DENSO Retirement Savings Plan SUMMARY PLAN DESCRIPTION Effective: January 1, 2013
While the Plan Sponsor currently intends to continue offering benefits under the Plan, the Plan Sponsor reserves the right to revise, discontinue, terminate or amend the benefits and the Plan at any time, for any reason. Additionally, there is no guarantee the benefits will remain unchanged in the future, or the Plan will continue indefinitely. Efforts have been made to ensure that these documents accurately reflect the terms and conditions that apply to the benefits provided under the Plan, however, occasionally mistakes happen. In the event of a mistake in these documents, the Plan Sponsor intends to correct the mistake rather than to operate the Plan in an improper manner. Please be aware that you should not rely on any inaccurate or improper statement that is inadvertently contained in these documents.
SUMMARY PLAN DESCRIPTION DENSO RETIREMENT SAVINGS PLAN TABLE OF CONTENTS Page GENERAL INFORMATION... 2 SOME IMPORTANT DEFINITIONS... 5 Account... 5 Associate... 5 Break in Service... 5 Code...5 Compensation... 6 Disabled... 6 Domestic Relations Order... 6 Employer... 6 Hour of Service... 6 Normal Retirement Age... 7 Participating Employer... 7 Period of Service... 7 Period of Severance... 7 Plan Year... 7 Prior Plan... 7 Qualified Domestic Relations Order or QDRO... 7 QMAC... 8 QNEC... 8 Severance from Service Date... 8 Year of Service... 8 HOW THE PLAN WORKS... 8 Eligibility to Participate... 8 Enrollment in the Plan... 9 Ending Your Participation... 10 Before-tax Contributions... 10 How Before-tax Contributions Work... 11 Roth After-tax Contributions... 11 How After-tax Contributions Work... 11 Annual Limits on Contributions... 12 Making Deferral Changes... 13 Matching Contributions... 13 Employer Annual Contributions... 14 Catch-Up Contributions... 15 Transfers From Other Plans (Rollover Contributions)... 15 i
Suspension of Active Participation... 15 YOUR PLAN ACCOUNT... 17 INVESTMENT FUNDS... 18 VALUING YOUR ACCOUNT... 20 VESTING OF YOUR ACCOUNT... 20 Break in Service... 23 Forfeitures... 24 DISTRIBUTIONS... 24 Retirement... 24 Death... 25 Disability... 25 Severance from Employment for Other Reasons... 25 MANNER AND TIMING OF PAYMENT... 26 TAX TREATMENT OF DISTRIBUTIONS FROM THE PLAN... 27 WITHDRAWALS... 28 Hardship Withdrawals... 28 Age 59-1/2 Withdrawals... 30 Administration of Withdrawals... 30 LOANS TO ASSOCIATES... 30 THE TRUST FUND... 32 INSURANCE... 32 TOP HEAVY PROVISIONS... 32 RIGHT TO AMEND OR TERMINATE THE PLAN... 33 OTHER THINGS YOU SHOULD KNOW... 33 Plan Administration... 33 Benefits May Not Be Assigned... 34 CLAIMS AND CLAIMS REVIEW PROCEDURES... 34 Claims for Plan Benefits... 34 Claims Review Procedure... 36 ERISA RIGHTS AND OBLIGATIONS... 37 APPENDIX A... 1 ii
SUMMARY PLAN DESCRIPTION DENSO RETIREMENT SAVINGS PLAN On January 1, 2011, the following retirement plans merged and were renamed the DENSO Retirement Savings Plan (the Plan ): DENSO International America, Inc. 401(k) Plan, American Industrial Manufacturing Services, Inc. 401(k) Savings Plan, the DENSO Associates Retirement Plan, the Employees 401(k) Plan of DENSO Sales California, Inc., and the DENSO Wireless Systems America, Inc. 401(k) Plan. Under the terms of the Plan, you may choose to defer receiving a portion of your current Compensation on a before-tax basis or after-tax basis. Your Employer will contribute your deferral to the Plan on your behalf. Your Employer may also match a portion of your Contributions with its own funds, adding to your benefit under the Plan. Your Employer may make other types of contributions to the Plan, in its discretion. Any earnings on the contributions to the Plan will be on a tax-deferred basis until your benefits are distributed to you. The Plan is a written document which sets forth the provisions of this retirement program. To find out how the Plan affects you and your family, you may read the actual Plan document. Copies are available to you at the offices of your Employer during regular business hours. To help you understand the Plan, we have summarized the major Plan provisions affecting your retirement benefits and other rights under the program. Because of the importance of saving for your retirement years, you should read this Summary carefully, consult with your own personal tax or financial advisor and advise your Human Resources representative if you have any questions before you make any decisions related to your participation in the Plan or your retirement. You should keep in mind, however, that none of these individuals can change the terms of the Plan orally or in writing. This Summary describes the form of Plan in effect as of January 1, 2013. THIS SUMMARY IS NOT MEANT TO INTERPRET, EXTEND OR CHANGE THE PLAN IN ANY WAY. AS A SUMMARY, THIS DOCUMENT CANNOT DESCRIBE EVERY TERM AND CONDITION OF THE PLAN IN DETAIL. IN CASE OF A CONFLICT BETWEEN THIS SUMMARY AND THE ACTUAL PROVISIONS OF THE PLAN OR IF THIS SUMMARY IS SILENT ON A SPECIFIC ISSUE, THE PROVISIONS OF THE PLAN AS INTERPRETED BY THE PLAN ADMINISTRATOR WILL GOVERN YOUR RIGHTS AND BENEFITS. THE TERMS OF THIS PLAN MAY ONLY BE AMENDED BY OFFICIAL ACTION OF DENSO INTERNATIONAL AMERICA, INC. ACCORDINGLY, YOU MAY NOT RELY ON ANY ORAL STATEMENTS OR REPRESENTATIONS MADE BY ANY PERSON WHICH WOULD HAVE THE EFFECT OF ALTERING THE PROVISIONS OF THE PLAN. 1
GENERAL INFORMATION Plan Name: DENSO Retirement Savings Plan (DRSP) Plan Year: January 1 through December 31 Plan Type: Plan Sponsor and Address: 401(k) defined contribution plan; ERISA 404(c) plan DENSO International America, Inc. 24777 Denso Drive P.O. Box 5047, Mail Code 4812 Southfield, Michigan 48086-5047 (248) 350-7500 Employer Identification Number: 38-2651421 Plan Number: 002 Plan Administrator: DENSO International America, Inc. 24777 Denso Drive Southfield, Michigan 48033 (248) 350-7500 The Plan Administrator has been designated to receive service of legal process on the Plan. Legal process may also be served on the Trustee. Named Fiduciary Participating Employers: DENSO National Retirement Committee 24777 Denso Drive Southfield, Michigan 48033 American Industrial Manufacturing Services, Inc.* 41673 Corning Place Murrieta, CA 92562 33-0212828 DENSO Manufacturing Arkansas, Inc. 100 Denso Road Osceola, AR 72370 20-0068644 2
DENSO Manufacturing Athens Tennessee, Inc. 2400 Denso Drive Athens, TN 37303 55-0809275 DENSO Manufacturing Michigan, Inc. One Denso Road Battle Creek, MI 49037 38-2555024 DENSO Manufacturing Tennessee, Inc. 1720 Robert C. Jackson Drive Maryville, TN 37801 62-1364854 DENSO Sales California, Inc.* 3900 Via Oro Avenue Long Beach, CA 90810 95-2677846 DENSO Wireless America, Inc. 3250 Business Park Drive Vista, CA 92081 33-0755976 * American Industrial Manufacturing Services, Inc. and DENSO Sales California, Inc. are expected to merge and to be re-named DENSO Products and Services Americas, Inc., on or about April 1, 2013. As a result of this change, DENSO Products and Services Americas, Inc., will become a Participating Employer. An updated list of the names, addresses, and phone numbers of the employers participating in the Plan may be obtained, or is available for examination, by Participants and beneficiaries upon written request to the Plan Administrator. Plan Recordkeeper: Putnam Investments Dept 1295 Denver, CO 80256-1295 3
(888) 411-4015 www.putnam.com/401k Trustee: Putnam Fiduciary Trust Company One Post Office Square Boston, Massachusetts 02109 (617) 292-1000 Contributions and Funding: Type of Administration: Plan contributions consist of Associate and Employer contributions plus earnings (collectively, Plan assets). The funding medium used for the accumulation of Plan assets and payment of Plan benefits is a trust maintained by the Trustee. The Plan is administered by the Plan Administrator, the DENSO National Retirement Committee, and outside service providers retained by contract(s) to provide services. 4
SOME IMPORTANT DEFINITIONS To help you understand the Plan, the following are definitions of certain key terms. Please review these terms carefully so that you understand what they mean when you see them in this Summary. 1. Account. For accounting purposes, a separate Account is maintained for each Associate who participates in the Plan. There may also be a number of subaccounts, as described in the section of this document titled Your Plan Account. 2. Associate. Associate means an individual categorized by the Employer as an employee, and excludes individuals categorized by the Employer as: (a) independent contractors or leased employees; (b) non-employees (including employees of affiliates who do not adopt this Plan); (c) Japanese Nationals on temporary assignment in the United States and who are exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act because of their executive, administrator or professional classification; (d) co-op students, other students and interns; (e) individuals covered by a collective bargaining agreement that does not expressly provide for participation in the Plan; (f) nonresident aliens who receive no earned income from a Participating Employer that constitutes income from sources within the United States; (g) employees of newly acquired business units, unless the Plan Sponsor expressly authorizes participation in the Plan; and (h) individuals classified as temporary employees by the Employer. All categorizations by the Employer will apply whether or not such classification is ultimately determined to be correct as a matter of law, or the Employer subsequently agrees to retroactively treat or reclassify such person. 3. Break in Service. Break in Service means a Period of Severance of 12 consecutive months during which you earn no Hours of Service. A special rule applies if you are absent from work because of your pregnancy, the birth of a child, placement of an adopted child, or caring for an adopted or natural child following birth or placement. In this event, you will not incur a Break in Service even if you have not earned an Hour of Service in the Plan Year in which the absence begins. If your period of absence continues through the following Plan Year, you will not incur a Break in Service in the second year if you accrued an Hour of Service during the preceding Plan Year when the absence began. Solely for purposes of determining whether you have incurred a Break in Service, if you are on an unpaid leave required by the Family and Medical Leave Act of 1993 you will be considered to be working in your regular position as if you were not on leave. 4. Code. The Internal Revenue Code of 1986, as amended. 5
