ESOP - Summary Plan Description by Days1914

DAY’S JEWELERS EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST SUMMARY PLAN DESCRIPTION

TABLE OF CONTENTS I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII.

Introduction and General Information ................................................... 1 Eligibility and Participation ................................................................... 3 401(k) Contributions………………………………………………………...4 ESOP Allocations under the Plan………………………………………….5 Roth Features and Elections……………………………………………… .6 Distribution of Plan Benefits……………………………………………… .6 Special ESOP Provisions……………………..…………………………... .8 Top-Heavy Rules………………………………………………………….. .8 Amendment and Termination…………………………………………….…9 Plan Administration…………………………………………………………..9 Claim Provisions…………………………………………………...…………9 Rights of Participants……………………………………………………….10

ARTICLE I: INTRODUCTION AND GENERAL INFORMATION H.E. Murdock Co., Inc. (the “Company” or “Employer”) has established the Day’s Jewelers Employee Stock Ownership Plan and Trust (the “ESOP” or “Plan”). The Plan permits employees to make elective deferrals (or salary reduction contributions) to accounts and provides that the Company can, in its sole discretion, match those contributions through Company contributions. The amounts so contributed are invested (at the employee’s direction) into certain assets. The H.E. Murdock Co., Inc. Profit Sharing Plan (the “Prior 401(k) Plan”) has been merged into the Plan. Through the ESOP feature, the Plan holds 100% of the stock of the Company; such stock will be allocated to Participant accounts over a period of many years. The Plan also includes a Roth feature which permits employees under certain circumstances to receive their Plan benefits free of tax, provided that Participant agrees to be immediately taxed at the time of the Roth election (in the case of deferrals) or conversions (with respect to other amounts). When a Participant terminates service, cash equal to vested value allocated to the Participant’s account under the Plan will be eligible for distribution. Upon retirement, death or disability, the entire value will be eligible for distribution, regardless of vesting. The purpose of this summary is to describe the main provisions of the Plan. More detail can be obtained by asking the Company to provide a copy of the Plan documents or by contacting the Company with questions. General information about the Plan follows: A.

Agent for Service of Legal Process: the Trustee of the Plan or the Company, as plan administrator (“Administrator” or “Plan Administrator”).

Effective Date: The Plan was adopted on October 25, 2021 but took effect on January 1, 2021 (the “Effective Date”); the provisions relating to elective and matching contributions (governed by IRC Section 401(k) and (m)) shall become effective upon a merger of the Prior 401k Plan with the Plan.

Employer Information: H.E. Murdock Co., Inc., 88 Main Street, Waterville, ME. 04901 The employer ID number is 01-0446411. (The Employer is not part of a controlled group of corporations.)

Three-Digit Plan Number: 002.

Plan Administrator: The Plan Administrator is the Employer, who shall be the agent for purposes of service.

Plan Year: The Plan Year is the consecutive twelve (12) month period beginning on January 1 and ending on December 31.

Trustee(s): The Trustee is the ESOP Trust Committee; the members of the Trustee Committee are selected by the Company’s Board of Directors. The address of the Trustee is the same as the address for the Employer.

Plan Assets. Plan assets are held in a Trust Fund.

ARTICLE II: ELIGIBILITY AND PARTICIPATION IN THE PLAN A.

Employment Requirement for Participation in the Plan: With respect to 401(k) elective deferral contributions and matching contributions, an eligible employee shall become a Participant in the Plan upon the first day of the Plan Year quarter after completing One Year of Service with the Employer. With respect to ESOP and profit sharing contributions, an eligible employee shall become a Participant on the July 1 or January 1 first following Participant’s completion of a Year of Service. A Year of Service is completed if the employee completes 1000 hours of service during Participant’s anniversary year. If Participant does not satisfy this requirement, Participant will have a Year of Service for the first Plan Year (beginning with the Plan Year beginning during the anniversary year) in which Participant completes 1000 Hours of Service.

Determination of Eligible Employees. Generally, all employees who are not excluded will be eligible to participate in the Plan. The Plan excludes leased employees, nonresident aliens, persons under age 18 and employees covered by a collective bargaining agreement (unionized employees). (The Plan is not maintained pursuant to any collective bargaining agreement.)

