FedEx Kinko s Office and Print Services, Inc., 401(k) Retirement Savings Plan. Summary Plan Description

Transcription

1 FedEx Kinko s Office and Print Services, Inc., 401(k) Retirement Savings Plan Summary Plan Description February 2007

2 Table of Contents Introduction 3 Eligibility and Participation 5 Contributions 9 Plan Administration and Investments 12 Investment Funds 13 Valuation of Your Plan Account 16 Payment of Benefits 17 Retirement Benefits 18 Disability Benefits 18 Death Benefits 18 Loans 19 Withdrawing Money 22 Federal Tax Consequences 24 Additional Plan Information 26 Glossary of Terms 29 Legal Notification Safe Harbor Notice 38 Special Tax Notice Regarding Plan Payments [402(f) Notice] 39

3 Introduction FedEx Kinko s Office and Print Services, Inc., 401(k) Retirement Savings Plan FedEx Kinko s Office and Print Services, Inc., offers the FedEx Kinko s Office and Print Services, Inc. 401(k) Retirement Savings Plan ( the Plan ) as a way to help you build retirement savings to achieve your long-term financial goals. You may not believe it, particularly if you are decades away from retirement age, but retirement is something you need to think about and plan for now. Planning now will help you to live more comfortably and have income for travel, hobbies, sports whatever you would like to do when you no longer work full-time. The following Summary Plan Description provides details about eligibility, enrollment, your contributions and FedEx Kinko s contributions, how to obtain loans and withdrawals, and more. A Glossary of Terms starts on page 30 and defines the first reference to specific words that are in boldface italics. First, following is a brief summary of the legally required information about the Summary Plan Description: A complete copy of the official Plan documents and policies, which are the governing instruments on 401(k) Plan benefits, eligibility, definitions, and all other aspects of the Plan, are on file in the FedEx Kinko s Benefits Department. In the case of any conflict between the official 401(k) documents and this Summary Plan Description, the terms of the official 401(k) Plan documents will rule. FedEx Kinko s reserves the right, at any time and to the extent permitted by law, to change, terminate or discontinue any aspects of the Plan. This can occur without the consent of, and without prior notice, to any participant of the Plan. All statements contained in this section are intended to reflect general policies, principals, and procedures, and do not represent a contractual commitment on the part of FedEx Kinko s, and may be changed at any time without notice. The Plan is a qualified section 401(k) Profit Sharing Plan, funded with eligible team member contributions and company matching contributions. FedEx Kinko s Office and Print Services, Inc., is the Plan Sponsor and Plan Administrator. However, the FedEx Corporation Retirement Plans Investment Board is responsible for the general administration of the Plan. All team member contributions, FedEx Kinko s cash match contributions, and Profit Sharing contributions are held in a trust fund by Vanguard Fiduciary Trust Company as Trustee.

4 If the Plan terminates, benefits provided under this Plan are neither insured nor guaranteed by the Employer, by the Pension Benefit Guaranty Corporation (a federal governmental agency), nor under any state or federal law. What is the Summary Plan Description? This Summary Plan Description supersedes all previously distributed Summary Plan Descriptions and takes the place of any previous oral or written communication on the subject of the Plan. This Summary Plan Description ("SPD") describes the retirement benefits available to eligible team members and their eligible dependents, under the FedEx Kinko s Office and Print Services, Inc., 401(k) Retirement Savings Plan. Every effort has been made to make this SPD as complete and comprehensive as possible. However, not all of the details of the plan are provided. A complete copy of the official plan document, which is the governing document on plan benefits, eligibility, definitions and other aspects of the Plan, is on file in the FedEx Kinko s Benefits Department. It is important to note that in the case of any conflict between the official Plan Document and this summary (or any communications), the terms of the official Plan document will prevail. All statements contained in this SPD are intended to reflect general policies, principles and procedures. They do not represent a contractual commitment on the part of FedEx Kinko s Office and Print Services, Inc., and they may be changed at any time without prior notice. While FedEx Kinko s intends to maintain this plan for an indefinite period of time, it does reserve the right, at all times, and to the extent permitted by law, to change, terminate or discontinue any of the benefits or the plan. This can occur without the consent of, and without prior notice to, any active or retired person, eligible dependent, or beneficiary covered by the benefits. Please be sure to keep this SPD with other important documents that you may have. If you have questions about the Plan Questions regarding the 401(k) Plan should be directed to Vanguard Participant Services. Access Vanguard s website at Select Personal Investors, then click the Log On button. If you need to register your account, set up your user name and password. You will need your Social Security number and plan number (093285) to register. Call Vanguard Participant Services by dialing (8:30 a.m. to 9:00 p.m., Eastern Time Monday through Friday). Call the 24-hour Vanguard VOICE Network using a touch-tone telephone and the Personal Identification Number (PIN) provided to you by dialing

