In an effort to encourage savings for retirement purposes, certain penalties are charged against any withdrawal or distribution from a qualified plan. The IRS imposes a nondeductible 10% additional tax on the entire taxable amount of the withdrawal or distribution. This tax is in addition to any income tax you might be liable for on the withdrawal or distribution. The additional tax applies to hardship withdrawals and distributions due to termination from Plan participation. Under the Plan, the additional 10% tax does not apply to the following:

• A distribution or withdrawal after you have reached age 59 1/2;
• A distribution to your beneficiary due to your death;
• A distribution to you due to your total and permanent disability;
• A distribution to you if you have reached age 55 (early retirement under the Plan) and actually do retire;
• A withdrawal because of medical expenses, but only to the extent deductible under the tax law;
• A payment to an alternate payee due to a Qualified Domestic Relations Order.