THE VANGUARD RETIREMENT AND SAVINGS PLAN SUMMARY PLAN DESCRIPTION APRIL 1, 2010 TABLE OF CONTENTS

THE VANGUARD RETIREMENT AND SAVINGS PLAN SUMMARY PLAN DESCRIPTION APRIL 1, 2010 TABLE OF CONTENTS INTRODUCTION Introduction...1 PART ONE - SPECIFICS OF THE PLAN A. PLAN PARTICIPATION Q.1 Who is eligible to participate in the Plan?... 2 Q.2 When am I eligible to participate in the Plan?... 2 Q.3 How do I satisfy the Plan s one-year-of-service requirement for Vanguard s matching contributions?... 2 Q.4 What is an hour of service?... 3 Q.5 What is a one-year break in service for participation purposes?... 3 Q.6 What are the eligibility requirements if I previously worked for Vanguard?... 3 Q.7 How do I elect to become a participant in the Plan?... 4 B. CONTRIBUTIONS TO THE PLAN Q.8 What types of contributions may be made to the Plan?... 5 Q.9 What are Employee Pre-Tax Basic and Roth Basic Contributions?... 5 Q.10 How is my base compensation determined?... 6 Q.11 How do Employee Pre-Tax Basic and Roth Basic Contributions affect my taxes?... 6 Q.12 How do I elect to make Employee Pre-Tax Basic and Roth Basic Contributions?... 7 Q.13 How does Vanguard match my contributions to the Plan?... 7 Q.14 What are Employee Pre-Tax Supplemental and Roth Supplemental Contributions?... 8 Q.15 How do Employee Pre-Tax Supplemental and Roth Supplemental Contributions affect my taxes?... 8 Q.16 How do I elect to make Employee Pre-Tax Supplemental and Roth Supplemental Contributions?... 9 Q.17 Are there limits on my contributions to the Plan?... 9 Q.18 May I change my contribution elections?... 10

Q.19 What are Retirement Plan Contributions... 11 Q.20 Why are there additional contributions for compensation above the Social Security taxable wage base?... 11 Q.21 Are there any overall limits on contributions to the Plan... 12 C. PLAN ACCOUNTS AND INVESTMENTS Q.22 How are contributions to the Plan held and accounted for?... 12 Q.23 In which Vanguard funds may I invest my contributions?... 12 Q.24 What if I have questions about the Vanguard funds available under the Plan?... 14 Q.25 How often may I change my investment directions?... 15 Q.26 How do I keep track of my accounts under the Plan?... 15 D. PLAN LOANS Q.27 May I borrow amounts from my accounts under the Plan?... 16 Q.28 How much may I borrow from my accounts?... 16 Q.29 How do I repay my loan?... 18 Q.30 What rate of interest will I be charged on my loan?... 18 Q.31 How do I apply for a loan?... 18 Q.32 What happens to my loan if I take a leave of absence?... 19 Q.33 What happens if I terminate employment with an outstanding loan?... 19 Q.34 How are Plan loans treated and accounted for?... 20 Q.35 What happens if I fail to make a scheduled loan repayment?... 20 Q.36 Will any fees be charged for taking a loan?... 20 E. VESTING Q.37 What is vesting?...20 Q.38 How am I credited with a year of service for vesting purposes?... 21 Q.39 How is my vested amount determined?... 21 Q.40 What is a one-year break in service for vesting purposes?... 23 Q.41 How will my vested amount be calculated if I leave Vanguard and later return?... 23 Q.42 Can I recover the unvested portion of my accounts if I am later reemployed by Vanguard?... 23 F. PLAN DISTRIBUTIONS Q.43 When will I be entitled to distributions under the Plan?... 24 Q.44 In what form may I receive my distribution?... 24 Q.45 May I defer the distribution of my accounts after terminating employment with Vanguard?... 24

Q.46 What happens if I die before the complete pay-out of my Plan accounts?... 25 Q.47 Who is my designated beneficiary under the Plan?... 25 Q.48 May I take in-service withdrawals from the Plan?... 26 Q.49 What does the Plan mean by financial hardship?... 27 Q.50 How much may I withdraw as a hardship withdrawal?... 27 Q.51 What other conditions apply to hardship withdrawals?... 28 Q.52 What are the consequences of taking a hardship withdrawal... 28 Q.53 How do I apply for an in-service or hardship withdrawal?... 28 G. SPECIAL RULES FOR PRE-2004 RETIREMENT PLAN ACCOUNTS Q.54 Are there any special limits on withdrawals from Pre-2004 Retirement Plan accounts?... 29 Q.55 When may I take distributions from these accounts?... 29 Q.56 May I withdraw money from my Pre-2004 Retirement Plan accounts while I am still employed by Vanguard?... 29 Q.57 What happens if I die while employed by Vanguard?... 29 Q.58 How can I waive the qualified preretirement survivor annuity?... 30 Q.59 In what form will I receive distributions from my Pre-2004 Retirement Plan accounts?... 31 Q.60 How can I waive the qualified joint-and-survivor (QJSA) form of distribution?... 31 Q.61 If I waive the annuity form of distribution, in what form may I choose to receive my distribution?... 32 H. FEDERAL INCOME TAX CONSEQUENCES Q.62 Am I taxed on the contributions to the Plan on my behalf?... 32 Q.63 Am I taxed on the investment earnings credited to my accounts in the Plan?... 32 Q.64 How are distributions from the Plan taxed?... 32 Q.65 What types of distributions can I roll over to an IRA or other retirement plan?... 33 Q.66 How can I make a rollover of my plan distribution?... 34 Q.67 What happens if I don t make a direct rollover?... 34 Q.68 What penalty taxes will I owe on distributions I receive before age 59½?... 34 I. MISCELLANEOUS Q.69 What about amendment or termination of the Plan?... 35 Q.70 Are my benefits under the Plan insured?... 35 Q.71 What if I participated in another employer s qualified plan before joining Vanguard?... 35

Q.72 May I assign my benefits under the Plan?... 36 Q.73 What is a qualified domestic relations order ( QDRO )... 36 Q.74 What if I am away on uniformed-services leave?... 36 PART TWO - ADMINISTRATIVE AND ERISA INFORMATION Administrative Facts... 37 Statement of Rights Under ERISA...38 Special Tax Notice Regarding Plan Distributions... 41

INTRODUCTION The Vanguard Retirement and Savings Plan ( Plan ) is designed to encourage long-term savings by Vanguard employees for retirement or other purposes. The Plan is a defined contribution 401(k) profit sharing plan that permits employees to save on a tax-favored basis. This means it does not guarantee a fixed benefit at retirement. Instead, the benefit you ultimately receive will depend on the total contributions that you and Vanguard make to the Plan on your behalf and the earnings or losses on the investment of those contributions. This Summary Plan Description is designed to introduce you to the most important features of the Plan as in effect on April 1, 2010. The Plan is the product of a merger of the Vanguard Retirement Plan into the Vanguard Thrift Plan. Throughout this Summary, the accounts that were transferred to the Plan from the Vanguard Retirement Plan are referred to as Pre-2004 Retirement Plan accounts or sometimes, simply, Pre-2004 accounts. The Summary is divided into two parts: 1. Part One gives you detailed information about the Plan s provisions on participation, contributions, investments, loans, and distributions. 2. Part Two gives you information about how the Plan is administered and tells you about your rights under the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). You should take the time to review this Summary carefully. Your benefits under the Plan can play an important role in your (and your family s) financial future. You should understand the benefits available and the choices you can make under the Plan. Please remember that this is a summary of the provisions of the Plan. It is not the Plan document itself. A summary cannot explain how each Plan provision might apply in every situation, nor can it explain all of the conditions and exceptions that might apply to the Plan provisions that are covered. If you have any questions about the Plan that are not addressed in this Summary or you would like to order your own copy of the Plan document, please contact: Vanguard Human Resources Dept., M-22 P.O. Box 876 Valley Forge, PA 19496 Telephone: (610) 503-2536 (610) 669-8090 Your rights under the Plan are governed exclusively by the provisions of the Plan document and related Trust Agreement. If there is any conflict between the provisions of this Summary and the Plan document, the provisions of the Plan document will control. 1

PART ONE SPECIFICS OF THE PLAN This Part discusses the specific provisions of the Plan. The provisions of the Plan are explained in question-and-answer format. The questions are listed in the Table of Contents at the beginning of the Summary. By referring to the Table of Contents, you should be able to locate quickly the answers to any specific questions you might have. A. PLAN PARTICIPATION Q.1 Who is eligible to participate in the Plan? A. In general, all employees of Vanguard may participate in the Plan, except employees who are classified as interns and employees whose service with Vanguard is governed by a collective bargaining agreement that does not allow them to participate in the Plan. Individuals who are not treated by Vanguard as employees for purposes of income and employment-tax withholding, such as independent contractors and leased employees, are not eligible to participate in the Plan. Q.2 When am I eligible to participate in the Plan? A. Employees who are eligible to participate in the Plan may choose to begin contributing from their pay upon hire and Vanguard will make quarterly Retirement Plan Contributions (subject to the vesting rules described in Questions 37-42). After you have completed one year of service (see Question 3), Vanguard will begin to match your Employee Pre-Tax Basic and/or Roth Basic Contributions. Q.3 How do I satisfy the Plan s one-year-of-service requirement for Vanguard s matching contributions? A. You will satisfy the Plan s one-year-of-service requirement by completing a 12-month period of employment with Vanguard called an eligibility computation period during which you are credited with at least 1,000 hours of service as a Vanguard employee. Your first 12- month eligibility computation period begins on your date of hire. Example: Mary is hired by Vanguard on February 3, 2011. During her first 12 months of employment, Mary is paid for 1,950 hours of service, including vacation, holidays, and sick pay. On February 3, 2012, Mary has completed a 12- month eligibility computation period during which she has been credited with at 2

least 1,000 hours of service. Mary will be credited with one year of service for Plan participation purposes on February 3, 2012. If you do not complete at least 1,000 hours of service during your initial 12-month eligibility computation period beginning on your date of hire, your subsequent eligibility computation periods for Vanguard s contributions will be the calendar years, starting with the first calendar year that begins after your date of hire. EXAMPLE: Joe is hired by Vanguard on February 3, 2011. During his first 12 months of employment, Joe is paid for 950 hours of service, including vacation, holidays, and sick pay, and therefore he has failed to satisfy the one-year-of-service requirement during his first eligibility computation period (ending February 3, 2012). Joe s second eligibility computation period would be calendar year 20012, and, if he again fails to complete 1,000 hours of service in 2012, his succeeding eligibility computation periods would be the calendar years 2013, 2014, etc. Q.4 What is an hour of service? A. In general, an hour of service means any hour for which you are paid for services performed for Vanguard. In addition, you will be credited with an hour of service for every hour for which Vanguard pays you due to vacation, holiday, illness (including disability), layoff, jury duty, military duty, or other approved leave of absence. However, you will not be credited with more than 501 hours of service for any continuous period during which you perform no services for Vanguard as a result of one of the events listed above. Q.5 What is a one-year break in service for participation purposes? A. For participation purposes, a one-year break in service is an eligibility computation period (see Question 3) during which you complete 500 or fewer hours of service. However, you will not incur a break in service during any approved leave of absence (even if unpaid) granted by Vanguard, regardless of your actual hours of service. Q.6 What are the eligibility requirements if I previously worked for Vanguard? A. In general, the eligibility requirements upon rehire vary with each type of Plan contribution: Pre-Tax Basic, Supplemental, and Roth Contributions. If you are rehired as an eligible employee (see Question 1), you may choose to begin contributing immediately from your salary. 3

Employer Matching Contributions. Whether Vanguard immediately begins to match your contributions will depend on whether you met the requirements to receive Vanguard s matching contribution during your previous employment with Vanguard. If you were eligible to receive matching contributions before your termination (see Question 3), you will automatically be eligible to receive matching contributions upon rehire. If you did not meet the one-year-of-service requirement to receive matching contributions during your previous employment with Vanguard, you will generally be considered a new employee, and you will have to meet the one-year-of-service requirement before Vanguard will match your contributions. Retirement Plan Contributions. If you are rehired as an eligible employee, you will receive quarterly Retirement Plan Contributions immediately upon rehire (subject to the Plan s vesting requirement; see Questions 37-42). Q.7 How do I elect to become a participant in the Plan? A. You are eligible to contribute to the Plan as early as your date of hire. Vanguard automatically enrolls new employees in the Plan at a pre-tax contribution rate of 4%. Depending on when you are hired, it may take one or two payroll periods to establish your account. If you want to change your contribution rate, annual increases, or investment options, or opt out of the RSP, you can: Log on to Vanguard Web Account Access at www.vanguard.com. Call the 24-hour Vanguard VOICE Network, using a Touch-tone telephone and the Personal Identification Number (PIN) provided to you by Vanguard, by dialing 1-800- 523-1188 (outside Vanguard) or extension 42000 (inside Vanguard). You should receive your PIN (by mail) within 10 business days of your date of hire. You should call Vanguard Participant Services if you do not receive your PIN within that time frame. Call the Vanguard Participant Services Department, using a Touch-tone telephone by dialing 1-800-523-1188 (outside Vanguard) or extension 42000 (inside Vanguard). Once you are eligible to receive Retirement Plan Contributions, an account to hold those contributions will be established for you, regardless of whether you are otherwise contributing to the Plan. 4