5 General Plan Information The Plan Administrator and the FedEx Corporation Retirement Plans Investment Board ("the RPIB") are responsible for interpreting and administering the terms and provisions of the Plans. The Plan Administrator, the RPIB, and any representative whom they choose to assist them to carry out their responsibilities under the Plans will have the maximum discretionary authority permitted by law to interpret, construe and administer the Plans, to make determinations regarding Plan participation, enrollment and eligibility for benefits, to evaluate and determine the validity of benefit claims, and to resolve any and all claims and disputes, regarding the rights and entitlements of individuals to participate in the Plans and to receive benefits and payments pursuant to the Plans. The decisions of the Plan Administrator, the RPIB, and their representatives will be given the maximum deference permitted by law. Eligibility and Participation FedEx Kinko s team members are eligible to enroll in the Plan on the first of the month coincident with or following one month of full or part time employment and may enroll in the Plan at any time after that period. Pre-tax deductions will begin with the first full pay period following your enrollment effective date. Once you meet your enrollment date, you may change your savings rate at any time. International Team Members: If an International team member transfers to a position within the United States, credit will be given for previous service with respect to satisfying eligibility requirements for benefits enrollment. Team Members of FedEx Kinko s Subsidiaries: If you work for a subsidiary that is 100% owned by FedEx Kinko s Office and Print Services, Inc., and your employer has elected to participate in the FedEx Kinko s Office and Print Services, Inc., benefit plans, then you will be treated as a FedEx Kinko s Office and Print Services, Inc., team member for purposes of the FedEx Kinko s Office and Print Services, Inc., benefit plans selected by your employer. Determining Team Member Status Only team members who satisfy the conditions of eligibility will be entitled to benefits. Those who are not regular team members of FedEx Kinko s Office and Print Services, Inc., such as independent contractors and individuals who contract with third parties to perform services for FedEx Kinko s Office and Print Services, Inc., are not eligible for benefits. All determinations concerning whether any individuals or groups should be classified as team members will be made by FedEx Kinko s Office and Print Services, Inc., in its sole and absolute discretion. You are not eligible to participate in this Plan if:

6 Your employment is covered by a collective bargaining agreement that does not provide for your participation in this plan; You are a non-resident alien who receives no earned income from the company that constitutes income from sources within the Untied States; or You have been classified by the company as a leased employee or an independent contractor, even if a court or government agency having competent jurisdiction reclassifies you as a Team Member. Enrolling in FedEx Kinko s 401(k) Plan for the First Time When you become eligible to participate, you will receive a letter stating that you are eligible to participate in the Plan. The letter will direct you to where you can find additional information about the Plan, such as what investments options are available. The letter will also describe what steps you will need to take to enroll in the Plan. A Personal Identification Number (PIN) will be sent to you under separate cover. If you wish to make pre-tax contributions and if eligible, catch-up and rollover contributions to the Plan, follow the instructions below. If you do not choose an investment option, your pre-tax contributions, company match, and if eligible catch-up and rollover contributions are automatically invested in the Vanguard Admiral Treasury Money Market Fund. (See investment options below.) Steps to Enroll Using Vanguard s automated VOICE Network: (1) Call Spanish speaking participants: Call Hearing impaired: Call TTY at (2) Enter your Social Security number. After entering your Social Security number, you can speak with a Vanguard Participant Services associate at any time during operating hours. You will need to verify your name, address, and date of birth. (3) Enter your PIN. (4) Main menu selection. Press 3 To make a transaction. (5) Then press 2 To change or review your contribution. (6) Then press 1 To change or enter your payroll deductions. The Vanguard Network guides you through the enrollment process for payroll deferral percentage elections and selecting your investment options.

7 or (7) Written confirmation of your payroll deduction and investment choices will be mailed to your home address within three business days. Contact Vanguard online at (1) Click on Personal Investors (2) Follow the online instructions to register and enroll. Be sure to write down the confirmation number given to you by the automated phone system, the Vanguard associate, or by the Internet, and also be sure to retain the confirmation statement mailed to your home address. Verify your savings rate on your first paycheck. Notify Vanguard of any discrepancies immediately. Your Vanguard Personal Identification Number (PIN) Your PIN is confidential. It is important that you remember your PIN; you will not be able to access your accounts through Vanguard s VOICE Network without it. If you forget your PIN, you must call Vanguard to request a new one. You will receive your new PIN, via U.S. mail to your home, in about seven to ten business days after your request. Your PIN is not required to speak to a Vanguard associate. Break in Service The Plan contains a number of special rules governing hours of service and your participation if you leave FedEx Kinko s and are later rehired, or in the event of military service, medical leave, or other paid or unpaid leaves of absence. Previously a Participant If you are a Plan participant and you transfer from one FedEx Kinko s location to another, or if you terminate your employment and you are rehired, your participation may be reinstated at your previous savings rate. Notify your supervisor upon transfer or rehire that you were previously a participant of the Plan. You are responsible for verifying that your contributions have begun on your paycheck. Contact Vanguard Participant Services if you no longer want to contribute or if your participation has not been reinstated. Additionally, your contributions will be invested in the investment elections you selected prior to your termination. To change your investment elections, contact Vanguard at or call Vanguard Participant Services.

