Spectrum Pension Consultants, Inc. 6402 19th Street West Tacoma, WA 98466 <PARTICIPANT NAME> <MAILING ADDRESS> <CITY>, <STATE> <ZIP CODE> INTRODUCTION The enclosed Annual Participant Booklet APB is being provided to incorporate all of the notices required for your retirement plan. This booklet is being delivered in paper format in accordance with current regulations. Spectrum Pension Consultants, Inc. provides administrative services for your retirement plan. Based on the provisions of your Plan you are required to receive all of the enclosed notices: ENCLOSED NOTICES Participant Fees Annual Disclosure Statement Safe Harbor 401(k) Participant Notice Automatic Contribution Arrangement Notice Qualified Default Investment Alternative ("QDIA") Notice Summary Annual Report ("SAR") PARTICIPANT FEES ANNUAL DISCLOSURE STATEMENT FD This disclosure statement advises you of information regarding fees associated with your participation in the Plan. Part I provides general plan information regarding the operation of the Plan. Part II provides information regarding charges for administrative expenses the Plan may incur. Part III provides information regarding individual expenses you may incur as a Plan Participant or Beneficiary. Also included is a Comparative Chart of Plan Investment Options ("Comparative Chart"), which will inform you about the Plan s investment alternatives. I. General Plan Information Giving investment instructions. In order to direct your Plan investments, you must complete an investment direction form or make your election on the following Web sites: http://www.spectrumpension.com/ or www.schwab.com. You may direct the investment of all funds held in your self-directed account. Limitations on instructions. You may give investment instructions on any day the New York Stock Exchange is open for business. Voting and other rights. The trustee will exercise any voting or other rights associated with ownership of your investments held in your plan account. Designated investment alternatives. The Plan provides designated investment alternatives into which you can direct the investment of your plan funds. The Comparative Chart lists these designated investment alternatives and provides information regarding the alternatives. Prepared on: March 15, 2013 Page 1
PARTICIPANT FEES ANNUAL DISCLOSURE STATEMENT (CONTINUED) Self-directed brokerage account option. In addition to any investment alternatives listed on the Comparative Chart, if applicable, the Plan offers you the option of making your own investments through a brokerage account option established with Charles Schwab. To establish a brokerage account, you should call Spectrum at 253-565-2100. II. Administrative Expenses The Plan pays outside service providers for Plan administrative services, such as legal, accounting and recordkeeping services, unless the plan sponsor elects, at its own discretion, to pay some or all of the Plan administrative expenses. The cost for these services fluctuates each year based on a variety of factors. To the extent these expenses are not charged against forfeitures or paid by the employer, or reimbursed by a third party, the Plan charges these expenses generally pro rata (i.e., based on the relative size of each account) against participants accounts. Please review Part III of this notice for any expenses that may be charged to your account on a per-capita or per-instance basis. The actual amount deducted from your account, as well as a description of the services to which the fee relates, will be reported on your quarterly benefit statement. III. Individual Expenses The Plan may impose certain charges against individual participants accounts, rather than against the Plan as a whole, when individual participants incur the charges. These charges may arise based on your use of a feature available under the Plan (e.g., participant loans), or based on the application of applicable law (e.g., processing a domestic relations order in case of a divorce). In addition, buying or selling some investments may result in charges to your individual account, such as commissions or redemption fees. The Comparative Chart provides information regarding these expenses. The Plan may impose the following charges: Expense Type Amount* Financial Hardship Withdrawal: $120 In-Service Distribution: $100 Participant Loan Maintenance, per quarter: $15 Participant Loan Origination: $90 Qualified Domestic Relations Order Processing: $750 Termination Distribution: $150 / $110 if submitted electronically** *Payments made directly to participants may also be subject to payment processing fees assessed by third party vendors. **Only certain plan arrangements allow for electronic Termination Distribution submissions. Please contact your Plan Administrator for details. Prepared on: March 15, 2013 Page 2
