Empower 401K Summary Plan Description

SURF CITY AUTO GROUP 401(K) PLAN
SUMMARY PLAN DESCRIPTION

INTRODUCTION

Surf City Auto Group, Inc. dba Huntington Chrysler Dodge Jeep Ram (the "Company") established the Surf City Auto Group 401(K) Plan (the "Plan") effective January 1, 1997. This Summary Plan Description describes the Plan as restated effective January 1, 2017.

This revised Summary Plan Description supersedes all previous Summary Plan Descriptions. Although the purpose of this document is to summarize the more significant provisions of the Plan, the Plan document will prevail in the event of any inconsistency. In addition, the terms of the Plan cannot be modified by written or oral statements made to you by the Plan Administrator or other personnel.

The following special effective dates apply to some features of the Plan: Roth Deferrals effective January 1, 2017.

ELIGIBILITY FOR PARTICIPATION
Eligible Employee
You are an "Eligible Employee" if you are employed by Surf City Auto Group, Inc. dba Huntington Chrysler Dodge Jeep Ram or any affiliate who has adopted the Plan. However, you are not an "Eligible Employee" if you are a member of any of the following classes of employees:

For purposes of Elective Deferral Contributions, Matching Contributions and Profit Sharing Contributions:
  • Any employee who is included in a unit of employees covered by a collective bargaining agreement, if retirement benefits were the subject of good faith bargaining, and if the collective bargaining agreement does not provide for participation in this Plan.
  • Any leased employee. 
  • Any employee who is a non-resident alien who received no earned income which constitutes income from services performed within the United States.
Elective Deferral Contributions
You will become eligible to make Elective Deferral Contributions on the a) first day of the first month of the Plan Year or b) first day of the seventh month of the Plan Year, coincident with or next following the date you attain age 18 and you complete 1 Hours of Service in a 6-month period, provided that you are an Eligible Employee at the end of that period. If the service requirement is not met in the first consecutive period of months, you will also be eligible for the Plan if you complete one Year of Eligibility Service, provided that you are an Eligible Employee at the end of that period.

Matching Contributions and Profit Sharing Contributions

You will become a Participant eligible to begin receiving Matching Contributions and Profit Sharing Contributions on the a) first day of the first month of the Plan Year or b) first day of the seventh month of the Plan Year coincident with or next following the date you attain age 18 and you complete one (1) Year of Eligibility Service, provided that you are an Eligible Employee on that date.

Computing Service
With respect to eligibility to make Elective Deferral Contributions, Matching Contributions and Profit Sharing Contributions "Year of Eligibility Service" means an Eligibility Computation Period during which you complete at least 1,000 hours of service.

"Eligibility Computation Period" means a 12-consecutive month period beginning with your first day of employment. Any succeeding Eligibility Computation Period will then switch to the Plan Year, beginning with the Plan Year that includes your first anniversary of employment. You will generally earn an hour of service for each hour you are paid for the performance of duties for the Company (however, numerous exceptions and special rules apply).

All eligibility service with the Company is taken into account.

Years of service will be treated as service with the Company for eligibility purposes for the following Company(s) subject to any listed limitations: Culver Chrysler-Plymouth, Inc. dba Huntington Beach Chrysler-Plymouth.

If you make or receive eligible contributions, you will be a "Participant" in the Plan.

CONTRIBUTIONS TO THE PLAN
Account
"Account" means all of the contributions, of whatever type, made to the Plan for a Participant, including the earnings and losses on those contributions.
Elective Deferral Contributions.

You may elect to reduce your Compensation (defined below) and make a contribution to the Plan on a pre-tax basis. These pre-tax contributions are known as Elective Deferral Contributions. You may elect to defer up to 100% of your Compensation on a pre-tax basis. Federal law also limits the amount you may elect to defer under this Plan and any other retirement plan permitting Elective Deferral Contributions during any calendar year ($18,000 in 2017). However, if you are age 50 or over, you may defer an additional amount, called a "Catch-up Contribution", of up to $6,000 (in 2017). The Internal Revenue Code may further restrict Elective Deferral Contribution elections by "highly compensated" Participants.

You may elect to start, increase, reduce or totally suspend your elections to contribute to the Plan effective as of each pay period.

