERMS Accounts - All of your various accounts under the Plan. This would include, for example, a Pretax Contributions Account, a Roth Contributions Account, a Matching Contributions Account and a Nonelective Contributions Account (if applicable). A complete list of all Accounts is set forth in Section 1 below. 3

6 Affiliated Company All of the employers that the Internal Revenue Service treats as a single employer with Concentra. Associated Company Certain companies that have a connection to Concentra. Service to Associated Companies will be included in Years of Service for vesting purposes if it immediately precedes or follows your service to Concentra. As of April 1, 2013, the Associated Companies are HumanaVitality, LLC and employers that are Professional Associations. Catch-up Contributions Additional Pretax Contributions, Roth Contributions, or any combination of Pretax and Roth Contributions that participants who will be at least 50 years old by the end of the Plan Year may make to the Plan after they have maximized their combined Pretax Contributions and Roth Contributions up to the deferral limit (for 2013, this limit is $17,500). Catch-up Contributions are limited to 35% of your Compensation for combined Catch-up Pretax Contributions and Catch-up Roth Contributions, and your combined Pre-tax and Catch-up Roth Contributions may not exceed $5,500 for You may not contribute more than your net pay (after all withholding, garnishments, and other deductions have been applied) for any payroll period, or more than 100% of your annual Compensation. Company Concentra and any Affiliated Company or Professional Association that has adopted the Plan. Compensation Compensation for purposes of your contributions to the Plan generally include your wages, salaries, overtime pay, bonuses, fees for professional services, and other amounts you receive (including payments received as back pay) for personal services rendered in the course of your employment with the Company, including any amounts you may defer pretax or after tax to various benefit plans. Compensation generally does not include amounts paid or reimbursed by the Company for moving expenses, the value of any qualified or nonqualified stock option granted to you by the Company to the extent such value is includable in the your taxable income, personal use of an employer-provided vehicle, car allowance, employer-provided club membership, taxable moving allowance, non-cash incentive or any other remuneration received or paid other than in cash, referral bonuses, retention bonuses, sign-on bonuses, Hall of Fame bonus, gifts and awards, live healthy payments, one-time Humana Inc. 50th anniversary award, severance payments, or any Compensation paid after severance from employment, unless paid by the later of 2½ months after the date of severance from employment or the end of the Plan Year that includes the date of the severance from employment. Federal law imposes a limit on the amount of Compensation that may be used in figuring the amount of contributions to the Plan (including Pretax Contributions). This limit is adjusted by the IRS for cost-of-living increases. In 2013, the limit is $255,000. Disabled You are considered disabled if, due to a physical or mental condition beginning during your employment with the Company, you become eligible for disability benefits from either the Social Security Administration or under a long-term disability plan sponsored by the Company. ERISA The Employee Retirement Income Security Act of 1974, as amended. ERISA is the federal law that, among other things, governs how an employer can provide retirement benefits to its employees. Hour of Service Any hour for which you are entitled to payment by the Company (i) for performing duties for the Company; (ii) for any period during which you are not performing duties; (iii) as a result of a back pay award; and (iv) attributable to qualified military service as provided in USERRA. Matching Contributions The contributions that the Company will make to the Plan for you based on the amount of your Pretax Contributions, Roth Contributions, or Catch-up Contributions (if applicable) up to specified limits. Normal Retirement Date The first day of the month coincident with or following the date on which (i) you have completed five Years of Retirement Service; (ii) you have reached at least age 55; and (iii) your 4