Entry Date(s) for Participation in the Plan. With respect to elective deferral/matching contributions: an employee will begin participation in the Plan on the first day of the Plan Year quarter after completing a Year of Service. With respect to ESOP/profit sharing contribution, Participant will begin participation on the January 1 or July 1 first following such completion.

Re-employment. If an employee terminates service with the Employer after becoming a Participant in the Plan, Participant will resume participation upon re-hire after completing 1 Hour of Service.

ARTICLE III: 401(k) CONTRIBUTIONS A.

Salary Reduction Contributions under the Plan. Each employee will be given a form to designate the Participant’s elective salary reduction to be contributed to Participant’s Account under the Plan. Such salary reductions (“Elective Deferrals”) shall include a designated percentage of deferrals up to 100%. These contributions may be limited by statute based upon the application of certain anti-discrimination rules.

Catch-Up Contributions. All Participants who have attained the age of 50 will be eligible to make catch-up Contributions. The 2022 limit for CatchUp Contributions is $6,500; this amount is adjusted periodically.

Matching contributions. The Company in its sole discretion may make matching contributions to Participant accounts. Matching contributions will be allocated to the Accounts of Participants who have made elective contributions during the Plan Year.

Profit Sharing contributions. The Company in its sole discretion may make profit sharing contributions to certain individual accounts.

Rollover Contributions. All Employees shall be permitted to roll over benefits from another qualified plan to the Plan, regardless of participation. Roll over contributions shall be fully vested at all times.

Participant Accounts. The Company will maintain a recordkeeping account in each Participant’s name to show the value of the Participant’s retirement benefits; this is called the ‘Plan or Non-ESOP Account.’ The assets attributable to this account will be valued regularly and will be available for regular review.

Vesting. All Elective Deferrals, Profit-Sharing, rollover amounts and, if applicable, safe harbor and qualified non-elective contributions shall be fully vested. Matching contributions vest in accordance with the following schedule:

Years of Vesting Service <1 1 2 3 4 5

Percentage Vested 0% 20% 40% 60% 80% 100%

Vesting service with respect to the Participant’s Non-ESOP Account will include service before the Plan Effective Date. Benefits that are not vested as of the Participant’s termination date will be forfeited, provided that no Participant will forfeit benefits on account of disability, death or termination of service after attaining age 65. If a Participant forfeits their benefit and returns to service before a 5-year break in service, the Participant will have benefits restored upon return to service, provided that, if Participant received a distribution, Participant must repay the distributed amount to the Plan. This Plan uses hours of service as a way to determine service for vesting purposes; an Employee shall be credited with one Year of Service upon completing 1000 Hours of Service during a Plan Year. An employee will receive credit for each hour for which Participant is paid or entitled to be

paid, even though not working (such as vacation, sickness, leave of absence, or disability), or hours for which Participant received back pay if hours were not already counted. A maximum of 501 hours will be credited in any year for periods that involves pay without work. Hours will be calculated using actual hours.

ARTICLE IV: ESOP ALLOCATIONS UNDER THE PLAN A.

Stock allocations under the Plan. The Plan is a leveraged ESOP. This means that stock held by the Plan was acquired by the ESOP using borrowed funds (via a stock acquisition loan). Shares acquired with borrowed funds are placed into a suspense account and are ‘released’ and allocated to Participant accounts as the loan is repaid by the Plan, using Company contributions. Participants have no liability for ESOP stock acquisition loans; further, the stock in their accounts cannot be used to repay such a loan.

Method for Allocating Shares to Participant Accounts. Shares of stock that are ‘released’ are allocated in proportion to each Participant’s allocation units. Each Participant shall receive 7 Allocation Units for each dollar per hour (excluding over time) the Participant earns as of the Allocation Date and 3 Allocation Units for each year of employment as of such date. For salaried Participants, dollars per hour shall be equal to adjusted compensation divided by 2000. For hourly Participants, their dollar per hour computation shall be adjusted to reflect annual bonuses, if any; the adjustment shall be equal to the bonus paid for the year divided by 2000. Years of employment shall be equal to months of employment divided by 12 (any day in a month shall be treated as a full month); a fraction will be treated as a full year of employment. Adjusted compensation shall refer to Compensation including bonuses but excluding overtime, if any. No ESOP allocation shall be made to the account of a Participant whose service terminated before the allocation date unless such termination was due to death or disability.