The Plan Administrator may establish rules regarding the manner in which your elections are made. The rules may also require that certain advance notice be given of any election. Your election regarding Elective Deferral Contributions is only effective for Compensation you will receive in the future. The Plan Administrator may also reduce or totally suspend your election if the Plan Administrator determines that your election may cause the Plan to fail to satisfy any of the requirements of the Internal Revenue Code.

Automatic Contributions
If, after receiving a notice from the Plan Administrator, you do not make an Elective Deferral Contribution election, you will be deemed to have made an Elective Deferral Contribution election in the amount of 3% of your Compensation. The amount of such automatic enrollment will increase in the following manner: increase 1% annually to a maximum of 6%.

NOTE: The automatic elections specified above will not apply if you already had an Elective Deferral Contribution election in effect on the effective date of the automatic enrollment feature that is equal to or exceeds the automatic contribution amount above.
The automatic elections specified above will be designated as pre-tax Elective Deferral Contributions.

Roth Contributions
The Plan allows Elective Deferral Contributions to be made as Roth Contributions. Roth Contributions are Elective Deferral Contributions that are made in the same manner as your pre-tax Elective Deferral Contributions except that Roth Contributions are made to the Plan on an after-tax basis. If certain requirements are met, a "qualified distribution" from your Roth Contribution Account in the Plan will not be taxed.

You must designate how much you would like to contribute on a pre-tax basis (normal Elective Deferral Contribution) and how much you would like to contribute as an after-tax Roth Contribution. You are not required to make any Roth Contributions. You may continue to designate all of your Elective Deferral Contribution elections as normal pre-tax contributions.

The sum of your Roth Contributions and regular Elective Deferral Contributions may not exceed the annual limit on regular Elective Deferral Contributions mentioned above.

As was mentioned above, a "qualified distribution" of your Roth Contributions (and earnings) is not taxable. A "qualified distribution" must be made more than five years after the first Roth Contribution is made and must meet at least one of the following requirements:

(i) the distribution must be made after you attain age 59-1/2;
(ii) the distribution must be made to your beneficiary after your death; or
(iii) the distribution must be made on account of your disability.

Please note that Roth Contributions are not suitable for everyone. Please consult with your tax advisor before making any Roth Contributions to the Plan.

Amount of Matching Contributions
The Company may, in its sole discretion, make a Matching Contribution on your behalf if you make a "Matched Employee Contribution" during the Plan Year. A "Matched Employee Contribution" is any Elective Deferral Contribution or Catch-up Contribution that you may make.

If you make a "Matched Employee Contribution" the Company may contribute to your Matching Contribution Account in an amount and allocation formula as determined by the Company in its sole discretion.

The total amount of Matching Contributions allocated to a Participant in any Plan Year will not exceed 6% of Compensation.

The Internal Revenue Code may also further restrict Matching Contributions for highly compensated employees.

Profit Sharing Contributions
The Company may, in its sole discretion, make a Profit Sharing Contribution to the Plan on your behalf. You will be eligible to receive an allocation if you have completed at least 1,000 hours of service during the Plan Year.

Please note that if you are an Eligible Employee and terminate employment with the Company due to death, disability or attainment of Normal Retirement Date you will be eligible to receive a Profit Sharing Contribution regardless of whether you meet any service requirement and/or last day requirement described in this Section.

Profit Sharing Contributions will be allocated to the Profit Sharing Contribution Accounts of each Participant eligible to share in such allocations after the end of the Plan Year. Such contributions will be allocated to the Profit Sharing Contribution Account of each Participant eligible in pro rata shares.

Qualified Non-Elective Contributions
In addition to the contributions described above, the Company may make additional Qualified Non-Elective Contributions for the benefit of such Participants determined at the discretion of the Company.

Rollovers
The Plan may accept a Rollover Contribution made on behalf of any Eligible Employee, regardless of whether such employee has met the age and service requirements of the Plan. An Eligible Employee who has not yet met any of the eligibility requirements of the Plan will be deemed a Participant only with respect to amounts, if any, in his Rollover Contribution Account. In general, any eligible rollover distribution will be accepted by the Plan; however, the Plan Administrator may establish procedures that regulate the method by which Rollover Contributions will be accepted.

Military Service
If you serve in the United States Armed Forces and must miss work as a result of such service, you may be eligible to receive contributions, benefits and service credit with respect to any qualified military service. In addition, your survivors may be eligible to receive benefits or service credit if you die while performing qualified military service.

Limits on Contributions
The amount that may be contributed to the Plan on your behalf in any year is limited to a fixed dollar amount ($54,000 in 2017). In addition, contributions cannot exceed 100% of your total Compensation.