5. Compensation. Compensation means the total of an individual s taxable base wages, overtime, shift differentials, vacation pay, sick pay and bonuses, plus all amounts excluded from the individual s gross income by reason of Code Sections 125 (contributions to a cafeteria plan), 132(f)(4) (qualified transportation fringe benefits), or 401(k) (qualified cash or deferred compensation plan contributions) for the period during the year the individual is both an eligible Associate and is participating in the Plan. Example (annual wages and annual deductions): Taxable Wages (base wages, OT, vacation, bonuses, etc.) $32,000 + Pre-tax health care premium deductions (Section 125) + 1,000 + Pre-tax Flexible Spending Account deductions (Section 125) + 600 + Before-tax 401(k) contributions ($35,000 x 4%) +1,400 DRSP Compensation (basis for 401(k) contributions) $35,000 Compensation excludes amounts paid after the later of 2 ½ months following severance from employment, or 2 ½ months after the end of the Plan Year that includes the date of severance from employment. Compensation further excludes amounts in excess of Code Section 401(a)(17) ($255,000 for the Plan Year beginning January 1, 2013). 6. Disabled. You are Disabled if you have a medically determinable physical or mental impairment that renders you incapable of performing any substantial gainful activity as this is defined for purposes of obtaining eligibility for Social Security disability benefits. The permanence and degree of impairment must be supported by the certificate of a medical examiner satisfactory to the Employer, certifying the inability and certifying that the condition is likely to be permanent. Total Disability ends upon your death or, if earlier, your recovery from the condition previously certified. 7. Domestic Relations Order. A Domestic Relations Order is an Order (such as a divorce decree, a dissolution of marriage, a property settlement agreement, or other domestic relations order) duly entered by a court of competent jurisdiction, which creates or recognizes the existence of an alternate payee s right, or assigns to an alternate payee the right to, all or a portion of the benefits payable to a Participant under the Plan. 8. Employer. Employer means the entity that employs you if it is a Participating Employer. 9. Hour of Service. An Hour of Service is each hour for which an Associate is paid, or entitled to payment, for the performance of duties for the Employer or any entity related to the Plan Sponsor by 80% or greater common ownership, including periods of vacation, illness, incapacity, layoff, jury duty military 6
duty or leaves of absence that are less than 12 consecutive months. An Associate's Hours of Service will be determined using the Employer s records. No Hours of Service will accrue during a period where an Associate is paid or entitled to payment by the Employer solely to reimburse medical expenses or to comply with workers compensation, unemployment compensation, or disability compensation laws. To the extent required by law, an Hour of Service includes an Associate s hours of service on behalf of the Employer performed as an employee of a staffing company. 10. Normal Retirement Age. Normal Retirement Age is the later of age 65 or the 5 th anniversary of the date you began participation in the Plan. 11. Participating Employer. Participating Employer means the Plan Sponsor and each entity related to the Plan Sponsor by common ownership that has elected to participate in the Plan by appropriate corporate action and which has been accepted as a Participating Employer by the Plan Sponsor. 12. Period of Service. Period of Service means the time interval beginning on the date that an Associate first performs an Hour of Service for the Employer and ending on the Associate s Severance from Service Date. If an Associate has a Period of Severance of 12 or more consecutive months, a new Period of Service will begin after the Associate again performs an Hour of Service for the Employer, and the separate Periods of Service will be added together. A period of Service will also include any Period of Severance of less than 12 consecutive months. 13. Period of Severance. Period of Severance means the time interval beginning on the Associate s Severance from Service Date and ending on the date on which an Associate again performs an Hour of Service for the Employer. 14. Plan Year. The Plan Year is the 12-month period from January 1 to December 31 each year. 15. Prior Plan. Prior Plan means the following retirement plans as they existed at the date of the merger that resulted in this Plan: DENSO International America, Inc. 401(k) Plan, American Industrial Manufacturing Services, Inc. 401(k) Savings Plan, the DENSO Associates Retirement Plan, the Employees 401(k) Plan of DENSO Sales California, Inc., and the DENSO Wireless Systems America, Inc. 401(k) Plan. 16. Qualified Domestic Relations Order or QDRO. A Qualified Domestic Relations Order is a Domestic Relations Order that meets the legal qualification requirements for the assignment of all or a portion of the Participant s Account, as specified by the Plan Administrator in Qualified Domestic Relations Order Policies and Procedures. 7
17. QMAC. QMAC means the qualified matching contributions generally made by a Participating Employer on an Associate's behalf under the Plan, and which are 100% vested at all times. 18. QNEC. QNEC means the qualified non-elective contributions generally made by a Participating Employer on an Associate's behalf under the Plan, and which are 100% vested at all times. 19. Severance from Service Date. Severance from Service Date means the earlier of (i) the date the Associate retires, quits, is discharged, or dies or (ii) the first anniversary of the first date on which an Associate was otherwise first absent from employment with the Employer. 20. Year of Service. Years of Service are used to apply the vesting rules under the Plan. An Associate will be credited with a Year of Service for each 12-month Period of Service. Associates participating in the Plan on January 1, 2011 will be credited with one Year of Service on the anniversary date in 2011 of the date they first performed an Hour of Service. This Year of Service will cover the Period of Service beginning on their anniversary date in 2010 and ending on the anniversary date in 2011. Eligibility to Participate HOW THE PLAN WORKS Except as noted below, all Associates who have completed one Hour of Service are eligible to participate in the Plan for purposes of making Before-tax Contributions, Roth After-tax Contributions, and for purposes of being eligible to receive Employer Matching Contributions and Employer Annual Contributions, if any are made. Your participation will actually begin on the first day after the date on which you meet these requirements that it is administratively feasible to begin your participation in the Plan. For example, if you meet the eligibility requirements on February 28, your participation may begin on March 1. In addition, in order to be eligible to receive an Employer Annual Contribution, if any are made, you must be employed with the Employer on the last day of the Plan Year, or must have retired on or after age 65, died, or became Disabled during that Plan Year. If applicable, you will be credited with the service necessary to satisfy the minimum requirements of the Family and Medical Leave Act of 1993 and the 8
Uniformed Services Employment and Reemployment Rights Act of 1994 (related to returning from military service). For more information about how these laws may affect you, contact your Human Resources representative. Enrollment in the Plan After you meet the Plan's eligibility requirements, you will be automatically enrolled in the Plan. Your Before-tax Contributions will begin as soon as administratively feasible thereafter. You may access www.putnam.com/401k or call toll-free (888) 411-4015 to opt out of automatic enrollment. The opt-out election will become effective as soon as administratively feasible after it is received. If you have not completed the required opt out process, you will automatically make Before-tax Contributions, and your Compensation will automatically be reduced accordingly, at the Automatic Enrollment Contribution Level of 4% of your Compensation (subject to IRS limits). You can make changes by accessing www.putnam.com/401k or calling toll-free (888) 411-4015 and providing the required information. Additionally, you can elect to make Roth After-tax Contributions to a Roth Account (as explained below), by accessing www.putnam.com/401k or calling toll-free (888) 411-4015 and providing the required information. You will not be automatically enrolled for Roth After-tax Contributions. Your before-tax contribution percentage will increase automatically on July 1 st every year in the future, by 1% (above the prior year s contribution percentage), unless you make a different affirmative election. Automatic contribution increases will stop once you reach a 10% contribution percentage, unless you make a different affirmative election. You may elect to contribute at a higher or lower automatic increase percentage rate than the default automatic contribution percentage by accessing www.putnam.com/401k and completing the required information. Putnam Investments will provide you with the necessary election materials, including instructions on how to opt out of participation or change your type or percentage of contributions. You can contact Putnam Investments toll-free at (888) 411-4015 or access the Putnam website at www.putnam.com/401k. When you make an election you will be required to: indicate the percentage of your Compensation you wish to defer as Beforetax Contributions, 9
indicate the percentage of your Compensation you wish to contribute as Roth After-tax Contributions, select the investment funds in which you want your Account invested and the percentage of each type of contribution (Before-tax Contributions or After-tax Contributions) you wish invested in each investment option, determine the rate for automatic annual increases in the amount of your contributions if you do not want the default rate to apply, and designate a beneficiary to receive payment of your benefits if you die. Special Note - The Named Fiduciary has selected Putnam Investments to provide recordkeeping, account and investment related services for the Plan. Many questions regarding your Account, enrollment, investments, distributions and other Plan features can be answered directly by Putnam toll-free at (888) 411-4015 or through Putnam s website at www.putnam.com/401k. Please contact Putnam with your questions or, if you prefer, you may contact your Human Resources representative. Ending Your Participation Your participation in the Plan will end on the earliest of the following: the date your employment with a Participating Employer terminates, you are no longer an eligible Associate, or the Plan terminates. Participating Associates who terminate employment and then return to covered service with a Participating Employer may resume participation immediately on the date they return. If you stop being an Associate of one Participating Employer and become an Associate of another Participating Employer, your participation in the Plan will continue. In addition, your participation will also continue to the extent necessary to comply with the minimum requirements of the Family and Medical Leave Act of 1993 and the Uniformed Services Employment and Reemployment Rights Act of 1994. For more information on these laws and their effect on the Plan, you should contact your Human Resources representative. Before-tax Contributions When you are enrolled in the Plan, a portion of your Compensation may be withheld through payroll deduction and contributed to the Plan as Before-tax Contributions. Before-tax Contributions are contributed to the Plan before income taxes are withheld from your pay. All of your Before-tax Contributions to the Plan are voluntary and are always 100% vested. In addition to Before-tax Contributions, you may also make voluntary Roth Aftertax Contributions (explained below), or you may make both Before-tax Contributions 10