Designated Investment Alternatives PARTICIPANT FEES ANNUAL DISCLOSURE STATEMENT (CONTINUED) This document includes important information to help you compare the investment options under your retirement plan. If you want additional information about your investment options, you can go to the specific Internet Web site address shown below or you can contact Spectrum at 253-565-2100 (6402 19th Street West, Tacoma, WA 98466). A free paper copy of the information available on the Web sites can be obtained by contacting Spectrum Pension Consultants, Inc. at 253-565-2100. The table below shows how plan investment alternatives have performed over time and allows you to compare them with an appropriate benchmark for the same time periods. As you review the following information, please remember that the performance data stated represents past performance, which does not guarantee future results. Your investment in these options could lose value. As you review this information, you may want to think about whether an investment in a particular option, along with your other investments, will help you achieve your financial goals. Keep in mind that the cumulative effect of fees and expenses can substantially reduce the growth of your retirement savings, but is only one of many factors to consider when you decide to invest in an option. Visit the Department of Labor s website at http://www.dol.gov/ebsa/publications/401k_employee.html for an example of the long-term effect of fees and expenses. The Investment Company Institute (ICI), an independent organization unaffiliated with MBM Advisors and the Plan, maintains a glossary of investment-related terms for retirement plan participants. Please visit http://www.ici.org/401k/11_401k_glos to learn more. Performance Data (%) Effective: 12/31/2012 Fee and Expense Information Asset Class Website Foreign Large Blend http://www.dodgeandcox.com Foreign Large Blend Foreign Large Value Foreign Small/Mid Blend High Yield Bond http://www.pimco-funds.com Intermediate-Term Bond http://www.pimco-funds.com Intermediate-Term Bond Large Blend Large Blend Large Growth Large Value http://www.dodgeandcox.com Large Value Mid-Cap Blend Moderate Allocation http://www.dodgeandcox.com Moderate Allocation Money Market http://www.schwab.com Real Estate Small Blend 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 17.00 18.00 19.00 Investment 1 Year 5 Year 10 Year Since Benchmark Inception Dodge & Cox International Stock -15.97-3.45 7.99 6.73 Vanguard Total Intl Stock Index Signal -14.52 N/A N/A -7.81 Vanguard International Value Inv -14.58-4.25 5.94 9.02 Vanguard International Explorer Inv -19.74-4.07 8.58 8.63 PIMCO High Yield Instl 4.00 6.26 7.61 8.11 Barclays US Agg Bond TR USD 7.84 6.50 5.78 6.27 PIMCO Total Return III Instl 3.53 7.78 6.69 7.76 Barclays US Agg Bond TR USD 7.84 6.50 5.78 6.27 Vanguard Total Bond Market Index Signal 7.69 6.48 N/A 6.50 Barclays US Agg Bond TR USD 7.84 6.50 5.78 6.27 Vanguard 500 Index Signal 2.08-0.23 N/A 1.02 Vanguard Total Stock Mkt Idx Signal 1.09 0.31 N/A 1.92 Vanguard Growth Index Signal 1.88 N/A N/A 0.65 Dodge & Cox Stock -4.08-4.10 4.03 10.51 Vanguard Value Index Signal 1.16 N/A N/A -4.46 Vanguard Mid Cap Index Signal -1.99 N/A N/A 0.45 Dodge & Cox Balanced -1.66-0.86 4.75 9.49 Morningstar Moderate Target Risk 0.53 3.07 6.00 5.54 Vanguard Balanced Index Signal 4.31 3.28 N/A 4.24 Morningstar Moderate Target Risk 0.53 3.07 6.00 5.54 Schwab Value Advantage Money Fund 0.01 1.06 1.78 3.22 USTREAS T-Bill Auction Ave 3 Mon 0.06 1.31 1.90 0.09 Vanguard REIT Index Signal 8.62 N/A N/A -1.81 MSCI World NR USD -5.54-2.37 3.62 3.50 Vanguard Small Cap Index Signal -2.68 1.91 N/A 1.73 Inception Date 05/01/01 11/29/10 05/16/83 11/04/96 12/15/92 05/01/91 09/01/06 09/29/06 09/01/06 06/04/07 01/04/65 06/04/07 03/30/07 06/26/31 09/01/06 06/04/07 12/15/06 OER (%) Per $1,000 0.64 $6.40 0.18 $1.80 0.41 $4.10 0.42 $4.20 0.55 $5.50 0.50 $5.00 0.05 $0.50 0.06 $0.60 0.52 $5.20 0.53 $5.30 0.57 $5.70 0.16 $1.60 Shareholder-Type Fees Prepared on: March 15, 2013 Page 3