Compensation
"Compensation" means wages that are shown as taxable wages on your IRS Form W-2. For any self-employed individual, Compensation will mean earned income. For purposes of Elective Deferral Contributions, Matching Contributions and Profit Sharing Contributions, Compensation will also include any amount you elect to defer on a tax-preferred basis to any Company benefit plan. For purposes of Matching Contributions and Profit Sharing Contributions, Compensation will include only that compensation which is actually paid to you by the Company during that part of the Plan Year that you are eligible to participate in the Plan. Compensation will exclude exclude bonuses from compensation.

No more than $270,000 (in 2017) of Compensation may be taken into account in determining your benefits under the Plan.

For purposes of Elective Deferral Contributions, Matching Contributions and Profit Sharing Contributions, Compensation will include payments of unused accrued bona fide sick, vacation, or certain other leave that are paid to you after you terminate employment.

VESTING
Elective Deferral Account, Rollover Contribution Account and Qualified Non-Elective Contribution Account
You are always fully (100%) vested in your Elective Deferral Account, Rollover Contribution Account and Qualified Non-Elective Contribution Account.

Matching Contribution Account and Profit Sharing Contribution Account
Your interest in your Matching Contribution Account and Profit Sharing Contribution Account will vest based on your Years of Vesting Service (defined below) in accordance with the following schedule:

Years of Vesting
Less than Two Years
Two Years but less than Three Years
Three Years but less than Four Years
Four Years but less than Five Years
Five Years but less than Six Years
Six or More Years
Vesting Percentage
0%
20%
40%
60%
80%
100%

However, if the Company must make a Matching Contribution to your Account in order to satisfy certain nondiscrimination tests required by the Internal Revenue Code, you will be 100% vested in those Matching Contributions.

Special Vesting Rules
You will become fully (100%) vested upon your attainment of Normal Retirement Age while an employee, your death while an employee or becoming disabled while an employee.

Forfeitures
If You Receive a Distribution. If your employment with the Company terminates and you receive a distribution of the entire vested portion of your Account, you will forfeit the nonvested portion of your Account. If the value of your vested Account balance is zero, you will be deemed to have received a distribution of your Account.

If You Do Not Receive a Distribution. If your employment with the Company terminates and you do not receive a complete distribution of the vested portion of your Account, you will forfeit the nonvested portion of your Account after the date you incur five consecutive One-Year Breaks in Service.

Reemployment. If you receive or are treated as receiving a distribution and you resume employment, the amounts you have forfeited (if any) will be restored to your Account if you repay the full amount of the previous distribution before the earlier of five (5) years after the first date on which you are subsequently reemployed, or the date you incur five (5) consecutive One-Year Breaks in Service following the date of the distribution.

Year of Vesting Service
"Year of Vesting Service" means a vesting computation period during which you complete 1,000 hours of service during the Plan Year.

Service with Culver Chrysler-Plymouth, Inc. dba Huntington Beach Chrysler-Plymouth will be treated as service with the Company for vesting purposes.

The vesting computation period is the Plan Year.

DISTRIBUTIONS

Commencement of Distributions
Termination of Employment. You are entitled to receive a distribution from your Account after you terminate employment. This includes termination due to Disability. The distribution will start at the time specified in the section titled "Timing and Form of Payment" below.

Late Retirement. If you continue working for the Company after your Normal Retirement Age, your participation under the Plan will continue, and your benefits will begin following the date you terminate employment. You may elect to have the Plan Administrator begin the distribution of your benefit at any time after reaching your Normal Retirement Date (even if you are still working) by providing the Plan Administrator with a written election that you want your benefits to begin.

Death. If you die, your beneficiary will become entitled to receive your vested Account balance. The distribution will start at the time specified in the section titled "Timing and Form of Payment" below.

Normal Retirement Age and Normal Retirement Date
"Normal Retirement Age" means the later of: (i) the date you reach age 65, and (ii) the 5 anniversary of your participation in the Plan.
Your Normal Retirement Date is First day of the Plan Year in which the participant completes the 5th anniversary of participation.

