TrueBlue, Inc. Nonqualified Deferred Compensation Plan Summary for 2011 Plan Year 1
Introduction The TrueBlue, Inc. Nonqualified Deferred Compensation Plan (the Plan ) is a nonqualified retirement plan for a select group of management or highly compensated employees of the TrueBlue, Inc. and its participating affiliates ( TrueBlue or the Company ). The Plan is intended to help provide financial security for you and your family and to provide you an opportunity to defer compensation independent of the limits imposed by the Internal Revenue Code (the Code ) on qualified retirement plans such as 401(k) plans. This Summary is designed to help you understand the features of the Plan. This document is the Summary for the Plan, established on June 1, 2006 and amended and restated effective January 1, 2011. The Plan Year for the Plan is the calendar year. You are responsible for understanding the provisions of this deferred compensation program. We strongly encourage you to take time to review the Summary and to keep it with your other important papers for future reference. As other members of your family may be affected, we recommend you review the document with them as well. As this Summary is designed to provide an easy-to-read overview of your rights and benefits under the Plan, the Summary does not cover all of the details of the Plan or how the rules of the Plan apply to every person, in every situation. You can find the specific rules of the Plan in the Plan Document, which you may request from your Benefits Manager. In the event of any conflict between the information in this Summary and provisions in the Plan document, your benefits will be determined based on the information found in the Plan document. If after reading this Summary you find you have questions concerning your benefits under the Plan, please contact TrueBlue s Director of Benefits. Eligibility You are eligible to participate in the plan during if you are a highly compensated employee as determined by IRS regulations. In 2010, IRS rules defined highly compensated employees as employees earning more than $110,000 in annual gross income. This amount may change in future years. If you are eligible you must enroll by during the time described below. Employees earning more than the IRS highly compensated employee amount are not eligible to participate in the TrueBlue 401(k) plan. Enrolling Eligible employees must enroll on-line during the enrollment period, which will generally be between November 15 and December 15 each year. If you previously completed a deferral election with respect to compensation to be paid in a subsequent Plan Year, you may increase, decrease or eliminate such compensation deferral election by December 15 prior to the Plan Year. When you make a deferral election, you must also elect a date or event for receiving your funds. For some events, you must also elect whether to receive your funds in a lump sum or in installments. Your deferral election will remain in effect for subsequent Plan Years unless, prior to the December 15 that precedes a subsequent Plan Year, the election is changed or you are not eligible to participate in the Plan in a subsequent year. As required by law, no changes to your deferral elections for a year can be made after December 15 of the preceding year. Your deferral election becomes irrevocable as of that date. For example, if you elect to defer 10% of you compensation between November 15 and December 15, 2010, 10% of your compensation will be withheld during 2011. After December 15, 2010, you would not be able to revoke your 10% election, increase it or decrease. As required by law, no exceptions can be made to this rule. If, by December 15, you are not certain what your final gross compensation for the year will be and you want to be able to defer compensation in the coming year, you must nevertheless make an election under this Plan by December 15. If it turns out that your gross compensation did not 2
exceed the dollar amount, your election will be void and you will be eligible to elect to participate in the 401(k) plan for the following year, provided that you have satisfied the eligibility conditions for that plan. Contributions to the Plan Employee Contributions You can elect to defer to the Plan, through payroll deductions, salary, bonuses, and commissions that you would otherwise receive. The chart below describes limits to these elections and time for making the deferrals. For purposes of determining the amount of your salary or annual bonus which is deferred, the gross amount is considered. Compensation Type When to make the deferral decision Amount that can be deferred Base Salary: regular, base salary during annual open enrollment Up to 75% Incentive Bonus: this would include any bonuses throughout the plan year during annual open enrollment Up to 100% Commissions during annual open enrollment Up to 100% Annual Bonus: bonus based on annual performance, typically paid in February of the following year elect during annual open enrollment, with an option to re-designate in June, 6 months prior to the end of the earnings period Up to 100% Company Contributions Employer matching contributions are discretionary and whether a match will be made for a Plan Year and the amount of any such match will be determined each year by TrueBlue. TrueBlue may establish different matching formulas for different classes of participants. If a matching contribution is made to the 401(k) plan, TrueBlue will match your Deferred Compensation contributions to at double the rate of the company 401(k) match, up to the 401(k) annual contribution limit as specified by the IRS. For example, the current dollar limit on elective deferrals is $16,500 and if you contributed $20,000 during the year, the first $16,500 may be matched at double the rate of the company match