B. CONTRIBUTIONS TO THE PLAN Q.8 What types of contributions may be made to the Plan? A. The Plan generally permits five types of contributions: Employee Pre-Tax Basic Contributions (up to 4% of pay)*; Employer Matching Contributions; Employee Pre-Tax Supplemental Contributions (up to 46% of pay)*; Employee Catch-Up Contributions (for employees age 50 and over); and Retirement Plan Contributions. * Employee Basic and Supplemental Contributions may also be made on an after-tax basis as Roth contributions. See Question 9.) Q.9 What are Employee Pre-Tax Basic and Roth Basic Contributions? A. In general, if you are eligible to participate in the Plan, you may elect to make Employee Pre- Tax or Roth Basic Contributions to the Plan in a amount equal to 1%, 2%, 3%, or 4% of your base compensation from Vanguard (i.e., your combined total of Employee Pre-Tax Basic and Roth Basic Contributions cannot exceed 4% of your base compensation). After you complete one year of service (see Question 3), your Employee Pre-Tax & Roth Basic Contributions to the Plan are matched each payroll period dollar-for-dollar by Vanguard s contributions to the Plan on your behalf. (See Question 13 for more information about how Vanguard s matching contributions are calculated.) Pre-Tax You may choose to contribute from your pay in the form of Employee Pre-Tax Basic Contributions, which are deducted from your pay on a pre-tax basis, reducing the amount of tax you pay in the current year. Roth Instead of making contributions on a pre-tax basis, you may instead contribute from your pay on an after-tax basis. Although Roth contributions are taxable at the time you make them, distributions of Roth amounts and earnings may be tax-free if certain criteria are met. (See Question 64.) 5

Q.10 How is my base compensation determined? A. For purposes of determining the amount of contributions that may be made to the Plan on your behalf, your base compensation is generally defined as your gross pay (including vacation, sick, overtime, performance bonuses, and short-term disability pay) from Vanguard before any reduction for your Employee Pre-Tax Contributions to the Plan or any pre-tax contributions to The Vanguard Group, Inc. Benefit Plan. However, your base compensation does not include certain taxable items, including, but not limited to, awards under the Vanguard Partnership Plan, non-performance-related bonuses (including but not limited to sign-on bonuses, departmental awards, and crew referral awards), tuition reimbursements, relocation-assistance payments, foreign assignment-related expense allowance or reimbursements, and dependent-care subsidy payments. In addition, federal tax law limits the amount of compensation that may be taken into account when determining the amount of plan contributions on behalf of any participant to $245,000 (for 2010). If your annual base compensation exceeds this federal compensation limit, contributions to the Plan on your behalf will be calculated based on the federal compensation limit instead. Q.11 How do Employee Pre-Tax Basic and Roth Basic Contributions affect my taxes? A. Pre-Tax Your Employee Pre-Tax Basic Contributions reduce the amount of your compensation subject to current-year federal income taxes (although your gross pay remains the same). Since your taxable compensation is reduced, you save on current-year federal income taxes. EXAMPLE: Sue, a Vanguard employee earning $40,000 a year, has 4% of her base compensation or $1,600 contributed to the Plan as Employee Pre-Tax Basic Contributions. As a result of this election, Sue will reduce her pay subject to federal income taxes by $1,600. If Sue is in the 25% tax bracket, this reduction could save Sue up to $400 on current-year federal income taxes. You should also recognize that the investment earnings on your Plan contributions including dividends and capital gains are not subject to federal income taxes until you withdraw those amounts from the Plan. Thus, another important benefit of the Plan is that your Plan savings grow on a tax-deferred basis. Note: Although Employee Pre-Tax Basic Contributions reduce the amount of your pay subject to current-year federal income taxes, they do not reduce the amount of your pay subject to current-year FICA taxes (Social Security and Medicare) or (possibly) state income taxes. 6

Roth Roth contributions are taxable when made so they do not reduce your current taxes. However, when you take a distribution, your Roth contributions are not taxed and, if certain criteria are met, the earnings on your Roth contributions are tax-free also. (See Question 64 regarding taxation of Roth distributions.) Q.12 How do I elect to make Employee Pre-Tax Basic and Roth Basic Contributions? A. You may elect to make Employee Pre-Tax Basic and/or Roth Basic Contributions to the Plan by enrolling through Vanguard Web Account Access at www.vanguard.com, or by calling the VOICE Network or Participant Services. (To enroll through the VOICE system, you will need to provide your Personal Identification Number (PIN), which Vanguard will provide to you upon hire. (It is NOT the same as your Crew Member Identification Number.) Your contributions will automatically be made to the Plan each payroll period through convenient payroll deduction. To encourage employee savings, Vanguard automatically enrolls new employees in the Plan so that they make the maximum 4% Pre-Tax Basic Contributions. This automatic enrollment program will also increase your annual contributions at a rate of 2% each year up to a maximum of 12% per year. Employees who do not wish to participate in the Plan may opt out of automatic enrollment on line or by calling Participant Services. (See Question 24 for contact information). Any contributions you made before stopping participation will continue to be held in your accounts under the Plan and may not be refunded to you. Q.13 How does Vanguard match my contributions to the Plan? A. To encourage employee savings, Vanguard will match your Employee Basic Contributions (Pre-Tax or Roth) to the Plan with Employer Matching Contributions on a dollar-for-dollar basis after you meet the one-year-of-service requirement. This means that for every dollar of Employee Basic Contributions that you contribute to the Plan, Vanguard will contribute a matching dollar of Employer Matching Contributions on your behalf up to a total of 4% of your base compensation from Vanguard. EXAMPLE: In the preceding example (Question 11), Sue elected to make Employee Pre-Tax Basic Contributions to the Plan in the amount of $1,600 (4%) for the current year and, by so doing, saved on current-year federal income taxes. She has also met the one-year-of-service requirement What s more, as a result of Sue s election, Vanguard will match Sue s Employee Pre-Tax Basic Contributions with Employer Matching Contributions on her behalf in the same amount $1,600 (4% base compensation). As a result, the total contributions to the Plan on behalf of Sue for the current year will be $3,200. Therefore, if Sue is in the 25% tax 7

bracket, and saves $400 in taxes as a result of her Pre-Tax Basic Contributions, it really only costs Sue $1,200 of her taxable income to receive $3,200 in total contributions to the Plan. Note: Vanguard calculates its matching contribution on a payroll-by-payroll basis, so as a general rule you will not receive a matching contribution unless you are also making an employee contribution during the pay period. However, if your contributions to the Plan are suspended due to the IRS contribution limits on employee deferrals ($16,500 in 2010), you will continue to receive matching contributions from Vanguard equal to up to 4%* of your eligible income each pay period until the earlier of the last pay period of the year, or when you have received the maximum allowable match for the Plan Year. *The matching contribution you receive will be equal to your employee deferral percentage while you were actively contributing to the Plan, up to a maximum of 4%. Q.14 What are Employee Pre-Tax Supplemental and Roth Supplemental Contributions? A. If you elect to make Employee Pre-Tax or Roth Basic Contributions to the Plan at the maximum 4% rate, you may also elect to make non-matched Employee Pre-Tax Supplemental or Roth Supplemental Contributions to the Plan in an amount up to an combined additional 46% of your base compensation from Vanguard. Q.15 How do Employee Pre-Tax Supplemental and Roth Supplemental Contributions affect my taxes? A. Pre-Tax As in the case of your Employee Pre-Tax Basic Contributions, your Employee Pre-Tax Supplemental Contributions further reduce the amount of your pay subject to current-year federal income taxes. EXAMPLE: The following federal income-tax savings are available for participants who elect to have 4% Employee Pre-Tax Basic Contributions and 21% Employee Pre-Tax Supplemental Contributions made to the Plan for a total of 25%. (Note: For simplicity, this example assumes that all of a participant s income is taxed at the same rate. If your taxable income crosses multiple tax brackets, your actual tax savings could be larger or smaller.) 8

Tax Savings Base Pay 15% Bracket 25% Bracket 28% Bracket $25,000 $938 $1,563 $1,750 $30,000 $1,125 $1,875 $2,100 $35,000 $1,313 $2,188 $2,450 $40,000 $1,500 $2,500 $2,800 In addition, the investment earnings on your Employee Pre-Tax Basic and Supplemental Contributions (including dividends and capital gains) are not subject to current-year federal income taxes until you withdraw those amounts from the Plan. Note: As indicated earlier, Employee Pre-Tax Basic and Supplemental Contributions do not reduce the amount of your compensation subject to Social Security and Medicare taxes (FICA) or (possibly) state income taxes. Roth Like Roth Basic Contributions, Roth Supplemental Contributions are taxable when made so they do not reduce your current taxes. However, when you take a distribution, your Roth contributions are not taxed and, if certain criteria are met, the earnings on your Roth contributions are tax-free also. (See Question 64 regarding taxation of Roth distributions.) Q.16 How do I elect to make Employee Pre-Tax and Roth Supplemental Contributions? A. You may elect to make from 1% to 46% Employee Pre-Tax or Roth Supplemental Contributions to the Plan each year (if you have also elected to make 4% Employee Pre-Tax Basic Contributions) by enrolling through Web Account Access at www.vanguard.com, the automated Vanguard VOICE Network, or Participant Services. Your Employee Pre-Tax Supplemental Contributions will be automatically made to the Plan each payroll period through convenient payroll deduction. (See Question 12.) Q.17 Are there limits on my contributions to the Plan? A. As explained above, you may make Employee Pre-Tax and Roth Basic Contributions to the Plan in an amount up to 4% of pay and Employee Pre-Tax and Roth Supplemental Contributions to the Plan in an amount up to 46% of pay, for a combined total of 50% Employee Pre-Tax and Roth Contributions. However, federal tax law imposes several other limits that might reduce the amount of contributions that may be made to the Plan on your behalf. 9

1. Indexed Limit on Employee Pre-Tax and Roth Contributions. Federal tax law imposes an indexed dollar limit on the total amount of Employee Contributions that may be made to the Plan on your behalf for any calendar year. It is important to recognize that this indexed dollar limit applies only to your combined Employee Basic and Supplemental Contributions (Pre-Tax and Roth) to the Plan. It does not apply to Vanguard s Employer Matching Contributions and Retirement Plan Contributions to the Plan on your behalf. The combined annual limit on Employee Contributions is $16,500 (for 2010). Employees age 50 or older may contribute up to an additional $5,500 (for 2010) as catch-up contributions. You may start taking advantage of this catch-up rule as early as the beginning of the year in which you turn 50. Note: These limits on employee contributions apply to your aggregate contributions to all employer retirement plans during the year (excluding rollover contributions), even if the employers are not related. For example, if you are under age 50, worked until March 2010 for another employer and contributed $6,500 to that employer s plan, and were hired by Vanguard in April 2010, you could only contribute another $10,000 to Vanguard s Plan, even if you otherwise receive enough compensation from Vanguard to contribute $16,500. Some examples of other retirement plans to which you might have contributed include: 401(k) plans, 403(b) plans (sometimes called tax-sheltered annuities ), SIMPLE IRAs, and SARSEPs. 2. Limits Based on Non-Discrimination Tests. For certain highly compensated employees as defined by federal tax law, there are other limitations that might reduce the total amount of contributions that may be made to the Plan for them. These limitations are not based on specific dollar figures but rather are based on quantitative nondiscrimination tests designed to make sure that employees at all pay levels benefit from the Plan on a relatively equivalent basis. Generally, if you would exceed these limits, the Vanguard Human Resources Department will notify you. However, if you have made contributions to another employer s retirement plan during the year, it is your responsibility to notify the Human Resources Department as soon as possible to ensure that your total contributions do not exceed limit (1) above. As a result of these limits, it is possible that you will not be permitted to make the full amount of Employee Pre-Tax and Roth Contributions to the Plan for any calendar year or that certain excess contributions previously made to the Plan on your behalf will be returned to you (adjusted for earnings and losses). In addition, any Matching Contributions attributable to those excesses must be forfeited back to the Plan. Q.18 May I change my contribution elections? A. You may change at any time the amounts of Employee Basic and Supplemental Contributions (Pre-Tax or Roth) that you would like to make to the Plan. (In general, your changes will be effective for the following payroll period.) You may change your contribution election 10