Timing and Form of Payment
Distribution for Reasons Other Than Death. If you become entitled to receive your benefit for any reason other than death your Account will be distributed in a lump sum payment. This is your normal form of payment. In addition to the normal form of payment, distributions from the Plan after termination of employment (for reasons other than death) may be made in a lump sum payment or substantially equal annual or more frequent installments over a period not to exceed the joint life expectancy of you or your Beneficiary. Payment of your vested Account may start as soon as administratively feasible with a final payment made consisting of any allocations occurring after your termination of employment. Your Account is payable in cash. If you do not choose a form of payment, the payment will be made in the form of a lump sum distribution.

Distribution on Account of Death. If you die before distribution of your Account begins, distribution of your entire Account must be completed by December 31 of the calendar year containing the fifth anniversary of your death.

If the Qualified Preretirement Survivor Annuity has been waived or is not required, as specified below, your beneficiary will be entitled to a distribution in any form that is available to you prior to your death.

If you die after distribution of your Account has begun, the remaining portion of your Account will continue to be distributed under the method of distribution being used prior to your death. If your Account was not being distributed in the form of an annuity at the time of your death, the remaining balance must be distributed by December 31 of the calendar year containing the fifth anniversary of your death.

Cash Out
After your termination of employment with the Company, if the vested amount of your Account (excluding rollovers) does not exceed $1,000 (or such lesser amount as determined by the Plan Administrator), your vested Account balance will be distributed directly to you in cash. If the vested amount of your Account balance is more than $1,000 (or such lesser amount as determined by the Plan Administrator) but less than $5,000, your vested Account will be distributed from the Plan. You may either elect to receive this distribution in cash or to roll over the distribution to an individual retirement account (IRA) or the qualified plan of your new employer (but only if your new employer's plan allows such rollovers). However, if you do not timely return your election forms, the Plan Administrator will transfer your vested Account to an IRA established in your name; unless the distribution occurs after the later of your Normal Retirement Age or age 62. This mandatory distribution will be invested in an IRA designed to preserve principal and provide a reasonable rate of return and liquidity. Fees will be paid from participant rollover accounts. For further information concerning the Plan's automatic rollover provisions, the IRA provider and the fees and expenses attendant to the individual retirement plan, please refer to the Notice at the end of this Summary Plan Description.

If the vested amount of your Account exceeds $5,000, you must consent to any distribution of your Account. However, the Plan Administrator will distribute your vested Account balance in a lump sum without your consent after the later of your attainment of Normal Retirement Age or age 62.

Beneficiary
You have the right to designate, in a written form acceptable to the Plan Administrator, one or more primary and one or more secondary beneficiaries to receive any benefit becoming payable upon your death. Your spouse must be your sole beneficiary unless he or she consents to the designation of another beneficiary. You may change your beneficiaries at any time and from time to time by filing written notice of such change with the Plan Administrator.

If you fail to designate a beneficiary, or in the event that all designated primary and secondary beneficiaries die before you, the death benefit will be payable to your spouse, or if there is no spouse, to your children in equal shares, or if there are no children to your estate.

IN-SERVICE DISTRIBUTIONS AND LOANS
In-service Distributions upon Normal Retirement Date
In-service distributions may be made upon attainment of Normal Retirement Date. These distributions can be made from the following Accounts: All Accounts.

Hardship Withdrawals
General Rule. You may receive a distribution on account of hardship from the vested portion of the following Accounts:

Elective Deferral Account, except certain earnings of your Elective Deferral Account may not be eligible for hardship withdrawal.

Your Roth Contributions may be withdrawn on account of financial hardship in the same manner as your regular Elective Deferral Contributions. Please note however, that the income on the Roth Contributions may be taxable (and subject to penalties for early withdrawal) if the withdrawal is not a "qualified distribution."

Rollover Contribution Account.

Immediate and Heavy Financial Need. You may receive a hardship distribution only if the Plan Administrator finds that you have an immediate and heavy financial need where you lack other available resources. The following are the only financial needs considered immediate and heavy:

(1) Expenses incurred or necessary for medical care, described in Code section 213(d), for you or your spouse, children, or dependents;
(2) The purchase (excluding mortgage payments) of a principal residence for the Participant;
(3) Payment of tuition and related educational fees for the next 12 months of post-secondary education for you or your spouse, children or dependents;
(4) The need to prevent the eviction of you from your principal residence (or a foreclosure on the mortgage on your principal residence);
(5) Payments for burial or funeral expenses for your deceased parent, spouse, children or dependents; or
(6) Expenses for the repair of damage to your principal residence that would qualify for the casualty deduction.

