Notice To Employees
Regarding "Saver's Tax Credit"

This notice explains how you may be able to pay less tax by contributing to your employer's retirement plan (the "Plan") or to an individual retirement arrangement ("IRA").

Beginning in 2002, if you make contributions to the Plan or to an IRA, you may be eligible for a tax credit, called the "Saver's Credit."

This tax credit could reduce the federal income tax you pay dollar-for-dollar. The amount of the credit you can receive is based on the contributions you make to your IRA or your employer's retirement plan and your tax credit rate. The tax credit rate can be as low as 10% or as high as 50%, depending on your adjusted gross income -- the lower your income, the higher the credit rate. The credit rate also depends on your filing status. See the tables at the end of this notice to determine your tax credit rate.

The maximum contribution taken into account for this tax credit for an individual is $2,000. If you are married filing jointly, the maximum contribution taken into account for this tax credit is $2,000 each for you and your spouse.

This tax credit is available to you if you:

• are 18 or older,
• are not a full-time student,
• are not claimed as a dependent on someone else's return, and
• have adjusted gross income (shown on your tax return for the year of the credit) that does not exceed:
• $50,000, if you are married filing jointly,
• $37,500, if you are a head of household with a qualifying person, or
• $25,000, if you are single or married filing separately.

Example: Susan and John are married and file their federal income tax return jointly. For 2002, their adjusted gross income would have been $34,000 if they had not made any retirement contributions. During 2002, Susan elected to have $2,000 contributed to her employer's 401(k) plan. John made a deductible contribution of $2,000 to an IRA for 2002. As a result of these contributions, their 2002 adjusted gross income is $30,000. If their Federal income tax would have been $3,000 (after applying any other credits to which they are entitled) without having made any retirement contributions, then their federal income tax as a result of making the $4,000 retirement contributions will be only $400 after application of the saver's credit and other tax benefits for the retirement contributions. Thus, by saving $4,000 for their retirement, Susan and John have also reduced their taxes by $2,600.

The annual contribution eligible for this tax credit may have to be reduced by any taxable distributions from a retirement plan or IRA that you or your spouse receive during the year you claim this tax credit, during the two (2) preceding years, or during the period after the end of the year for which you claim the tax credit and before the due date for filing your return for that year. A distribution from a Roth IRA that is not rolled over is taken into account for this reduction, even if the distribution is not taxable. After these reductions, the maximum annual contribution eligible for the credit per person is $2,000.

Example: Mark's adjusted gross income for 2002 is low enough for him to be eligible for the tax credit that year and he defers $3,000 of his pay to his employer's 401(k) plan during 2002. During 2001, Mark took a $400 hardship withdrawal from his employer's plan and during 2002 he takes an $800 IRA withdrawal. Mark's 2002 saver's credit will be based on contributions of $1,800 ($3,000 - $400 - $800).

The amount of your saver's tax credit will not change the amount of your refundable tax credits. A refundable tax credit, such as the earned income credit or the refundable amount of your child tax credit, is an amount that you would receive as a refund even if you did not otherwise owe any taxes.

The amount of your saver's tax credit in any year cannot exceed the amount of tax that you would otherwise pay (not counting any refundable credits or the adoption credit) in any year. If your tax liability is reduced to zero because of other nonrefundable credits, such as the Hope Scholarship Credit, then you will not be entitled to the saver's tax credit.

Credit Rates:

NOTICE: The forgoing is provided for informational purposes only and is not to be construed as or considered to be legal or tax advice. You should always consult your tax advisor with any and all questions regarding any and all tax and tax related matters, including any questions that you may have concerning the Saver's Tax Credit described above.