under the 401(k) plan. The Company may make other discretionary contributions to the Plan, but is not required to do so. Vesting You are always 100% vested in your elective deferral contributions to the Plan. You will also be immediately vested in any matching contributions made to you by TrueBlue. Vesting in other discretionary employer contributions will be determined according to the vesting schedule announced by TrueBlue at the time such contribution is made. Funding Assets are not required to be invested in a trust; instead benefits represent merely an unfunded, unsecured promise by your employer to pay cash lump sums in the future. If your employer becomes insolvent, you will be treated like any other general, unsecured creditor of your employer and you may receive only a fraction (or none) of your benefit. You are risking a loss of your benefit in exchange for the opportunity to defer taxation on the salary and bonus amounts deferred. TrueBlue and its participating affiliates are jointly and severally liable for Plan benefit obligations. TrueBlue may choose in its discretion to invest assets through one or more rabbi trusts. The assets of any such rabbi trust will be subject to the claims of the creditors in the event that the employer sponsoring the trust becomes insolvent. 3
Investment Options The plan offers several different investment fund options. No assets are required to actually be invested in such funds, although the Company currently plans to invest the deferrals into the funds pursuant to your elections. Divide your contributions among the funds below (in 1% increments). Investment Advisor Reference Investment Option Capital Research and Mgmt Co American Funds EuroPacific Growth R4 Fund Capital Research and Mgmt Co American Fund Growth Fund of America R4 Fund Vanguard Index 500 Fund Vanguard Total International Stock Index Inv Fund Janus Perkins Mid Cap Value T Fund PIMCO PIMCO Total Return Instl Fund Principal Global Investors Money Market R3 Fund Prudential Investments, LLC Prudential Jennison Mid Cap Growth A Fund Royce & Associates, LLC Royce Pennsylvania Mutual Investment Fund Vanguard Intermediate-Term Bond Index Inv Fund Vanguard Mid-Cap Index Inv Fund Vanguard Small-Cap Index Inv Fund Vanguard Windsor II Fund *Fund listing current as of December 2010 You can transfer money between the funds in 1% increments during a Plan Year by completing an investment election form. Receiving Your Funds During Employment The Internal Revenue Code limits when you may receive your funds. While you are an employee, you can only withdraw funds: On a specific date that you elected at the time of your deferral election for In-Service Distributions, or in the case of an unforeseen emergency, or in the event you become disabled, or in the event of a change in control Specified Date for In-Service Distributions You may elect to receive a distribution of funds on a specified date that is at least two years from the date the amount is contributed to your Plan account. For example, for 2011 deferrals, you could elect to receive a distribution of all, or a portion of, your deferrals from 2011 on the date that you chose in 2013. These funds could be used for any purpose in the future; for example: a child s education, a major purchase, or for other purposes. At the time of election, you could also choose to have a certain portion of deferred funds distributed to you in lump sums, or over multiple years. Unforeseen Emergency Withdrawals are available only if you have a severe financial hardship resulting from an illness or accident (of you or a family member), a loss of your property due to casualty, or another similar extraordinary and unforeseeable circumstance beyond your control, as determined by TrueBlue in its sole discretion and if permitted by law. Under current law, examples of additional unforeseeable emergencies include an imminent foreclosure or eviction, unreimbursed medical expenses such as the cost of prescription drugs and funeral expenses for a family member. The purchase of a home or payment of college tuition is not 4
considered an unforeseeable emergency. If you want to receive your funds for either of those events, you must plan for them and elect a specific date for distribution as described above. The amount of the hardship withdrawal cannot be more than the amount needed to relieve your financial hardship (including amounts necessary to pay any taxes as a result of the withdrawal). The amount distributed will be determined after taking into account other insurance or assets you may have available to alleviate the financial hardship. Whether there is an unforeseen emergency will be considered on a case-by-case basis considering all of the facts. Disability If you become disabled, you will receive a lump sum cash distribution of the vested portion of your Plan account within 30 days after you are determined to be disabled. You are considered to be disabled if you are unable to engage in any substantial gainful employment due to a medically determinable physical or mental condition that is expected to result in death or can last for a continuous period of not less than 12 months. You are also considered disabled if you have such a condition and are receiving income replacement benefits for a period of at least three months under a welfare benefit plan sponsored by your employer. Change in Control You can elect upon your initial enrollment in the Plan to have your account distributed to you if there is a change in the ownership or effective control of your employer, as determined under the terms of the Plan. If you have made that election you will receive a lump sum cash distribution of the vested portion of your Plan account within 60 days after the change in control. Seniority Date and Separation from Service The Seniority Date is the date