Hardship distributions may be made for certain expenses of your primary beneficiary in addition to your dependents. These expenses include those for medical, tuition, and funeral expenses. A person is your "primary beneficiary" if that person is named as a beneficiary under the Plan and has an unconditional right to all or a portion of your Account Balance upon your death.

Amount Necessary to Satisfy Need. A distribution will be considered as necessary to satisfy your immediate and heavy financial need only if:

(1) You have obtained all distributions, other than hardship distributions, and all nontaxable loans under all plans maintained by the Company;
(2) Your Elective Deferral Contributions, if applicable, will be suspended for 6 months after the receipt of the hardship distribution; and
(3) The distribution is not in excess of the amount of an immediate and heavy financial need (including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution).

Attainment of Age 59-1/2
You may receive a distribution after you reach age 59-1/2 from the vested portion of all of your Accounts. Your Roth Contributions may be withdrawn on account of attainment of age 59-1/2 in the same manner as your regular Elective Deferral Contributions. Please note however, that the income on the Roth Contributions may be taxable (and subject to penalties for early withdrawal) if the withdrawal is not a "qualified distribution."

Withdrawals at Any Time
You may receive a distribution from your Rollover Contribution Account at any time.

Reservist Distributions
If you are a military reservist called to active duty for a period in excess of 179 days or for an indefinite period, you may receive a distribution from the Plan while still employed from amounts attributable to Elective Deferral Contribution elections and Catch-up Contributions. You must take the distribution during the period beginning on the date of your call-up and ending at the close of the active duty period. In addition, you must have been called to active duty after September 11, 2001.

Disability Distributions
If you become Disabled (defined below) while still employed, you may receive a distribution from your Accounts. However, the following Accounts may not be distributed unless a severe disability has occurred: Elective Deferral Contribution Account and Qualified Non-Elective Contribution Account. A severe disability is as follows: the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The permanence and degree of such impairment shall be supported by medical evidence.

Rules Regarding In-service Distributions
A participant may not receive an In-Service Distribution in an amount which is less than $1,000. The minimum amount does not apply to Disability, Normal Retirement Age or Qualified Reservist Distributions.

The Plan Administrator may establish uniform procedures that include, but are not limited to, prescribing limitations on the frequency and minimum amount of withdrawals. All distributions will be made in the form of a single sum as soon as practicable following the valuation date as of which such withdrawal is made. Such distributions will be paid in cash or in kind. Only Employees are eligible to receive in-service distributions.

Loans

If you are an active employee you may apply for a loan from the Plan. Loans will only be made to persons who the Plan Administrator determines have the ability to repay the loan. The maximum amount of your loan is the lesser of:
(1) $50,000 minus the highest outstanding balance of loans in the past 12 months, or
(2) one-half the present value of your vested Account balance.

Loans must be repaid over a period not extending beyond five years from the date of the loan.

You must repay a loan in accordance with the repayment schedule. Prepayments are not permitted. You may not refinance your loan. The loan will become payable in full on your termination of employment. The maximum number of loans outstanding at any one time is 1. The minimum loan amount is $1,000. Payments will be made through payroll deduction from each regular paycheck.

Loan fees may be charged against the Account of the Participant to whom the loan is granted and the Plan Administrator may adopt any administrative rules or procedures that it deems necessary or appropriate with respect to the granting and administering of loans. Please contact the Plan Administrator if you would like more information regarding taking a loan from the Plan.

INVESTMENTS
Participant Self Direction
In General. The Plan Administrator allows you to direct the investment of all of your Accounts. The Plan Administrator may establish uniform guidelines and procedures relating to Participant self-direction.

Investment Elections. You may direct the percentage of your Accounts to be invested in one or more of the available investment funds. Your elections will be subject to such rules and limitations as the Plan Administrator may prescribe. After your death, your beneficiary may make investment elections as if the beneficiary were the Participant. However, the Plan Administrator may restrict investment transfers to the extent required to comply with applicable law.

Investment Decisions. The Plan is intended to constitute a plan described in section 404(c) of ERISA. This means that Plan fiduciaries may be relieved of liability for any of your losses that are the result of your investment elections.

Qualifying Employer Securities
The Trustee may not invest the assets of the trust fund in "qualifying employer securities" or "qualifying employer real property".

Voting Rights
You may not direct the Trustee as to the exercise of voting rights with respect to any Trust Fund Investment.

Valuation Dates
Accounts are valued each business day.