8 Eligible Prior to Break If you were eligible for the Plan prior to your break in service but did not become a participant, FedEx Kinko s will recognize your service for eligibility purposes. Break Prior to Eligibility If you left FedEx Kinko s prior to becoming eligible, FedEx Kinko s will recognize your service; however, you must meet the eligibility criteria to become a participant of the Plan. Contributions Your Contributions You can contribute from 1% to 50% of your eligible compensation on a pre-tax basis. The amount you save will be taken out of both your regular paychecks and any profit sharing or bonus paychecks you may receive. Contributions to the Plan will be deposited into your account each pay period. You are always 100% vested (that is, you own 100% of your contributions to the Plan). Limits on Contributions The IRS limits the annual amount that you may contribute to a qualified retirement plan. Once you reach the contribution or compensation limit, you will no longer be able to contribute to the Plan. The limits set by the IRS are subject to change. Contact Vanguard Participant Services for additional information on the current contribution and compensation limits. Your pre-tax contributions are subtracted before federal income taxes have been withheld from your paycheck. Since you do not actually receive the money you put into the Plan, your taxable income is reduced by the amount of your contributions. That means you do not have to pay taxes on that amount until you receive the money from the Plan. Pre-tax contributions are subject to Social Security tax (FICA and FUTA withholding). Exceeding the Annual Limit on Contributions If your contributions during any Calendar Year exceed the maximum contribution or compensation limits specified by the IRS, the Plan could lose its tax-favored status. To avoid this, the Plan will prohibit excess contributions or refund any excess amount to you. Salary Reduction Catch-up Contributions Team members age 50 and older as of the end of the taxable year will be allowed to make pre-tax catch-up contributions. You can make a separate catch-up contribution

9 election as a percentage of compensation from 1 to 30% and deductions begin from your paycheck as soon as administratively possible. The maximum elective contribution for FedEx Kinko s 401(k) Plan can be reached in the following ways: You reach the maximum deferral limit set by the IRS; or You reach the maximum compensation limit set by the IRS; or You contribute the maximum plan limit of 50% for the whole year. Changing the Amount You Save Once you meet your enrollment date, you may change your savings rate at any time. Contact Vanguard at or to: Increase or decrease your contribution percentage Stop your contributions, or Reenroll if you have stopped your contributions. Your contribution change will begin with the next feasible pay period. Be sure to write down all confirmation numbers issued to you by Vanguard and retain all confirmation statements mailed to your home address. Additionally, check your paycheck to verify that your savings rate is correct. FedEx Kinko s Matching Contributions FedEx Kinko s matches your contributions dollar-for-dollar up to the first 5% of your eligible compensation for the Calendar Year. These contributions are made each pay period. As a participant of the Plan, you receive 100% of the company match in cash to invest in your designated investment elections. Prior to January 1, 2004, 25% of the company match was made in Kinko s stock. On February 13, 2004, all Kinko s stock in the 25% Company Match Account was converted to cash at the fair market value on that day and invested in the Money Market investment option available at that time. You now have complete investment discretion over all company match. Founder's Grant The Founder's Grant was an expression of thanks for team member contributions to the Company. The Board of Directors granted a one-time gift of stock worth $300 to all team members who were eligible for the Plan on January 1, The Founder's Grant is 100% vested for eligible team members. On February 13, 2004, all Kinko s stock in the Founder s Ground Account was converted to cash at the fair market value on that day and invested in the Money Market investment option available at that time. You now have complete investment discretion over amounts in your Founder s Grant account.

10 Profit Sharing Prior to December 31, 1993, the Company offered a Profit Sharing Plan as part of the retirement plan, which was funded by employer contributions. The Plan enabled all eligible team members to share in the profitability of the company and served as supplemental income for team members who retired from the Company. However, in an effort to offer an enhanced 401(k) Plan, contributions to the Profit Sharing Plan were discontinued. The final contribution to the Profit Sharing Plan was for the period ending December 31, As of January 1, 1998, all plan participants became 100% vested in their Profit Sharing account. Prior to January 1, 1998, a six-year vesting schedule was included as part of the Profit Sharing Plan. Participants who left FedEx Kinko s before reaching normal retirement age may have forfeited the non-vested portion of their Profit Sharing account. In the past, forfeitures were used to pay Plan administrative expenses. If you forfeited profit sharing and you have since been rehired, you may repay the full amount of any prior profit sharing distribution. If you make the repayment, the Plan will credit your Profit Sharing account with the amount previously forfeited. However, you can make the repayment only if you are rehired before you have had five consecutive one-year breaks in service, and the repayment must be made within five years of your rehire date by FedEx Kinko s. Rollover Contributions Prior to eligibility, or at any time while active, you can roll over assets from a qualified retirement plan into FedEx Kinko s 401(k) Plan. FedEx Kinko s 401(k) Plan can also accept rollovers from 403(b) Plans (Tax Sheltered Annuities/Non Profit Organizations) and 457 Plans (State Government Agencies). Rollovers must come from a qualified retirement plan that meets the requirements of the Internal Revenue Code Section 401(a), 403(b) or 457, or from an individual retirement account, or IRA. However, the Plan cannot accept a rollover of after-tax funds. The tax law provides strict rules regarding rollovers, and you will be required to certify that your rollover is from a qualified retirement plan, 403(b) Plan, 457 Plan or IRA. Additionally, all rollovers must be received within 60 days of distribution and must be in the form of a check. The Plan is unable to accept stock certificates or direct wire transfers for a rollover. If you want to make a rollover, call Vanguard, Your rollover funds are 100% vested, and you may direct the investment of your rollover funds among the investment options available under the Plan. You are also eligible to participate in the hardship withdrawal provisions of the Plan. If you would like to obtain prospectuses for the funds, you can go to or call Vanguard Participant Services.