through Web Account Access at www.vanguard.com, by calling the Vanguard VOICE Network or the Vanguard Participant Services Department. Q.19 What are Retirement Plan Contributions? A. Retirement Plan Contributions begin upon hire as an eligible employee. (See Question 1.) Vanguard makes Retirement Plan Contributions to the Plan on your behalf for each calendar quarter in an amount equal to 10% of your base compensation (see Question 10) from Vanguard for the calendar quarter, subject to certain legal limitations explained in Question 21 below. If your base compensation exceeds the taxable wage base under Social Security for old-age, survivors, and disability insurance, Vanguard makes additional contributions on your behalf in an amount equal to 5.7% of the amount of your base compensation in excess of the Social Security taxable wage base. To be eligible for a Retirement Plan Contribution for any calendar quarter, you must be employed on the last business day of that calendar quarter. EXAMPLE: Kathy earns base compensation of $120,000 for 2010. She is paid $30,000 each quarter. For 2010, the Social Security taxable wage base (SSTWB) is $106,800. The total Retirement Plan contribution to the Plan on Kathy s behalf for the year would be $12,752, calculated as follows: 1 St Quarter Contribution 10% of 1 st Quarter Compensation ($30,000) $3,000 2 nd Quarter Contribution 10% of 2 nd Quarter Compensation ($30,000) $3,000 3 rd Quarter Contribution 10% of 3 rd Quarter Compensation ($30,000) $3,000 4 th Quarter Contribution 10% of 4 th Quarter Compensation ($30,000) $3,000 5.7% of Compensation over SSTWB ($120,000 - $106,800) $ 752 Total Contributions: $12,752 Q.20 Why are there additional contributions for compensation above the Social Security taxable wage base? A. Vanguard makes old-age insurance contributions on behalf of employees to Social Security our public retirement system based on employee compensation up to the 11

current-year Social Security taxable wage base, which is adjusted each year for cost-of-living increases. (The Social Security taxable wage base for 2010 is $106,800.) Since Vanguard s oldage insurance contributions to Social Security are cut off at the Social Security taxable wage base, the Plan provides for additional contributions for base compensation above the wage base. The reason for these additional contributions is to make sure that the total amount of retirement and old-age insurance contributions by Vanguard to the Plan and Social Security on behalf of a participating employee is approximately the same percentage of each participating employee s base compensation from Vanguard. Q.21 Are there any overall limits on contributions to the Plan? A. Yes. Federal tax law does not permit your and Vanguard s combined total contributions to the Plan on your behalf for any year to exceed the lesser of: (1) $49,000 (for 2010); or (2) 100% of your compensation for the year. (The catch-up contributions available to participants age 50 or over are not subject to the $49,000 limit.) As a result, Vanguard maybe required to reduce its and/or your contributions to the extent needed to ensure that these limitations are not exceeded. C. PLAN ACCOUNTS AND INVESTMENTS Q.22 How are contributions to the Plan held and accounted for? A. All contributions to the Plan on your behalf will be credited to one or more separate accounts established in your name. Plan contributions are held in trust by Vanguard Fiduciary Trust Company, the Plan Trustee, for the exclusive benefit of participating employees and their beneficiaries. Q.23 In which Vanguard funds may I invest my contributions? A. You may direct the investment of the contributions to the Plan on your behalf among the following Vanguard fund portfolios: Money Market/Savings Trust Funds Vanguard Money Market Reserves Vanguard Retirement Savings Trust Prime Portfolio Income Funds Vanguard Fixed Income Securities Short-Term Investment-Grade Portfolio 12

Long-Term Investment-Grade Portfolio GNMA Portfolio High Yield Corporate Portfolio Vanguard Bond Index Fund Total Bond Market Portfolio Vanguard Inflation-Protected Securities Fund Target Retirement Funds Vanguard Target Retirement Income Fund Vanguard Target Retirement 2005 Fund Vanguard Target Retirement 2010 Fund Vanguard Target Retirement 2015 Fund Vanguard Target Retirement 2020 Fund Vanguard Target Retirement 2025 Fund Vanguard Target Retirement 2030 Fund Vanguard Target Retirement 2034 Fund Vanguard Target Retirement 2040 Fund Vanguard Target Retirement 2045 Fund Vanguard Target Retirement 2050 Fund Balanced Funds Vanguard Asset Allocation Fund Vanguard/Wellesley Income Fund Vanguard Life Strategy Fund Conservative Growth Portfolio Growth Portfolio Income Portfolio Moderate Growth Portfolio Vanguard Balanced Index Fund Vanguard/Wellington Fund Stock Funds Vanguard Explorer Fund Vanguard Morgan Growth Fund Vanguard Windsor II Fund Vanguard Selected Value Fund Vanguard Index Trust Vanguard PRIMECAP Fund Extended Market Portfolio Vanguard U.S. Growth Portfolio 500 Portfolio Vanguard/Windsor Fund Small Cap Stock Portfolio Vanguard Calvert Social Index Fund Total Stock Market Portfolio International Stock Funds Vanguard International Growth Portfolio Vanguard International Value Portfolio Vanguard Total International Portfolio 13

You may choose any number of the above options for the investment of your Plan contributions, but you must make your choices in whole percentages. You should initially designate your investment directions when you enroll in the Plan. If you do not provide investment directions, all of your contributions to the Plan will be automatically invested in the Vanguard Target Retirement Fund with a Target Retirement Date closest to the date that you attain normal retirement age under the plan (age 65). For example, if you were born in 1970, you would be placed in the Vanguard Target Retirement Fund 2035. You may exchange out of the Vanguard Target Retirement Fund at any time by contacting Vanguard. See Questions 24 and 25 about providing investment instructions. Please note that the Plan intends to operate as an ERISA Section 404(c) Plan. Because the Plan allows and encourages you to direct your investments among a broad range of options and to have access to all pertinent information concerning your investments, the fiduciaries of the Plan will be relieved of liability for the results of your investment decisions, as provided under Section 404(c) of the Employee Retirement Income Security Act of 1974 ( ERISA ) and Title 29 of the Code of Federal Regulations Section 2550.404c-1. Q.24 What if I have questions about the Vanguard funds available under the Plan? A. When you become eligible to participate in the Plan, you will be given comprehensive information about the Vanguard funds available under the Plan, including an explanation of their investment objectives and policies, risk and return characteristics, past and current investment performance (net of expenses), operating expenses, and the type and diversification of assets held in the portfolio of each fund. You will also receive ongoing updates of this information in the form of prospectuses and shareholder reports for each of the Vanguard fund portfolios that you have selected for the investment of your Plan contributions. If you have any questions about the Vanguard funds available under the Plan or you would like more detailed information concerning any specific Vanguard fund portfolio (including a copy of the fund s current prospectus), you may: Call Vanguard Participant Services from 8:30 a.m. to 9:00 p.m. (Eastern Time), or use the 24-hour Vanguard VOICE Network, using a Touch-tone telephone and the Personal Identification Number (PIN) provided to you by dialing: Inside Vanguard: Extension 42000 Outside Vanguard: 1-800-523-1188 14

Use Vanguard Web Account Access (with your Web Account Access password) by contacting Vanguard at www.vanguard.com. Q.25 How often may I change my investment directions? A. Two sets of rules apply, depending on whether your are changing the investment of your future contributions or changing the investment your current balance. Directing the investment of future contributions The general rule is that you may change your investment directions with respect to your future Plan contributions through Vanguard Web Account Access or the 24-hour Vanguard VOICE Network. Changes to your investment directions may take several days to implement. Directing the investment of your current balance You are generally free to direct the investment of your account subject to the following restrictions: Code of Ethics. Under Vanguard s Code of Ethics, you are generally prohibited from exchanging out of any Vanguard fund within 30 days of investing in it. Additional information about the Vanguard Code of Ethics may be located on Crewnet or by calling the Code of Ethics hotline at extension 33344. Fund Prospectus Guidelines. Each Vanguard fund offered under the plan has restrictions on exchanging into and out of the fund. Currently, if you exchange out of a Vanguard fund, you may not exchange back into that same fund within 60 days. (This exchange restriction applies only to existing balances and will not prevent you from directing future contributions into the fund, however.) Currently, the Vanguard Prime Money Market and Short-Term Investment Grade Funds are not subject to this limit. If you have any questions about a fund s exchange policy, contact Participant Services or check on the Vanguard website. (See Question 24 about contacting Vanguard.) Retirement Savings Trust. Accounts in the Vanguard Retirement Savings Trust are subject to special investment exchange limitations. Contact the Participant Services Department for more details. Q.26 How do I keep track of my accounts under the Plan? A. Quarterly participant statements will be provided to you through Web Account Access. These statements will show the total amount credited to your accounts under the Plan as of the end of each calendar quarter and will reflect all Plan activities including contributions, earnings, investment exchanges, loans, and distributions occurring within your Plan accounts during 15

the most recent calendar quarter. In addition, you may use Web Account Access (www.vanguard.com) or call the 24-hour Vanguard VOICE Network to obtain your current account balance and the value of the shares of any Vanguard fund held in your account. D. PLAN LOANS Q.27 May I borrow amounts from my accounts under the Plan? A. Current employees of Vanguard may borrow amounts from their accounts under the Plan for any reason (see below concerning principal residence loans). However, participants who have terminated employment with Vanguard are not eligible to take loans. In addition, a beneficiary of a deceased participant and an alternate payee of a participant (as a result of a divorce decree, for example) may not take loans from the Plan. You may request one new loan per calendar year, but you may not have more than two loans outstanding at any one time. Only one of these outstanding loans may be for a principal residence. (See Question 29.) In addition, after you pay off one loan, you must wait 30 days before requesting a new loan. Principal residence loans: Loans directly used to purchase a principal residence may be paid off over an extended period of time (see Question 29), but are subject to additional requirements. To qualify, the loan must be requested and processed before settlement, and you will be required to provide a copy of the contract or agreement of sale or other written documentation acceptable to Vanguard to support the claim. Due to the documentation and other administrative requirements for principal residence loans, it may take several business days to process a principal-residence loan request so it is vital that you do not wait until only a few days before settlement to file your request. Otherwise, your only option will be a generalpurpose loan with the standard repayment term. NOTE: While the Plan does permit loans, it is important to recognize that there are risks to borrowing from your account and that severe adverse tax consequences could result under certain circumstances (described below). Therefore, while a Plan loan can be a valuable option, you should always carefully consider whether another source of funds might be more appropriate (for instance, a home-equity loan, the interest on which might be tax-deductible), particularly if the amounts needed are small. Q.28 How much may I borrow from my accounts? A. Generally, the maximum amount that you may borrow from the Plan is limited to the lesser of: (1) $50,000; or (2) 50% of the total balance in your accounts under the Plan for Employee 16

Pre-Tax and/or Roth Contributions, Matching Contributions, and Rollover contributions. The general minimum amount of any new loan from the Plan is $1,000 and the minimum loan installment per payroll period is $25. (If you request a loan of $1,000 over five years, and the repayments would be less than $25 per pay period, you will have to reduce the term of the loan sufficiently to result in at least a $25 payment; alternatively, you could increase the amount of your loan request.) You may have up to two outstanding loans from the Plan at any given time. Example 1: Mike has accumulated a total of $12,000 in his Employee Pre-Tax Contribution and Matching Contribution accounts under the Plan. He has no outstanding loans from the Plan. The maximum amount that Mike may borrow from the Plan is $6,000 (50% of his $12,000 total account balance). The minimum amount that Mike can borrow is $1,000. Example 2: Janice has a total of $30,000 in her Employee Pre-Tax, Matching Contribution, and Rollover accounts under the Plan. Janice s total account balance includes an existing Plan loan with a current outstanding balance of $6,000. (In other words, Janice s accounts consist of $24,000 invested in the Vanguard funds and a $6,000 Plan loan for a total balance of $30,000.) The maximum amount that Janice may borrow from the Plan is $9,000. That amount is 50% of Janice s total loan-eligible balance of $30,000 or $15,000 minus her $6,000 outstanding Plan loan. The minimum amount that Janice may borrow is $1,000. If Janice takes out a second Plan loan, she will not be permitted to take out another loan from the Plan until she has completely repaid one of her existing Plan loans. Example 3: Tom has accumulated a total of $120,000 in his Employee Pre-Tax and Matching Contribution accounts under the Plan. He has no outstanding loans from the Plan. The maximum amount that Tom may borrow from the Plan is $50,000. That amount is the lesser of 50% of his $120,000 eligible account balances ($60,000) or $50,000. For purposes of the $50,000 limit on Plan loans, if you had an outstanding loan from the Plan at any time during the preceding 12 months, the maximum amount that you may borrow as a new Plan loan is limited to the $50,000 limit reduced by your highest outstanding loan balance on your prior Plan loan (or loans) during the preceding 12 months. Example 4: Cathy has accumulated a total of $150,000 in her Employee Pre- Tax and Matching Contribution accounts under the Plan. Cathy s accounts include an existing Plan loan with a current outstanding balance of $20,000. Cathy s existing Plan loan had a highest outstanding loan balance during the preceding 12 months of $30,000. The maximum amount that Cathy may borrow from the Plan as a second Plan loan is $20,000. That amount is $50,000 minus 17