7 age plus Years of Retirement Service equals or exceeds 65. If your employment is terminated and you are later rehired, service prior to the termination will be included only if the period between the termination date and the date you are credited with an Hour of Service is less than six months. Nonelective Contributions Contributions that the Company may elect to make to certain eligible employees from time to time. If the Company elects to make a Nonelective Contribution, you will be notified if you are eligible and the amount of that contribution. The Companies that have elected to make a Nonelective Contribution and the employees eligible for those contributions are listed in Appendix A at the end of this SPD. Plan Recordkeeper Charles Schwab Retirement Plan Services. Pretax Contributions Contributions you make to the Plan through payroll deductions of amounts you would otherwise receive in cash. Pretax Contributions are deducted from your Compensation before federal, state, and local withholding taxes are calculated and deducted. Pretax Contributions, and any earnings on these contributions, are taxed when they are distributed to you. Professional Associations Any entity that provides services to Concentra or any affiliated company according to the terms of an occupational medicine center management and consulting agreement between Concentra or the affiliated company and a professional association formed for the purpose of providing such medical services. QDRO A qualified domestic relations order is a court-ordered payment of benefits in connection with a support order, divorce, legal separation, or custody case that the Plan Administrator has determined is qualified under the Plan s QDRO procedures. Please contact the Plan Administrator if you would like a copy of the Plan s QDRO procedures for determining whether a domestic relations order is qualified. Rollover Contributions Amounts that you can transfer to the Plan from another employer-sponsored qualified retirement plan or from an IRA. Rollover Contributions that come from a Roth account in another employer-sponsored plan are referred to as Roth Rollover Contributions, and must be separately accounted for under the Plan. Roth Contributions Contributions you make to the Plan through payroll deductions of amounts you would otherwise receive in cash that you irrevocably designate as Roth Contributions. Roth Contributions are deducted from your earnings after federal, state, and local withholding taxes are calculated and deducted. Roth Contributions, and any earnings on these contributions, are eligible for tax free distributions to you under certain circumstances detailed in this SPD. Roth Conversion Contributions - Contributions in your Accounts that are eligible for distribution, which you may irrevocably designate for conversion into a Roth Conversion Account in the Plan. Conversions from any Accounts that include tax-deferred savings will be included in your gross income in the year in which the conversion occurs. Following conversion, these Roth Conversion Contributions will be treated as Roth Contributions. USERRA - The Uniformed Services and Reemployment Rights Act, which protects certain rights of Plan participants who return to work after taking a leave of absence to perform qualified military service. Year of Retirement Service For purposes of reaching your Normal Retirement Date, each twelve month period beginning on the date you first perform an Hour of Service and continuing throughout (i) the period during which you perform services as an eligible employee; (ii) all periods of an approved leave of absence and (iii) all periods of service with certain related employers. If your employment is terminated and you 5

8 are later rehired, service prior to the termination will be included only if the period between the termination date and the date you are credited with an Hour of Service is less than six months. Year of Service For purposes of vesting in Matching Contributions and Nonelective Contributions, you will be credited with a Year of Service for each twelve-month period beginning on the date you first perform an Hour of Service and continuing throughout the period during which you perform services to the Company or, if applicable, an Associated Company. Please refer to Section 7 for more information on vesting and crediting Years of Service. 1. Plan Name: BASIC PLAN INFORMATION Concentra Operating Corporation 401(k) and Profit Sharing Plan 2. Name, Address and Telephone Number of the Sponsoring Employer: Concentra Operating Corporation 5080 Spectrum Drive, Suite 1200, West Tower Addison, TX (972) Sponsoring Employer s Identification Number (EIN) and Plan Number: EIN: Plan Number: Type of Plan: The Concentra Operating Corporation 401(k) and Profit Sharing Plan is a defined contribution plan subject to the provisions of ERISA. The Plan is intended to qualify under Internal Revenue Code (the Code ) section 401(a) as a profit sharing plan that provides a cash or deferred arrangement permitted under Code section 401(k), designated Roth contributions under Code section 402A, and matching contributions under Code section 401(m). The Plan is intended to constitute a plan that meets the requirements of ERISA section 404(c), as described in Section 5. The Plan is intended to be a qualified automatic contribution arrangement to satisfy the safe harbor nondiscrimination requirements of Code section 401(k)(13) and 401(m)(12). 5. Plan Administrator: Concentra Retirement Plan Committee 5080 Spectrum Drive, Suite 1200, West Tower Addison, TX (972) Type of Administration: Contract Administration (Charles Schwab Retirement Plan Services) 6

9 7. Name and Address of Agent for Service of Legal Process: Director, Associate Benefit Programs Humana Inc. 500 West Main Street Louisville, Kentucky (502) Legal notices may also be sent to the Trustee and the Plan Administrator. 8. Name and Address of Trustee (Directed Trustee): Concentra Operating Corporation 401(k) and Profit Sharing Plan Charles Schwab Trust Company 211 Main Street, 14 th Floor San Francisco, CA Plan Year: January 1 through December Plan Funding: All money that is contributed to the Plan is held in a trust fund ( Trust ). The Trustee is responsible for the safekeeping of the Trust. The Trust established by the Trustee will be the funding medium used for the accumulation of assets from which benefits will be distributed. While all the Plan assets are held in a Trust, the Plan Recordkeeper separately accounts for each participant s interest in the Plan. 11. Affiliated Companies and Professional Associations who have adopted the Plan as of April 1, 2013: AFFILIATED COMPANIES (Concentra Entities/Divisions/Branches) 1. Concentra Health Services, Inc. 2. Concentra Solutions, Inc. 3. Concentra Laboratory, L.L.C. 4. Auto Injury Solutions, Inc. PROFESSIONAL ASSOCIATIONS 1. OHC of the SW (non-arizona States) 2. OHC of California 3. OHC of Michigan 4. OHC of the Southwest (Arizona) 5. OHC of Georgia 6. OHC of New Jersey 7. OHC Of Ohio 8. OHC of North Carolina 9. OHC Of New York 10. Therapy Centers of the Southwest I, P.A. 11. OHC of Arkansas 7