and Roth After-tax Contributions. When making your deferral election, you may elect to save from 1% to a total of 75% of your Compensation for the Plan Year, in whole percents (i.e., 2%, 3%, etc.) as Before-tax Contributions, Roth After-tax Contributions, or both. Each pay period, these percentages are multiplied by your total Compensation for that pay period, and those amounts are contributed to the Plan. How Before-tax Contributions Work The amount you contribute to the Plan on a before-tax basis is subject to Social Security (FICA) taxes, but exempt from federal, state and in some cases local income taxes until distributed to you from the Plan. In addition, investment earnings on these contributions are not subject to income tax until you receive them from the Plan. Roth After-tax Contributions When you are enrolled in the Plan, you may elect to have a portion of your Compensation withheld through payroll deduction and contributed to the Plan as Roth After-tax Contributions. Roth After-tax Contributions are contributed to the Plan after income taxes are withheld from your pay. All of your Roth After-tax Contributions to the Plan are voluntary and are always 100% vested. When making your deferral election, you may elect to save from 1% to a total of 75% of your Compensation for the Plan Year, in whole percents (i.e., 2%, 3%, etc.) as Roth After-tax Contributions, Before-tax Contributions, or both. Each pay period, these percentages are multiplied by your total Compensation for that pay period, and those amounts are contributed to the Plan. How After-tax Contributions Work The amount you elect to contribute to the Plan as Roth After-tax Contributions is withheld from your Compensation after it has already been reduced for Social Security (FICA) taxes, federal, state, and, if applicable, local income taxes. Any earnings on the Roth After-tax Contributions are not taxed as long as they remain in the Plan. When you take a distribution from your Roth Account at retirement, under current law the distribution will be not be subject to federal income tax as long as you meet the following requirements. First, the distribution from your Roth Account must not take place before five years have passed since the first day of the calendar year in which you made your first Roth After-tax Contribution to the Plan. Next, the distribution must not occur before you have reached age 59½, have died, or become Disabled. 11
A distribution from your Roth Account before these requirements are met is generally a nonqualified distribution, meaning that the portion of the distribution that reflects accrued earnings within the Roth Account will be included in your taxable gross income and may be subject to a 10% early distribution penalty. Regardless of whether these requirements are met, the portion of any distribution from your Roth Account that consists of after-tax contributions will not be subject to tax again. Distributions from your Roth Account whether qualified or nonqualified may also be subject to state and local taxes. You should consult a qualified tax professional before making any decision regarding making a Roth After-tax Contribution or taking a nonqualified distribution, to determine what is best for you under your particular circumstances. Annual Limits on Contributions The Federal tax laws limit the amount of your contributions (Before-tax Contributions and Roth After-tax Contributions combined) to this Plan and to other elective deferral retirement plans. The limit is $17,500 for the 2013 calendar year, and this amount may be adjusted in future years for cost of living increases. You will be informed of the maximum amount which you may contribute each year. Any amount you contribute above the limit which is returned to you will be taxable. If the combined amount of your contributions to this Plan plus any similar elective deferrals to any other form of retirement program exceed the maximum, you must inform the Plan Administrator no later than March 1 of the year following the year the contributions were made, if you want any refund of the excess to be made from this Plan. If you do not provide this notice, you may be taxed twice on the amount of the excess. If the Plan Administrator determines that your contributions to this Plan alone exceed this limit, you will automatically receive a refund of the excess. The tax laws also limit the total amount of contributions to the Plan that can be made to your Account (from you or the Employer) for a Plan Year to the lesser of $51,000 or 100% of your compensation (for 2013). This amount may be adjusted in future years for cost of living increases. If the contributions to your Account exceed this limit, you will also receive a distribution of the excess contributions you made, as a taxable distribution. Please be aware of these limits when deciding the percentage of your Compensation you wish to defer. 12
Making Deferral Changes You may cancel or change the amount of your future Before-tax Contributions or Roth After-tax Contributions to the Plan by contacting Putnam Investments toll-free at (888) 411-4015 or accessing its website at www.putnam.com/401k. Changes may be made at any time and will become effective as soon as administratively feasible following the date of the change. You will receive a written or electronic confirmation of your change or cancellation from Putnam Investments. Your new election must be in whole percents and may not exceed 75% of your Compensation for the Plan Year. Matching Contributions To encourage Associates to save money under the Plan, your Employer may elect to make a Matching Contribution on your behalf each pay period. The current Matching Contribution for the 2013 Plan Year is equal to 100% of the first 4% of the Associate s Compensation contributed to the Plan. Currently, Matching Contributions are composed of both normal Matching Contributions, which vest over time, and QMACs, which are 100% vested at the time they are made. Each Matching Contribution is currently composed of 75% normal Matching Contributions and 25% QMACs. The Employer reserves the right to change, suspend or eliminate this Matching Contribution at any time in the future. Matching Contributions will be deposited in your Account as soon as possible following the end of each pay period. If you are employed by your Employer on the last day of the Plan Year, your Employer will check to make sure that the actual Matching Contributions on your behalf were correct, in light of any changes in your contributions that occurred during the year or due to other factors. If the total annual Matching Contributions were not correct, the Employer will contribute an amount to true-up any shortage. If the Matching Contributions were too high, your Matching Contribution Account will be decreased accordingly. The following example helps illustrate how Matching Contributions are made. Example. Assume your annual Compensation is $40,000 for the Plan Year beginning in 2013, you are paid on a bi-weekly basis and you participated the full year. The following chart shows the Employer s Matching Contributions based on your contribution amount (assuming the Employer makes a Matching Contribution up to 4% of Compensation). Your Deferral %: 1% 2% 5% 15% Your Deferrals: $400 $800 $2,000 $6,000 Employer Match: $400 $800 $1,600 $1,600 Total $800 $1,600 $3,600 $7,600 13
Like your Before-tax Contributions, Matching Contributions are not considered current taxable income and therefore will not appear as wages on your W-2 statement at year end. In addition, the investment earnings on these contributions are not subject to income tax until you receive them from the Plan. Matching Contributions are not considered wages subject to FICA tax at the time they are contributed. Employer Annual Contributions Once you are eligible, your Employer may, but is not required to, make discretionary Employer Annual Contributions which will be allocated to your Account based on the ratio of your Compensation to the total of all Associates Compensation for the Plan Year. The amount of the Employer Annual Contributions, if any, will be determined at the end of the Plan Year. Employer Annual Contributions will only be allocated to eligible Associates who are employed by the Employer on the last day of the Plan Year, or who have terminated during the Plan Year due to death, Disability, or Retirement after age 65. For the 2012 Plan Year, Participating Employers elected to make Employer Annual Contributions of up to 3% of the Associate s Compensation (subject to IRS limits) for the following Associates who were employed by the Employer on the last day of the Plan Year, or who terminated during the Plan Year due to death, Disability, or Retirement after age 65: DENSO Manufacturing Arkansas, Inc. all eligible Associates; DENSO Manufacturing Athens Tennessee, Inc. all eligible Associates; DENSO Manufacturing Michigan, Inc. all eligible Associates; DENSO Manufacturing Tennessee, Inc. all eligible Associates; American Industrial Manufacturing Services, Inc. all eligible Associates who are not accruing benefits under the Employer s defined benefit pension plan; DENSO International America, Inc. all eligible Associates who are not accruing benefits under the Employer s defined benefit pension plan; DENSO Sales California, Inc. all eligible Associates who are not accruing benefits under the Employer s defined benefit pension plan; and DENSO Wireless Systems America, Inc. all eligible Associates who are not accruing benefits under the Employer s defined benefit pension plan. Each Employer Annual Contribution may be composed of normal Annual Contributions, which vest over time, and QNECs, which are 100% vested at the time they are made. Currently, 75% of each Employer Annual Contribution will be a normal Annual Contribution and 25% will be classified as a QNEC. 14