$30,000, the highest outstanding loan balance on her existing Plan loan during the preceding 12 months. Q.29 How do I repay my loan? A. As required by federal tax law, all loans from the Plan must be repaid within 5 years, except that a loan used to acquire your principal residence may be repaid over a longer period of time determined by the Vanguard Benefits Committee. All Plan loans must be repaid through automatic payroll deduction. You may prepay all of the unpaid principal balance of your Plan loan at any time (within payroll deadline limitations) without penalty. You may also make partial repayments of the loan. Contact Vanguard Participant Services or visit www.vanguard.com to make a full or partial prepayment. Note: Unlike a plan withdrawal, a plan loan is not taxed but it may present tax disadvantages. For instance, if you make pre-tax contributions to the plan, your current tax liability is reduced. However, you make loan repayments with after-tax dollars, so you lose an opportunity to save on taxes. In addition, you pay taxes on the repaid loan amount again when you begin to take distributions from your account. Q.30 What rate of interest will I be charged on my loan? A. You will be charged a fixed rate of interest on your Plan loan based on current market rates as determined by the Vanguard Benefits Committee. The interest rate for new Plan loans is determined monthly and is currently based on the current prime interest rate plus 100 basis points. You may contact the Participant Services Department for the current interest rate being charged for new Plan loans. Q.31 How do I apply for a loan? A. Loans may be requested by contacting: Vanguard Web Account Access, at www.vanguard.com, using your assigned password Vanguard VOICE Network Internally: Extension 42000, or Externally: 1-800-523-1188 Depending upon the type of loan you request, you will receive either a check or a loan application. Principal residence loans must always be requested through a written loan application due to the additional documentation required. You will also receive a promissory 18

note in which you will authorize automatic payroll deductions to repay your loan and pledge your eligible accounts under the Plan as security for the loan. All Plan loans are administered by the Vanguard Human Resources Department. Plan loans are approved on a uniform and nondiscriminatory basis with respect to all participants. Q.32 What happens to my loan if I take a leave of absence? A. If you take an approved unpaid leave of absence with a loan outstanding, your repayments may be suspended for up to 12 months or until you return from leave, whichever is earlier. Although your repayments are suspended, interest will continue to accrue on your loan. Also, you must still repay the loan within the original term; the suspension does not extend the time period you have to repay the loan. When you return from leave, a new installment amount will be calculated (through a process called reamortization ) to reflect the additional interest that accrued during the leave, as well as the number of payments left in the original term of the loan. Example. In January 2011, John takes a loan with a five-year term (ending January 2016). His biweekly installment payment deducted from his paycheck is $412. In February 2013, he goes on unpaid leave for a year. Vanguard grants his request to suspend loan repayments during his period of leave (up to 12 months). When he returns in February 2014, the outstanding loan balance, including interest that accrued during his period of leave, is reamortized, and his installments are increased to $510 so that the loan will be repaid by January 2016. Q.33 What happens if I terminate employment with an outstanding loan? A. If you terminate employment with an outstanding Plan loan, all remaining installment payments on your Plan loan will be immediately due and payable. If you do not repay your loan in full upon termination of employment, your accounts under the Plan will be reduced by your outstanding loan balance and you will be treated as having received a taxable distribution of the outstanding loan balance. If you are under age 59½, you generally would be subject to an additional 10% IRS penalty tax on the unpaid loan balance. If the total amount of your accounts under the Plan (including your outstanding loan balance) exceeds $1,000, you may choose to repay your loan in full upon termination of employment to avoid current taxation of your outstanding loan balance. In that case, your loan repayment will be reinvested in the Vanguard funds in accordance with your current investment directions and distributed to you at the time you elect (or are required) to receive a distribution of your accounts under the Plan. 19

Q.34 How are Plan loans treated and accounted for? A. It is important to recognize that a Plan loan is considered an investment of your accounts under the Plan (and not a taxable distribution or withdrawal at the time you receive your loan proceeds). The security for your Plan loan is the pledge of your interest in your loan-eligible accounts under the Plan. All repayments on your Plan loan will be credited to your Plan accounts and reinvested in the Vanguard funds in accordance with your current investment directions for Plan contributions. Q.35 What happens if I fail to make a scheduled loan repayment? A. Although this is unlikely to occur because loan payments are made through payroll deduction, if you do fail to make a scheduled loan repayment (and you are not on an approved leave of absence), your loan will be in default. However, you might be allowed a cure period to make up the missed payment(s) and cure the default. This cure period cannot extend past the end of the calendar quarter following the calendar quarter in which the missed payment was due. If the default is not cured, the outstanding loan balance will be deemed a taxable distribution to you (a deemed distribution ) and will be reported on IRS Form 1099-R for the year in which it occurred. You will not be allowed to take out a new loan following a deemed distribution until you have repaid the outstanding balance of the prior loan, including accrued interest from the date of the deemed distribution, in full. Q.36 Will any fees be charged for taking a loan? A. To defray expenses, you may be charged a reasonable fee for the origination and maintenance of each loan. Currently, the fee is $40 for loans initiated through Vanguard.com or the automated VOICE Network. The fee is $90 for loans initiated by phone through a Participant Services associate. There is a $25 annual maintenance fee for all loans. These fees are subject to change at any time. Contact the Participant Services Department to learn the fees currently being charged for loans. E. VESTING Q.37 What is vesting? A. Vesting refers to whether you are entitled to keep the amounts allocated to your accounts if your employment with Vanguard is terminated, whether or not voluntarily. Your vested 20

interest is expressed as a percentage and is based on the number of calendar years during which you have completed 1,000 or more hours of service. The vesting rules vary with the type of contribution, as explained in Question 39 below. Q.38 How am I credited with a year of service for vesting purposes? A. You are credited with one year of service for vesting purposes for each calendar year during which you are credited with at least 1,000 hours of service as a Vanguard employee. (See Question 4 above for the definition of an hour of service.) EXAMPLE: Bob is hired by Vanguard on May 1, 2011 and completes at least 1,000 hours of service from May through December 31, 2011. In addition, Bob completes 1,000 hours of service in both 2012 and in 2013. At the beginning of 2014, Bob will have completed three years of service for vesting purposes. Note: Vanguard credits hours of service for vesting purposes based on the hours worked as shown on your paystub. Therefore, in the above example, if the last full pay period for a year ended on December 23, Bob s vesting would be based on the hours reflected on his paystub through December 23, and the hours Bob worked between December 24 and December 31 would actually be credited to the following plan year. Q.39 How is my vested amount determined? A. You are always fully vested in your Employee Pre-Tax and Roth Basic and Supplemental Contributions, Rollover Contributions, Vanguard s Matching Contributions, and, if you were employed by Vanguard before January 1, 1987, your Employee After-Tax Contributions (if any). Retirement Plan and Pre-2004 Retirement Plan accounts (except Employee After-Tax Contributions) are subject to vesting requirements. The vesting schedule that applies to these accounts varies depending on when you were in Vanguard s employment: If you were employed by Vanguard as of or after January 1, 2007. Retirement Plan Contributions and any Pre-2004 Retirement Plan accounts (except Employee After-Tax Contributions) are subject to the following six-year graded vesting schedule: Years of Service Vested Percentage Less than 2 0% 2 20% 3 40% 4 60% 21

5 80% 6 100% If you terminated employment with Vanguard before January 1, 2007, a seven-year graded vesting schedule applies as follows: Years of Service Vested Percentage Less than 3 0% 3 30% 4 40% 5 60% 6 80% 7 100% All Participants: Regardless of the applicable vesting schedule, you will become fully vested in your accounts, regardless of your years of service, if any one of the following events occurs while you are still employed by Vanguard: reaching normal retirement age (age 65), disability, or death. For these purposes, disability means a physical or mental condition that the Social Security Administration has determined renders you permanently disabled. You must submit a copy of the Social Security Administration s determination when claiming disability. If you terminate employment and are not fully vested, the unvested portion of your accounts will be forfeited and used to fund contributions for the remaining participants in the Plan. EXAMPLE: Jane, age 32, terminates employment with Vanguard on December 31, 2011. Because she was employed by Vanguard on or after January 1, 2007, the six-year graded schedule is used to determine how much she will receive. She has three calendar years of service during each of which she completed 1,000 hours of service; therefore, she is 40% vested in her Retirement Plan account. When she submits her distribution request, she has the following account balances under the Plan: Balance Vested % Employee Pre-Tax & Roth (Basic and Supplemental): $15,000 100% Employer Matching: $ 8,000 100% Retirement Plan: $10,000 40% As noted above, she is always 100% vested in her Employee Pre-Tax and Roth accounts and Vanguard s Matching Contribution account, and receives the full $23,000 ($15,000+$8,000) allocated to those accounts. In addition, she receives $4,000 from her Retirement Plan account (40% of $10,000). (The actual amount received would be based on the value of her accounts on the date of distribution.) 22

Q.40 What is a one-year break in service for vesting purposes? A. For vesting purposes, a one-year break in service is any calendar year during which you complete 500 or fewer hours of service, except that you will not incur a break in service during any approved leave of absence granted by Vanguard, even if you do not complete more than 500 hours of service. However, approved unpaid time does NOT count towards the 1,000 hours of service required for you to be actually credited with a year of vesting; avoiding a break in service merely ensures that you will not actually forfeit any benefits during your period of approved unpaid leave. Q.41 How will my vested amount be calculated if I leave Vanguard and later return? A. All your years of service will be reinstated when calculating your vested amount unless you have incurred five consecutive one-year breaks in service. If you have experienced such a break in service, separate accounts will be established to distinguish contributions and earnings related to your previous employment with Vanguard from contributions and earnings related to your current employment with Vanguard (a prior-employment and a current-employment account). You will not be able to increase the vested percentage in your prior-employment account. EXAMPLE: In the previous example (in Question 39), Jane completes three years of service through 2011 (and is therefore 40% vested in her Retirement Plan), except assume that this time she does not separate from service until March 31, 2012 but has completed only 450 hours of service in 2012. She does not work any hours for Vanguard in 2013, 2014, and 2015. She returns to Vanguard on October 1, 2016, but only works 475 hours by the end of the year. Jane has incurred five consecutive one-year breaks in service (2012-2016) and will not be able to increase her 40% vested percentage for the period of her prior employment. Upon rehire, you will be given credit in your current-employment account for your period of prior service, however. Q.42 Can I recover the unvested portion of my accounts if I am later re-employed by Vanguard? A. If you forfeited a portion of your accounts when you previously terminated employment with Vanguard, the unvested portion of your account will be restored unadjusted for earnings and losses if both of the following conditions are met: (1) you must be reemployed by Vanguard before experiencing five consecutive one-year breaks in service; and (2) within five years of reemployment by Vanguard, you must repay the full amount of any distribution of your vested portion that you took when you previously terminated employment with Vanguard. 23

F. DISTRIBUTIONS Q.43 When will I be entitled to distributions under the Plan? A. You will be entitled to receive the entire vested amount credited to your accounts under the Plan if you retire, incur a disability, or your employment with Vanguard is otherwise terminated for any reason. (See Questions 37-42 regarding plan vesting rules.) You may also take an in-service withdrawal from your Employee Pre-Tax and Roth Accounts and your Matching Contribution account at any time after reaching age 59½. You may not make a withdrawal from your Retirement Plan Contribution or Pre-2004 Retirement Plan accounts until you reach age 65. Note: For the purpose of eligibility to take a distribution, disability means a physical or mental condition that the Social Security Administration has determined renders you permanently disabled. You must submit a copy of the Social Security Administration s determination when claiming disability. Q.44 In what form may I receive my distribution? A. In general, you may only elect to receive your accounts under the Plan in a lump-sum payment of cash or a rollover to an IRA or employer-sponsored retirement plan. You will be given a distribution election form on which you may elect when to receive your Plan benefits. (See Questions 54-61 for special rules on the forms of distribution applicable to Pre-2004 Retirement Plan accounts.) Q.45 May I defer the distribution of my accounts after terminating employment with Vanguard? A. Whether you may defer the distribution of your accounts after you terminate employment with Vanguard will depend on the vested balance in your accounts, as described below. Vested balance over $1,000. If the total vested amount credited to all your accounts under the Plan exceeds $1,000, you may choose to defer the distribution of your accounts until a later date. However, if your balance later falls below $1,000, your account may be automatically distributed in accordance with the rules below. In all cases, you may not delay the start of required minimum distributions beyond the following dates: If you terminate employment with Vanguard before or during the calendar year in which you attain age 70½, you must begin taking required minimum distributions by April 1 of the year following the calendar year in which you attain age 70½; or 24

