401(k) ANNUAL UPDATE. What s Inside. Need to Enroll in the 401(k)?

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1 Engility MASTER SAVINGS PLAN 401(k) ANNUAL UPDATE Timely information to Help You take control of your future What s Inside How to enroll 2016 Contribution Limits Make Sure Your 401(k) Account Is On Track Are You a Hands-on or Hands-off Investor? your 401(k) Investment Options Need to Enroll in the 401(k)? Log on to Fidelity NetBenefits at or call the Fidelity Participant Service Center at to enroll in the 401(k). Your enrollment becomes effective once you elect a deferral percentage, which initiates deductions of your contributions from your pay. These salary deductions will generally begin one or two pay periods after we receive your enrollment information, or as soon as administratively possible. If you do not enroll in the 401(k) within 30 days from your date of hire, you will be automatically enrolled at a pretax contribution rate of 3% of your eligible earnings. Your contributions will be invested in one of the Voya Target Solution Trust Funds, based on your date of birth. However, we encourage you to take an active role in the 401(k) and to choose a contribution rate and investment options that are appropriate for you. If you do not wish to contribute to the 401(k), you must change your contribution rate to 0% within the first 30 days of your employment. You may change your contribution rate at any time by logging on to NetBenefits at or by calling a Fidelity Representative at Contribution Limits Make sure you review your contributions for 2016 to help ensure you re contributing an amount to help you reach your retirement goals. The following are the 2016 IRS pretax deferral and compensation limits for the Engility Master Savings Plan 401(k) (the 401(k) ): You may continue to make pretax and/or Roth contributions to the 401(k) up to $18,000 in The pretax IRS contribution limit for 2015 was $18,000. Your current deferral election will remain in effect unless you change it. In 2016, the 401(k) allows you to contribute from 0% to 75% in the pretax and Roth deferral sources. You can also contribute up to 50% in the catch-up source (note that the catch-up election is separate from the pretax and Roth elections). Additionally, you can contribute up to 50% in the after-tax source. All combined contribution sources may equal up to 75%. If you reach the annual limit prior to year-end, your contributions will stop. Your contributions will resume beginning with the first pay period in the following year and will be based on your most recent deferral percentage election. In addition to the $18,000 contribution limit, the IRS allows employees age 50 (or turning age 50 during the year) or older to make a separate additional contribution up to $6,000. These contributions are referred to as catch-up. To make any changes to your deferrals, please contact Fidelity at or call Internationally based employees may call the Fidelity Participant Service Center collect at You may change your deferral percentage election at any time. Please note that changes will go into effect as soon as administratively possible: generally one or two pay periods after the date you make the change. For 2016, the compensation limit for making contributions to the 401(k) remains unchanged from 2015 at $265,000. 1

2 Make Sure Your 401(k) Account Is On Track Did you know that your portfolio s mix of investments will have a big impact on your long-term growth potential? When it comes to reaching your retirement goals, your portfolio s mix of assets is one of the most influential factors. Your asset mix or blend of stocks, bonds, and short-term investments can impact your portfolio s long-term performance. In order to make sure your 401(k) account is on track to meet your retirement savings goals, Engility believes you should review your portfolio annually and make adjustments if necessary. Follow these simple steps below to review your 401(k) account today. Step 1: What Kind of Investor Are You? Take time now to review the 401(k) investment options on pages 4 and 5 and to determine what kind of investor you are. Hands-on A hands-on investor chooses their own investments and actively manages them on their own. This approach provides investors with more control over their investments, but is often time intensive. Investors who prefer to handle their money management themselves need to make sure they re actively engaged in managing their accounts, remembering to make the necessary adjustments to their mix of investments as the markets affect their asset allocation and as their personal situation evolves. But hands-on doesn t mean you re all alone. You can benefit from a number of online tools, education, and other services that can help you build a portfolio that suits your circumstances and that can help ensure you re making progress toward your long-term goals. First and foremost, hands-on investors need to make sure they re well versed in financial topics. In order to build an appropriate portfolio, you ll need to understand the major types of investments, and how to put them together in a mix, as well as staying informed about the state of the economy and the markets. You will also need to evaluate investment products and navigate the strategies, costs, and quality of different solutions. Also, an essential element of hands-on investing is the selection of an appropriate asset mix (one that reflects your risk tolerance, investment horizon, and financial situation) and the discipline to stick with it. Of course, your investment portfolio is built around your life, your goals, and the markets, which will evolve over time so your portfolio will need to change with them. Major events, such as sending a child to college, receiving company stock, or getting ready to retire, will require a corresponding adjustment to your investment strategy and financial plan. Hands-off The 401(k) offers two different hands-off approaches which include the Lifecycle Funds as well as Fidelity Portfolio Advisory Services at Work. Lifecycle Funds Designed for a specific retirement year The Voya Target Solution Trust Series (the Trusts ) is a suite of 10 Target Date Trusts that are designed to simplify retirement investing with an all-in-one, fully managed portfolio that evolves as a participant s career does. The Target Solution Trust invests in a combination of funds that cover multiple asset classes and fund families to create diversified allocations for participants based on their retirement date and risk profile. While diversification does not assure a profit or protect against a loss, the portfolios gradually adjust over time to become more conservative as the target year approaches, reducing risk automatically. 2