Like your Before-tax Contributions and Matching Contributions, any Employer Annual Contributions are not considered current taxable income and therefore will not appear as wages on your W-2 statement at year end. In addition, the investment earnings on these contributions are not subject to income tax until you receive them from the Plan. Employer Annual Contributions are not considered wages subject to FICA tax at the time they are contributed. Catch-Up Contributions If you are eligible to make contributions under this Plan and you are, or will attain, age 50 before the end of the calendar year, you may be eligible to make an additional contribution to the Plan called a Catch-Up Contribution. Catch-Up Contributions are in addition to your regular combined Before-tax Contribution and Roth After-tax Contribution limit ($17,500 for 2013 as adjusted for inflation). If you reach this regular contribution limit during the year, and are eligible to make Catch-Up Contributions, your existing contribution elections will continue and these additional amounts will be treated as Catch-Up Contributions. The maximum amount you will be permitted to contribute to the Plan as a Catch-Up Contribution for the 2013 calendar year is $5,500. These limits may be adjusted in future years and you will be informed of the maximum amount which you may contribute each year. Catch-Up Contributions will be treated in the same manner as any Before-tax Contributions or Roth After-tax Contributions you make for distributions and all other purposes under the Plan but are not eligible for Matching Contributions. To opt out of making Catch-Up Contributions, or to make changes to your Catch-Up Contributions contact Putnam Investments tollfree at (888) 411-4015 or access www.putnam.com/401k. Transfers From Other Plans (Rollover Contributions) You may deposit into your Account distributions you receive from certain individual retirement accounts or annuities or other eligible employer retirement plans sponsored by a non-participating Employer, including qualified retirement plans such as other 401(k) plans, 403(b) plans, and certain other programs. This type of deposit is called a "Rollover Contribution." All Rollover Contributions to the Plan are fully vested at all times. In order to protect the Plan, the Plan Administrator has the ability to reject any request for a Rollover Contribution to the Plan. Making a Rollover Contribution may result in tax savings to you. You should consult a qualified tax professional to determine if making a Rollover Contribution to the Plan is in your best interest. Suspension of Active Participation Your active participation in the Plan will be suspended for any period during 15
which (i) you are not an Associate, (ii) you do not receive any Compensation, or (iii) your participation is suspended following certain withdrawals, as described below. During a period of suspension, you cannot make any Before-tax or Roth After-tax Contributions. Your Account will, however, continue to be invested under the Plan. Special Note on Qualified Military Service If you were eligible to participate in the Plan prior to or during Qualified Military Service (as defined by the Code) and you return to the employ of the Employer during the period that you are entitled to reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994: You may make Before-tax Contributions, Roth After-tax Contributions, and Catch-Up Contributions you would have been eligible to make if you had not been in Qualified Military Service; and The Employer will match your Contributions to the extent that they would have been matched had they actually been made during the period of Qualified Military Service. If the Compensation you would have received from the Employer but for your Qualified Military Service is not reasonably certain, your Compensation for this purpose is the average Compensation from the Employer during the period of employment (not exceeding 12 months) immediately preceding your Qualified Military Service. Any such Before-tax Contributions, Roth After-tax Contributions, Catch-Up Contributions, and Matching Contributions must be made during the period which begins with your date of reemployment with the Employer, and extends for the lesser of five years or the period which is three times your period of Qualified Military Service. All other contributions, benefits, and service credit with respect to Qualified Military Service will be provided as required by the Code. Additionally, the Plan permits two types of distributions for military personnel: Qualified Military Service distributions and Qualified Reservist Distributions, as described below. If you are on active duty in Qualified Military Service for more than 30 days, you will be treated as having severed from employment during the Qualified Military Service period solely for purposes of your eligibility to elect a distribution from the Plan of your elective deferrals to the extent permitted by the Code Section 414(u)(12)(B). You may not make Before-tax Contributions or Roth After-tax Contributions to the Plan for 6 months after the date of your distribution. 16
Qualified Reservist Distributions will also be allowed under the Plan to the extent permitted by the Code. These distributions are an elective distribution of an Associate s Before-tax or Roth After-tax Contributions, made to an individual who is on active duty for a periods in excess of 179 days or for an indefinite period, and which are made after the order or call, or during the active duty period. You are not prohibited from making Before-tax Contributions or Roth After-tax Contributions to the Plan during the 6 month period after the date of a Qualified Reservist Distribution. YOUR PLAN ACCOUNT When you first begin to participate in the Plan, Putnam Investments will establish an Account on your behalf showing all contributions to your Account and the investment gains and losses on these contributions. The amount in your Account will be invested at your direction among the various investment funds maintained under the Plan. Your Account may include subaccounts for your Before-tax Contributions, Roth After-tax Contributions, Matching Contributions, Roth Matching Contributions, and discretionary Employer Annual Contributions. If you were a participant in a Plan that merged into this Plan, one or more Prior Plan subaccounts will be created. Also, if you rolled over to the Plan amounts distributed to you from another eligible retirement plan, a Rollover Contributions subaccount will be maintained for you. If you take out a Participant Loan, a Loan subaccount will be created for you. Certain other subaccounts, such as a qualified non-elective contribution ( QNEC ) subaccount and a qualified matching contribution ( QMAC ) subaccount, may also be established for you. These QNEC and QMAC subaccounts will be fully vested at all times and are subject to specific distribution restrictions described elsewhere in this Summary (for example, in the Loans to Participants section). You will periodically receive (or you can access online at www.putnam.com/401k) a statement showing the status of your Account. This statement will show the amount of each of your subaccounts established by Putnam Investments, as well as Plan expenses charged directly to you (if any), investment earnings, and gains or losses allocated to your Account. All Accounts are of a bookkeeping nature only, shown to signify the value of your benefits. You will have no right to or claim against any specific asset of the Plan. All benefits will be paid from the Plan's general assets. The Plan will charge your Account for a portion of the Plan s costs for administrative services necessary to operate the Plan, such as legal, accounting, and 17
recordkeeping services. In order to assist the Plan s cash-flow requirements, the Employer may elect to pay Plan administrative costs directly, and then receive a reimbursement from the Plan at a later date, without interest. The Plan Administrator will collect these administrative fees during the first month of each quarter based on the prior quarter-end balance in those Accounts that had an Account balance on the last day of that quarter. The administrative fee is currently not expected to exceed 0.75% on an annual basis, and may vary from one quarter to another quarter as deemed necessary at the sole discretion of the Plan Administrator. When you make an investment associated with your Account, as discussed in the next section, a portion of the investment fund fees may also be used indirectly to pay the costs for administrative services necessary to operate the Plan, such as legal, accounting, and recordkeeping services. These investment fund fees are explained in the investment s prospectus and related investment disclosures. Additionally, if you apply for a loan from the Plan or for a hardship withdrawal from your Account, your individual Account will be charged an administrative fee established from time to time by the Plan Administrator. The amount of these administrative fees is available from Putnam Investments on request. Effective January 1, 2013, a fee of $300 will be deducted from your Account for any Domestic Relation Order submitted for processing. If you submit a Domestic Relations Order pertaining to a Participating Employer s pension plan, and the two are processed concurrently, the fee for processing the Domestic Relations Order pertaining to this Plan will be reduced to $225. Once the Domestic Relations Order is approved as a Qualified Domestic Relations Order, the dollar amount assigned to the alternate payee in the order will be reduced by ½ of the fee that was deducted from your Account. In other words, although you will initially pay the full processing fee, you and your former Spouse will each ultimately pay ½ of the processing fee out of your Account balances. INVESTMENT FUNDS This Plan is intended to comply with Section 404(c) of the Employee Retirement Income Security Act of 1974 ( ERISA ) and Labor Regulation Section 2550.404c-1. Under these rules, you are allowed to direct the investment of your Accounts among the various investment options maintained under the Plan. Since you direct the investment of your Account, the law provides that the Plan's fiduciaries may be relieved of liability for any loss which is the direct and necessary result of your investment decisions. A general description of the investment objectives, risk and return characteristics of each option, including information about the type and diversification of assets comprising each option, will be provided to you. The following information is available from Putnam Investments toll-free at (888) 411-4015 or on its website at www.putnam.com/401k or upon request to the Plan Administrator: 18
Copies of any prospectuses, financial statements and reports and any other material received by the Plan which relates to any investment option; A description of the annual operating expenses of each investment option and other costs which would reduce your rate of return; A list of assets that comprise the portfolio of each investment option that constitutes a "plan asset," as well as the value of each asset (or the proportion of the investment option which it comprises); Information concerning the value of shares in each investment option, as well as past and current investment performance for each investment option; Information concerning any proxy voting rights associated with an investment option; and Information concerning the value of shares held in your individual Account in a particular investment option. No one is authorized by the Plan Administrator or the Named Fiduciary to advise you as to the manner in which contributions should be invested. You are solely responsible for the investment of your Account. You may elect to invest your Account, in whole percentages (i.e., 2%, 3%, etc.) among the available options. The fact that a particular investment option is available to you for investment of your Account is not a recommendation that you invest in such investment option. The Named Fiduciary retains the right at any time to change any investment option available under the Plan or to suspend the use of any investment option or the right of Associates to direct their investments, which sometimes occurs in connection with changes in investment options, recordkeepers, fund custodians or for other administrative reasons. If you do not specify the manner in which your Account is to be invested, your Account will be invested in a default investment selected by the Named Fiduciary. When an Associate has not given adequate investment direction, the Named Fiduciary is currently investing those Accounts in the age-based moderate asset allocation model portfolio associated with your estimated retirement date. You should read all prospectuses and summary prospectus information carefully before making any investment decisions. Subject to certain restrictions on trading contained in investment prospectuses, you may change your investment elections in whole percents by contacting Putnam Investments toll-free at (888) 411-4015 or on its website at www.putnam.com/401k. 19