If you continue to work for Vanguard past the calendar year in which you reach age 70½, you must begin taking required minimum distributions by April 1 of the year following the calendar year in which you retire from Vanguard. Vested balance of $1,000 or less. Vested balances of $1,000 or less will be paid to you in cash unless you choose a direct rollover to an IRA or another employer s retirement plan. (See Questions 65-67 regarding rollovers.) Q.46 What happens if I die before the complete pay-out of my Plan accounts? A. If you die before the complete distribution of your accounts under the Plan, your designated beneficiary(ies) under the Plan will be entitled to receive all undistributed vested amounts credited to your Plan accounts. (See Questions 54-61 for special rules on the form of distribution applicable to Pre-2004 Retirement Plan accounts--including employee after-tax contributions under the Pre-2004 Retirement Plan).) Q.47 Who is my designated beneficiary under the Plan? A. Your choices for designating a beneficiary will depend on whether you are married at the time of your death. Married Participants. If you are married, your sole primary beneficiary is automatically your spouse unless your spouse executes a notarized consent to your designation of someone else as your beneficiary under the Plan. Unmarried Participants. If you are not married, you may designate any person (or persons) as your Plan beneficiary. If you later marry, the rules applicable to married participants will automatically apply; therefore, your sole primary beneficiary will automatically become your spouse, regardless of any designation you previously made, unless your spouse executes a notarized consent to your designation of someone else as your beneficiary. You designate your beneficiary under the Plan by completing a beneficiary designation form online at Vanguard.com (and, if necessary, a spousal consent form), which will be provided during the online beneficiary designation process. You may change your beneficiary designation at any time by submitting a new beneficiary designation form. If no beneficiary designation is in effect at the time of your death and your spouse (if any) has predeceased you, your designated beneficiary under the Plan will be your estate. Note: A beneficiary designation form is effective only if it is filed with Vanguard while you are still alive. 25

Note: Vanguard only accepts beneficiary designations and spousal waivers on forms that it provides. A prenuptial agreement or any other contractual agreement is NOT a valid spousal waiver. Q.48 May I take in-service withdrawals from the Plan? A. You may withdraw amounts from your accounts under the Plan while still employed by Vanguard under the following circumstances: After Age 59½ (Employee Pre-Tax and Roth Contributions and Matching Contributions Only): You may withdraw any amount credited to these accounts under the Plan if you have attained 59½. (Note: If your withdrawal includes Roth contributions, the earnings on the Roth contributions would be subject to taxes. See Question 64 for more information on when earnings on Roth contributions are taxfree.) After Age 65 (Retirement Plan Contributions and Pre-2004 Retirement Plan): You may withdraw any amount credited to these accounts under the Plan if you have attained age 65. (See Questions 54-61 for special rules applicable to the form of withdrawal applicable to Pre-2004 Retirement Plan accounts.) Financial Hardship: Before age 59½, you may withdraw certain Employee Pre-Tax and Roth Basic and Supplemental Contributions that you have made to the Plan for reasons of financial hardship. (A 10% federal penalty tax might apply to the withdrawal, however.) Rollover withdrawals: You may withdraw any amounts in your rollover account at any time. (A 10% penalty tax might apply to this withdrawal if you are under age 59½.) Employee After-Tax Contributions: If you participated in the Plan before January 1, 1987, and made employee after-tax contributions to the Plan (or to the Pre-2004 Retirement Plan), you may withdraw any amounts credited to your employee after-tax contribution accounts under the Plan at any time. (Withdrawals of employee after-tax contributions from pre-2004 Retirement Plan accounts must also comply with the requirements of Questions 54-61.) Note: Vanguard may establish limits setting a minimum amount that must be withdrawn and limiting the number of in-service withdrawals each year. 26

Q.49 What does the Plan mean by financial hardship? A. For purposes of the Plan, the term financial hardship means an immediate and heavy financial need that cannot be satisfied through other reasonably available financial resources. An immediate and heavy financial need includes a need to: pay certain medical expenses incurred by you, your spouse, or your dependents; purchase your principal residence (excluding mortgage payments); pay tuition, related educational fees, and room and board expenses for the next 12 months of post-secondary education for you, your spouse, or your dependents; prevent your eviction from your principal residence or foreclosure on the mortgage on your principal residence; payments for burial or funeral expenses for your parent, spouse, or dependents; or pay certain expenses for the repair of damage to your principal residence (generally only severe and unexpected damage directly resulting from fire or natural disaster; maintenance or repairs resulting from neglect do not qualify). Important: A 10% penalty tax might apply to any hardship withdrawal you receive before age 59½. (See Question 68 for more information.) Q.50 How much may I withdraw as a hardship withdrawal? A. The maximum amount that you may withdraw as a hardship withdrawal is generally limited to the amount of your Employee Pre-Tax and Roth Basic and Supplemental Contributions to the Plan. This means that you may not withdraw any earnings on your Employee Pre-Tax or Roth Contributions nor may you withdraw any of Vanguard s Employer Matching Contributions to the Plan on your behalf. (One exception to this rule is that if you were a participant in the Vanguard Thrift Plan before 1989, you may withdraw for hardship any amounts including earnings credited to your accounts for Employee Pre-Tax Contributions and Employer Matching Contributions as of December 31, 1988.) The amount of your hardship withdrawal may not exceed the amount that is necessary to relieve your immediate and heavy financial need (including any taxes reasonably expected to result from the withdrawal) and that is not reasonably available to you from other financial resources. 27

Q.51 What other conditions apply to hardship withdrawals? A. To be eligible for a hardship withdrawal, you must have taken the maximum amount available as a loan under the Plan and must have withdrawn all amounts credited to your Employee After-Tax and Rollover Contributions Accounts (if any). You must also sign a statement certifying that you have suffered an immediate and heavy financial need and that your need cannot be relieved by other reasonable means such as: selling any assets you might own; borrowing from a bank or other commercial lender on reasonable commercial terms; reimbursement or compensation by insurance; or stopping any Employee Pre-Tax or Roth Basic or Supplemental Contributions that you are currently making to the Plan. You must also include evidence of your immediate and heavy financial need, such as copies of medical bills, tuition bills, purchase agreement for a principal residence, etc. Note: Only one hardship withdrawal may be taken in a twelve-month period. Q.52 What are the consequences of taking a hardship withdrawal? A. The decision to take a hardship withdrawal should not be made lightly. If you take a hardship withdrawal, you will not be allowed to make any Basic or Supplemental (Pre-Tax or Roth) contributions for six months following your hardship withdrawal. Also, as a result of the suspension of your contributions to the Plan, you would not receive any Matching Contributions from Vanguard during the six-month suspension, either. After the suspension period ends, you are responsible for restarting your contributions to the Plan; Vanguard will not automatically restart your contributions to the Plan. Q.53 How do I apply for an in-service or hardship withdrawal? A. To withdraw amounts from your accounts under the Plan while employed by Vanguard, you must obtain a withdrawal request form either online at Vanguard.com or from the Vanguard Participant Services Department and return the completed form (along with the required certification and evidence of need in the case of a hardship withdrawal) to the Vanguard Human Resources Department. A determination will be made on your withdrawal request as soon as practicable. 28

G. SPECIAL RULES FOR TRANSFERRED AMOUNTS FROM THE PRE-2004 RETIREMENT PLAN The following special rules apply to all amounts transferred to the Plan from The Vanguard Group, Inc. Retirement Plan (the original Vanguard Retirement Plan), including any employee after-tax contributions that were made to that plan, unless otherwise specified. Q.54 Are there any special limits on withdrawals from Pre-2004 Retirement Plan accounts? A. Yes. The restrictions on the timing and form of distribution that applied to accounts under The Vanguard Group, Inc. Retirement Plan before the 2004 plan merger must by law continue to be maintained on those amounts after transfer to the Plan. Q.55 When may I take distributions from these accounts? A. You may take a distribution from the vested portion of these transferred amounts when you terminate employment with Vanguard or become disabled. (See Question 39 for vesting rules applicable to distributions at termination of employment and disability.) Q.56 May I withdraw money from my pre-2004 Retirement Plan accounts while I am still employed by Vanguard? A. Generally, you may withdraw money from this account while employed by Vanguard only if you have reached age 65 (normal retirement age). Any employee after-tax contributions that were made to The Vanguard Group, Inc. Retirement Plan before 1987 may be withdrawn at any time, but these withdrawals are subject to certain restrictions. If you are eligible, you may take up to two in-service withdrawals in a calendar year. The minimum amount you may withdraw is the lesser of $5,500 or 100% of your account balance. These limitations may be changed at any time. Call Participant Services if you have any questions about the rules applicable to in-service withdrawals from transferred amounts. Q.57 What happens if I die while employed by Vanguard? A. If you die while employed by Vanguard, the entire amount credited to your Pre-2004 Retirement Plan accounts will become fully vested and will be distributed in accordance with the following rules: 29

Married Participants: If you are married, the law requires that 50% of your Pre-2004 Retirement Plan accounts under the Plan be paid upon your death to your surviving spouse as a qualified pre-retirement survivor annuity unless you waived the qualified preretirement survivor form of benefit during your lifetime with the consent of your spouse. If the qualified preretirement survivor annuity requirement applies, an amount equal to 50% of your accounts will be distributed to your spouse as an annuity contract or in a lump-sum payment of cash (as chosen by your spouse). If the value of that 50% of your Pre-2004 Retirement Plan accounts is less than $5,000, your spouse s only option will be to receive a lump-sum payment of cash. The other 50% will be paid as a lump-sum cash payment to your spouse, unless your spouse previously consented to the designation of another beneficiary. (See Question 47 regarding spousal waiver of beneficiary rights.) Unmarried Participants: If you are not married, the entire amount credited to your accounts under the Plan will be paid upon your death to your designated beneficiary under the Plan. (See Question 47.) Note: If you die after terminating employment with Vanguard, your spouse (and/or other beneficiaries) will only be entitled to receive the vested portion of your account, calculated under the schedule described in Question 39. Q.58 How can I waive the qualified preretirement survivor annuity (QPSA)? A. You may waive the qualified preretirement survivor annuity (QPSA) form of benefit at any time after the first day of the calendar year in which you reach age 35. Generally, a waiver of the QPSA is appropriate only if you are married and want someone other than your spouse (your children, for example) to receive your benefits under the Plan in the event of your death. Your waiver of the QPSA will be valid only if your spouse signs a notarized consent to your waiver. If you are eligible, you may waive the QPSA by completing a Waiver of Preretirement Survivor Annuity Form and returning the form to the Vanguard Human Resources Department. If you make a valid waiver of the QPSA, your pre-2004 Retirement Plan accounts will be distributed to your designated beneficiary(ies) under the Plan if you die while still employed by Vanguard. Note: A prenuptial agreement or other contractual agreement is NOT a valid waiver of the QPSA. The waiver must be made on a form provided by Vanguard for this purpose. 30

Q.59 In what form will I receive distributions from my Pre-2004 Retirement Plan accounts? A. The amount that you are entitled to receive from your Pre-2004 Retirement Plan accounts upon your retirement or other termination of employment will be distributed in accordance with the following rules, unless the vested balance of your Pre-2004 accounts is $5,000 or less, in which case your only option is to receive a lump-sum payment (cash or rollover to an IRA or other retirement plan). Married Participants: If you are married and the amount of your distribution exceeds $5,000, the law requires that your distribution be made in the form of a qualified joint and survivor annuity (QJSA) with your spouse, unless you waive the annuity form of distribution with the consent of your spouse. Under a QJSA, your accounts will be used to purchase an annuity contract from an insurance company. The annuity contract will provide you with periodic payments for life, and, in the event of your death, periodic payments to your spouse (if your spouse survives you) in an amount equal to 50% of the payments you received during your lifetime. You may also choose a QJSA with a survivor benefit for your spouse of more than 50%, but doing so will decrease the amount of the periodic payments that will be made during your life. EXAMPLE: Jane retires and elects to receive her benefits in the form of a QJSA with a 50% survivor benefit for her husband s life. The annuity pays Jane $1,000/month while she is alive. When Jane dies, her husband (if he is still alive) will continue to receive a payment of $500/month (50% of $1,000). Unmarried Participants: If you are not married and the amount of your distribution exceeds $5,000, the law requires that your distribution be made in the form of a single-life annuity, unless you waive the annuity form of distribution. Under a single-life annuity, your accounts will be used to purchase an annuity contract that will provide you with periodic payments for life, with no survivor annuity payable upon your death. Q.60 How can I waive the qualified joint-and-survivor annuity (QJSA) form of distribution? A. If you do not want to have your distribution from your Pre-2004 Retirement Plan accounts made in the form of an annuity (for example, because you want to roll over your accounts to an IRA or another retirement plan), you may elect to waive the annuity form of distribution. If you are married, your waiver of the QJSA form of distribution will be valid only if your spouse executes a notarized consent to your election. The Vanguard Human Resources Department will give you a Waiver of Qualified Joint and Survivor Annuity form upon your retirement or other termination of employment on which you (and your spouse, if 31