Participant Accounts. The Company will set up a recordkeeping account in each Participant’s name to show the value of stock attributable to the Participant; this is called the ‘ESOP Account.’ The stock attributable to this account will be valued at least once a year by an outside valuation expert.

All ESOP benefits are subject to a 3-year vesting schedule: Years of Vesting Service Less than 3 3 or more

Percentage Vested 0 100%

Vesting service with respect to the Participant’s ESOP Account will not be counted before the Plan Effective Date. Benefits that are not vested as of the Participant’s termination date will be forfeited, provided that no Participant will forfeit benefits on account of disability, death or termination of service after attaining age 65. If a Participant forfeits benefits and returns to service before a 5-year break in service, the Participant will have benefits restored upon returning to service.

ARTICLE V: ROTH FEATURE AND ELECTIONS A.

Roth Feature. Normally, a Participant’s Plan benefits are fully taxable as ordinary income upon receipt, or, in the case of the ESOP benefits (under certain circumstances), long term capital gains. However, a Participant in a 401(k) plan, such as the Plan, may be eligible to elect “Roth treatment” if the plan is drafted to permit such treatment. If Roth treatment is elected with respect to certain Plan benefits, the distribution amounts may not be subject to tax upon distribution if certain conditions are met. This Plan contains the Roth feature.

Application of Roth Feature to Plan Benefits. Under the Plan, a Participant may elect Roth treatment with respect to Elective Deferrals, and other vested benefits under the Plan, provided that the Participant makes an election to initiate a ‘Roth rollover or transfer’ within the Plan. When Roth treatment is elected, a Participant will be currently taxable on the amounts with respect to which Roth treatment is elected.

ARTICLE VI: DISTRIBUTION PROVISIONS A.

Timing of Benefit Distributions. Participants or their beneficiaries are eligible to receive their benefits in the following circumstances: termination of employment, death, disability, and termination of the Plan.

Special ESOP Rules for Diversification. The Plan provides for diversification in accordance with the legal requirements, meaning that, when a Participant has attained age 55 and completed at least 10 years of participation, the Participant may diversify 25% of their ESOP Account for a 5-year period and up to 50% in the 6th year. Participants seeking to diversify pursuant to these rules shall have the amounts transferred to their Plan or Non-ESOP Accounts within the Plan. The Company may permit earlier distributions for diversification pursuant to the Plan terms at the sole discretion of the Company.

Form of Distributions. Benefits from the Plan or Non-ESOP Account will

be distributed in cash in a lump sum as soon as practicable following an event described in A., above; if the benefit exceeds $5000, the Participant is not required to receive a lump sum or immediate distribution subject to rules set out below. Benefits from the ESOP Account will generally be distributed in the year following a distribution event. ESOP benefits will be received in the form of cash. This is generally accomplished by a stock distribution to the Participant which is immediately turned over (put) to the Company for a cash payment. Except for certain lump sum payments (which apply to benefits under $5,000 or to larger benefits with the Company/Participant approval), distributions typically are paid over a 5year period; distributions of large accounts may occur over a longer period. Benefits of less than $5,000 can be distributed without Participant approval. (Rollovers are not taken into account when determining the $5,000 limit.) D.

Rollovers. Distributions shall be eligible for rollover treatment.

Mandatory Distributions. Participants generally must begin receiving Plan benefits when they have attained age 72 if they have also separated from service.

In-Service Withdrawals. A Participant shall be permitted to withdraw all vested benefits attributable to vested Non-ESOP Account from the Plan upon attaining age 59 1/2. A Participant who has experienced hardship shall be eligible to receive an in-service distribution of vested benefits. Benefits attributable to ESOP Accounts are ineligible for hardship or age 59 1/2 in-service withdrawals.