PARTICIPANT FEES ANNUAL DISCLOSURE STATEMENT (CONTINUED) Performance Data (%) Effective: 12/31/2012 Fee and Expense Information Asset Class Website Small Growth Small Value World Stock http://www.dodgeandcox.com World Stock 20.00 21.00 22.00 23.00 Investment Benchmark Vanguard Explorer Inv Vanguard Small Cap Value Index Inv Dodge & Cox Global Stock Vanguard Total World Stock Index Inv 1 Year 5 Year 10 Year Since Inception -1.89 1.29 4.69 8.63-4.16-0.31 6.12 6.21-11.39 N/A N/A -5.68-7.88 N/A N/A -2.09 Inception Date 12/11/67 05/21/98 05/01/08 06/26/08 OER (%) Per $1,000 0.50 $5.00 0.35 $3.50 0.66 $6.60 0.40 $4.00 SH Shareholder-Type Fees SAFE HARBOR 401(K) PARTICIPANT NOTICE This is an annual notice and only applies to the Plan Year beginning on January 01, 2013. Employee Deferral Contributions You are allowed to defer a portion of your compensation to the Plan. These amounts are referred to as deferrals and are held in an account for your behalf. When you are permitted to take a distribution from the Plan, you will be entitled to all of your deferrals, as adjusted for any gains or losses. The type of compensation that may be deferred under the Plan is explained in the section of the Summary Plan Description entitled "What compensation is used to determine my Plan benefits?" (this is in the Article entitled "COMPENSATION AND ACCOUNT BALANCE"). Your total deferrals in any taxable year may not exceed a dollar limit which is set by law. The dollar limit may increase each year for cost of living adjustments. The Administrator will notify you of the maximum percentage you may defer. If you are at least age 50 or will attain age 50 during a calendar year, then you may elect to defer additional amounts (called "catch up contributions") to the Plan. These are additional amounts that you may defer, up to an annual limit imposed by law, regardless of any other limits imposed by the Plan. You may make either Regular 401(k) deferrals (pre tax) or Roth 401(k) deferrals (after tax). Your election regarding the amount and type of deferrals is irrevocable with respect to any deferrals already withheld from your compensation. If you make Regular 401(k) deferrals, your deferrals are not subject to income tax until distributed from the Plan. If you make Roth 401(k) deferrals, your deferrals are subject to income tax at the time of deferral. The Roth 401(k) deferrals, however, are not taxed when you receive a distribution from the Plan. In addition, if the distribution of Roth 401(k) deferrals is considered "qualified," then the earnings on the deferrals will not be subject to income tax when distributed from the Plan. Distributions from your Roth accounts will be considered "qualified" only if the distribution is on account of attainment of age 59 1/2, death or disability, and the distribution must not occur prior to the end of the 5 year participation period that begins with the first taxable year for which you made a Roth 401(k) deferral to the Plan, or if earlier, the first taxable year for which you made a Roth 401(k) deferral to another Roth 401(k) plan or Roth 403(b) plan that you rolled over to this Plan. Both types of deferrals are subject to Social Security taxes at the time of deferral. Your Employer will deduct the Social Security taxes, and in the case of Roth 401(k) deferrals will deduct income taxes, from your remaining compensation. Automatic deferrals. The Plan includes an automatic enrollment feature known as a Qualified Automatic Contribution Arrangement ("QACA"). Under the QACA provisions of the Plan, if you do not complete and return a salary reduction agreement, then the Employer will automatically withhold a portion of your eligible compensation from your pay each payroll period and contribute that amount to the Plan as an elective deferral (the automatic amount is described below). If you wish to defer the automatic deferral amount, then you do not need to complete a salary reduction agreement. However, you may choose a different amount (including zero). You may make this election by submitting a salary reduction agreement to the Plan Administrator in accordance with the deferral procedures of the Plan. Application of automatic deferral provisions. The automatic deferral provisions are effective as of January 01, 2013. If you were a Participant as of the effective date of the automatic deferral provisions, then the automatic deferral provisions apply to you regardless of any salary reduction agreement that you may have made in the past. If you become a Participant on or after the effective date of the automatic deferral provisions, then these provisions will automatically apply to you. Prepared on: March 15, 2013 Page 4
