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SPECIAL NOTICE CONCERNING DEPENDENT CARE EXPENSES Under current law, a tax credit is available for dependent care expenses of the same type eligible for reimbursement through the Plan. The amount of the credit depends on the taxpayer's adjusted gross income and ranges from 20% to 35% of eligible expenses up to a limit of $3,000 of expenses if there is one eligible Dependent and $6,000 of expenses if there are two or more eligible Dependents. As indicated above, however, you will not be eligible to take the tax credit for any expenses reimbursed through the Plan. In addition, the maximum amount of expenses eligible for the credit will be reduced on a dollar-for-dollar basis for each dollar of dependent care reimbursements you receive under the Plan. For example, if you have two children and incur $6,000 of dependent care expenses in the current calendar year, $2,000 of which are reimbursed through the Plan, the maximum amount of your expenses eligible for the credit would be $4,000 ($6,000 less $2,000). Determining whether taking the credit or reimbursement under the Plan is more beneficial involves complex calculations. Because each individual's situation is different, the Employer cannot predict whether or not it would be more beneficial to you to take the tax credit for dependent care expenses or to have your expenses reimbursed under the Plan. EARNED INCOME CREDIT Under federal law, an earned income credit is available for individuals with lower incomes. The amount of the credit differs depending on whether or not an individual has children, and is phased out as income increases. Participation in the Plan may affect your eligibility for the earned income credit and/or the amount of the credit. You should consult your tax return instructions to determine whether this credit applies to you. EFFECT ON SOCIAL SECURITY OR OTHER GOVERNMENT BENEFITS If you use your Pay Conversion Contributions for nontaxable benefits from the Plan, the amount of social security benefits and other government provided, pay-related benefits for which you later may be eligible may be reduced. For example, if you earn less than the social security wage base, which is $106,800 for 2009 (unlimited for the 1.45% Medicare portion), and you use your Pay Conversion Contributions to obtain nontaxable benefits, you will have lower earnings for social security purposes, and retirement and other benefits based on these earnings could also be reduced. 18