Other. Participant loans are permitted with respect to non-ESOP benefits in accordance with certain specified circumstances set out in the Plan. Except for distributions pursuant to “qualified domestic relations orders” (relating to the provision of child support, alimony payments, or marital property rights), Plan benefits cannot be sold, assigned or transferred prior to distribution. Further, prior to distribution, Plan benefits are generally not subject to any debts or claims against Participants, except for federal tax levies or collections by the IRS on judgments arising from unpaid tax assessments. Information relating to procedures in connection with an outstanding QDRO may be obtained through the Plan Administrator.

ARTICLE VII: SPECIAL ESOP PROVISIONS A.

Voting Rights. In general, Participants do not have the ability to vote their shares and make decisions about how the Company is run or managed. However, in certain events (merger, liquidation, sale of substantially all assets, etc.), Participants may vote the shares attributable to their Accounts. The Trustee will then vote the allocated and unallocated shares (in the suspense account, if any) based upon the directions received from

the Participants with respect to allocated shares. B.

Dividends. If dividends are paid with respect to ESOP shares, such dividends shall be used to repay ESOP debt (causing shares to be released and allocated to Participant Accounts), allocated directly to Participant Accounts or paid to Participants directly.

Put Rights and Rights of First Refusal. Currently, the Company is an electing Subchapter S corporation and, as a result, ESOP distributions are made in the form of cash (equal to the value of stock allocated to the Participant’s ESOP account). However, in the event that the Company’s status changes and stock distributions are made from the ESOP, the shares distributed to the Participant would be subject to (1) a right of first refusal (meaning that they would have to be offered to the ESOP and the Company before being sold to a third party buyer) and (2) a put right (meaning that the Company must be willing to purchase the shares from the Participant immediately following distribution).

ARTICLE VIII: TOP-HEAVY RULES A.

Top-Heavy Plan Description. A Top-Heavy Plan is one in which the total account balances of certain highly paid employees (“Key Employees”) are more than 60% of the total account balances of all Participants.

Required Features of Top-Heavy Plans. If the Plan becomes top-heavy, the Plan will provide for a minimum contribution to be allocated to each non-Key Employee equal to 3% of compensation.

ARTICLE IX: PLAN ADMINISTRATION A.

Trustee. The Trustee (or Trustee Committee) owns the stock in the Plan and has responsibility for the investment of the Plan’s non-stock assets, consistent with Participant directions. It also has responsibility for receiving contributions and making distributions when appropriate. It has responsibility for keeping records regarding Plan holdings and disseminating annual reports regarding these holdings.

Plan Administrator. The Plan Administrator administers the Plan and has overall control and authority to administer the Plan. The Plan Administrator may retain and appoint professional advisors or administrators to provide services to the Plan. It instructs the Trustee regarding payments to/from the Plan and communicates with Employees regarding participation, benefits, claims, etc. It has responsibility for completing and submitting annual returns and reports to governmental agencies. The Plan Administrator shall resolve all questions regarding Plan operation and interpretation.

ARTICLE X: AMENDMENT AND TERMINATION The Company’s Board of Directors reserves the right to amend or terminate the Plan at any time in the future. No amendment may retroactively reduce a Participant’s benefits under the Plan. If the Plan is terminated before a Participant’s benefits have been fully distributed, they will be distributed as soon as practicable following the termination. If there is debt remaining on a stock acquisition loan, the shares held in the suspense account (that have not been allocated to any Participant Accounts) can be used to repay the debt. If the value of the shares exceeds the outstanding debt, the residual amount will be allocated to Participant Accounts. If the value is less, there will be no recourse against Participants’ Accounts; the lender cannot collect anything more from the Plan than the value of the unallocated shares.

ARTICLE XI: CLAIM PROVISIONS A.

Claims. When a Participant is entitled to a distribution, the Participant will be directed to file a form. Participants do not have to file claims in order to receive distributions. However, if a Participant believes they are not receiving the benefits to which they are entitled, the Participant may file a claim with the Administrator or Company at the Company address.

Notice of Claim Resolution. A Participant’s claim generally will be reviewed within 60 days and they will receive a notification within 90 days. If the claim is wholly or partially denied, the Participant will be notified in writing of such denial and it will include: the specific reasons for the denial; the specific provisions of the Plan on which the denial was based; any additional material or information necessary for Participant to perfect the claim and an explanation of why such material or information is necessary; and the steps that Participant must take to have the claim for benefits reviewed.