SPECIAL TOP-HEAVY RULES
Minimum Allocations
If the Plan is Top-Heavy, the Company will generally allocate a minimum of 3% of your Compensation to the Plan if you are a Participant who is (i) employed by the Company on the last day of the Plan Year and (ii) not a key employee.

Note that if you are covered by a collective bargaining agreement you will not share in Top-Heavy minimum allocations, provided retirement benefits were the subject of good faith bargaining.

The minimum benefits paid under this section will vest in the same manner as any Profit Sharing Contributions.

CLAIM PROCEDURES
Application for Benefits. You or any other person entitled to benefits from the Plan (a "Claimant") may apply for such benefits by completing and filing a claim with the Plan Administrator. Any such claim must be in writing and must include all information and evidence that the Plan Administrator deems necessary to properly evaluate the merit of and to make any necessary determinations on a claim for benefits. The Plan Administrator may request any additional information necessary to evaluate the claim.

Timing of Notice of Denied Claim. The Plan Administrator will notify the Claimant of any adverse benefit determination within a reasonable period of time, but not later than 90 days (45 days if the claim relates to a disability determination) after receipt of the claim. This period may be extended one time by the Plan for up to 90 days (30 additional days if the claim relates to a disability determination), provided that the Plan Administrator both determines that such an extension is necessary due to matters beyond the control of the Plan and notifies the Claimant, prior to the expiration of the initial review period, of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision. If the claim relates to a disability determination, the period for making the determination may be extended for up to an additional 30 days if the Plan Administrator notifies the Claimant prior to the expiration of the first 30-day extension period.

Content of Notice of Denied Claim. If a claim is wholly or partially denied, the Plan Administrator will provide the Claimant with a written notice identifying (1) the reason or reasons for such denial, (2) the pertinent Plan provisions on which the denial is based, (3) any material or information needed to grant the claim and an explanation of why the additional information is necessary, and (4) an explanation of the steps that the Claimant must take if he wishes to appeal the denial including a statement that the Claimant may bring a civil action under ERISA.

Appeals of Denied Claim. If a Claimant wishes to appeal the denial of a claim, he must file a written appeal with the Plan Administrator on or before the 60th day (180th day if the claim relates to a disability determination) after he receives the Plan Administrator's written notice that the claim has been wholly or partially denied. The written appeal must identify both the grounds and specific Plan provisions upon which the appeal is based. The Claimant will be provided, upon request and free of charge, documents and other information relevant to his claim. A written appeal may also include any comments, statements or documents that the Claimant may desire to provide. The Plan Administrator will consider the merits of the Claimant's written presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Plan Administrator may deem relevant. The Claimant will lose the right to appeal if the appeal is not timely made. The Plan Administrator will ordinarily rule on an appeal within 60 days (45 days if the claim relates to a disability determination). However, if special circumstances require an extension and the Plan Administrator furnishes the Claimant with a written extension notice during the initial period, the Plan Administrator may take up to 120 days (90 days if the claim relates to a disability determination) to rule on an appeal.

Denial of Appeal. If an appeal is wholly or partially denied, the Plan Administrator will provide the Claimant with a notice identifying (1) the reason or reasons for such denial, (2) the pertinent Plan provisions on which the denial is based, (3) 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, and (4) a statement describing the Claimant's right to bring an action under section 502(a) of ERISA. The determination rendered by the Plan Administrator will be binding upon all parties.

Determinations of Disability. If the claim relates to a disability determination, determinations of the Plan Administrator will include the information required under applicable United States Department of Labor regulations.

YOUR RIGHTS UNDER ERISA
As a participant, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). This federal law provides that you have the right to:
Examine, without charge, at the Plan Administrator's office and at other specified locations, such as worksites and union halls, all documents governing the Plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description. The Plan Administrator may make a reasonable charge for the copies.

Receive a summary of the Plan's annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.

Obtain, once a year, a statement from the Plan Administrator regarding your Accrued Benefit under the Plan and the nonforfeitable (vested) portion of your Accrued Benefit, if any. This statement must be requested in writing and is not required to be given more than once every 12 months. The Plan must provide the statement free of charge.

In addition, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer, your union, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining your benefits or exercising your rights under ERISA.

If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. 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 such a case, the court may require the Plan Administrator to provide the materials and 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 U.S. 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.

If you have any questions about the 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, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. 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.