Any change in investment election made by you will be effective as of the business day you complete the change with Putnam Investments (or the next business day if you change your investment election after 4 p.m. Eastern Standard Time or on holidays or weekends). For more information regarding the investment options available under the Plan, your ability to direct the investment of your Account or to obtain a prospectus, you should contact Putnam Investments or your Human Resources representative. VALUING YOUR ACCOUNT The assets in your Account will be valued at their fair market value as of the close of each business day (4 p.m., Eastern Standard Time). Accounts existing at the close of each such valuation date will be adjusted to reflect any additional contributions made to each Account and any change in value of the investment funds attributable to each Account. The Trustee and Named Fiduciary reserve the right to adjust the dates on which Plan assets will be valued. VESTING OF YOUR ACCOUNT Vesting refers to the percentage of your Account balance that is nonforfeitable if you terminate employment. You are always 100% vested in your Before-tax Contributions, Roth After-tax Contributions, Catch-Up Contributions, Rollover Contributions, QNECs, and QMACs. Earning and Calculating Years of Service for Vesting Your vesting percentage is the percentage of employer contributions in your Account that you will not forfeit if you terminate employment. Years of Service are used to calculate your vesting percentage. If you are an Associate, you will earn a Year of Service for each 12-month Period of Service you work. A Period of Service generally means the time period you are employed. Your Period of Service starts on the date that you first perform an Hour of Service for the Employer, and ends on the date you have a Severance from Service. A Severance from Service occurs when you: Terminate employment, retire, or die while you are an Associate; or Are absent from service for more than 12 consecutive months for any other reason, such as vacation, illness, incapacity, layoff, jury duty, military duty or leave of absence. If you have a Period of Severance of 12 or more consecutive months, a new Period of Service will begin if you return to work for the Employer and perform an Hour 20
of Service. If this happens, the separate Periods of Service will be added together. If you have a Period of Severance of less than 12 consecutive months, that period will still count toward your Period of Service as though you did not have a Severance from Service. You should also understand the meaning of the phrase Hour of Service, since your Period of Service begins when you earn an Hour of Service. An Hour of Service is an hour for which you are entitled to be paid as an Associate for performing job duties for the Employer or any entity related to the Plan Sponsor by 80% or greater common ownership. You will not earn an Hour of Service for a time period for which you are entitled to payment by the Employer under workers compensation, unemployment compensation, or disability compensation laws, or if payment is solely to reimburse medical expenses. To the extent required by law, an Hour of Service includes your hours of service on behalf of the Employer performed as an employee of a staffing company or performed in a capacity other than as an Associate. Hours of Service will be determined using the Employer s records. Special Transition Rule on Earning Vesting in 2011 A special transition rule applies for Associates who participated in a Prior Plan. Associates participating in the Plan on January 1, 2011 will be credited with one Year of Service on the anniversary date in 2011 of the date they first performed an Hour of Service, as reflected in the records of the Prior Plan in which the Associate previously participated. This Year of Service will cover the Period of Service beginning on their anniversary date in 2010 and ending on their anniversary date in 2011. Vesting Percentages and Schedules You will vest in your Matching Contributions, Roth Matching Contributions, and Employer Annual Contributions at the rates reflected in the following schedules: Actual Normal Matching Contribution Vesting % Actual QMAC Vesting % Years of Service Effective Vesting % Less than 2 0% 100% 25% 2 33 1/3% 100% 50% 3 66 2/3% 100% 75% 4 or more 100 100% 100% 21
Actual Normal Annual Contribution Vesting % Actual QNEC Vesting % Years of Service Effective Vesting % Less than 2 0% 100% 25% 2 33 1/3% 100% 50% 3 66 2/3% 100% 75% 4 or more 100 100% 100% There are a couple of additional vesting rules: If you are an Associate when you reach Normal Retirement Age, die, or become Disabled, you will be 100% vested in your entire Account regardless of your level of vesting under any vesting schedule. The Employer, in its sole discretion, may fully vest the Matching Contributions and Employer Annual Contributions for a group of Plan participants affected by a business divestiture, layoff, or other similar transaction, or as required by law. If your employment terminates and you are later rehired, any vested Account balance remaining in the Plan is still yours. In addition, your past Years of Service will be counted toward vesting the contributions made after you are rehired. Special Transition Vesting Schedule Rule A special transition rule applies for Associates who participated in a Prior Plan. If the Employer contributions in your Prior Plan Accounts were not 100% vested as of January 1, 2010, they will vest under the following schedule: Years of Service Percent Vested Less than 2 25% 2 but less than 3 50% 3 but less than 4 75% 4 or more 100% This vesting schedule will not apply if it will reduce the vested percentage of your accrued benefit as it existed on December 31, 2010, under the terms of any Prior Plan. If you are a former Associate with a Prior Plan Account and are not credited with at least one Hour of Service on or after January 1, 2011, your vesting percentage will be determined under the applicable Prior Plan s vesting schedule in place at the time of your termination of employment, and not under a vesting schedule provided for in this Plan. 22
Break in Service Generally, if you do not have a Year of Service in a 12 month period, you will have a Break in Service. All of your Years of Service, whether earned before or after a Break in Service, will be counted in determining the vesting in any Employer contributions that are made to the Plan on your behalf after a Break in Service. Some types of leaves of absence, such as certain maternity, paternity, or military leaves, will not count toward a Break in Service. If you are away from work for a period of time and are later reemployed, please contact your Human Resources representative to determine the impact your Breaks in Service will have. Examples of How Vesting Works Example 1: Assume an Associate first performed an Hour of Service for the Employer on March 1, 2011 and worked continuously through June 30, 2013 when the Associate terminated employment. The Associate s Period of Service began on March 1, 2011 and ended on June 30, 2013. The Associate has earned two Years of Service (March 1, 2011-March 1, 2013). The four months earned between March 1, 2013 and June 30, 2013 are less than a whole year and do not result in a Year of Service. Example 2: Assume an Associate first performed an Hour of Service for the Employer on March 1, 2011 and worked continuously through June 30, 2013. The Associate then went on a leave of absence until April 30, 2014 when the Associate terminated employment. The Associate s Period of Service begins on March 1, 2011 and ends on April 30, 2014. The Associate would have earned three Years of Service (March 1, 2011-March 1, 2014). The two months earned between March 1, 2014 and April 30, 2014 are less than a whole year and do not result in a Year of Service. Example 3: Assume an Associate first performed an Hour of Service for the Employer on March 1, 2011 and worked continuously through June 30, 2013 when the Associate terminated employment. The Associate s Period of Service begins on March 1, 2011 and ends on June 30, 2013. The Associate has earned two Years of Service (March 1, 2011-March 1, 2013). The four months earned between March 1, 2013 and June 30, 2013 are less than a whole year and do not result in a Year of Service. 23
Now assume the Associate is rehired on April 1, 2015 and works continuously through December 31, 2017. The Associate would have a new Period of Service from April 1, 2015 through December 31, 2017, and would have earned two Years of Service for this Period of Service (April 1, 2015-April 1, 2017). The nine months earned between April 1, 2017 and December 31, 2017 are less than a whole year and would not result in a Year of Service. However, the nine months the Associate worked at the end of the second Period of Service is added to the four months earned at the end of the first Period of Service. Since these two fractional years total at least 12 months, the Associate would earn another one Year of Service. Forfeitures If you terminate employment before you are 100% vested in your Matching Contributions, Roth Matching Contributions, and Employer Annual Contributions, and receive a distribution of your vested Account balance, if any, you will forfeit the unvested balance. The forfeited amounts will be used by the Plan first to reduce any Matching Contributions or Employer Annual Contributions for the Plan Year in which the forfeitures are allocated and then to pay Plan expenses. If you return to work for a Participating Employer as an eligible Associate after having taken a distribution from the Plan or a Prior Plan that resulted in a forfeiture, the forfeited portion of your Account may be restored and additional vesting earned on such amounts if you repay the distribution to the Plan within five years of your return to work. Retirement DISTRIBUTIONS If you terminate employment with the Employer and certain affiliates of the Employer on or after the date you attain age 65, your Account will be payable to you. If you continue to work after attaining age 65, you may continue to participate in the Plan until your actual retirement. 24