SAFE HARBOR 401(K) PARTICIPANT NOTICE (CONTINUED) Automatic deferral amount. The automatic deferral amount is 6% of your compensation for each pay period. Note: If your salary deferrals are automatically suspended under the terms of the Plan (e.g., to qualify for a hardship distribution), then your salary reduction agreement that was in place prior to the suspension will not continue in effect after the suspension and you will be subject to the automatic deferral provisions unless you make a new salary deferral election if you want to opt out of the automatic contribution arrangement. Limited right to withdraw automatic deferrals. For a limited time, if your Employer automatically enrolled you and you did not want to participate in the Plan, you may elect to have the Plan distribute to you all of your prior automatic deferrals (adjusted for any earning or losses). You may make this election on the form provided to you by the Plan Administrator. You must make this election no later than 90 days after the first automatic deferral is taken from your compensation. If you elect to withdraw your automatic deferrals, then the entire amount, will be subject to income taxes, but you will not be subject to the 10% premature distribution penalty tax, even if you receive the distribution prior to age 59 1/2. Also, if you withdraw your prior automatic deferrals, then you will forfeit any matching contributions related to those deferrals. If you take out automatic deferrals, then the Employer will treat you as having chosen to make no further contributions. However you can choose to continue or restart making contributions by completing a salary reduction agreement. Employer Safe Harbor Contribution Election To help you make an informed decision on the level of your own elective deferral contributions, if any, your Employer must inform you about the contributions it will make to the Plan. Your Employer has elected to make the following employer safe harbor contribution: Safe Harbor Matching Contribution. Your Employer will make a safe harbor matching contribution equal to 100% of your elective deferrals that do not exceed 1% of your compensation plus 50% of your elective deferrals between 1% and 6% of your compensation. This safe harbor matching contribution may be subject to a vesting schedule. For purposes of calculating the safe harbor matching contribution, your compensation and deferrals will be determined on an annual basis. Other Employer Contributions In addition to the above, other contributions may be made to the Plan. You should review the Article of the SPD entitled "EMPLOYER CONTRIBUTIONS" for details regarding these other contributions. Vesting Participants who separate from service after attainment of Normal Retirement Age, or as a result of death or disability, are entitled to 100% of their account balances. Upon separation of service for reasons other than Retirement, Death or Disability, participants are entitled to a portion of their account balances depending on their Years of Service ("YOS") and according to the following vesting schedules: Profit Sharing - 1 YOS = 0% 2 YOS = 20% 3 YOS = 40% 4 YOS = 60% 5 YOS = 80% 6 YOS = 100% SH Match QACA - 1 YOS = 0% 2 YOS = 100% 100% vested contributions. You are always 100% vested (which means that you are entitled to all of the amounts) in your accounts attributable to the following contributions: Salary Deferral, Unrelated Rollover, Salary Deferral Rec, Roth Salary Deferral and Roth Deferral Distribution Provisions The Plan and law impose restrictions on when you may receive a distribution from the Plan. Below is general information on when distributions may be made under the Plan. See the SPD for more details, including details on how benefits are paid. Also, at the time you are entitled to receive a distribution, the Plan Administrator will provide you with a notice explaining the rules regarding the taxation of the distribution. You generally may not withdraw your deferral contributions except when one of the following events occurs: severance from employment with the Employer, death, disability, or attainment of age 59 1/2. You are always 100% vested in your deferral contributions. You may withdraw any additional contributions provided for in "Other Employer Contributions" upon your death, disability, or termination of employment. Prepared on: March 15, 2013 Page 5