on which a participant in the Plan has: (a) attained age 65, or (b) attained age 50 and completed 10 years of service with the Company. If your employment with TrueBlue or its affiliates is terminated for any reason (including retirement) before you have reached the Seniority Date, then you will be paid your vested Plan account balance. Notwithstanding the foregoing, your payment will be delayed six months if you are considered a key employee (i.e., an officer earning more than an amount set forth in the Code and adjusted by the IRS from time to time). If your employment with TrueBlue or its affiliates is terminated for any reason (including retirement) after you have reached the Seniority Date, then you will receive your deferred funds in the manner you elected prior to deferral If you reach the Seniority Date, payments from the Plan may be scheduled over 10 years. If you die, your beneficiary will receive your vested Plan account balance. Receiving your Funds Your funds will be distributed to you in the following manner: Specific Date In-Service Distributions. If you elected to receive your funds on a specific date, you must also elect whether to receive them in a lump sum or in installments over a maximum period of 5 years. Your funds will be paid according to your election if your employment with TrueBlue has not ended by that date. 5
Separation from Service on or After Seniority Date. If your employment ends on or after your Seniority Date, your funds will be paid in a lump sum or in installments over a maximum period of 10 years, according to your election made at the time of your deferral. Separation from Service Prior to Seniority Date. Notwithstanding other elections as to the time of distribution or form, if your employment ends before your Seniority Date, your account will be paid to you in a lump sum upon Separation from Service. Change of Control. If you elected to receive your funds upon a change of control, you will receive your funds in a lump sum within 60 days of the change of control. Death. Your account will be distributed to your beneficiary in a lump sum in the event of your death. Disability. Your account will be distributed in a lump sum in the event of your Disability. De Minimis Amounts. Notwithstanding other elections regarding the form of payment, your account will be distributed in a lump sum if it does not exceed $10,000. Acceleration Prohibited You cannot elect to receive your funds on a date that is earlier than the date you originally elected. Change to Deferrals Ordinarily, you cannot elect to delay a payment that you are scheduled to receive. However, you may elect to delay or change the method of payment if the following rules are strictly followed: The new election cannot take effect until at least 12 months after the date on which the new election is made. The new election must provide for a deferral of the payment to a date that is at least five from the date the payment would have otherwise been made. If the new election relates to a payment that was to be made on a specified date, the new election must be made at least 12 months prior to the date of the first scheduled payment. Tax Implications Amounts paid to you under the Plan will be reduced for required tax withholdings. Amounts due for FICA/FUTA taxes on your elected deferrals and employer contributions, if any, will be withheld from the undeferred portion of your salary and annual bonus. FICA/FUTA taxes are owed on the amounts you elect to defer to the Plan when the deferrals are made. FICA/FUTA taxes are owed on amounts your employer contributes to the Plan when you vest in those contributions. Withdrawals and distributions from the Plan may be subject to federal and, in some states, state income taxes. Income tax laws and regulations are complex and constantly changing. You should seek professional tax advice before you receive funds from the Plan. Situations Affecting Your Plan Benefits Loss or Reduction of Benefits Under some circumstances, you may lose some or all of your benefits under the Plan. For example: If the investment funds decrease in value, your account value will also decrease. If TrueBlue becomes insolvent, your account value may be used to satisfy the claims of their creditors. In such a circumstance, you will be treated like all other unsecured creditors of TrueBlue. Naming a Beneficiary 6
When you enroll, you need to name a beneficiary. You can name more than one beneficiary. If your marital status changes, you must notify the Benefits Department. If you become divorced after having named your spouse as a Beneficiary, the prior designation of the spouse as Beneficiary will be void. After a divorce, you may designate your ex-spouse as a Beneficiary by filling out a new Beneficiary Designation Form. If you do not name a beneficiary or if you are not survived by a named beneficiary, your benefits will be paid to your estate. You can change your beneficiary at any time by sending a new form to the Benefits Department. Claims Procedures If you believe you may be entitled to benefits under the plan, or if you disagree with any determination that has been made, you may present a claim to the Benefits Committee ( Committee ). The procedure applied to your claim will depend on whether the Committee must determine whether you are disabled to render a decision on your possible entitlement to benefits. Procedures For Claims Not Requiring A Determination Regarding Disability Your claim must be written and must be delivered to the Committee. Within 90 days after you deliver your claim, you will receive either: (a) a decision; or (b) a notice for extension describing special circumstances requiring additional time to process your claim (up to 90 days from the day you delivered your request for review). Any notice for extension will describe the special