You may elect, in accordance with procedures established by the Plan Administrator, to have a portion of your vested Accounts (other than amounts in your Roth pay deferral or Roth rollover accounts) directly transferred to a Roth In-Plan Conversion account. You may elect to make such an in-plan conversion even if the vested amounts are not otherwise distributable to you. The benefit of making a Roth In-Plan Conversion is that the converted amount, along with any earnings on the converted amount, will not be taxed upon your receipt of such amounts in a "qualified" distribution (see "Tax consequences of Roth distributions" for information on qualified Roth distributions).

A Roth In-Plan Conversion generally will be treated as a distribution for tax purposes, which means that in the year of the conversion, you will owe ordinary income taxes on any tax-deferred money in your Accounts, and any earnings in your Accounts, which are converted to Roth under the Plan in a Roth In-Plan Conversion.

A Roth In-Plan Conversion will not trigger any early distribution penalty tax (as discussed in "Excise tax on certain early distributions"), but the penalty may apply later if the converted amount is not held in the designated Roth account for the 5-year period required for Roth distributions to be tax-free.

Roth In-Plan Conversions are not subject to mandatory or optional tax withholdings. Therefore, if you decide to make a Roth In-Plan Conversion, you may need to increase your withholding or make estimated tax payments outside the Plan to avoid any underpayment penalties that may result from the conversion.

If you wish to complete a Roth In-Plan Conversion, contact Vanguard (see "Contacting Vanguard").

Important: Because the tax rules on Roth In-Plan Conversions can be complicated, you should consult with your professional tax advisor before deciding whether or not to complete a Roth In-Plan Conversion. Once a Roth In-Plan Conversion is made, it is irrevocable and cannot be undone or re-characterized in any way.

Any amounts transferred to a Roth In-Plan Conversion account will remain subject to any distribution restrictions that were applicable prior to the transfer.