SAMPLE EMPLOYER MEMO REGARDING



TO: To Eligible Employees

FROM: Plan Administrator

RE: Automatic Enrollment in the ITS, Inc. 401(k)

Based upon surveys and various articles, experts believe that most Americans will likely live 20, 30, even 40 years in retirement. Yet, on average, today’s employees are planning for only 19 years of post-retirement living. We are very concerned about our employees planning adequately for their retirement and feel it is in their best interest to assist them by designing our plan to incorporate the automatic enrollment feature. We strongly encourage employees to participate. However, as a part of the automatic enrollment feature, employees will still have the chance to “OPT Out” of the plan if they elect not to participate.

Under the plan design, an Employee is automatically enrolled at a 4% deferral rate as a Participant in the Plan once he or she has met the (age and/or service) eligibility requirements for participation in the Plan. Automatic payroll withholding at this rate will continue until you, as a Participant advise the Plan Administrator in writing either to increase or decrease the amount of withholding or to stop payroll withholding. In conjunction with this feature, we have incorporated an annual automatic enrollment and automatic employee contribution increase of 1% for any participant deferring less than 10%. This goes into effect in October/November of each year. The specific paycheck date will be announced prior to processing. You have the right to change the amount of payroll withholding at any time before you meet the eligibility requirements for Plan Participation, and on a monthly basis going forward after you become a Participant. You may stop payroll withholding at any time by giving the Plan Administrator written notice.

The ITS Inc. 401(k) Plan offers a Participant a choice of where his or her contributions may be invested. All deferrals of amounts withheld from pay under the automatic enrollment rules will be invested in the Plan’s Life Cycle Funds (age appropriate) until such time as the Participant advises the Plan Administrator in writing of his or her investment selection. If you are satisfied with the automatic investment selection, you do not have to do anything at this time. If you wish to make a change either to the amount you defer or to the investment direction, please complete the enrollment/change form

CONTRIBUTION CHANGE

New Employees: Employees who have not met the eligibility requirements shall have pre-tax elective deferrals withheld in the amount of 4% of Compensation.

[ ] Opt Out: I hereby withdraw my authorization to continue payroll deductions under the Plan. I understand this will be effective as soon as administratively feasible upon proper and timely notice to the Employer.

Please refer to your Summary Plan Description for more details about the Plan and the available investment choices. If you have any questions, please contact Sharon Peters.

AUTOMATIC ENROLLMENT

I certify that I have received, read and agree with the above Notice of Automatic Enrollment for the ITS Inc. 401(k) Plan.

Employee’s Signature Date

Plan Administrator's Signature Date

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