applicable) may elect to waive the annuity form of distribution. If you are single, you may waive the annuity form of distribution simply by electing a lump-sum cash payment. Q.61 If I waive the annuity form of distribution, in what form may I choose to receive my distribution? A. If you make a proper waiver of the annuity form of distribution, you may elect to receive your Pre-2004 Retirement Plan accounts in a lump-sum payment of cash or a rollover to an IRA or another retirement plan. Alternatively, you can receive a Qualified Optional Survivor Annuity (QOSA), which is essentially the same as QJSA with additional flexibility on the survivor benefit for your spouse. The Vanguard Human Resources Department will give you a distribution election form on which you may elect when to receive your Plan benefits. H. FEDERAL INCOME TAX CONSEQUENCES Q.62 Am I taxed on the contributions to the Plan on my behalf? A. As explained earlier, your Employee Pre-Tax Basic and Supplemental Contributions to the Plan reduce the amount of your pay subject to current-year federal income taxes, but not Social Security or Medicare taxes (FICA) or (possibly) state income taxes. Roth contributions are taxable when you make them, but may offer tax-free distributions if certain requirements are met. In addition, Vanguard s Matching and Retirement Plan Contributions to the Plan on your behalf are not included in your income for federal income tax purposes at the time these contributions are made to the Plan. Q.63 Am I taxed on the investment earnings credited to my accounts in the Plan? A. Because the Plan is a tax-qualified plan, the investment earnings credited to your accounts under the Plan are not subject to current-year federal income taxes. Thus, an important advantage of the Plan is that, unlike a conventional taxable savings program, your Plan accounts grow on a tax-deferred basis. Q.64 How are distributions from the Plan taxed? A. General Rule: Except for Roth accounts, all amounts paid to you or your designated beneficiary(ies) from the Plan are subject to federal income taxes in the year they are distributed (except that, if you made any employee after-tax contributions to the Plan before 1987, the portion of any distribution attributable to your after-tax contributions will not be 32

taxable). As explained below, you may defer paying taxes on certain Plan distributions by rolling them over to an IRA or other employer s tax-qualified plan that accepts rollover contributions. Roth Accounts Because Roth contributions are taxable when made, you would not be taxed on your Roth contributions again when they are distributed. In addition, the earnings on your Roth contributions may also be distributed tax-free if both of the following conditions have been met at the time of distribution: (1) your Roth account has been open for at least five calendar years, and (2) you have attained age 59½ or become permanently disabled. Therefore, because Roth contributions only became available starting in 2006, the five-year minimum holding period means that no Roth account will allow for tax-free distributions of earnings from the Plan before 2011. Distribution of Roth earnings that do not meet these conditions are subject to taxes and possibly penalties just like any of your other pre-tax accounts. Q.65 What types of distributions can I roll over to an IRA or other retirement plan? A. You can roll over any eligible rollover distribution from the Plan to an IRA or another employer-sponsored retirement plan that accepts rollover contributions. In general, all distributions from the Plan qualify as eligible rollover distributions, except the following: annuity or installment payments made for life (or life expectancy) or over a period of 10 years or more (including payments in the form of a qualified joint-and-survivor annuity, qualified preretirement-survivor annuity, or qualified optional survivor annuity from Pre- 2004 Retirement Plan accounts); any required minimum distributions payable to you at age 70½ or older (see Question 45 for more information about the timing rules for required minimum distributions); and distributions taken from the Plan due to financial hardship. (See Questions 49-53.) Note: Because Roth contributions may be subject to special tax benefits upon distribution, Roth balances may only be rolled over to a Roth IRA or to a Roth account under another employer s 401(k) plan that will accept the rollover. A rollover to another employer s 401(k) plan must occur directly between the Vanguard Retirement and Savings Plan and the other 401(k) plan. Also, if you roll over your Roth account to a Roth IRA, you cannot roll the assets back out to a Roth account under another employer-sponsored retirement plan. 33

Q.66 How can I make a rollover of my Plan distribution? A. Generally, you can have all or any portion of an eligible rollover distribution from the Plan paid as a direct rollover to an IRA in your name or to another employer-sponsored retirement plan that accepts rollover contributions. In a direct rollover, your distribution is transferred by the Plan directly to your IRA or employer-sponsored retirement plan, rather than paid to you in cash. When you terminate employment you will be given a comprehensive explanation of the direct rollover option and other tax rules that apply to your distribution. Q.67 What happens if I don t make a direct rollover? A. Any eligible rollover distribution that you do not choose to have paid in the form of a direct rollover to an IRA or other employer-sponsored retirement plan will be paid to you and will be subject to automatic 20% federal income-tax withholding on the taxable portion of the distribution. You can still rollover the distribution within 60 days and avoid current taxation by adding from your own funds the amount of the federal income-tax withholding. If you do not add the amount of the federal income tax withholding to your rollover, the amount withheld will be considered a taxable distribution (and possibly subject to a 10% excise tax if you are under age 59½). Note: A Roth account can only be rolled over to another employer-sponsored retirement plan through a direct rollover. Therefore, if you don t elect a direct rollover of your Roth account, your only alternative to a cash distribution would be an indirect rollover to a Roth IRA, but you would not then be able to roll over the Roth IRA to another employersponsored retirement plan. Q.68 What penalty taxes will I owe on distributions I receive before age 59½? A. In general, you will have to pay a 10% federal penalty tax in addition to ordinary income taxes on any taxable distribution you receive from the Plan including any hardship withdrawal before attaining age 59½. However, this 10% penalty tax will not apply to the following types of distributions: distributions you timely roll over to an IRA or another tax-favored employer-sponsored retirement plan; distributions made to your designated beneficiary(ies) upon your death; distributions made on account of your permanent disability: 34

distributions made to you if you terminated employment with Vanguard in the year you attained age 55 (or older); distributions that do not exceed the total amount of medical expenses you may deduct in the tax year of distribution; and Amounts contributed as Roth contributions. (However, earnings on the Roth contributions could be subject to the 10% penalty tax.) Important: Because the tax rules governing distributions from qualified plans are complex and contain many conditions and exceptions, you should consult with a tax adviser before taking any substantial distribution from the Plan. I. MISCELLANEOUS Q.69 What about amendment or termination of the Plan? A. Vanguard currently intends to continue the Plan indefinitely. However, Vanguard reserves the right to amend or terminate the Plan at any time. If the Plan is amended, the benefits already credited to you under the Plan will not be reduced unless required by the Internal Revenue Service. If the Plan is terminated or if all contributions to the Plan are permanently discontinued, you will become fully vested in all amounts credited to your separate accounts in the Plan. If the Plan is terminated and Vanguard maintains another tax-qualified defined contribution retirement plan (other than an employee stock ownership plan), your assets in the Plan will be transferred to the other plan, unless you consent to receive an immediate payment of your Plan accounts. If Vanguard does not maintain another tax-qualified defined contribution plan at the time the Plan is terminated, your only option will be to receive an immediate lump-sum payment of your Plan benefits. Q.70 Are my benefits under the Plan insured? A. Because the Plan is not a defined benefit pension plan under ERISA, the Plan s benefits are not insured by the Pension Benefit Guaranty Corporation, a governmental agency formed for purposes of insuring certain types of benefits under defined benefit pension plans. Q.71 What if I participated in another employer s qualified plan before joining Vanguard? A. The Plan generally allows a Vanguard employee who is eligible to participate in the Plan to make a rollover contribution to the Plan of an eligible rollover distribution from a prior 35

employer s retirement plan. However, the Plan does not accept rollovers of employee aftertax amounts (other than Roth 401(k)), and furthermore, only accepts rollovers from the following types of plans: 401(a) (including 401(k)), 403(a), 403(b), and a 457(b) sponsored by a state or local government). In addition, since there are other technical requirements that apply to rollover contributions, you should contact the Vanguard Participant Services Unit before you attempt to make a rollover contribution to the Plan. Also, please note that any pre-tax or Roth employee contributions you made to another employer s plan during the year you joined Vanguard might limit the amount of Employee Pre-Tax and Roth Contributions you may make to the Plan. (See Question 17.) Q.72 May I assign my benefits under the Plan? A. Generally, your rights and benefits under the Plan cannot be assigned, sold, transferred, or pledged by you or reached by your creditors or other party except under a qualified domestic relations order (see below). Q.73 What is a qualified domestic relations order ( QDRO )? A. A QDRO is a court order issued under state domestic relations law relating to divorce, legal separation, custody, or support proceedings. The QDRO recognizes the right of someone other than you (your spouse or children, for example) to receive all or a part of your Plan benefits. You will be notified if Vanguard receives a QDRO relating to your benefits. Receipt of a QDRO will allow for an earlier-than-normal distribution to the other person(s) ( alternate payee ) listed in the order. The Plan maintains documents that describe the Plan s procedures for determining whether a domestic relations order meets the requirements to be a QDRO. These documents are available upon request at no charge by calling the Human Resources Department at (610) 669-8090. Q.74 What if I am away on uniformed services leave? A. The Plan is operated in compliance with the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). In accordance with the provisions of USERRA, if you return to work from a qualified uniformed services leave, you may be permitted to make-up any Employee Pre-Tax and/or Roth Contributions that you could have otherwise made during the period of leave and receive corresponding matching contributions (if eligible), in accordance with the Plan and USERRA. Also, if you are called up for uniformed services duty and have a plan loan outstanding, your loan payments will be suspended for the duration of your leave, even if it is longer than twelve months. This suspension will also extend the term of the loan, although interest will continue to accrue. (See Question 32 for more information on the limitations that usually apply to loan suspensions during a period of absence.) 36

PART TWO ADMINISTRATIVE AND ERISA INFORMATION Administrative Facts: Name of the Plan: The Vanguard Retirement and Savings Plan (the Plan ). Name and Address of Plan Sponsor: The Vanguard Group, Inc. P.O. Box 2600 Valley Forge, Pennsylvania 19482 ( Vanguard ). Plan Numbers: (1) 23-1945930 The employer identification number assigned to Vanguard by the Internal Revenue Service (2) 002 The Plan number used for reporting to the Department of Labor and the Internal Revenue Service. Type of Plan: The Plan is a profit-sharing thrift plan with a cash-or-deferred arrangement under Section 401(k) of the Internal Revenue Code. Plan Administrator: Plan Trustee: THE VANGUARD BENEFITS COMMITTEE P.O. Box 876 Valley Forge, Pennsylvania 19496 Telephone: 1-610-503-2536 ( Committee ) Vanguard Fiduciary Trust Company P.O. Box 2600 Valley Forge, PA 19496 Telephone: 1-610-503-2536 Annuity Providers: The Plan currently uses the American International Group (AIG) to provide qualified preretirement survivor annuities and qualified joint-and-survivor annuities. Please note that this vendor may be changed at any time. If any part of your distribution is subject to these annuity requirements, you will be informed of the current annuity provider at the time you elect to receive a distribution, and the information is also available at any time, at no charge, upon request to the Committee. Agent for service of legal process: Service of legal process may be made upon the Vanguard Legal Department (V26), P.O. Box 876, Valley Forge, Pennsylvania 19496. Service of legal process may also be made upon the Plan Trustee or the Plan Administrator. 37

Plan Documents: This Summary contains a description of the important features of the Plan. If you want more information, you will find complete details in the official Plan document and the related Trust Agreement, which legally govern the operations of the Plan. These documents, and the annual reports for the Plan as filed with the Internal Revenue Service and the U.S. Department of Labor, are available for review by you or your beneficiaries in the offices of Vanguard during regular working hours. Copies of all Plan documents and copies of the latest annual report are available to you or your beneficiary upon written request to the Vanguard Benefits Committee ( Committee ) (although a reasonable charge to cover reproduction costs may be made). Plan Year: For purposes of administering the Plan, records are kept on a calendar year basis. Therefore, the Plan Year is from January 1 through December 31. Claims Procedure: If you or your beneficiary feel that you are not receiving a Plan benefit that you should, you may file a written claim for the benefit with the Committee. If the Committee denies your claim, you will receive written notice within 90 days of the date your claim was received by the Committee telling you why it was denied and on what part of the Plan the denial is based. If special circumstances require more than 90 days to process the claim, you will be so notified within the 90-day period. The notice will also tell you what, if anything, you can do to have your claim approved. You will have a chance within 60 days after the date you receive written notice of the denial to ask for a final review of your claim and its denial by the Committee. You and your representative can review the documents that relate to your claim and can make written comments to the Committee. Your claim will then be reviewed again by the Committee and you will be sent a written notice of the final decision within 60 days after your request for review, unless special circumstances require an extension of time in which case you will be so notified before the expiration of the 60-day period. This extension will not extend past 120 days of the date of your request for review. STATEMENT OF RIGHTS UNDER ERISA As a participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 ( ERISA ). ERISA provides that all plan participants are entitled to: I. Receive Information About Your Plan and Benefits ERISA gives Plan participants certain rights and protections. You may: Look at, without charge, all Plan documents and copies of all papers filed by the Plan with the U. S. Department of Labor, such as detailed reports and Plan descriptions. 38