11 Vesting Vested benefits are those benefits you are entitled to keep if you leave FedEx Kinko s. You are always fully vested in your pre-tax contributions, FedEx Kinko s matching contributions, rollover contributions and the investment earnings on your account. Plan Administration and Investments Plan Administration The Plan Administrator and the FedEx Corporation Retirement Plans Investment Board (the "RPIB") are responsible for interpreting and administering the terms and provisions of the Plan. The Plan Administrator, the RPIB, and any representative whom they choose to assist them to carry out their responsibilities under the Plan will have the maximum discretionary authority permitted by law to interpret, construe, and administer the Plan; to make determinations regarding Plan participation, enrollment and eligibility for benefits; to evaluate and determine the validity of benefit claims; and to resolve any and all claims and disputes regarding the rights and entitlements of individuals to participate in the Plan and to receive benefits and payments pursuant to the Plan. The decisions of the Plan Administrator, the RPIB, and their representatives will be given the maximum discretion permitted by law. Investment Information You, as the participating team member, decide how to invest your 401(k) contributions, 100% of FedEx Kinko s matching contributions, and all rollover contributions, as well as any Profit Sharing Plan contributions (for participants prior to December 31, 1993). Participant-Directed Investment Information Because you control the investment of your contributions, rollover contributions, FedEx Kinko s cash match, Founder s Grant and profit sharing contributions, the Plan is intended to constitute a plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and Title 29 of the Code of Federal Regulations Section c-1, and the fiduciaries of the Plan may be relieved from liability for any losses directly resulting from your investment directions. You will receive a statement of your accounts each calendar quarter. The statement, which lists your account balances, contributions and other activity, is sent about two to three weeks after the end of the quarter. Recent statements covering time periods while Vanguard has been the trustee are also available at In addition, you have the right to request the following information at any time, and the Plan will provide you with the most current information including: A list of assets comprising the value of each investment option, the value of each asset (or its percentage of the total fund), and for each fixed-rate contract, the

12 name of the issuer of the contract, the term of the contract, and the rate of return on the contract. Information concerning the value of shares or units in each investment option, as well as the past and current investment performance of the option determined, net of expense, on a reasonable and consistent basis. Information concerning the value of shares or units in each investment option held in your account. A description of the annual operating expenses that reduce your rate of return, and the aggregate amount of these expenses (expressed as a percentage of average net assets) for each investment option. Copies of the prospectuses, financial statements, reports, and any other materials related to your investment options. For such information, please refer to or contact Vanguard Participant Services. Types of Funds Offered You may invest in one fund or a combination of the mutual funds offered. Mutual funds consist of money that is pooled from the savings of many individual investors. The funds are managed by professionals to achieve specific investment goals, such as growth and/or income. Mutual funds generally invest in stocks, bonds, and other investment vehicles as set forth by their investment objectives. Some funds, considered to be more conservative, will emphasize safety over growth, while others the more aggressively managed funds will offer potentially greater rewards at the price of higher risk. The FedEx Corporation RPIB has selected a variety of funds to offer diversification among the investment elections. If you would like more information about these funds, or if you would like to order a prospectus, please log on to or contact Vanguard Participant Services at If you opt to speak with a Vanguard associate, you will need to provide them with the actual name of the fund offered. To obtain investment information or a prospectus from the automated phone system or you will need to enter the four-digit code for each fund as listed below: Investment Funds Investment Options Fund Code Vanguard LifeStrategy Conservative Growth 0724