10 12. OHC of Louisiana 13. OHC of Nebraska 14. OHC of Delaware 15. Therapy Centers of South Carolina P.A. 16. OHC of Hawaii, Inc. Participants and beneficiaries may receive from the Plan Administrator, upon written request, information as to whether a particular employer is participating in the Plan and, if the employer is participating, that employer s address. 12. Collective Bargaining: The Plan is not maintained pursuant to any collective bargaining agreement. 13. Contract Administrator (Plan Recordkeeper): Charles Schwab Retirement Plan Services 4150 Kinross Parkway Richfield, OH (800) (English) (877) (Español) SECTION 1 OVERVIEW OF THE PLAN The Plan contains a tax-deferral feature that enables you to save for retirement and reduce the amount of your taxable income by deferring a portion of your Compensation as Pretax Contributions to the Plan instead of receiving it in your paycheck. The Plan also allows you to make an after tax contribution to the Plan that you irrevocably designate as a Roth Contribution, which can grow and be distributed tax free, subject to certain requirements. The Company will also make Matching Contributions to the Plan on your behalf as described in this SPD. Amounts are credited into the Accounts maintained on your behalf under the Plan. The types of Accounts that you may have are as follows: Pretax Contribution Account this Account is credited with amounts from your Compensation that you have elected to contribute to the Plan before paying income taxes, including Catch-up Contributions described below. Roth Contribution Account this Account is credited with amounts from your Compensation that you have elected to contribute to the Plan after paying income taxes, including Catch-up Contributions described below, that you irrevocably designate as Roth contributions. Matching Contribution Account this Account is credited with Matching Contributions that the Company makes on your behalf. Nonelective Account this Account is credited with any annual Nonelective Contribution that the Company elects to make for a Plan Year on behalf of participants who are employed on the last day of that Plan Year. 8

11 Qualified Nonelective Contributions Account this Account is credited with Qualified Nonelective Contributions ( QNECs ) that the Company may have made to participants. Qualified Matching Contributions Account this Account is credited with Qualified Matching Contributions ( QMACs ) that the Company may have made to participants. Rollover Account this Account is credited with any Rollover Contributions of pretax deferrals you elect to make from another Plan. Roth Rollover Account this Account is credited with any Roth Rollover Contributions of after tax deferrals designated as Roth Contributions that have been separately accounted for that you elect to make from another Plan. Your retirement benefit from the Plan is the total vested amount in all of your Accounts at the time of distribution. Please refer to Section 7 for information concerning vesting in your Accounts. When you leave the Company and become eligible for your benefit, the Trustee will pay the benefit in the form you choose as described in Section 12. The amount in your Accounts will largely depend on the amount of the contributions deposited, the investment performance of the investment funds in which you choose to invest, and your share of the Plan s administrative expenses. Participants in the Plan do not pay any current federal income tax on the amounts contributed to the Plan, other than amounts contributed to your Roth Contributions Account. Your Pretax Contributions will be treated as taxable wages for purposes of Social Security and Medicare withholding and may be subject to state and local taxes, depending on applicable state and local law. In addition, you will not be taxed on any investment earnings or employer contributions credited to your Accounts until these amounts are actually distributed to you. SECTION 2 PARTICIPATION Beginning Participation. If you are an eligible employee, you will become a participant in the Plan after you complete one month of employment with a Company as an eligible employee. Eligibility. Employees of the Company are generally eligible to participate in the Plan. However, you are not eligible to participate if: You are a union employee and your collective bargaining agreement does not provide for participation in the Plan; You are a leased employee; You are classified as an independent contractor by the Company; Your compensation from the Company is reported on an IRS Form 1099; You are an agency employee to the Company; Your employer does not participate in the Plan; You are a nonresident alien and receive no earned income from the Company that constitutes United States sourced income unless Concentra has specifically designated you for eligibility; You are a resident of and primarily work in Puerto Rico; or You are eligible to participate in any other tax-qualified savings plan sponsored by Concentra or any Affiliated Company or Professional Association. 9