3 Fidelity Portfolio Advisory Service at Work (PAS-W) Professional help in managing my investments Engility has teamed up with Fidelity to offer a valuable managed account service. It s a way to help you get, and stay, on course toward your retirement goals. With Fidelity Portfolio Advisory Service at Work, you get active retirement account management. This means that Fidelity s team of investment professionals invest, monitor, and rebalance your account as needed to adjust to changes in the market, or changes to your situation. Fidelity Guidance Professionals are available to answer any questions you may have about this managed account service. Call for more information. This service provides discretionary money management for a fee. Once you ve determined what kind of investor you are, that will help you take the next steps. Hands-on investors: Follow steps 2 4. Hands-off investors: Choose the Voya Target Solution Trust Fund that has a target retirement date closest to the year you might retire assuming a retirement age of 65; or Call to enroll in the PAS-W Step 2: Allocate and Diversify Your Investments Proper asset allocation and diversification may be the key to successfully managing your investment portfolio. When the market in one asset class is down, another is typically up. By spreading your assets among stocks, bonds, and short-term investments, you may reduce the impact a down market in any one asset class has on your portfolio. Consider this: Choosing an asset allocation strategy and sticking with it for the long term may be a better approach than constantly trying to stay ahead of the markets. Investors with a long time horizon and greater tolerance for risk may benefit from the long-term growth of equity mutual funds. Bond funds and money market funds, while providing lower potential return, can be used to reduce some risk from a stock-heavy portfolio or may increase preservation of assets as you move closer to retirement. Keep in mind that neither diversification nor asset allocation ensures a profit or guarantees against loss. Step 3: Monitor and Change Your Investments The 401(k) offers a range of investment options to help you meet your retirement goals. You can select from a mix of investment options that best suits your goals, time horizon, and risk tolerance. The many investment options available through the 401(k) include conservative, moderately conservative, and aggressive funds. Are you wondering how to better navigate your unique journey to retirement? Talking through big decisions about your 401(k) account and financial future can help make it all feel a bit more manageable. Call and talk one-on-one with a Fidelity Guidance Representative. These noncommissionpaid Fidelity employees are available free of charge to discuss your situation with you and help you find the best options for reaching your goals. 3

4 Step 4: Learn More about Saving and Investing The Planning & Guidance Center makes it easier to plan for the retirement you envision. By answering just a few questions, you ll be able to: Estimate how much income you may have or need in retirement Receive guidance to help you get or stay on track Create a retirement plan in minutes Available on NetBenefits via the Planning link or at NetBenefits.Fidelity.com/planningcenter. Log on and take a virtual tour of the Planning & Guidance Center today! Also visit the Library section of NetBenefits where you will find checklists, tools, and videos can help you make smarter choices about your benefits and your money. Learn the basics. Hone your skills. Above all, get the most out of everything Fidelity has to offer. IMPORTANT: The projections or other information generated by Fidelity s Planning & Guidance Center Retirement Analysis regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Results may vary with each use and over time. Your 401(k) Investment Options Here is a comprehensive list of the 401(k) investment options. For up-to-date performance information and other fund specifics, go to Lifecycle Funds The Voya Target Solution Trust Series (the Trusts ) is a suite of 10 Target Date Trusts that are designed to simplify retirement investing with an all-in-one, fully managed portfolio that evolves as a participant s career does. The Target Solution Trust invests in a combination of funds that cover multiple asset classes and fund families to create diversified allocations for participants based on their retirement date and risk profile. While diversification does not ensure a profit or protect against a loss, the portfolios gradually adjust over time to become more conservative as the target year approaches, reducing risk automatically. Investment Options to the left have potentially more inflation risk and less investment risk Investment Options to the right have potentially less inflation risk and more investment risk Lifecycle Funds Voya Target Solution Income Trust Voya Target Solution 2020 Trust Voya Target Solution 2025 Trust Voya Target Solution 2030 Trust Voya Target Solution 2035 Trust 4 Voya Target Solution 2040 Trust Voya Target Solution 2045 Trust Voya Target Solution 2050 Trust Voya Target Solution 2055 Trust Voya Target Solution 2060 Trust Target date investments are generally designed for investors expecting to retire around the year indicated in each investment s name. The investments are managed to gradually become more conservative over time. The investment risks of each target date investment change over time as its asset allocation changes. They are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates.