MISCELLANEOUS
Domestic Relations Orders
Under certain circumstances, a court may issue a domestic relations order assigning a portion of your benefits under the Plan to a spouse, former spouse, child or other dependent. The Plan Administrator will determine whether the order is a qualified domestic relations order ("QDRO"). If the Plan Administrator determines that the order is a QDRO, it will implement the terms of the QDRO and divide your Account accordingly. You may obtain, without charge, a copy of the Plan's QDRO procedures from the Plan Administrator.

Disability
Under this Plan, you are disabled if you have been determined disabled by the Social Security Administration and you are eligible to receive disability benefits under the Social Security Act.

Assignment and Alienation of Benefits
Except as provided below, your Account is held in trust and cannot be assigned and, to the extent permitted by law, is not subject to any form of attachment, garnishment, sequestration or other actions of collection. You may not alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments which you may expect to receive, contingently or otherwise, under the Plan, except that you may designate a beneficiary.

However, you may lose all or part of your balance:
• pursuant to the terms of a QDRO;
• to comply with any federal tax levy; or
• to comply with the provisions and conditions of a judgment, order, decree or settlement agreement between you and the Secretary of Labor or the Pension Benefit Guaranty Corporation relating to your violation (or alleged violation) of ERISA fiduciary responsibilities.

Amendment and Termination
Although the Company intends to maintain the Plan indefinitely, the Company may amend or terminate the Plan at any time in its sole discretion. If any of these actions is taken, you will be notified. However, no such action may permit any part of Plan assets to be used for any purpose other than the exclusive benefit of participants and beneficiaries or cause any reduction in your vested Account balance as of the date of the amendment or termination. If the Plan is terminated, all amounts credited to your Account will become 100% vested.

Fees
Your Account may be charged for some or all of the costs and expenses of operating the Plan. Such expenses include, but are not limited to, investment expenses and costs to process loans, Plan distributions and QDROs. For specific information regarding the fees that are charged by the Plan, please contact the Plan Administrator.

Insurance
The Plan is not insured by the Pension Benefit Guaranty Corporation (PBGC) because it is not a defined benefit pension plan.

Administrator Discretion
The Plan Administrator has the authority to make factual determinations, to construe and interpret the provisions of the Plan, to correct defects and resolve ambiguities in the Plan and to supply omissions to the Plan. Any construction, interpretation or application of the Plan by the Plan Administrator is final, conclusive and binding.

Plan Not a Contract of Employment
The Plan does not constitute, and is not to be deemed to constitute, an employment contract between the Company and any employee or an inducement or condition of employment of any employee. Nothing in the Plan is to be deemed to give any employee the right to be retained in the Company's service or to interfere with the Company's right to discharge any employee at any time.

Waiver
Any failure by the Plan or the Plan Administrator to insist upon compliance with any of the Plan's provisions at any time or under any set of circumstances does not operate to waive or modify the provision or in any other manner render it unenforceable as to any other time or as to any other occurrence, whether the circumstances are the same or different. No waiver of any term or condition of the Plan is valid or of any force or effect unless it is expressed in writing and signed by a person authorized by the Plan Administrator to grant a waiver.

Errors
Any clerical or similar error by the Plan Administrator cannot give coverage under the Plan to any individual who otherwise does not qualify for coverage under the Plan. An error cannot give a benefit to an individual who is not actually entitled to the benefit.

ADMINISTRATIVE INFORMATION
1. The Plan Sponsor and Plan Administrator is Surf City Auto Group, Inc. dba Huntington Chrysler Dodge Jeep Ram.
Address: 16701 Beach Boulevard, Huntington Beach, CA 92647
Phone number: 714-841-3999
Employer Identification Number: 95-3834819
2. The Plan is a 401(k) profit-sharing plan. The Plan number is 001.
3. The Plan's designated agent for service of legal process is the President of the corporation named in item 1. Any legal papers should be delivered to such person at the address listed in item 1. However, service may also be made upon the Plan Administrator or a Trustee.
4. The Plan's assets are held in a trust created under the terms of the Plan. The Trustees are Pete Shaver and Rosie Casillas. Their principal place of business is the address listed in item 1.
5. The Company's fiscal year and the Plan Year end on December 31.
6. If the Plan is established or maintained by two or more employers, you can obtain a complete list of the employers sponsoring the Plan upon written request to the Plan Administrator (this list is also available for examination by participants and beneficiaries); you may also receive from the Plan Administrator, upon written request, information as to whether a particular employer is a sponsor of the Plan and, if the employer is a plan sponsor, the sponsor's address.