13 Vanguard LifeStrategy Moderate Growth 0914 Vanguard Admiral Treasury Money Market Fund 0011 Vanguard Retirement Savings Trust 0034 Vanguard Total Bond Market Index Fund Institutional Shares 0222 Vanguard Wellington Fund 0021 Vanguard 500 Index Fund 0040 Vanguard Windsor Fund 0022 Vanguard PRIMECAP Fund 0059 Vanguard Extended Market Index Fund 0098 Vanguard International Value Fund 0046 Vanguard Total International Stock Index Fund 0113 Investment Choices The Plan offers a wide variety of investment elections (see the following chart). You may invest in any of the mutual funds offered. It is extremely important that you review each of the prospectuses for the investment alternatives before making your investment decisions. Keep in mind that you should re-evaluate your investments regularly. As your needs change over time, you have the flexibility to change your investment elections on a daily basis. If you would like additional information, or a prospectus on these funds, or to make a change to your account, you may access your account through or contact Vanguard Participant Services. Vanguard also offers a variety of investment education tools at Listed below are the current fund choices and their risk level. Lower Risk Higher Risk Type of Fund Money Market Bond Balanced (Stocks and Bonds) Growth & Income Stock Growth Stock International Stock Fund(s) Offered Vanguard Admiral Treasure Money Market Fund Vanguard Retirement Savings Trust Vanguard Total Bond Market Index Fund Institutional Shares Vanguard Wellington Fund Vanguard LifeStrategy Consrv Grwth Vanguard LifeStrategy Mod Grwth Vanguard 500 Index Fund Vanguard Windsor Fund Vanguard PRIMECAP Fund Vanguard Extended Market Index Fund Vanguard International Value Fund Vanguard Total International Stock Index Fund

14 Please notice the funds have been placed on the chart according to their risk level, as established by The Vanguard Group. How to Select or Change Your Investment Options You may select up to twelve investment options for each account or by investment fund in the Plan. Selections are made in 1 percent increments. You can choose any combination of options as long as the total equals 100 percent, such as: 100 percent in one fund; 45 percent in one fund, 55 percent in another fund; 50 percent in each of two different funds; 50 percent in one fund, 15 percent in one fund and 35 percent in one fund, or 10 percent in each of 6 different funds and 40 percent in one fund. There are two ways in which you can change your investment choices: You can transfer your existing balance among your investment fund options. You can also change your investment choices for future contributions at any time. Each investment change is independent of the other. To change both existing balance and future contributions, you must make two independent changes. Change may be made any day, 24 hours a day subject to limitations set forth in each fund s prospectus. However, you can only change your investment choices for your existing balances once during any business day. Once you have made a change in your investment choices for your existing balances, you must wait until the following business day to make another change. Vanguard provides convenient, automated service that allows you to select or change your investment options, check your loanable amounts and account balances, model and request loans, and request withdrawal forms by phone. Just contact Vanguard at or How to Request a Change Changes can be made any day, 24 hours a day on-line or by calling Vanguard s VOICE Network at You can also speak to a Vanguard Participant Services associate between 8:30 a.m. and 9:00 p.m., Eastern Time, Monday Friday, by calling Vanguard at If you make elections/changes before the stock market closes (normally 4:00 p.m., Eastern Time), your elections/changes are based on that day s closing price. If you make elections/changes after the stock market closes, your elections/changes will be based on the next business day s closing price. When the stock market closes before 4:00 p.m., Eastern Time (e.g., Christmas Eve), any elections/changes made before closing are based on that day s closing price. Elections/changes made after the closing are based on the next business day s closing price.

15 Vanguard will send a written confirmation of your elections or changes to your home address within seven business days. Current Account Balance Your current account balance is money that has already been invested in the Plan. For example, if 100% of your 401(k) assets are currently invested in the Vanguard 500 Index Fund, you can move these assets into any of the other mutual funds offered in the Plan in 1% increments totaling 100%. Please contact Vanguard Participant Services for additional information. Future Contributions Your future contributions are those funds that will be deducted from your paycheck, or those funds that are coming into the Plan at a future date. For example, your current account balance is invested in the Vanguard 500 Index Fund. However, you want your future contributions (ongoing deductions from your paycheck) to be invested in the Vanguard PRIMECAP Fund. You will need to instruct Vanguard to invest your future contributions differently from the investment of your current account balance. In this example, your funds would be invested as follows: Current Account Balance: Future Contributions: 100% 500 Index 100% PRIMECAP Please contact Vanguard Participant Services for additional information and assistance. Valuation of Your Plan Account How Investment Results Affect Your Account The value of your account is determined as of the end of each business day. Investment gains and losses will be separately allocated to your account based on the individual investment performance of the investment elections you have selected. You will receive a quarterly statement of the investment performance of your individual account and the various investment elections offered through the Plan. Determining the Total Value of Your Account The total value of your account will depend on the amount of each of the following: Pre-tax contributions made by you, Any rollover contributions made by you,