Obtain copies of all Plan documents and other Plan information by asking the Committee in writing. The Committee may assess a reasonable charge for the copies. Obtain a summary of the Plan's annual financial report. ERISA requires the Committee to give each participant a copy of this summary annual report each year. Obtain a statement telling you the amounts currently credited to your separate accounts in the Plan. The statement will also tell you the vested amount of your account balance (if any); if you are not vested in any portion of your accounts, the statement will tell you how many more years you must work to become vested. This statement must be requested in writing from the Committee. The Committee is only required to give you one such statement in a twelve-month period. The Plan must provide this statement free of charge. However, as explained in Part II of this Summary, Vanguard automatically makes quarterly participant statements available through Web Account Access (at no charge). The statements show the total amounts credited to your separate accounts under the Plan as of the end of each calendar quarter and all Plan activities occurring within your separate accounts during each calendar quarter. (Instead of receiving your statements by mail, you may choose instead to view your statements exclusively through Web Account Access.) II. Prudent Actions by Plan Fiduciaries ERISA also imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan are called fiduciaries. They have a duty to act prudently and solely in the interests of you and other Plan participants and beneficiaries. No one, including Vanguard, may dismiss you or otherwise discriminate against you in any way solely because you attempt to obtain a Plan benefit or exercise your rights under ERISA. III. Enforce Your Rights If your claim for a pension benefit is denied in whole or in part, you have the right (1) to receive a written explanation of the reason for the denial; (2) obtain copies of documents relating to the decision; and (3) 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 Committee and do not receive them within 30 days, you may file suit in federal court. In that case, the court may require the Vanguard Benefits Committee to provide you with the materials and pay you up to $110 a day until you receive the requested materials, unless the materials were not sent because of reasons beyond the Committee s control. If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in 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 or state court. Of course, you should follow the Claims Procedure provided by the Plan as described above before you take legal action. 39

If the Plan s fiduciaries misuse the Plan s money, or if you are discriminated against for asserting your rights, you may ask for help from the U.S. Department of Labor or you may sue in federal court. The court will decide who has to pay court costs and legal fees. If you win, 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). IV. Assistance With Your Questions If you have any questions about the Plan, you should contact: Vanguard Human Resources Department P.O. Box 876 Valley Forge, PA 19496 Telephone: (610) 503-2536 (610) 669-8090 If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Committee, you should contact the nearest area office of the Employee Benefits Security Administration division of the 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 NW; Washington, DC 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. 40

SPECIAL TAX NOTICE REGARDING PLAN DISTRIBUTIONS You are receiving this notice because all or a portion of a distribution you are receiving from the Vanguard Retirement and Savings Plan (the Plan ) may be eligible to be rolled over to an IRA or an employer plan. This notice is intended to help you decide whether to complete such a rollover. Part I of this notice describes the rollover rules that apply to Plan distributions that are not from a designated Roth account. Part II of this notice describes the rollover rules that apply to Plan distributions that are from a designated Roth account. Vanguard will tell you the amount that is being paid from each type of account. Rules that apply to most payments from a plan are described in the General information about rollovers section. Special rules that only apply in certain circumstances are described in the Special rules and options section. For more information This notice summarizes only the federal (not state or local) tax rules that might apply to your payment. The following rules are complex and contain many conditions and exceptions that are not included in this notice. Therefore, you may want to consult with the Plan administrator or a professional tax advisor before you take a payment of your benefits from your Plan. Also, you can find more detailed information on the federal tax treatment of payments from employer plans in: IRS Publication 575, Pension and Annuity Income; IRS Publication 590, Individual Retirement Arrangements (IRAs); and IRS Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). These publications are available at local IRS offices, on the Web at www.irs.gov, or by calling 1-800-TAX-FORM. Part I. Distributions not from a Roth account General information about rollovers Q. How can a rollover affect my taxes? A. You will be taxed on a Plan payment if you do not roll it over. If you are under age 59½ and do not complete a rollover, you will also have to pay a 10% federal penalty tax on early distributions (unless an exception applies). However, if you complete a rollover, you will not have to pay tax until you receive payments later, and the 10% federal penalty tax will not apply if those payments are made after you are age 59½ (or earlier if an exception applies). 41

Q. Where may I direct a rollover? A. You may roll over the payment to either an IRA (an individual retirement account or individual retirement annuity) or an employer plan (a tax-qualified plan, section 403(b) plan, or governmental section 457(b) plan) that will accept the rollover. The rules of the IRA or employer plan that holds the rollover will determine your investment options, fees, and rights to payment from the RIA or employer plan (for example, no spousal consent rules apply to IRAs and IRAs may not provide loans). Further, the amount rolled over will become subject to the tax rules that apply to the IRA or employer plan. Q. How do I complete a rollover? A. There are two ways to complete a rollover. You can complete either a direct rollover or a 60-day rollover. With a direct rollover, the Plan will make the payment directly to your IRA or an employer plan. You should contact the IRA sponsor or the administrator of the employer plan for information on how to complete a direct rollover With a 60-day rollover, you can still complete a rollover by making a deposit into an IRA or eligible employer plan that will accept it. You will have 60 days after you receive the payment to make the deposit. If you do not complete a direct rollover, the Plan is required to withhold 20% of the payment for federal income taxes. This means that, in order to roll over the entire payment in a 60-day rollover, you must use other funds to make up for the 20% withheld. If you do not roll over the entire amount of the payment, the portion not rolled over will be taxed and will be subject to the 10% federal penalty tax on early distributions if you are under age 59½ (unless an exception applies). Q. How much may I roll over? A. If you wish to complete a rollover, you may roll over all or part of the amount eligible for rollover. Any payment from the Plan is eligible for rollover, except: Certain payments spread over a period of at least ten years or over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary). Required minimum distributions after age 70½ (or after death). Hardship distributions. Corrective distributions that exceed tax law limitations. Loans treated as deemed distributions (for example, loans in default because of missed payments before your employment ends). The Plan administrator or the payor can tell you what portion of a payment is eligible for rollover. 42

Q. If I don't complete a rollover, will I have to pay the 10% federal penalty tax on early distributions? A. If you are under age 59½, you will have to pay the 10% federal penalty tax on early distributions for any payment from the Plan (including amounts withheld for income tax) that you do not roll over, unless one of the exceptions listed below applies. This tax is in addition to the regular income tax on the payment not rolled over. The 10% federal penalty tax does not apply to the following payments from the Plan: Payments made after you separate from service if you will be at least age 55 in the year of the separation. Payments made because of disability. Payments after your death. Corrective distributions of contributions that exceed tax law limitations. Payments made directly to the government to satisfy a federal tax levy. Payments made under a qualified domestic relations order (QDRO). Payments up to the amount of your deductible medical expenses. Q. If I complete a rollover to an IRA, will the 10% federal penalty tax apply to early distributions from the IRA? A. If you receive a payment from an IRA and are under age 59½, you will have to pay the 10% federal penalty tax on early distributions from the IRA, unless an exception applies. In general, the exceptions to the 10% federal penalty tax for early distributions from an IRA are the same as the exceptions listed above for early distributions from a plan. However, there are a few differences for payments from an IRA, including: There is no exception for payments after separation from service that are made after age 55. The exception for qualified domestic relations orders (QDROs) does not apply (although a special rule applies under which, as part of a divorce or separation agreement, a tax-free transfer may be made directly to an IRA of a spouse or former spouse). The exception for payments made at least annually in equal or close to equal amounts over a specified period applies without regard to whether you have had a separation from service. There are additional exceptions for (1) payments for qualified higher education expenses, (2) payments up to $10,000 used in a qualified first-time home purchase, and (3) payments after you have received unemployment compensation for 12 consecutive weeks (or would have been eligible to receive unemployment compensation but for self-employed status). Special rules and options 43

Q. What if my payment includes after-tax contributions? A. After-tax contributions included in a payment are not taxed. If a payment is only part of your benefit, an allocable portion of your after-tax contributions is generally included in the payment. If you have pre-1987 after-tax contributions maintained in a separate account, a special rule may apply to determine whether the after-tax contributions are included in a payment. You may roll over to an IRA a payment that includes after-tax contributions through either a direct rollover or a 60-day rollover. You must keep track of the aggregate amount of the after-tax contributions in all of your IRAs (in order to determine your taxable income for later payments from the IRAs). If you complete a 60-day rollover to an IRA of only a portion of the payment made to you, the after-tax contributions are treated as rolled over last. For example, assume you are receiving a complete distribution of your benefit that totals $12,000, of which $2,000 is after-tax contributions. In this case, if you roll over $10,000 to an IRA in a 60-day rollover, no amount is taxable because the $2,000 amount not rolled over is treated as being after-tax contributions. You may roll over to an employer plan all of a payment that includes after-tax contributions, but only through a direct rollover (and only if the receiving plan separately accounts for the after-tax contributions and is not a governmental section 457(b) plan). You can complete a 60-day rollover to an employer plan of part of a payment that includes after-tax contributions, but only up to the amount of the payment that would be taxable if not rolled over. Q. What if I miss the 60-day rollover deadline? A. Generally, the 60-day rollover deadline cannot be extended. However, the IRS has the limited authority to waive the deadline under certain extraordinary circumstances, such as when external events prevented you from completing the rollover by the 60-day rollover deadline. To apply for a waiver, you must file a private letter ruling request with the IRS. Private letter ruling requests require the payment of a nonrefundable user fee. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs). Q. What if I have an outstanding loan? A. If you have an outstanding loan from the Plan, your account balance may be reduced (or offset ) by the amount of the loan, typically when your employment ends. The remaining loan balance is treated as a distribution to you and will be subject to taxes (and the 10% federal penalty tax if you are under age 59½, unless an exception applies) unless you complete a 60-day rollover of such amount to an IRA or employer plan. Q. What if I was born on or before January 1, 1936? 44

A. If you were born on or before January 1, 1936, and receive a lump-sum distribution that you do not roll over, special rules for calculating the amount of the tax on the payment might apply to you. For more information, see IRS Publication 575, Pension and Annuity Income. Q. What if I roll over my payment to a Roth IRA? A. If you roll over the payment to a Roth IRA, a special rule applies under which the amount of the payment rolled over (reduced by any after-tax contributions) will be taxed. However, the 10% federal penalty tax on early distributions will not apply (unless you take the amount rolled over out of the Roth IRA within five years, counting from January 1 of the year of the rollover). For payments from the Plan during 2010 that are rolled over to a Roth IRA, the taxable amount can be spread over a two-year period starting 2011. If you roll over the payment to a Roth IRA, later payments from the Roth IRA that are qualified distributions will not be taxed (including earnings after the rollover). A qualified distribution from a Roth IRA is a payment made after you are age 59½ (or after your death or disability, or as a qualified first-time homebuyer distribution of up to $10,000) and after you have had a Roth IRA for at least five years. In applying this fiveyear rule, you count from January 1 of the year for which your first contribution was made to a Roth IRA. Payments from the Roth IRA that are not qualified distributions will be taxed to the extent of earnings after the rollover, including the 10% federal penalty tax on early distributions (unless an exception applies). You do not have to take required minimum distributions from a Roth IRA during your lifetime. For more information, see IRS publication 590, Individual Retirement Arrangements (IRAs). You cannot roll over a payment from the Plan to a designated Roth account in an employer plan. Q. What if I am not a Plan participant? A. If you receive a distribution after the participant's death that you do not roll over, the distribution will generally be taxed in the same manner described elsewhere in this notice. However, the 10% federal penalty tax on early distributions does not apply, and the special rule described under the section If you were born on or before January 1, 1936 applies only if the participant was born on or before January 1, 1936. If you receive a payment from the Plan as the surviving spouse of a deceased participant, you have the same rollover options that the participant would have had, as described elsewhere in this notice. In addition, if you choose to complete a rollover to an IRA, you may treat the IRA as your own or as an inherited IRA. 45

An IRA you treat as your own is treated like any other IRA of yours, so that payments made to your before you are age 59½ will be subject to the 10% federal penalty tax on early distributions (unless an exception applies) and required minimum distributions from your IRA do not have to start until after you are age 70½. If you treat the IRA as an inherited IRA, payments from the IRA will not be subject to the 10% federal penalty tax on early distributions. However, if the participant had started taking required minimum distributions, you will have to receive required minimum distributions from the inherited IRA. If the participant had not started taking required minimum distributions from the Plan, you will not have to start receiving required minimum distributions from the inherited IRA until the year the participant would have been age 70½. If you receive a payment from the Plan because of the participant s death and you are a designated beneficiary other than a surviving spouse, the only rollover option you have is to complete a direct rollover to an inherited IRA. Payments from the inherited IRA will not be subject to the 10% federal penalty tax on early distributions. You will have to receive required minimum distributions from the inherited IRA. If you are the spouse or former spouse of the participant who receives a payment from the Plan under a qualified domestic relations order (QDRO), you generally have the same options the participant would have (for example, you may roll over the payment to your own IRA or an eligible employer plan that will accept it). Payments under the QDRO will not be subject to the 10% federal penalty tax on early distributions. Q. What if I am a nonresident alien? A. If you are a nonresident alien and you do not complete a direct rollover to a U.S. IRA or U.S. employer plan, instead of withholding 20%, the Plan is generally required to withhold 30% of the payment for federal income taxes. If the amount withheld exceeds the amount of tax you owe (as may happen if you complete a 60-day rollover), you may request an income tax refund by filing Form 1040NR and attaching your Form 1042-S. See Form W-8BEN for claiming that you are entitled to a reduced rate of withholding under an income tax treaty. For more information, see also IRS Publication 519, U.S. Tax Guide for Aliens, and IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities. Q. Are there any other special rules? A. If a payment is one in a series of payments for a period of less than ten years, your choice whether to make a direct rollover will apply to all later payments in the series (unless you make a different choice for later payments). 46