SAFE HARBOR 401(K) PARTICIPANT NOTICE (CONTINUED) If your vested account balance exceeds $5,000, you may elect to have your vested account balance distributed to you as soon as administratively feasible following your termination of employment. If your vested account balance does not exceed $5,000, a distribution of your vested account balance will be made to you, regardless of whether you consent to receive it, as soon as administratively feasible following your termination of employment regardless of consent. You may also withdraw money from the Plan from certain accounts if you have reached age 59 1/2, if you have incurred a disability or if you have an immediate and heavy financial need. However, there are various rules and requirements that you must meet before any withdrawal is permitted. See the Article in the SPD entitled "DISTRIBUTIONS PRIOR TO TERMINATION" for more details. You may withdraw money from your account attributable to money purchase contributions, effective as of January 1, 2007, if you have reached age 62. You may withdraw money at any time from your rollover account. Effective as of September 12, 2001, if you: (i) are a reservist or National Guardsman; (ii) were/are called to active duty after September 11, 2001; and (iii) were/are called to duty for at least 180 days or for an indefinite period, you may take a distribution of your elective deferrals under the Plan while you are on active duty, regardless of your age. The 10% premature distribution penalty tax, normally applicable to Plan distributions made before you reach age 59 1/2, will not apply to the distribution. You also may repay the distribution to an IRA, without limiting amounts you otherwise could contribute to the IRA, provided you make the repayment within 2 years following your completion of active duty. Administrative Procedures The amount you elect to defer will be deducted from your pay in accordance with a procedure established by the Administrator. Your election will become effective as soon as administratively feasible. Your election will remain in effect until you modify or terminate it. You may revoke or make modifications to your salary deferral election in accordance with procedures that the Plan Administrator provides. In addition to any other election periods provided above, you may make or modify a deferral election during the 30 day period immediately preceding the Plan Year for which this notice is being provided. For the Plan Year you become eligible to make deferrals, you may complete a salary deferral agreement during a 30 day period that includes the date you become eligible. Employer's Right to Terminate Plan Pursuant to the terms of the Plan, your Employer has the right, at any time, to terminate the Plan. Termination of the Plan will result in the discontinuance of all contributions to the Plan (including the safe harbor 401(k) contribution) with respect to any compensation you receive after the effective date of the termination. Termination of the Plan will not affect your right to receive any contributions you have accrued as of the effective date of the termination. QUALIFIED DEFAULT INVESTMENT ALTERNATIVE NOTICE QDIA This is an annual notice and only applies to the Plan Year beginning on January 01, 2013. Right to direct investment/default investment. You have the right to direct the investment of your Regular 401(k) and Roth 401(k) deferrals and other directed accounts under the Plan (your "directed accounts") in any of the investment choices explained in the investment information materials provided to you. We encourage you to make an investment election to ensure that amounts in the Plan are invested in accordance with your long term investment and retirement plans. However, if you do not make an investment election, then the amounts that you could have elected to invest will be invested in a default investment that the Plan officials have selected. Prepared on: March 15, 2013 Page 6
QUALIFIED DEFAULT INVESTMENT ALTERNATIVE (CONTINUED) Description of default investment. The default investment is: Name of investment: 60/40 (Stock/Bond) Investment objectives: The investment seeks current income and long-term capital appreciation. Risk and return characteristics (if applicable): Below Average Risk/Above Average Return Fees and expenses: Net Expense Ratio 0.50% Right to alternative investment. If the Plan invests some or all of your directed accounts in the default investment, then you have the continuing right to direct the investment of your directed accounts in one or more of the other investment choices available to you as explained above. You may change your investments as often you would like, subject to practical limitations on how soon the Plan may be able to make the change, including taking into account weekends, holidays and other days when investments may not be changed. No transfer fees or expenses will be charged if you elect an alternative investment within 90 days after first being subject to the default investment. However, your account will be