5 Core Investment Options Investment Options to the left have potentially more inflation risk and less investment risk Investment Options to the right have potentially less inflation risk and more investment risk CONSERVATIVE AGGRESSIVE Money Market Managed Income Bond Domestic Equity International/ Global Equity Company Stock Fidelity Money Market Trust Retirement Government Money Market Portfolio Managed Income Portfolio II Class 2 Diversified Fidelity Total Bond Fund U.S. Bond Institutional Class Large Value Dodge & Cox Stock Fund Small Value American Beacon Small Cap Value Fund Class Institutional Large Blend 500 Institutional Class Mid Blend Extended Market Index Fund Fidelity Advantage Class Large Growth Fidelity Blue Chip Growth Fund Class K Small Growth Lord Abbett Developing Growth Fund Class I Diversified MFS International Diversification Fund Class R4 International Institutional Class Emerging Markets Emerging Markets Institutional Class Engility Stock Fund You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund s sponsor, have no legal obligation to provide financial support to money market funds and you should not expect that the sponsor will provide financial support to the fund at any time. Fidelity s government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares, nor temporarily suspend your ability to sell shares if the fund s weekly liquid assets fall below 30% of its total assets because of market conditions or other factors. This spectrum, with the exception of the Domestic Equity category, is based on Fidelity s analysis of the characteristics of the general investment categories and not on the actual investment options and their holdings, which can change frequently. Investment options in the Domestic Equity category are based on the options Morningstar categories as of the 1/1/2016. Morningstar categories are based on a fund s style as measured by its underlying portfolio holdings over the past three years and may change at any time. These style calculations do not represent the investment options objectives and do not predict the investment options future styles. Investment options are listed in alphabetical order within each investment category. Risk associated with the investment options can vary significantly within each particular investment category and the relative risk of categories may change under certain economic conditions. For a more complete discussion of risk associated with the mutual fund options, please read the prospectuses before making your investment decisions. The spectrum does not represent actual or implied performance. You are not permitted to make a direct exchange among BrokerageLink, Wells Fargo Stable Return Portfolio U, Fidelity Money Market Trust Retirement Government Money Market Portfolio, and/or the Managed Income Portfolio II Class 2 (considered competing funds ). Before exchanging between these funds, you must first exchange to a noncompeting fund for 90 days. While these requirements may seem restrictive, they are typically imposed by issuers such as insurance companies, banks, or other approved financial institutions, as a condition for issuing investment contracts to retirement plans. 5

6 Log on to NetBenefits at to: Set up your username and password to access your account. Add your preferred address and elect edelivery. Enroll in the 401(k), adjust your contribution amount, make your age 50+ catch-up contributions (if applicable), and/or change your investment elections. Enter your beneficiary information. Access information about each investment option available in the 401(k), including investment risk, strategy, and objective. Review the fact sheet or prospectus, if available. Go mobile. Download the NetBenefits mobile app. Screenshots are for illustrative purposes only. *System availability and response times may be subject to market conditions. Apple, the Apple logo, ipad, iphone, and ipod touch are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android and Google Play are trademarks of Google Inc. This document provides only a summary of the main features of the Engility Master Savings Plan, and the Plan document will govern in the event of any discrepancies. Company stock funds are neither mutual funds nor diversified or managed investment options. Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal. In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible. Guidance provided by Fidelity through the Planning & Guidance Center is educational in nature, is not individualized, and is not intended to serve as the primary basis for your investment or tax-planning decisions. Before investing, consider the funds investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI FMR LLC. All rights reserved