12 Eligibility Upon Rehire. If you leave the Company and are later rehired, you may begin participation in the Plan beginning with the first payroll period following your rehire date if you were already eligible to participate in the Plan when you terminated employment with the Company. If you were not eligible to participate when you left the Company, you will be eligible to participate upon completing one month of employment with a Company as an eligible employee. Your Matching Contributions and Nonelective Contributions will vest according to your credited Years of Service. Refer to Section 7 for more information on vesting. If you are rehired and had automatic deferrals contributed to the Plan on your behalf in the Plan Year that includes your rehire date or the immediately preceding Plan Year, you will be automatically enrolled upon rehire at the same automatic deferral rate that would apply if you had remained continually employed and automatically enrolled. Otherwise, you will be considered a new hire for automatic enrollment purposes. Joining the Plan. Unless you have made an affirmative election not to participate, you will be automatically enrolled in the Plan as soon as practicable following the date you complete one month of employment with a Company as an eligible employee. (See Section 3 for more information on automatic enrollment). If you have elected not to participate, you may begin participation at any time by completing a deferral authorization in the form and manner prescribed by the Plan Recordkeeper. Participation will become effective for the payroll period beginning as soon as practicable after a completed authorization is received by the Plan Recordkeeper. Once you have started making Pretax Contributions or Roth Contributions, participation in the Matching Contribution Account is automatic. Transferring From a Nonparticipating Affiliated Company or an Associated Company. If you transfer employment to the Company from any Affiliated Company or Associated Company that does not participate in the Plan, you will be eligible to begin participating as described above in Joining the Plan on your first date of employment with the Company. Any election you made under any prior plan you participated in will not be effective under this Plan. For more information regarding transfers of employment within Concentra, see Section 13 below. Naming a Beneficiary. When you join the Plan, or if you have not already done so, you should name a beneficiary. A beneficiary is the person or persons you designate to receive the value of your Accounts if you die before receiving your retirement benefit from the Plan. If you are married, your spouse will automatically be your beneficiary unless he or she irrevocably consents to the designation of an alternate beneficiary in writing. However, if your alternate beneficiary predeceases you, your benefit will be distributed to your spouse unless you designate (with spousal consent) another alternate beneficiary. If you are not married, you do not need anyone s consent to name your beneficiary, who may be anyone you choose. If you are not married and have not named a beneficiary, or your beneficiary predeceases you, your benefits will be distributed to your estate. It is important that you keep your beneficiary designation on file with the Plan current. You may change your beneficiary designation at any time by completing a new beneficiary designation form and returning it to the Plan Recordkeeper in the manner prescribed by the Plan Recordkeeper. A properly completed beneficiary designation form delivered in the manner prescribed by the Plan Recordkeeper will revoke and supersede any prior beneficiary designations. The Committee, in its sole discretion, may suspend the distribution of any benefit to a beneficiary (or person claiming to be a beneficiary) while the Committee determines if the beneficiary is disqualified from receiving the benefit or the designation or establishment of the beneficiary is invalid or void for any reason. Once a beneficiary is determined under the Plan, he or she will have the right to direct the investment of the Accounts and request distributions. 10

13 PRETAX CONTRIBUTIONS SECTION 3 EMPLOYEE CONTRIBUTIONS Salary Deferrals. The Pretax Contribution Account holds your Pretax Contribution elective deferrals which are contributed to the Plan through payroll deductions. When you begin participating, you choose how much you want to defer, from 0% to 35% of your Compensation, subject to the deferral limits discussed below. You may defer paying federal income taxes on your Pretax Contributions and any earnings on those contributions until the Account is distributed to you. Deferral Procedure. The amount you elect to defer will be deducted from your pay in accordance with a procedure established by the Plan Administrator. Your deferral election remains in effect until you revoke or modify it. Deferral Modification. You can stop making Pretax Contributions to the Plan or change your contribution percentage by notifying the Plan Recordkeeper. Changes will generally be made as soon as administratively feasible. Automatic Deferral. The Plan includes a Pretax Contribution automatic deferral feature. The Company will automatically withhold a portion of your Compensation from your pay each payroll period and contribute that amount as a Pretax Contribution unless you make a different election or elect not to participate in the Plan. Application. Eligible employees who did not begin participating in the Plan before April 1, 2013, because they did not have one month of employment as of that date will be automatically enrolled in making Pretax Contributions after completing one month of employment. Automatic Deferral Provisions. If you do not make a deferral election, the following provisions apply to the Pretax Contribution automatic deferrals: o At any time you may complete a salary deferral agreement in the manner prescribed by the Plan Recordkeeper to select an alternative deferral amount, to designate Roth Contributions, or to elect not to defer under the Plan. o Automatic deferrals will be invested in the Plan s designated default investment option unless you designate alternative investment options available under the Plan. o You may elect within 90 days of your automatic enrollment date to not participate in the automatic enrollment feature and to have any deferrals that have been made on your behalf returned to you. Thereafter you may change your deferral elections only for any future Pretax Contributions. o Your initial Pretax Contribution automatic enrollment deferral will be 4% of your Compensation. While you are a participant under the Plan s automatic enrollment arrangement, the automatic deferral amount will increase one percentage point as of the first paycheck after the first day of the third and fourth Plan Years of your participation unless you elect not to participate or elect to participate at a different amount. The table below sets forth the escalating automatic deferral amounts. The first Plan Year is the Plan Year in which you are first enrolled in the Plan. 11