adjusted for any investment gains or losses. If you elect to transfer to an alternative investment after the 90 day period beginning after first being subject to the default investment, then the following restrictions, fees or expenses will apply: Redemption fees do not apply. Additional Information Where to go for further information. This notice is not a substitute for the Summary Plan Description. The provisions of the Plan are very complex and you should always look at the Summary Plan Description if you have any questions about the Plan. If, after reading the Summary Plan Description, you still have questions, contact the Plan Administrator. The Plan Administrator is the Employer. You may contact the Employer at: Contact: Spectrum Pension Consultants, Inc. Address: 6402 19th Street West; Tacoma, WA 98466 Telephone: (253) 565-2100 Where to go for further investment information. You can obtain further investment information about the Plan's investment alternatives by contacting the Plan Administrator as listed above. Prepared on: March 15, 2013 Page 7
SUMMARY ANNUAL REPORT SAR This is a summary of the annual report for the Spectrum Pension Consultants, Inc. 401(k) Profit Sharing P&T, EIN 91-1035498, Plan No. 1, for period 1/1/2011 through December 31, 2011. The annual report has been filed with the Employee Benefits Security Administration, U.S. Department of Labor, as required under the Employee Retirement Income Security Act of 1974 (ERISA). Basic financial statement. Benefits under the plan are provided by a trust fund. Plan expenses were $473,617. These expenses included $381 in administrative expenses, $473,087 in benefits paid to participants and beneficiaries, and $149 in other expenses. A total of 48 persons were participants in or beneficiaries of the plan at the end of the plan year. The value of plan assets, after subtracting liabilities of the plan, was $1,743,428 as of December 31, 2011, compared to $2,159,521 as of January 01, 2011. During the plan year the plan experienced a change in its net assets of $-416,093. This change includes unrealized appreciation and depreciation in the value of plan assets; that is, the difference between the value of the plan's assets at the end of the year and the value of the assets at the beginning of the year or the cost of assets acquired during the year. The plan had total income of $57,524, including employer contributions of $40,684, employee contributions of $125,171, and earnings from investments of $-108,331. Your rights to additional information. You have the right to receive a copy of the full annual report, or any part thereof, on request. The items listed below are included in that report: Financial information To obtain a copy of the full annual report, or any part thereof, write the office of Spectrum Pension Consultants, Inc. at 6402 19th Street West, Tacoma, WA 98466, or call (253) 565-2100. The charge to cover copying costs will be $0.25 per page for any part thereof. You also have the right to receive from the plan administrator, on request and at no charge, a statement of the assets and liabilities of the plan and accompanying notes, or a statement of income and expenses of the plan and accompanying notes, or both. If you request a copy of the full annual report from the plan administrator, these two statements and accompanying notes will be included as part of that report. The charge to cover copying costs given above does not include a charge for the copying of these portions of the report because these portions are furnished without charge. You also have the legally protected right to examine the annual report at the main office of the plan (Spectrum Pension Consultants, Inc., 6402 19th Street West, Tacoma, WA 98466) and at the U.S. Department of Labor in Washington, D.C., or to obtain a copy from the U.S. Department of Labor upon payment of copying costs. Requests to the Department should be addressed to: Public Disclosure Room, Room Small plan audit waiver. The plan has met the requirements to waive the annual examination and report of an independent qualified public accountant. You have the right, upon request of the Plan Administrator and without charge, to examine or receive copies of statements from the regulated financial institutions describing the qualifying plan assets. If you are unable to examine or obtain these documents, contact an Employee Benefits Security Administration (EBSA) Regional Office for assistance. Information about contacting EBSA regional offices can be found on the Internet at http://www.dol.gov/ebsa. Prepared on: March 15, 2013 Page 8