circumstances (such as the need to hold a hearing) requiring more time and the date by which the Committee expects to render a decision. If your claim is denied in whole or in part, you will receive a written notice specifying: (a) the reasons for the denial; (b) the Plan provisions on which the denial is based; (c) any additional information needed from you in connection with the claim and the reason such information is needed; and (d) an explanation of the claims review procedure and the applicable time limits. The time limits for making a decision on your claim will be frozen until any necessary additional information is received by the Committee. Procedures For Claims Requiring a Disability Determination Within 45 days after you deliver your written claim you will receive either: (a) a decision; or (b) a notice for extension describing reasons beyond the control of the Plan requiring additional time (up to 30 days from the day you delivered your claim) to reach a decision. Any notice for extension will explain the standards on which your entitlement to a benefit is based, describe the unresolved issues that prevent an immediate decision on the claim, and indicate any additional information needed. You will be given at least 45 days to provide any necessary additional information specified in the notice for extension, and the time limits for making a decision on your claim will be frozen until any necessary additional information is received by the Committee. The Plan may extend its decision for a second 30-day period if additional reasons beyond the control of the Plan exist. You will be informed in writing if such circumstances arise. If your claim is denied in whole or in part, you will receive a written notice specifying (in addition to the items specified above) any internal guidelines or criteria that were relied upon in making the adverse determination. You may ask to examine or receive free copies of such internal guidelines or criteria by asking the Committee. Appeal Procedures You must make a written request for review to the Committee within the specified time limits indicated below. Your written request for review may (but is not required to) include issues, comments, documents, and other records you want considered in the review. All the information you submit will be taken into account on appeal, even if it was not reviewed as part of the initial decision. You may ask to examine or receive free copies of all pertinent Plan documents, records, and other information relevant to your claim by asking the Committee. The Committee may, in its discretion, hold one or more hearings. You may, at your own expense, have an attorney or other representative act on your behalf, but the Committee requires a written authorization. The Committee reserves the right to delegate its authority to make decisions. The decision will be in writing and will specify: (a) the reasons for the denial; (b) the Plan provisions on which the denial is 7
based; and (c) any documents, records or other information relevant to your claim for benefits, which you may ask to examine or receive free copies of by asking the Committee. Additional Appeal Procedures For All Benefit Claims Not Requiring A Determination of Disability Your written request for review must be delivered to the Committee within 60 days of the date you receive the initial claim denial. Within 60 days after you deliver your request for review, you will receive either: (a) a decision; or (b) a notice for extension describing special circumstances requiring additional time to process your claim (up to 60 days from the day you delivered your request for review). Any notice for extension will describe the special circumstances (such as the need to hold a hearing) requiring more time and the date by which the Plan expects to render a decision on appeal. Additional Appeal Procedures Applicable Only To Claims Requiring A Determination of Disability Your written request for review must be delivered to the Committee within 180 days of the initial claim denial. You will be given the identity of medical or vocational experts whose advice was obtained by the Plan in connection with your initial claim denial, even if their advice was not relied upon in making the initial decision. Within 45 days after you deliver your request for review, you will receive either: (a) a decision; or (b) a notice for extension describing special circumstances requiring additional time to process your claim (up to 45 days from the day you delivered your request for review). Any notice for extension will describe the special circumstances (such as the need to hold a hearing) requiring more time and the date by which the Plan expects to render a decision on appeal. The decision will also specify any internal guidelines or criteria that were relied upon in making the adverse determination. You may ask to examine or receive free copies of such internal guidelines or criteria by asking the Committee. Decisions upon appeal are final and binding on all parties. Plan Administration The Plan is administered by the TrueBlue Benefits Committee. This Committee has the sole authority and responsibility to interpret and construe the provisions of the Plan and to determine all factual and legal questions under the Plan. The Committee will determine the entitlement of employees, participants and beneficiaries to benefits and the amount, if any, of their benefits. This discretionary authority extends to all matters arising under the Plan. The Committee has discretionary authority to grant or deny benefits under the Plan. Amendment and Termination TrueBlue reserves the right to amend, suspend or terminate the Plan at any time. The Company does not promise the continuation of any benefits nor does it promise any specific level of benefits during your employment. 8