Death Upon your death, your beneficiary will be entitled to receive a distribution of the vested percentage of all of your Accounts, after providing required documentation and submitting a completed application form. You select a beneficiary under the Plan by completing a beneficiary designation form that will be provided to you by your Human Resources representative. You may also designate your beneficiary on-line through Putnam Investments at www.putnam.com/401k. Under the law, your beneficiary will be your spouse unless you are not legally married or you validly designate a beneficiary other than your spouse. If you are married, you may designate a beneficiary other than your spouse, but the designation will not generally be valid unless your spouse consents to the designation. Your spouse's consent must be in writing, must acknowledge the effect of the designation, must be witnessed by a notary public, and must specifically acknowledge the beneficiary named or expressly permit you to make beneficiary designations without any requirement of further consent by your spouse. Your spouse's consent is not required if you establish to the satisfaction of a Plan representative that the consent cannot be obtained because you are not legally married, your spouse cannot be located, or under such other circumstances as are prescribed by treasury regulations. Spousal consent is not required with regard to Prior Plan balances transferred from the American Industrial Manufacturing Services, Inc. 401(k) Savings Plan. A beneficiary designation is effective when filed with the Plan Recordkeeper. The designation made by you and consented to by your spouse may be revoked by you in writing at any time without the consent of your spouse. The number of revocations is not limited. Any new designation made by you must comply with all of the requirements regarding your spouse's consent. Any new designation you make will automatically revoke any prior designation. The consent of a former spouse will not be binding on a current spouse. Disability If you become Disabled while you are employed by the Employer, you may elect to receive a distribution of your vested Account. Severance from Employment for Other Reasons If you sever employment with the Employer and all affiliates of the Employer before you are eligible for retirement, you may elect to receive a distribution of your vested Account. If you are no longer an Associate of one Participating Employer and become an Associate of another Participating Employer, your participation in the Plan will continue. In this situation, you will not be eligible for a distribution from your account. 25
MANNER AND TIMING OF PAYMENT Generally, if the value of your vested Account does not exceed $1,000 (including any amounts in your Rollover Contribution subaccount), benefits will be distributed to you (or to your beneficiary in the event of your death) in a lump sum payment of cash only, as soon as practical following your termination of employment. You or your beneficiary will be given the choice of receiving this mandatory distribution directly or rolling it over into another Eligible Retirement Plan, including an individual retirement account ( IRA ). If the value of your vested Account exceeds $1,000 but does not exceed $5,000 (including any amounts in your Rollover Contribution subaccount), you or your beneficiary will be given the choice of receiving this mandatory distribution as a lumpsum payment of your vested Account balance, as soon as practical following your termination of employment. You or your beneficiary will also be given the choice of rolling it over into an Eligible Retirement Plan, including an IRA. If you fail to return the distribution election forms during the election period, the entire vested Account balance will automatically be rolled over to an IRA maintained at an institution selected by the Named Fiduciary. Currently, any mandatory distribution rollover amounts are rolled into an IRA provided by Putnam Fiduciary Trust Company and Putnam Investor Services, Inc. The IRA will be invested in an investment product designed to preserve principal and provide a reasonable rate of return and liquidity. Fees and expenses attendant to the IRA will be drawn from the IRA. For further information concerning the Plan's automatic rollover provisions, the IRA provider, and the fees and expenses attendant to the IRA, call Putnam Investments at (888) 411-4015 or visit Putnam Investment s website at www.putnam.com/401k. If the value of your vested Account exceeds $5,000 (including any amounts in your Rollover Contribution subaccount), benefits will not be distributed to you without your consent. You may elect to receive a distribution under one or more of the following methods: 1. One or more lump-sum payments from your Account; 2. One or more rollovers to an Eligible Retirement Plan from your Account; 3. You may rollover any Loan you have outstanding to certain types of Eligible Retirement Plans that permit such rollovers. 26
You may generally elect to delay the commencement of your benefit distribution. However, by law, payments must begin by April 1 of the calendar year following the later of the calendar year in which you attain age 70 1 / 2, or the calendar year in which you retire. To receive a distribution, you should contact Putnam Investments toll-free at (888) 411-4015. Putnam Investments will process your distribution as soon as administratively feasible after you complete a distribution request. Certain immediate loan repayment rules exist if you have an outstanding loan at the time of your distribution. Please see the section entitled "Loans to Associates" in this Summary. TAX TREATMENT OF DISTRIBUTIONS FROM THE PLAN You will be responsible for paying taxes on the full amount of your distribution from the Plan, with the exception of distributions taken from your Roth Account that meet the requirements for tax-free distributions. All taxable distributions from the Plan will generally be taxed as ordinary income. Your distributions (but not your withdrawals or the proceeds of Participant Loans) are eligible to be rolled over to an IRA or Roth IRA, to another employer's qualified retirement plan or to certain other types of retirement plans. For eligible rollover distributions, you have two choices: you can have all, or a portion, of your distribution paid in a direct rollover or paid directly to you. The choice you make will affect the taxes you owe. If you roll over the amount directly to an IRA or Roth IRA, to another employer plan or to certain other types of retirement plans, the amount rolled over will not be taxed in the current year and no income tax will be withheld. If you choose to have any taxable distribution paid directly to you, you will receive 80% of the distribution because the Trustee is required by law to withhold 20% of the payment and send it to the IRS to be credited against your federal taxes. Plan distributions cannot be rolled over to SIMPLE IRAs, SIMPLE 401(k)s or Coverdale Education IRAs. If your beneficiary receives a lump-sum distribution, he or she may be able to defer taxes by rolling over all or a part of the distribution as a direct rollover. Your distribution will also be subject to a 10% excise tax -- unless you're over age 59 1 / 2 or the distribution is due to your death, disability, or other termination of 27
employment on or after your 55th birthday, or if certain other limited circumstances apply. IMPORTANT NOTE: WHENEVER YOU RECEIVE A DISTRIBUTION, YOU WILL RECEIVE A MORE DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES THAT GOVERN THE TAXATION OF QUALIFIED PLAN DISTRIBUTIONS ARE VERY COMPLEX AND CHANGE FREQUENTLY. THE PLAN ADMINISTRATOR CANNOT PROVIDE YOU WITH LEGAL OR TAX ADVICE OR ADVISE YOU ON WHICH MANNER OF DISTRIBUTION WOULD BE BEST FOR YOU. YOU ARE STRONGLY ADVISED TO CONSULT WITH A QUALIFIED TAX PROFESSIONAL BEFORE MAKING AN ELECTION REGARDING A DISTRIBUTION FROM THE PLAN. WITHDRAWALS The federal government has given special tax advantages to savings programs like this Plan in order to encourage people to save and invest for retirement. As a result, there are certain restrictions on money being withdrawn from the Plan while you are employed by the Employer or certain related entities. Generally, no amount may be withdrawn from the Plan while you are still employed with the Employer or certain affiliates of the Employer, except as described below. Hardship Withdrawals The Plan Administrator may, in its discretion, direct the Trustee to make a distribution to you in the event of an immediate and heavy financial need. These distributions are known as "hardship withdrawals." You may request a hardship withdrawal of your Before-tax Contribution Account and After-tax Roth Account, subject to a minimum withdrawal of $500. Earnings in these accounts are not available for withdrawal. To initiate a hardship withdrawal, contact Putnam Investments toll-free at (888) 411-4015. Putnam Investments will assist you with the withdrawal request process. Hardship withdrawals must be taken from the Before-tax Contribution Account first before any Roth Account amounts may be withdrawn. Whether an immediate and heavy financial need exists will be determined based upon all relevant facts and circumstances. Withdrawals will be authorized only if the distribution is to be used for one of the following purposes: (1) The payment of medical expenses (described in Code Section 213(d)) incurred by you, your spouse, your primary beneficiary or your dependents, or necessary for those persons to obtain medical care 28
described in Code Section 213(d)(see IRS Publication 502, Medical and Dental Expenses, to see what kind of expenses qualify; available at www.irs.gov/formspubs/index.html); (2) The purchase (excluding mortgage payments) of your principal residence; (3) The payment of tuition, educational fees and room and board expenses for the next 12 months of post-secondary education for yourself, your spouse, your primary beneficiary or your dependents; (4) The need to prevent your eviction from your principal residence or foreclosure on the mortgage of your principal residence; (5) Payment of burial or funeral expenses for your deceased parent, your spouse, your children, your primary beneficiary or your dependents (as defined in Code Section 152); (6) Expenses for the repair of damage to your principal residence that would qualify for the casualty loss deduction under Code Section 165 (determined without regard to whether the loss exceeds 10% of your adjusted gross income); and (7) Any other expense the Internal Revenue Service ( IRS ) determines to qualify as a safe harbor hardship expense. The amount of the distribution may not exceed the amount of the immediate and heavy financial need. The amount of the immediate and heavy financial need may be increased to include amounts necessary to pay federal, state or local income taxes and penalties that may be anticipated as a result of the distribution. You may make a hardship withdrawal only after you have received all available: distributions other than hardship withdrawals from all plans maintained by the Employer or any affiliate of the Employer; non-taxable loans from the Plan. This means that if you are eligible for a Plan loan at the time of the hardship withdrawal request, you must apply for the loan before a hardship withdrawal request will be granted. If you receive a hardship withdrawal from the Plan, you may make no Contributions to the Plan (or any other elective deferral plan administered by the 29