14 Plan Year of Participation Automatic Deferral Percentage First and Second 4% Third 5% Fourth and thereafter 6% EXAMPLE: If you are hired on January 1, 2013, you will be automatically enrolled on or after January 30, 2013, to contribute 4% of your Compensation to your Pretax Contribution Account. If you do not make any other deferral election, beginning with the first paycheck in 2015, your deferral will automatically increase to 5% for all paychecks paid in If you do not make any other deferral election, beginning with the first paycheck in 2016, your deferral will automatically increase to 6% for all subsequent paychecks until you elect not to participate, to make Roth Contributions, or to participate in a different deferral amount. Deferral Limit. Regulations limit the amount of your Pretax Contributions. The limit is adjusted periodically to reflect changes in the cost of living. The current limit is $17,500 for ROTH CONTRIBUTIONS Salary Deferrals. The Roth Contribution Account holds your elective deferrals which you irrevocably designate as Roth Contributions to be contributed to the Plan through payroll deductions. When you begin participating, you choose how much you want to defer, from 0% to 35% of your Compensation, subject to the deferral limits discussed below. You will pay income taxes on your Roth Contributions before they are contributed to the Plan, but while they remain in the Plan, Roth Contributions grow tax free, and may be distributed from the Plan tax free under certain circumstances (refer to Section 10 below). Deferral Procedure. The amount you irrevocably designate to defer as Roth Contributions will be deducted from your pay in accordance with a procedure established by the Plan Administrator. Your Roth Contribution deferral election remains in effect until you revoke or modify it. Deferral Modification. You can stop making contributions to the Plan or change your contribution percentage by notifying the Plan Recordkeeper. Changes will generally be made as soon as administratively feasible. IMPORTANT HOLDING PERIOD NOTICE FOR ROTH CONTRIBUTIONS. Federal law imposes a 5-taxable-year period holding requirement for Roth Contributions before they may be eligible for tax-free distribution from the Plan. The holding period begins with the first taxable year that your first contribution to a designated Roth Account is includable in gross income and ends with the end of the fifth taxable year following the contribution. If you are a calendar year tax payer and make your first Roth Contribution in 2013, your holding period would end on December 31, If you take a distribution of your Account before that date, some of the distribution may be included in your taxable income in the distribution year, and may be subject to early withdrawal penalties as well. You are encouraged to speak with a qualified tax professional concerning the implications that electing Roth Contributions may have for your particular tax situation. CATCH-UP CONTRIBUTIONS Catch-up Contributions. If you have contributed the maximum allowable Pretax Contributions or Roth Contributions and will be age 50 or older before the close of a particular Plan Year, you are eligible to make Catch-up Contributions of up to an additional 35% of Compensation in Pretax Catch-up 12

15 Contributions and 35% of Compensation in Roth Catch-up Contributions. Federal law limits the amount of Catch-up Contributions you can make annually. For 2013, the limit is $5,500. You may designate the Catch-up Contributions to be Pretax Contributions, Roth Contributions, or any combination of Pretax and Roth Contributions up to each limit. LIMITS ON DEFERRAL CONTRIBUTIONS In addition to the individual contribution limits discussed above, the following percentage limits apply to the amount of Pretax Contributions and Roth Contributions you may make to the Plan: The total combined amount of your Pretax Contributions and Roth Contributions may not exceed 35% of your Compensation. For example, if you elect to defer 30% of your compensation in Roth Contributions, you may only contribute 5% in Pretax Contributions. Any combination of Pretax Contributions and Roth Contributions will work, provided the combined total does not exceed 35% of your Compensation. You may contribute up to an additional 35% of your Compensation in Pretax Catch-up Contributions, and up to an additional 35% of your Compensation in Roth Catch-up Contributions. This percentage is not a combined limit, but the annual combined dollar limit for all Catch-up Contributions is $5,500 for The total combined amount of your deferral contributions (including Pretax Contribution, Roth Contributions, and Catch-up Contributions) for any pay period may not exceed your total pay for that payroll period net of all withholdings, garnishments, deductions, reductions, loan repayments, and any other decreases, and this total combined amount for the Plan Year may not exceed your Compensation for the Plan Year. In addition to the Plan limits discussed above, Federal law limits the total dollar amount of Pretax Contributions and Roth Contributions you are permitted to make to the Plan. For 2013, the annual deferral limit is $17,500 for all Pretax Contributions and Roth Contributions combined. The annual combined limit for all Catch-up Contributions may not exceed $5,500 for These limits are adjusted by the IRS periodically to reflect changes in the cost of living. If you elect both Pretax Contributions and Roth Contributions and exceed the deferral limits, the excess deferrals will be refunded to you first from your Roth Contributions Account, if any, and then from your Pretax Contributions, until all excess deferrals are returned. Although you may be allowed to make Catchup Contributions each payroll period, if you do not exceed the federal dollar amount limit for regular Pretax Contributions and Roth Contributions for the Plan Year, your Catch-up Contributions will be redesignated as regular Pretax Contribution or Roth Contributions, as applicable. If you are eligible to make Catch-up Contributions and your combined Pretax Contributions and Roth Contributions exceed the annual deferral limit, your excess contributions will automatically be considered Catch-up Contributions, up to the annual Catch-up Contribution limit. IMPORTANT NOTE: You are responsible for following the percentage and dollar contribution limits when making your deferral elections. If you elect to defer more of your Compensation to the Plan than the Plan or law allow, the Plan Administrator, in its sole and complete discretion, may reduce or reject any deferral election, or may reduce or reject any part of a deferral election, to ensure that the Plan s percentage limits are followed. If you defer more to the Plan than the applicable total dollar amount limit imposed by law, or if your contributions to the Plan when combined with the contributions you make to any other employer s plan in the Plan Year exceed this limit, you must make a request before February 15 of the following Plan Year to the Plan s Recordkeeper to return your excess deferrals or they may be subject to double taxation. 13