If your payments for the year are less than $200 (not including payments from a designated Roth account in the Plan), the Plan is not required to allow you to complete a direct rollover and is not required to withhold for federal income taxes. However, you may complete a 60-day rollover. Unless you elect otherwise, a mandatory cashout of more than $1,000 (not including payments from a designated Roth account in the Plan) will be directly rolled over to an IRA chosen by the Plan administrator or the payor. A mandatory cashout is a payment from a Plan to a participant made before age 62 (or normal retirement age, if later) and without consent, where the participant's benefit does not exceed $5,000 (not including any amounts held under the plan as a result of a prior rollover made to the Plan). You may have special rollover rights if you recently served in the U.S. Armed Forces. For more information, see IRS Publication 3, Armed Forces' Tax Guide. 47

Part II. Distributions from a Roth account This part of the tax notice describes the rollover rules that apply to payments from the Plan that are from a designated Roth account. If you also receive a payment from the Plan that is not from a designated Roth account, refer to Part I of this notice for the rollover rules that apply to such payment. The Plan administrator or the payor will tell you the amount that is being paid from each account. All or a portion of a distribution from your employer plan (the Plan ) may be eligible to be rolled over to a Roth IRA or designated Roth account in an employer plan. The following questions and answers are intended to help you decide whether to complete a rollover. Rules that apply to most payments from a designated Roth account are described in the General information about rollovers (from a Roth account) section. Special rules that only apply in certain circumstances are described in the Special rules and options section. General information about rollovers (from a Roth account) Q. How can a rollover affect my taxes? A. After-tax contributions included in a payment from a designated Roth account are not taxed, but earnings might be taxed. The tax treatment of earnings included in the payment depends on whether the payment is a qualified distribution. If a payment is only part of your designated Roth account, the payment will include an allocable portion of the earnings in your designated Roth account. If the payment from the Plan is not a qualified distribution and you do not complete a rollover to a Roth IRA or a designated Roth account in an employer plan, you will be taxed on the earnings in the payment. If you are under age 59½, a 10% federal penalty tax on early distributions will also apply to the earnings (unless an exception applies). However, if you complete a rollover, you will not have to pay taxes currently on the earnings and you will not have to pay taxes later on payments that are qualified distributions. If the payment from the Plan is qualified distribution, you will not be taxed on any part of the payment even if you do not complete a rollover. If you complete a rollover, you will not be taxed on the amount you roll over and any earnings on the amount you roll over will not be taxed if paid later in a qualified distribution. A qualified distribution from a designated Roth account in the Plan is a payment made after you are age 59½ (or after your death or disability) and after you have had a designated Roth account in the Plan for at least five years. In applying the five-year rule, 48

you count from January 1 of the year your first contribution was made to the designated Roth account. However, if you did a direct rollover to a designated Roth account in the Plan from a designated Roth account in another employer plan, your participation will count from January 1 of the designated Roth account in the other employer plan. Q. To where may I roll over the payment? A. You may roll over the payment to either a Roth IRA (a Roth individual retirement account or Roth individual retirement annuity) or a designated Roth account in an employer plan (a tax-qualified plan or section 403(b) plan) that will accept the rollover. The rules of the Roth IRA or employer plan that holds the rollover will determine your investment options, fees, and rights to payment from the Roth IRA or employer plan (for example, no spousal consent rules apply to Roth IRAs and Roth IRAs may not provide loans). Further, the amount rolled over will become subject to the tax rules that apply to the Roth IRA or the designated Roth account in the employer plan. In general, these tax rules are similar to those described elsewhere in this notice, but differences include: If you complete a rollover to a Roth IRA, all of your Roth IRAs will be considered for purposes of determining whether you have satisfied the five-year rule (counting from January 1 of the year for which your first contribution was made to any of your Roth IRAs). If you complete a rollover to a Roth IRA, you will not be required to take a distribution from the Roth IRA during your lifetime and you must keep track of the aggregate amount of the after-tax contributions in all of your Roth IRAs (in order to determine your taxable income for later Roth IRA payments that are not qualified distributions). Eligible rollover distributions from a Roth IRA can only be rolled over to another Roth IRA. Q. How do I complete a rollover? A. There are two ways to complete a rollover. You can either complete a direct rollover or a 60-day rollover. With a direct rollover, the Plan will make the payment directly to your Roth IRA or designated Roth account in an employer plan. You should contact the Roth IRA sponsor or the administrator of the employer plan for information on how to complete a direct rollover. With a 60-day rollover, you may still complete a rollover by making a deposit within 60 days into a Roth IRA, whether the payment is a qualified or nonqualified distribution. In addition, you can complete a rollover by making a deposit within 60 49

days into a designated Roth account in an employer plan if the payment is a nonqualified distribution and the rollover does not exceed the amount of the earnings in the payment. You cannot complete a 60-day rollover to an employer plan of any part of a qualified distribution. If you receive a distribution that is a nonqualified distribution and you do not roll over an amount at least equal to the earnings allocable to the distribution, you will be taxed on the amount of those earnings not rolled over, including the 10% federal penalty tax on early distributions if you are under age 59½ (unless an exception applies). If you do not complete a direct rollover and the payment is not a qualified distribution, the Plan is required to withhold 20% of the earnings for federal income taxes (up to the amount of cash and property received other than employer stock). This means that, in order to roll over the entire payment in a 60-day rollover to a Roth IRA, you must use other funds to make up for the 20% withheld. Q. How much may I roll over? A. If you wish to complete a rollover, you may roll over all or part of the amount eligible for rollover. Any payment from the Plan is eligible for rollover, except: Certain payments spread over a period of at least tem years or over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary). Required minimum distributions after age 70½ (or after death). Hardship distributions. Corrective distributions of contributions that exceed tax law limitations. Loans treated as deemed distributions (for example, loans in default because of missed payments before your employment ends). The Plan administrator or the payor can tell you what portion of a payment is eligible for rollover. Q. If I don't complete a rollover, will I have to pay the 10% federal penalty tax on early distributions? A. If a payment is not a qualified distribution and you are under age 59½, you will have to pay the 10% federal penalty tax on early distributions with respect to the earnings allocated to the payment that you do not roll over (including amounts withheld for income tax), unless one of the exceptions listed below applies. This tax is in addition to the regular income tax on the earnings not rolled over. The 10% federal penalty tax does not apply to the following payments from the Plan: Payments made after you separate from service if you will be at least age 55 in the year of the separation. Payments made because of disability. 50

Payments made after your death. Corrective distributions of contributions that exceed tax law limitations. Payments made directly to the government to satisfy a federal tax levy. Payments made under a qualified domestic relations order (QDRO). Payments up to the amount of your deductible medical expenses. Q. If I complete a rollover to a Roth IRA, will the 10% federal penalty tax apply to early distributions from the IRA? A. If you receive a payment from a Roth IRA when you are under age 59½, you will have to pay the 10% federal penalty tax on early distributions on the earnings paid from the Roth IRA, unless an exception applies or the payment is a qualified distribution. In general, the exceptions to the 10% federal penalty tax for early distributions from a Roth IRA listed above are the same as the exceptions for early distributions from a plan. However, there are a few differences for payments from a Roth IRA, including: There is no special exception for payments after separation from service. The exception for qualified domestic relations orders (QDROs) does not apply (although a special rule applies under which, as part of a divorce or separation agreement, a tax-free transfer may be made directly to a Roth IRA of a spouse or former spouse). The exception for payments made at least annually in equal or close to equal amounts over a specified period applies without regard to whether you have had a separation from service. There are additional exceptions for (1) payments for qualified higher education expenses, (2) payments up to $10,000 used in a qualified first-time home purchase, and (3) payments after you have received unemployment compensation for 12 consecutive weeks (or would have been eligible to receive unemployment compensation but for self-employed status). Special rules and options Q. What if I miss the 60-day rollover deadline? A. Generally, the 60-day rollover deadline cannot be extended. However, the IRS has the limited authority to waive the deadline under certain extraordinary circumstances, such as when external events prevented you from completing the rollover by the 60-day rollover deadline. To apply for a waiver, you must file a private letter ruling request with the IRS. Private letter ruling requests require the payment of a nonrefundable user fee. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs). Q. What if I have an outstanding loan? 51

A. If you have an outstanding loan from the Plan, your account balance may be reduced (or offset ) by the amount of the loan, typically when your employment ends. The loan offset amount is treated as a distribution to you at the time of the offset and if the distribution is a nonqualified distribution the earnings in the loan offset will be taxed (including the 10% federal penalty tax on early distributions, unless an exception applies) unless you complete a 60-day rollover in the amount of the earnings in the loan offset to a Roth IRA or designated Roth account in an employer plan. Q. What if I receive a nonqualified distribution and I was born on or before January 1, 1936? A. If you were born on or before January 1, 1936, and receive a lump-sum distribution that is not a qualified distribution and that you do not roll over, special rules for calculating the amount of the tax on the earnings in the payment might apply to you. For more information, see IRS Publication 575, Pension and Annuity Income. Q. What if I am not a Plan participant? A. If you receive a distribution after the participant's death that you do not roll over, the distribution will generally be taxed in the same manner described elsewhere in this notice. However, whether the payment is a qualified distribution generally depends on when the participant first made a contribution to the designated Roth account in the Plan. Also, the 10% federal penalty tax on early distributions and the special rules for public safety officers do not apply, and the special rule described under the section "If you receive a nonqualified distribution and you were born on or before January 1, 1936" applies only if the participant was born on or before January 1, 1936. If you receive a payment from the Plan as the surviving spouse of a deceased participant, you have the same rollover options that the participant would have had, as described elsewhere in this Notice. In addition, if you choose to complete a rollover to a Roth IRA, you may treat the Roth IRA as your own or as an inherited Roth IRA. A Roth IRA that you treat as your own is treated like any other Roth IRA of yours, so that you will not have to receive any required minimum distributions during your lifetime and earnings paid to you in a nonqualified distribution before you are age 59½ will be subject to the 10% federal penalty tax on early distributions (unless an exception applies). If you treat the Roth IRA as an inherited Roth IRA, payments from the Roth IRA will not be subject to the 10% federal penalty tax on early distributions. An inherited Roth IRA is subject to required minimum distributions. If the participant had started taking required minimum distributions from the Plan, you will have to receive required minimum distributions from the inherited Roth IRA. If the participant had not stated taking required minimum distributions, you will not have to start receiving required minimum distributions from the inherited Roth IRA until the year the participant would have been age 70½. Q. What if I am a surviving beneficiary other than a spouse? 52

A. If you receive a payment from the Plan because of the participant's death and you are a designated beneficiary other than a surviving spouse, the only rollover option you have is to complete a direct rollover to an inherited Roth IRA. Payments from the inherited Roth IRA, even if made in a nonqualified distribution, will not be subject to the 10% federal penalty tax on early distributions. You will have to receive required minimum distributions from the inherited Roth IRA. Payments under a qualified domestic relations order. If you are the spouse or a former spouse of the participant who receives a payment from the Plan under a qualified domestic relations order (QDRO), you generally have the same options the participant would have (for example, you may roll over the payment as described in this notice). Q. What if I am a nonresident alien? A. If you are a nonresident alien and you do not complete a direct rollover to a U.S. IRA or U.S. employer plan, instead of withholding 20%, the Plan is generally required to withhold 30% of the payment for federal income taxes. If the amount withheld exceeds the amount of tax you owe (as may happen if you complete a 60-day rollover), you may request an income tax refund by filing Form 1040NR and attaching your Form 1042-S. See Form W-8BEN form claiming that you are entitled to a reduced rate of withholding under an income tax treaty. For more information, see also IRAS Publication 519, U.S. Tax Guide for Aliens, and IRS Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities. Other special rules If a payment is one in a series of payments for a period of less than ten years, your choice whether to make a direct rollover will apply to all later payments in the series (unless you make a different choice for later payments). If your payments for the year (only including payments from the designated Roth account in the Plan) are less than $200, the Plan is not required to allow you to complete a direct rollover and is not required to withhold for federal income taxes. However, you can complete a 60-day rollover. Unless you elect otherwise, a mandatory cashout from the designated Roth account in the Plan of more than $1,000 will be directly rolled over to a Roth IRA chosen by the Plan administrator or the payor. A mandatory cashout is a payment from a plan to a participant made before age 62 (or normal retirement age, if later) and without consent, where the participants benefit does not exceed $5,000 (not including any amounts held under the plan as a result of a prior rollover made to the plan). 53

You may have special rollover rights if you recently served in the U.S. Armed Forces. For more information, see IRS Publication 3, Armed Forces' Tax Guide. 2009 The Vanguard Group, Inc. All rights reserved. 54