Employer) for 6 months following the distributions. If you are married, you will generally need your spouse s consent prior to taking a hardship withdrawal. Spousal consent is not required with regard to Prior Plan balances transferred from the American Industrial Manufacturing Services, Inc. 401(k) Savings Plan. Other requirements, such as the hardship withdrawal documentation requirements and applicable fees, are available by contacting Putnam Investments toll-free at (888) 411-4015. Age 59 1 / 2 Withdrawals You may withdraw amounts from any of your Accounts at any time without restriction after you are age 59 1 / 2. You do not have to show a hardship and your ability to make Before-tax Deferral Contributions or Roth After-tax Contributions will not be affected. However, if you are married and still working for the Employer, you generally must receive your spouse s consent in order to take a distribution prior to retirement. Spousal consent is not required with regard to Prior Plan balances transferred from the American Industrial Manufacturing Services, Inc. 401(k) Savings Plan. Withdrawals can be taken from Roth Accounts only after all other Accounts have been exhausted. The portion of each Account you elect to withdraw will be liquidated, and the net cash proceeds paid to you as soon as reasonably practicable after your completed withdrawal request is received and processed. The minimum withdrawal amount permitted will be $500. Only one withdrawal will be permitted during any calendar quarter. Administration of Withdrawals Withdrawals will reduce the value of your Account, reducing the benefits you will otherwise receive from the Plan. Withdrawals from Accounts other than your Roth Account are taxable and all are generally subject to a 10% Code excise tax on premature distributions if you are under age 59 1 / 2 at the time of the withdrawal. Hardship withdrawals may not be rolled over. You should consult your tax advisor prior to requesting a withdrawal. To request a withdrawal, call Putnam Investments at (888) 411-4015 or apply through Putnam Investment s website at www.putnam.com/401k. Your withdrawal will be paid to you as soon as practicable after your request for a withdrawal is approved. The amount of your withdrawal will reduce your interest in the investment funds in which your Account is invested on a pro rata basis unless the Named Fiduciary permits otherwise. LOANS TO ASSOCIATES 30
Associates may obtain a Participant Loan from their vested Account, excluding Roth After-tax Contributions and related earnings, upon certain conditions. To initiate a loan request or inquiry, contact Putnam Investments toll-free at (888) 411-4015. Putnam Investments will assist you in the process. The Named Fiduciary has prepared a written loan policy with more detail regarding Plan loans. For a copy of this policy, contact your Human Resources representative or Putnam Investments. The Named Fiduciary reserves the ability to deny any application. You may be charged certain fees for loan origination and for annual loan administration as detailed in the loan policy. When you take a loan from the Plan, your subaccounts (other than your Roth Account) will be reduced by the amount of the loan. Your subaccounts will be reduced as necessary in an amount equal to the loan, in the following order: (1) Rollover Account and Prior Plan Accounts; then (2) Before-tax Contribution Account; then (3) Matching Contribution Account and Roth Matching Contribution Account, pro rata, to the extent vested; then (4) Employer Annual Contribution Account, to the extent vested; then (5) QNEC Account; then (6) QMAC Account. Within each subaccount, investments will be liquidated on a pro rata basis from amongst the Investment Options in which such subaccounts are invested, unless you provide contrary written directions, in accordance with procedures established by the Named Fiduciary. Roth Contribution Accounts will serve as collateral for a Loan, but cannot be used to offset the funding of the Loan. During your active employment with the Employer, loans must be repaid in equal installments by means of automatic payroll deductions. You can also repay any loan in advance. Loan repayments will be credited to the investment funds you have selected. If you have an outstanding loan balance when a distribution of your benefits under this Plan is made, the distribution will be offset by the amount of the outstanding loan plus interest, and the amount of the offset will be treated as a taxable distribution unless you roll over the unpaid loan balance to an Eligible Retirement Plan. If you default on repayment of a Plan loan, the entire principal balance plus interest and costs will become immediately due and you will be deemed to have received a taxable distribution from the Plan in this amount. You will be in default on your loan repayments if any payment is not made by the end of the calendar quarter following the quarter in which it was due. However, the Named Fiduciary will not foreclose on your defaulted loan (but will still report the default to IRS as taxable to 31
you) until you have an event (such as a severance from employment) which would allow a distribution to be made to you. In the meantime, interest continues to accrue on the unpaid balance for purposes of determining your eligibility for future loans. If you are on an Employer-approved unpaid leave of absence or a Military Leave, repayment of your loan may be suspended for up to 12 months in certain circumstances, upon your request. For this purpose, if you are on leave and receiving Workers Compensation you will be considered to be on a paid leave of absence. If you are on a military leave of absence for service in the uniformed services, you may request that the Named Fiduciary suspend your loan repayments for the duration of your service in the military. You are responsible for ensuring your loan repayments resume immediately upon your return from leave. Failure to resume payments will render you ineligible for the loan payment suspension, and may cause your loan to go into default and be deemed distributed. THE TRUST FUND All contributions to the Plan are paid into a trust for the benefit of you and other Plan participants and beneficiaries. Currently, the Plan's Trustee is Putnam Fiduciary Trust Company. The Trustee holds these amounts in trust and invests the contributions according to the terms of the Plan and your investment directions. A copy of the Plan and the trust agreement with the Trustee is on file with the Named Fiduciary. You may examine these documents if you wish by contacting the Named Fiduciary. INSURANCE Benefits under the Plan are not insured by the Pension Benefit Guaranty Corporation ( PBGC ) if the Plan terminates, since it is not one of the types of plans which are eligible for such coverage. TOP HEAVY PROVISIONS There are special rules that apply in any Plan Year that the Plan is determined to be a Top Heavy Plan. A Top Heavy Plan is one where the sum of the Account balances of the key employees is greater than 60% of the sum of the Account balances of all employees. A key employee may include shareholders and officers of the Employer and certain affiliates of the Employer. For Plan Years during which this Plan is a Top Heavy Plan, the Employer may be required to provide you with a minimum contribution for the Plan Year and an accelerated vesting schedule. 32
RIGHT TO AMEND OR TERMINATE THE PLAN As Plan Sponsor, DENSO International America, Inc. intends to continue the Plan indefinitely, however, DENSO International America, Inc. specifically reserves the right to amend, freeze, or terminate the Plan at any time for any reason without prior notice. Further, each Participating Employer has the right to cease its participation in the Plan at any time. In the event that the Plan is amended, frozen, terminated, or the Employer ceases participation in the Plan, the nonforfeitable percentage of your Account may not be reduced. The money in the trust must be used to supply the benefits earned under the Plan or to defray the costs of administering the Plan and may not be used by the Employer for any other purpose. Plan assets may be returned to the Employer in the event of mistakes of fact, nondeductibility of contributions or under other limited circumstances. Plan Administration OTHER THINGS YOU SHOULD KNOW The Named Fiduciary has full discretion and authority to administer the Plan. The Named Fiduciary has full discretion and authority to: 1 administer and interpret the Plan; determine eligibility for and the amount of benefits; determine the status and rights of participants, beneficiaries and other persons; make rulings and factual determinations; make regulations and prescribe procedures; gather needed information; prescribe forms; exercise all power and authority contemplated by ERISA and the Internal Revenue Code with respect to the Plan; employ or appoint persons to help or advise in any administrative functions, such as claims administrators, trustees or other service providers; and generally perform necessary functions to operate, manage and administer the Plan. The Plan has other fiduciaries and service providers. The Named Fiduciary may allocate fiduciary responsibility among the Plan s fiduciaries and may delegate 1 This includes the discretionary authority and control contemplated by the United States Supreme Court s decision in Firestone Tire & Rubber Co. v. Bruch. 33
responsibilities to others. The Named Fiduciary has delegated discretion and authority for certain day-to-day operations of the Plan to the Plan Administrator. Each fiduciary is solely responsible for its own acts or omissions. Except to the extent required by ERISA, no fiduciary has the duty to question whether any other fiduciary is fulfilling all of the responsibilities imposed upon the other fiduciary by law. No fiduciary is liable for a breach of fiduciary duty committed before it became, or after it stopped being, a fiduciary. Benefits May Not Be Assigned Because this Plan is designed to provide you benefits upon retirement, your benefits under the Plan may not be assigned, transferred or otherwise encumbered by you or anyone else except as specifically provided in the Plan, for example, as security for a Plan loan to you. However, under certain circumstances such as divorce, your benefit may be subject to a court order called a "Qualified Domestic Relations Order" transferring all or part of your benefit to the benefit of an "alternate payee" such as former spouse or child. If the Plan Administrator receives an order purporting to be a Qualified Domestic Relations Order, it will be forwarded to a qualified third party to determine if it complies with the laws governing such orders. You may be required to pay a fee for this review. During this review process your ability to receive a distribution, loan or withdrawal of amounts from your Account may be restricted. The Named Fiduciary has prepared "Qualified Domestic Relations Order Policies and Procedures" discussing the general administration of Qualified Domestic Relations Orders and detailing the fees associated with this review process. For a copy of this document, please contact your Human Resources representative. Claims for Plan Benefits CLAIMS AND CLAIMS REVIEW PROCEDURES Plan participants and their beneficiaries generally must request that Plan benefits be paid to them. A request for Plan benefits must be made in writing to the Plan Administrator or Putnam Investments. Your request for Plan benefits will be considered a claim for Plan benefits, and will be subject to a full and fair review. If your claim is wholly or partially denied, the Plan Administrator will furnish you with a written notice of this denial. The written notice must provide the following information in an understandable manner: The specific reason or reasons for the denial; 34