16 ROLLOVER CONTRIBUTIONS AND ROTH ROLLOVER CONTRIBUTIONS In General. The Rollover Account holds any Rollover Contributions you make to the Plan. The Roth Rollover Account holds any Roth Rollover Contributions you make to the Plan. Rollover Contributions. You may make a written request to the Plan Recordkeeper to transfer a Rollover Contribution from another qualified plan (or rollover IRA) to the Plan. The Plan Administrator will determine in its discretion whether or not to accept any particular Rollover Contribution. The Plan does not accept rollovers of after-tax contributions from another plan unless they are irrevocably designated as Roth contributions. Roth Rollover Contributions. You may make a written request to the Plan Recordkeeper to directly transfer a Roth Rollover Contribution from a designated Roth account in another employer s qualified plan (but NOT a Roth IRA) to the Plan. The Plan Administrator will determine in its discretion whether or not it will accept any particular Roth Rollover Contribution. The Plan does not accept rollovers of after-tax contributions from another plan unless they are irrevocably designated as Roth contributions. If the prior plan provides the Plan with the appropriate information, the date the applicable 5-taxable-year holding period commenced under the prior plan will continue to apply to the Roth Rollover Contribution. SECTION 4 EMPLOYER CONTRIBUTIONS In addition to any contributions that you make, the Company may make additional contributions to the Plan on your behalf. This Section describes Company contributions that may be made to the Plan and how your share of the contributions is determined. MATCHING CONTRIBUTIONS Amount. The Company makes a Matching Contribution in an amount equal to 100% of your Pretax Contributions, Roth Contributions, and Catch-up Contributions that combined do not exceed 2% of your Compensation, and makes a Matching Contribution in an amount equal to 50% of your Pretax Contributions, Roth Contributions, and Catch-up Contributions that combined exceed 2% but do not exceed 6% of your Compensation. The Company will make Matching Contributions in cash. You are 100% vested in the Matching Contribution after completing two Years of Service. The Matching Contributions will be made on a tax deferred basis and credited to your Matching Contribution Account, regardless of whether you elect to designate your contributions as Pretax Contributions or Roth Contributions. This means that your Matching Contributions will be treated in much the same way as your Pretax contributions because they will not be taxed when they are contributed to the Plan or while they remain in the Plan, but will be subject to taxation when they are distributed to you. If you designate deferrals as both Pretax Contributions and Roth Contributions, your Pretax Contributions are always matched first, then Roth Contributions up to the 6% of Compensation limit. So, if you elect to defer 4% in Pretax Contributions and 3% in Roth Contributions, the Plan will first match the 4% of Pretax Contributions and then the first 2% of your Roth Contributions. The last 1% of your Roth Contributions will not be matched because it exceeds the 6% of Compensation limit for Matching Contributions. Example 1. If your Compensation is $50,000 and you elect to defer 16% in Pretax Contributions, your Pretax Contribution would be $8,000 for the year ($50,000 x 0.16 = $8,000). The Company will match 100% of the Pretax Contribution up to 2% of your Compensation, and 50% of the Pretax 14