Fees Addendum
Your account may be charged for some or all of the costs and expenses of operating the Plan. Such expenses include the following:
The Plan may charge the account of a terminated Participant (affected participants only) for the expenses of receiving a distribution following termination of employment as follows: $150.00 distribution processing fee plus any applicable fee charged by the Plan's record keeper.
The Plan may charge the account of an active Participant (affected participants only) for the expenses of receiving a hardship withdrawal: $150.00 processing fee plus any applicable fee charged by the Plan's record keeper.
The Plan may pay the administrative cost for determining required minimum distributions in the following manner: $150.00.
The Plan may charge the accounts of active Participants (affected participants only) for the expenses of receiving in-service withdrawals other than hardship withdrawals in the following manner: $150.00 processing fee plus any applicable fee charged by the Plan's record keeper.
The Plan may charge the accounts of affected Participants for the expenses of processing a domestic relations order, in the following manner: time and expense. However, this will be determined at the Plan Sponsor's discretion; either the Plan Sponsor may pay the expenses, the expense may be deduced from the affected participant's account, or the expenses will be paid by the affected participant and/or alternate payee as agreed to in the Qualified Domestic Relations Order.
If you obtain a loan, the Plan will charge your account an initial loan processing fee of $150.00 plus any applicable up-front and annual loan administration fees the Plan's record keeper may assess.
Fees listed above are subject to change. Please check with the Plan Administrator to be sure you have a current fee listing.

SUPPLEMENTAL NOTICE REGARDING PLAN PAYMENTS
Plans Containing Automatic Rollover Distributions
This notice explains what will happen to your Plan Benefits if you do not respond to the Plan Administrator's request for direction on the distribution of your Plan Benefits and contains important information you will need before you decide about how to receive your Plan Benefits. This notice is provided to you by your Plan Administrator because all or part of the payment that you may receive from the Plan may be eligible for rollover by you or your Plan Administrator to a traditional IRA or an eligible employer plan. A rollover is a payment by you or the Plan Administrator of all or part of your benefit to another plan or IRA that allows you to continue to postpone taxation of that benefit until it is paid to you. Your payment cannot be rolled over to a SIMPLE IRA, or a Coverdell Education Savings Account (formerly known as an education IRA). An "eligible employer plan" includes a plan qualified under section 401(a) of the Internal Revenue Code, including a 401(k) plan, profit-sharing plan, defined benefit plan, stock bonus plan, and money purchase plan; a section 403(a) annuity plan; a section 403(b) tax-sheltered annuity; and an eligible section 457(b) plan maintained by a governmental employer (governmental 457 plan). Special rules may apply if your payment includes Roth contributions.

MANDATORY DISTRIBUTION:
A mandatory distribution is a distribution that is made without your consent and that is made to you before you attain the later of age 62 or normal retirement age. A distribution to a surviving spouse or alternate payee is not a mandatory distribution for purposes of the automatic rollover requirements.

AUTOMATIC ROLLOVER:
Automatic rollover requirements apply to mandatory distributions of Plan benefits less than $5,000. To satisfy the automatic rollover requirements of the Internal Revenue Code, a plan must provide that when making a mandatory distribution that is an eligible rollover distribution, the distribution will be paid in a direct rollover to an individual retirement plan, unless you elect to receive a mandatory distribution directly or have it paid in a direct rollover to an eligible retirement plan after receiving this Notice.
Mandatory distribution rules apply to Plan Benefits attributable to vested account balances with a present value of $5,000 or less. Automatic rollover provisions apply without regard to the amount of the distribution, as long as the amount exceeds $1,000.
The automatic rollover will be invested in an investment product designed to preserve principal and provide a reasonable rate of return and liquidity, whether or not such return is guaranteed, consistent with liquidity.
The automatic rollover described in this Notice shall be made to:
Trustee or Custodian: Millennium Trust Company
2001 Spring Road
Suite 700
Oak Brook, IL 60523

FEES:
Account Set Up Fee: $30
Annual Account Fee: $45
Annual Paper Statement Fee: $10 (if web access is not elected)
Account Closing Fee: $25
Fees Paid by: Fees will be taken from the Participant's rollover account.
If you have additional questions after reading this Notice, you may contact your Plan Administrator or CliftonLarsonAllen LLP at 815-729-9421.