Reference(s) to the specific Plan provision(s) on which the denial is based; A description of any additional information or material necessary to correct your claim and an explanation of why the additional material or information is necessary; and A description of the Plan s review procedures and the time limits applicable to the review procedures, and notification of your right to bring a civil legal action under Section 502(a) of ERISA if the claim is denied on review. and, if applicable in the case of a disability benefit: The specific rule, guideline, protocol or similar criterion (if any) that was relied on in making the benefit determination, or a statement that the rule, guideline, protocol or other similar criterion was relied on and will be provided to the claimant free of charge upon request; If the denial is based on a medical necessity or an experimental treatment exclusion or limit, either an explanation of the scientific or clinical judgment for the determination that applies the terms of the Plan to the claimant s medical circumstances or a statement that the explanation will be provided free of charge on request; The identity of the medical or vocational experts whose advice was obtained by the Plan Administrator in the process of deciding the claim, regardless of whether the advice was relied upon. This written notice must be provided to you within a reasonable period of time (generally not more than 90 days, or 45 days in the case of a disability benefit) after the Plan Administrator receives your claim. However, the Plan Administrator may require an additional period of time to make a decision on your claim because of matters beyond the Plan Administrator s control. If the Plan Administrator requires additional time, which cannot be longer than 90 days (30 days in the case of a disability benefit), the Plan Administrator will notify you in writing, before the end of the initial 90-day period (or 45-day period in the case of a disability benefit), of the circumstances requiring the extension of time and the date by which the Plan Administrator expects to make a decision on your claim. If your claim is denied and you wish to appeal the denial, you must follow the Claims Review Procedure. 35
Claims Review Procedure If the Plan Administrator notifies you that your claim for Plan benefits is denied, and you wish to appeal the denial, you must notify the Plan Administrator in writing, within 60 days (45 days in the case of a disability benefit) after you receive written notice of the denial, of your request for a review of the denial of your claim by the Named Fiduciary. The Named Fiduciary will give you, or your authorized representative, the opportunity to submit written comments, documents, records, and other information related to your claim for benefits. If you or your authorized representative makes a written request, the Named Fiduciary will provide reasonable access to, and copies of, all documents, records, and other information relevant to your claim, free of charge. The Named Fiduciary s review of the denial of your claim will take into account all comments, documents, records, and other information relating to your claim and submitted by you or your authorized representative, even if the information was not submitted or considered when your claim was initially denied. The Named Fiduciary will notify you in writing or by electronic means of the decision on your claim upon review, and in the event of an adverse determination shall include: The specific reason or reasons for the adverse determination; Specific reference(s) to pertinent Plan provision(s) on which the denial is based; A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant to the claimant's claim for benefits; For disability benefits, if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination and that a copy will be provided free of charge upon request; and A statement of the claimant's right to bring an action under ERISA Section 502(a) and for disability claims, the following statement: You and your Plan may have other voluntary alternative dispute resolution options, such as 36
mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency. This written notice must be provided to you within a reasonable period of time (generally not more than 60 days, or 45 days in the case of a disability benefit) after the Plan Administrator receives your request for review of the denied claim. However, the Named Fiduciary may require an additional period of time to make a decision on the review of your claim denial because of special circumstances, including the need to hold a hearing. If the Named Fiduciary requires additional time, which cannot be longer than 60 days (or 45 days in the case of a disability benefit), the Named Fiduciary will notify you in writing, before the end of the initial 60-day period (or 45-day period), of the special circumstances requiring the extension of time and the date by which the Named Fiduciary expects to make a decision on your claim. A document, record, or other information is considered to be relevant to your claim for Plan benefits if the document, record, or other information: Was relied upon by the Named Fiduciary in making a decision on your claim; Was submitted, considered, or generated in the course of the Named Fiduciary making a decision on your claim, even if the document, record, or other information was not relied upon by the Named Fiduciary in making a decision on your claim; or Demonstrates compliance with administrative processes and safeguards governing the claim decision and appeal process that are designed to ensure and verify that benefit claim decisions are made in accordance with governing Plan documents and that, where appropriate, Plan provisions have been applied consistently with respect to similar situations. ERISA RIGHTS AND OBLIGATIONS As a participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (ERISA). ERISA provides that all Plan participants shall be entitled to: Receive Information About Your Plan and Benefits (1) Examine, without charge, at the Plan Administrator's office and at other specified locations such as worksites, all documents governing the Plan, including insurance contracts, if applicable, and a copy of the latest 37
annual report (Form 5500 Series) filed by the Plan Administrator with the United States Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. (2) Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts, if applicable, and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The Plan Administrator may make a reasonable charge for the copies. (3) Receive a summary of the Plan's annual financial report. The Plan Administrator is required by law to furnish each Plan participant with a copy of this summary annual report. (4) Obtain a statement telling you whether you have a right to receive a retirement benefit at Normal Retirement Age and if so, what your benefits would be if you stop working under the Plan now. If you do not have a right to Plan benefits, the statement will tell you how many more years you have to work to get a right to Plan benefits. This statement must be requested in writing and is not required to be given more than once a year. The Plan must provide the statement free of charge. Prudent Action 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 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 the Employer, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a retirement benefit or exercising your rights under ERISA. Enforce Your Rights If your claim for a retirement benefit is denied, in whole or in part, you must receive a written explanation of the reason for the denial and to obtain copies of documents relating to the decision without charge. You have the right to have the Plan Administrator review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In 38
such a case, the court may require the Plan Administrator to pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the Plan s decision or lack thereof concerning the qualified status of a domestic relations order, you may file suit in Federal court. If it should happen that Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the United States Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. Assistance with Your Questions If you have any questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, United States Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, United States Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C., 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration. DENSO INTERNATIONAL AMERICA, INC. January 1, 2013 395438_10 39
APPENDIX A ADMINISTRATIVE RULE REGARDING MATCHING CONTRIBUTIONS For ease of administration, the Plan calculates a Participant's Matching Contributions on a payroll period basis. At year end or shortly thereafter, the Plan calculates a Participant's total Matching Contributions for the Plan Year using the worksheet shown below, and makes any necessary adjustment. The worksheet should be adjusted annually to reflect future changes in the maximum annual Compensation (line 1) and the Plan's matching formula. WORKSHEET FOR DETERMINING MATCHING CONTRIBUTIONS 1. Compensation for Plan Year (not to exceed $255,000 for the 2013 Plan Year, and as adjusted by law thereafter):... 1. 2. Dollar amount of Before-tax and Roth After-tax Contributions for Plan Year:... 2. 3. Percentage of Compensation deferred (line 2 divided by line 1):... 3. 4. Using the Plan's matching formula, determine the actual matchable percentage of Compensation the Participant is entitled to for the Plan Year based on Before-tax and Roth After-tax Contributions to date (see line 3):... 4. 5. Multiply line 1 by line 4 and enter the resulting dollar amount:... 5. 6. Enter the dollar amount of actual Matching Contributions made for the Participant to date for the Plan Year:... 6. 7. Subtract line 6 from line 5 and enter the resulting dollar amount:... 7. IF THE AMOUNT ON LINE 7 IS A POSITIVE NUMBER, THE PARTICIPANT'S MATCHING CONTRIBUTIONS FOR THE PLAN YEAR SHOULD BE INCREASED BY THAT AMOUNT. IF THE AMOUNT ON LINE 7 IS A NEGATIVE NUMBER GREATER THAN $100, THE PARTICIPANT'S MATCHING CONTRIBUTIONS FOR THE PLAN YEAR SHOULD BE DECREASED BY THAT AMOUNT. FOR EXAMPLE, A NEGATIVE AMOUNT OF $135 WOULD RESULT IN A DECREASE, BUT A NEGATIVE AMOUNT OF $85 WOULD NOT RESULT IN A DECREASE UNLESS IT EXCEEDS A STATUTORY CONTRIBUTION LIMIT. A-1