16 FedEx Kinko s matching contributions made on your behalf, Investment earnings, gains and losses, and expenses allocated to your account, and Outstanding loans, withdrawals, and distributions from your account. Payment of Benefits Withdrawals or Distributions If you are no longer working for FedEx Kinko s nor any member of the FedEx control group, you have the following options: Leave your assets invested in the Plan if your account balance is more than $1,000. Roll over your assets into another qualified retirement plan to postpone taxation and avoid penalties (for additional tax information, see the 402(f) Notice contained in the Legal Notifications section). Receive a cash distribution generally subject to mandatory 20% federal income tax withholding and a 10% federal penalty (if you receive your assets before you are 55), and often state taxes and penalties as well (for additional tax information, see the 402(f) Notice contained in the Legal Notifications section). Always check with a qualified tax advisor before you elect a distribution. If your account balance is more than $1,000, you may leave all of your funds in the Plan until retirement. Assets in the Plan continue to experience investment gains and losses, and you may continue to transfer your funds between the investment options. Statements of your account will be mailed to your home address on a quarterly basis. If your account balance is $1,000 or less, you must take a distribution or roll over the balance of your account to another qualified retirement plan or IRA. Each quarter, a notification will be mailed to terminated participants with an account balance of $1,000 or less who have not requested a rollover or distribution of their account. This notice will outline the options available. Failure to respond to this notice by the indicated deadline will result in a de minimus distribution check being mailed to your home address. If you no longer work for FedEx Kinko s nor any member of the FedEx control group, you may receive a distribution or roll over your assets invested in mutual funds at any time following 45 after your termination date. All distributions will be in cash.

17 If you have an outstanding 401(k) loan, Vanguard must receive your repayment prior to your applying for a rollover of your remaining account balance, or your outstanding loan balance will be deemed a distribution and reported to the IRS as a taxable event. Please note that you are not eligible for a distribution or rollover if you transfer to another FedEx Kinko s location, if you are rehired by FedEx Kinko s, if you are working for FedEx Kinko s on a temporary basis, or if you are working for any member of the FedEx control group. If you are a Plan participant receiving severance pay, see the heading entitled, Severance Pay. Retirement Benefits Retirement is the later of age 65 or the fifth anniversary of the date you become a Plan participant. For example, if you are eligible to participate when you are 62, you will be eligible to receive your account balance at age 67 when you retire. Plan benefits are always paid in a single lump sum. If you decide to continue working beyond your normal retirement age, the Plan will not distribute your account to you until after you actually retire, unless you elect to withdraw funds before then. See the heading entitled, Loans and Withdrawals later in this section for information on withdrawals at age 59-1/2 and required minimum distributions (RMDs). If you want to withdraw funds after you reach age 59-1/2, your withdrawal will not be subject to the 10% federal penalty. For additional information, contact Vanguard Participant Services. Disability Benefits If you become long-term disabled and your employment is terminated with FedEx Kinko s, you will be entitled to your account balance as a disability benefit in the same manner as if you had retired. For additional information or to request your vested account balance, call Vanguard Participant Services. Death Benefits Should you die while you are a participant in the Plan, your designated beneficiary will be eligible to receive the vested value (or vested accrued benefit) of your FedEx Kinko s 401(k) account, called a death benefit. If upon your death you are married, your death benefits will automatically be paid to your spouse unless you select another beneficiary

18 and your spouse consents to the designation of another beneficiary, in writing on the applicable form. The account balance may be distributed shortly after the death of the participant or, at the election of the designated beneficiary, the distribution may be delayed. Death benefits generally must be distributed by December 31 of the fifth anniversary of the participant s death. For additional information, call Vanguard Participant Services. For tax information, see the 402(f) Notice contained in the Legal Notifications section. For information on designating a beneficiary see the heading entitled, Additional Plan Information later in this section. Steps to Take to File an Application for Benefits Death (1) Your beneficiary must notify Vanguard at of your death and submit necessary information to Vanguard. (2) Vanguard will verify the beneficiary and coordinate the distribution process. Vanguard will mail a PIN to the beneficiary along with detailed information regarding the distribution. Payment of Benefits Benefits are paid in a single lump sum. Loans General Loan Information The Plan offers two types of loans: general purpose loans and home loans. Loans are limited to participants who are employed by FedEx Kinko s. All loans are granted on a non-discriminatory basis. General purpose loans may be taken for any reason, and home loans may be taken for the purchase or construction of your primary residence. General purpose loans must be repaid within five years and home loans must be repaid within 10 years. You may take one loan per Calendar Year; up to two loans may be outstanding at any time. You can borrow up to half of your account balance, excluding Profit Sharing and Founder s Grant contributions. The minimum loan amount is $500; the maximum loan amount is $50,000; however, the principal outstanding on an existing 401(k) loan affects the amount available for an additional loan. Moreover, the available amount for a new loan may be affected by your highest outstanding balance of loans during the past 12 months. For details on the amount available to you, log