17 Contribution that exceeds 2% but does not exceed 6% of your Compensation, or $2,000, calculated as follows: ($50,000 x 0.02 x 1.0) + ($50,000 x 0.04 x 0.5) = $1, ,000 = $2,000. In this case, you would make a Pretax Contribution of $8,000 and the Company would make a Matching Contribution of $2,000, neither of which would be included in your taxable income for income tax purposes, so your gross taxable income for the year of the Pretax Contribution and Matching Contribution would be $42,000. Example 2. If your Compensation is $40,000 and you elect to contribute (or were automatically enrolled at) 4% of your Compensation, your Pretax Contribution would be $1,600 ($40,000 x 0.04 = $1,600). The Company will match 100% of the Pretax Contribution up to 2% of your Compensation, and 50% of the Pretax Contribution that exceeds 2% but does not exceed 6% of your Compensation, or $1,200, calculated as follows: ($40,000 x 0.02 x 1.0) + ($40,000 x 0.02 x 0.5) = $ = $1,200. Your gross income for income tax purposes for the year of the Pretax Contribution and Matching Contribution would be $38,400 (neither the Pretax Contribution nor the Matching Contribution would be included). Example 3. If your Compensation is $30,000 and you elect to defer 3% in Pretax Contributions and 2% in designated Roth Contributions, your Pretax Contribution would be $900 ($30,000 x 0.03 = $900), and your Roth Contribution would be $600 ($30,000 x 0.02 = $600). Your Matching Contribution would equal 100% of the Pretax Contribution up to 2% of your Compensation, and 50% of the Pretax Contribution and Roth Contribution that exceeds 2% but does not exceed 6% of your Compensation, or $1,050, calculated as follows: ($30,000 x 0.02 x 1.0) + ($30,000 x 0.03 x 0.5) = $ = $1,050. The Matching Contribution would be contributed solely on a pretax basis. Your gross income for income tax purposes would be $29,100, because the $900 Pretax Contribution and the $1,050 Matching Contribution would not be included, but the Roth Contribution of $600 would be included as taxable income. Exclusions. Your Pretax Contributions, Roth Contributions, and Catch-up Contributions in excess of 6% of Compensation are not matched with Matching Contributions. Rollover Contributions (whether pretax or Roth) are not matched with Matching Contributions. NONELECTIVE CONTRIBUTIONS As of the last day of the Plan Year, the Company may elect to make (or elect not to make) a Nonelective Contribution to the Plan in an amount determined by the Company to be allocated to the Nonelective Account of each Participant who is an eligible employee of a Company as of the last day of the Plan Year, regardless of whether you made any Pretax Contributions or Roth Contributions for such year. Nonelective Contributions, if made, are made on an annual basis on or after the last day of the Plan Year. The allocation of the Nonelective Contribution for the Plan Year is made to the Nonelective Contributions Account of each participant eligible to share in the allocation, in the ratio that each Participant s Compensation for that Plan Year bears to the aggregate Compensation of all Participants for that Plan Year. You will be notified if the Company elects to make a Nonelective Contribution for 15

18 any Plan Year. Nonelective Contributions made by the Company and the employees eligible for those contributions are listed in Appendix A. LIMITATION Federal law limits the total amount of all contributions (other than Catch-up Contributions and Rollover Contributions) that may be made to your Accounts annually. For 2012, the limit is the lesser of 100% of your compensation or $50,000. ADDITIONAL CONTRIBUTIONS (QMACS and QNECS) The company may make additional contributions (see discussion of QMACs and QNECs in Section 1) to participants in the Plan. Such additional contributions will be fully vested when made. SECTION 5 INVESTMENTS The Trustee of the Plan has been designated to hold the assets of the Plan for the benefit of Plan Participants and their beneficiaries in accordance with the terms of this Plan and the trust agreement. The accumulation of assets contributed to the Trust established by the Trustee will fund the benefits provided by the Plan. Participant Directed Investments. You are responsible for directing the investment of your entire Account balance in the Plan among the investment options made available by the Plan Administrator. The Plan Recordkeeper will provide you with information on the investment choices available to you, the procedures for making investment elections, the frequency with which you can change your investment choices and other important information. You must follow the procedures for making investment elections and you should carefully review the information provided to you before you give investment directions. Default Investment. If you do not direct the investment of your Plan Accounts, then your Accounts will be invested in accordance with the default investment alternatives established under the Plan. The Plan s default investment alternatives are the Schwab Managed Retirement Trust Funds (sometimes called Target Date Funds) listed in Appendix B at the end of this SPD. Each of these funds contains a diversified investment mix that automatically becomes more conservative over time. The specific fund selected is based upon the participant s birth date and anticipated retirement date. The default investment alternatives are designed to be qualified default investment alternatives under the Code. The fiduciaries of the Plan will not be responsible or liable for any losses resulting from investment in a default investment alternatives. Investment Options. The Plan Administrator will from time to time designate funds into which your Accounts may be invested. The investment options available under the Plan and certain historical performance are set forth in Appendix B at the end of this SPD. The Plan also has a self-directed brokerage account feature that allows you to invest in funds other than those selected for investment by the Plan Administrator. Earnings (or losses) and expenses are determined separately and credited to (or debited from) each self-directed brokerage account. Making Investment Elections. You can make your investment selections by visiting or by calling (por Español, ). Limits on Changing Investment Elections. The investment options available under the Plan are generally intended to be long-term investments suitable for retirement savings and are not designed to accommodate frequent exchanges (purchases and sales) by participants. An exchange occurs anytime you transfer all or a portion of your Accounts from one investment option to another. Frequent exchanges by participants may be harmful to the performance of the Plan s investments by increasing transaction costs that are shared by 16