Request for Further Review. If Participant receives a denial, Participant will have the opportunity to file a written request for a full and fair review of the claim provided that the request is submitted within 60 days of receiving notices of the denial. The Administrator will make a decision within 60 days after receiving a request for review. If there are special circumstances (such as a need for a hearing) that require an extension of time for completing the review, the Administrator will render a decision no later than 120 days after receipt of a request for review. The decision will be in writing and will set out the specific reasons and Plan provision on which the decision was based.

ARTICLE XII: RIGHTS OF A PARTICIPANT

Participant Rights to Information. This Plan is subject to the Employee Retirement and Income Security Act of 1974, as amended (“ERISA”). However, because it is a defined contribution plan, plan benefits are not guaranteed by the Pension Benefit Guaranty Corporation. Each participant in an ERISA plan is entitled to certain information: •

The Participant may examine, without charge, at the Administrator’s office and other specified locations, all documents governing the Plan, including insurance contracts and collective bargaining agreements, a copy of the Plan’s procedures concerning qualified domestic relations orders, and a copy of the latest annual report (Form 5500 series) filed with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

•

The Participant may obtain, upon written request to the 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 Administrator may make a reasonable charge for the copies. The Participant may obtain a copy (without charge) of the Plan’s procedures concerning qualified domestic relations orders.

•

The Participant may 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.

•

The Participant may obtain a statement indicating whether Participant has a right to receive a retirement plan distribution at normal retirement age (age 65) and, if so, what the benefits would be at normal retirement age assuming the Participant stopped working at the time of the request. This statement must be requested in writing and is not required to be given more than once every twelve (12) months. The Administrator must provide the statement free of charge.

Prudent Actions by Plan Fiduciaries. In addition to creating rights for ERISA plan Participants, ERISA imposes duties upon the people who are responsible for the operation of their plans. The people who oversee the ESOP, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of Plan Participants and beneficiaries. No one, including the Company, a union, or any other person, may fire someone or otherwise discriminate against them in any way to prevent them from obtaining Plan benefits or exercising their rights under ERISA.

Enforcing ERISA Rights. If a claim for a Plan benefit is denied or ignored, in whole or in part, the filing Participant shall 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. These were discussed in detail above under the ‘Claims’ section. If the Participant feels that these rights are being ignored or disregarded, there are steps the Participant can take to enforce the rights under ERISA. For instance, if a Participant requests a copy of Plan documents or the latest annual report for the Plan and does not receive them within 30 days, they may file a lawsuit in a Federal court. In such a case, the court may require the Administrator to provide the materials and pay the Participant up to $110 a day until Participant receives the materials, unless the materials were not sent because of a reason beyond the control of the Administrator. If the Participant has a claim for benefits that is denied or ignored, in whole or in part, Participant may file a lawsuit in a state or Federal court. In addition, if the Participant disagrees with the Administrator’s decision or lack thereof concerning the qualified status of a domestic relations order, Participant may file a lawsuit in Federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if a Participant is discriminated against for asserting Participant rights, the Participant may seek assistance from the U.S. Department of Labor, or the Participant may file a lawsuit in a Federal court. The court will decide who should pay court costs and legal fees. If successful, the Participant may be reimbursed for costs and fees if the court so orders. If the Participant loses, the court may order the Participant to pay costs and fees, for example, if it finds the claim is frivolous. D.

Assistance With Questions. Questions regarding the Plan should be referred to the Administrator. Questions about this statement or ERISA rights, or assistance in obtaining documents from the Plan Administrator should be referred to the nearest office of the Employee Benefits Security Administration of the U.S. Department of Labor listed in the 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, DC 20210. Certain publications about a Participant’s rights and responsibilities under ERISA are available by calling the publications hotline of the Employee Benefits Security Administration.

This Summary is not the Plan document; it is a summary description that states principal provisions of the Plan in a manner that can be easily understood by most Employees. Although it is not intended to include every limit or detail, this description has been drafted to provide concise and accurate information. However, if there is a discrepancy between the terms in this summary and the official Plan document, the terms of the Plan document shall control.