19 on to or contact Vanguard Participant Services at The interest rate on a loan is the prime rate plus 2%, which is reviewed and adjusted periodically. The interest rate and principal repayment amount is fixed for the period of the loan. Once you have cashed your check, you have agreed to the terms of your loan and your repayment amount cannot be altered. You repay the principal and interest directly to your 401(k) account through payroll deductions. Loans are funded first from rollover contributions; next from team member contributions; and finally from FedEx Kinko s cash match. All loan repayments are first credited to FedEx Kinko s cash match, next to team member contributions, and finally to rollover contributions. Once you request a 401(k) loan, you will be charged an initial set-up fee of $100, which is deducted from the proceeds of the loan. You repay a 401(k) loan through automatic payroll deductions over a period of six months to five years or in any six-month increment in between for a general purpose loan, or to 10 years if the loan is used to purchase or construct your primary residence. Because all loan repayments are made through automatic payroll deductions, you are not eligible for a 401(k) loan if you no longer work for FedEx Kinko s. Your contributions to the Plan will continue while you repay a 401(k) loan, unless you contact Vanguard to stop your contributions. Participant loans from 401(k) plans are not included in taxable income unless a team member fails to make regular repayments on the 401(k) loan. Failure to make a repayment on time may result in the loan being deemed a distribution and reported to the IRS as a taxable event. If you are not yet age 59-1/2, a 10% federal penalty tax and possibly a state penalty tax may also apply. In addition, if you transfer from one FedEx Kinko s location to another, you are responsible for ensuring that your 401(k) loan repayment(s) are reflected on your paycheck. Failure to immediately notify the Payroll Department of discrepancies may result in the 401(k) loan(s) being deemed a distribution and reported to the IRS as a taxable event. If you are not yet age 59-1/2, a 10% federal penalty tax and possibly a state penalty tax may also apply. If you go on an approved leave of absence at a rate of pay (after withholdings) that is less than the required loan repayments, you will not be required to make your 401(k) loan repayments for up to one year while on the leave. Upon your return, your loan payments will resume. You may pay the missed amount

20 accumulated during your leave upon return to active status, or by the last scheduled payment date of your loan. If you fail to make up the missed payments by the end of the term of your loan, your loan will be considered delinquent and will default. When a loan is declared in default, Internal Revenue Service regulations require that the outstanding principal balance, plus the interest accrued through the date of default, be treated as having been received as a distribution from the Plan. If you terminate your employment after receipt of a loan, and do not pay the outstanding balance by the last day of the calendar quarter following the calendar quarter in which your last scheduled payment was due or made, whichever is first, your loan will be deemed a distribution and reported to the IRS as a taxable event. Federal and state early distribution penalties may also apply. General Purpose Loans To request a general purpose loan, contact Vanguard at or Loan checks are generally mailed to your home address one week after you complete your request. (Express loans are generally mailed the next business day.) You will also receive a promissory note regarding the terms of your loan from Vanguard for your files. Review your agreement carefully before you sign, cash, or deposit your check. Once you have signed, cashed, or deposited your check, you will be held to the terms of your promissory note. Home Loans If the terms shown on your promissory note are not correct, do not sign, cash, or deposit your check call Vanguard Participant Services immediately. To request a home loan, contact Vanguard at or A loan application packet will be mailed to your home address five to seven business days after you complete your request. Once you have received your application: Sign and return the application with any required documentation to Vanguard. Your check will be sent about one week after approval.

21 Verification of Your Account If you are in the process of purchasing a home and you need verification of your account, you can request an account statement by contacting Vanguard at or Repaying a 401(k) Loan You may repay the outstanding principal of your loan at any time without penalty. To repay a 401(k) loan early, contact Vanguard Participant Services. Total repayment must be in the form of a cashier's check or money order and should be made payable to: "VFTC as Trustee for FedEx Kinko s 401(k) Plan , FBO (your name and Social Security number)" Send the cashier's check or money order with a note indicating you are repaying your loan early as follows: For Overnight Deliveries Only: By Regular Mail: The Vanguard Group Attn: Plan # Vanguard Blvd. Malvern, PA The Vanguard Group Attn: Plan # P.O. Box 1101 Valley Forge, PA Partial payments and personal checks cannot be accepted. For information on repaying a 401(k) loan if you are a Plan participant receiving severance pay, please see the heading entitled Additional Plan Information. Withdrawing Money Hardship Withdrawals After exhausting the loan process, you may be eligible to take a hardship withdrawal if you are an active team member or on an approved leave of absence. If you roll over funds into the Plan, you are eligible to take a hardship withdrawal prior to participating in the Plan. To take a hardship withdrawal, you must be prepared to provide paperwork evidencing one of the financial needs as defined by the Internal Revenue Service (IRS): Purchase or construction of your primary residence, Prevention of eviction from, or foreclosure of, your primary residence,