19 all investors and by interfering with portfolio management. Therefore, the Trustees, Plan Administrator and/or the entities that provide investments and administrative services to the Plan may adopt procedures to discourage these activities. Procedures may include, but are not limited to, the following: limits on the frequency with which you may submit investment directions; limits on the frequency with which you may transfer in and out of investment options; limits on the dollar value of transactions; fees applied when you transfer out of an investment option within a certain period of time after transferring into the investment options; restrictions on the means by which you may submit investment directions; and other procedures which the Plan Administrator or the Plan Recordkeeper determine to be appropriate to prevent or discourage frequent trading activity. You will be notified of any such procedures applicable under the Plan. You should keep in mind that such procedures may not detect or prevent all frequent trading in the Plan s investment options and that these activities may be harmful to investment performance. Your investment fund election or transfer election may be delayed for one or more days if the stock market is closed or trading in a particular investment fund is restricted because of unusual circumstances, such as insufficient liquidity to process transactions and major market disruptions. Some funds impose a shortterm trading fee on redemptions and exchanges of shares held for short periods of time such as 30 days, 90 days, or 6 months. The fee is retained by the fund for the benefit of the remaining shareholders. In addition, some funds do not permit market timing and will limit the number of times you may purchase and sell shares of their funds. Each mutual fund prospectus will have information regarding short-term trading fees and will explain their policy on market timing and excessive trading. Please note that you are solely responsible for the selection and monitoring of your investment options. Neither the Trustee nor the Plan Administrator assumes any responsibility for your investment choices. You should evaluate the investment options available under the Plan in the same way you would evaluate any investment to determine whether you are comfortable with the investment risk and expected rate of return. Responsibility for Investment Decisions. The Plan is intended to constitute a plan under ERISA Section 404(c) and Title 29 of the Code of Federal Regulations, Section c-1. This means, among other things, that you are responsible for choosing the investments for your Accounts and any earnings or losses that those investments experience. The fiduciaries of the Plan will not be responsible or liable for any losses resulting from investment instructions given by you or your beneficiaries. You are urged to read the literature describing each investment option and speak with a competent investment or financial advisor prior to making any investment decisions. You will share in any losses as well as any gains of the investment options you choose. In accordance with ERISA Section 404(c), the Plan Recordkeeper has been designated to provide the following information to Plan participants upon their request: a description of the annual operating expenses of each investment alternative (including investment management fees, administrative fees, transaction costs and other costs which may reduce the rate of return of such investment alternative), and a description of the amount of any such expenses expressed as a percentage of average net assets of the investment alternative; 17

20 copies of prospectuses, financial statements and reports, and any other relevant materials relating to the investment alternatives available under the Plan to the extent such information is provided to the Plan; a list of the assets comprising 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 investment alternative which is a fixed rate investment contract issued by a bank, savings and loan institution or an insurance company, the name of the issuer of the contract, the term of the contract and the rate of return of the contracts; information with regard to the value of shares or units of the investment alternatives, as well as the past and current investment performances of each alternative, determined, net of expenses, on a reasonable and consistent basis; and information with regard to the value of shares or units of the investment alternatives held in your Accounts. This information can be obtained at or by calling (por Español, ). In deciding whether to invest in any of the funds, you should consider the information provided for each fund as well as the investment options available under the Plan. A summary of certain of the historical performance of each fund offered as an investment option under the Plan is attached as Appendix B. You may elect to invest in any one, some or all of the investment funds and may allocate investments between funds on a daily basis. You can also direct how any future contributions are to be invested. Earnings or Losses. When you direct investments, your Accounts are segregated for purposes of determining the earnings or losses on these investments. Your Account does not share in the investment performance of other Participants who have directed their own investments. You should remember that the amount of your benefits under the Plan will depend in part upon your choice of investments. Gains as well as losses can occur and the Company, the Plan Administrator, and the Trustee will not provide investment advice or guarantee the performance of any investment you choose. SECTION 6 FEES Fees. Your Accounts may be charged three different categories of fees: plan administration fees, individual service fees, and investment management fees. Participant Accounts are charged a periodic plan administration fee to cover the administrative costs of operating the Plan including fees of the Trustee, recordkeeping costs, fees for professional services, and participant communications. The plan administration fee amount is a variable percentage of each Account balance and is determined by the number of participants in the Plan and the amounts charged by the Plan s service providers. Individual service fees are fees charged separately to the Account of individuals who chose to take advantage of a particular Plan feature. Each participant is responsible for paying the following fees, as applicable: Type of Fee Amount $100 annual fee Self-directed Brokerage $8.95 per transaction Loan Origination Fee $75 QDRO Fee $1,000 Withdrawal Processing Charge $25 18