22 Payment of unreimbursed medical expenses for yourself, your spouse or your dependents, Payment of post-secondary education for yourself, your spouse or your dependents, Payment of burial or funeral expenses for your deceased parent, spouse or dependents, or Certain expenses for the repair of damage to your principal residence. Hardship withdrawals are limited to team member contributions and rollover contributions only. FedEx Kinko s matching contributions, Founder s Grant and Profit Sharing are not available for hardship withdrawals. You may take one hardship withdrawal per Calendar Year. The minimum withdrawal amount is $500 or the maximum available to you under $500. The Plan may only issue to you the amount necessary for your hardship, federal and state taxes, and potential penalties. You must attest that no other funds are available to satisfy your immediate financial need and be prepared to provide paperwork evidencing this financial need. Hardship withdrawals are subject to federal and state taxes, and potential penalties. Please contact a qualified tax advisor before applying for a hardship withdrawal. If you receive a hardship withdrawal, you are suspended from participating in the Plan for six months following your hardship withdrawal. Steps to take to Request a Hardship Withdrawal (1) Call Vanguard at to request a withdrawal form. Vanguard will send you a withdrawal form with five to seven business days. (2) Complete the withdrawal form and return it to Vanguard. If any documentation is required, you will need to provide proof of the financial hardship with your form. If approved, your check will be mailed within one week after your request is received and approved by Vanguard. In-service Withdrawals at Age 59-1/2 When you have reached age 59-1/2, you may withdraw all or any portion of your contributions, as well as rollover contributions to the Plan. Company matching contributions, Founder s Grant and Profit Sharing contributions are not available for withdrawal.

23 To be eligible for a withdrawal at age 59-1/2, you must be an active team member or on an approved leave of absence. If you elect to take a withdrawal at age 59-1/2, you may continue to participate in the Plan. At age 59-1/2, there is no minimum withdrawal amount, and there is no limit on the number of withdrawals you may take in a 12-month period. All withdrawals are subject to federal and state income taxes, but not the 10% federal penalty. Steps to take to Request a 59-1/2 Withdrawal (1) Call Vanguard at A Vanguard associate will assist you in determining the amount available for withdrawal. You can either request an express withdrawal or request an application, which will be sent within five to seven business days. (2) If you request an application, complete and mail the application back as directed on the form. The application expiration period is 20 business days from the application date. (3) Your check will generally be mailed the next business day for an express withdrawal or within one week of Vanguard receiving the properly completed application. Required minimum Distributions (RMDs) If you remain actively employed with FedEx Kinko s beyond age 70-1/2, you may elect to receive the assets in your account: On or after April 1 st of the Calendar Year in which you attain age 70-1/2, or On or after April 1 st of the Calendar Year in which you terminate employment with FedEx Kinko s. Contact Vanguard Participant Services for additional information. General Information All questions and transactions on your account must be initiated with Vanguard at or In the event that your address is incorrect, loan checks, withdrawals, distributions, and rollovers cannot be issued until your address is corrected through FedEx Kinko s MyHR and transmitted to Vanguard. Address corrections may take up to 30 days, depending on the payroll cycle. Distributions or Rollovers To request a distribution or rollover, call Vanguard Participant Services. Distribution and rollover checks are generally mailed to your home address five to seven working days

24 after you complete your request, provided your termination status and termination date have been transmitted by the Payroll Department to Vanguard and your address is correct. If your address or status is incorrect, your distribution or rollover may be delayed up to 30 days depending on the payroll cycle. During the month of January following your receipt of a distribution or rollover, you will receive an IRS 1099-R form for tax reporting purposes. It is critical that you maintain a current address with FedEx Kinko s to ensure you receive all necessary tax information. Federal Tax Consequences The following information addresses questions you may have about the tax consequences of participating in the Plan. However, you should understand that because the tax laws are complex, this information is not complete in all respects and does not address state or local tax laws or the application of foreign or United States tax laws if you live outside the United States. Furthermore, because tax laws and regulations are constantly changing, you should consult a tax advisor concerning the tax consequences of participation in the Plan, including the affects of distributions, withdrawals, loans, or any other payments made to you from the Plan. You may also obtain additional information from the 402(f) Notice in the Legal Notifications section. Taxes on Your Contributions The Plan is designed to qualify for special tax treatment under Section 401(a) and 401(k) of the Internal Revenue Code. As long as the Plan continues to qualify for such treatment, as a participant, you will be able to defer federal income taxes on your contributions and FedEx Kinko s matching contributions, until you receive a distribution or withdrawal. Taxes on Your Investment Earnings As with contributions, you will be able to defer federal income taxes on the investment earnings or realized gains on the amounts invested in your 401(k) account until you receive a distribution or withdrawal. Future Taxes on Your Contributions and Earnings Income tax deferral is not the same as never having to pay taxes. Any distribution or withdrawal that you receive from your 401(k) account will be included in your taxable income in the year in which you receive the distribution or withdrawal. Ordinarily, you will be taxed on your distribution or withdrawal from your account as ordinary income in the year of the distribution. The taxes you owe will be calculated at the rates on ordinary income in effect at the time of distribution, which may be higher or lower than the tax