Proprietary 8-23 30 Plan administration This Plan is administered by the Farmers Agency Force Deferred Compensation Committee, which has discretionary authority to interpret the Plan provisions, as well as make the rules necessary for the Plan’s day-to-day operation. Empower is the Plan recordkeeper, responsible for maintaining and reporting your elections and account balances. Tax consequences No income taxes are withheld from deferrals; whatever you contribute to the Plan will not be included as income on your Form 1099. Income taxes are not assessed until there is a distribution from your account. Investment returns credited to your account are also not subject to income taxes or self-employment taxes, until distribution. The Plan is a non-qualified plan and is not subject to most provisions of ERISA (the Employee Retirement Income Security Act of 1974). All distributions from the Plan (including investment returns) are treated as ordinary income, subject to income taxes (federal and most state) and self-employment taxes at the time of distribution. Consult your tax professional for your individual tax consequences and benefits related to participating in this deferred compensation plan. Risks of a deferred compensation plan Investment risks The value of your account will vary depending on the performance of the investment-crediting funds that you select. Changes in tax or other applicable laws The Plan will be administered consistent with applicable regulations in order to allow deferral of income. If there are changes in tax laws, other regulations or legal interpretations, certain Plan features may no longer be available. We make no representation or guarantee concerning future tax treatments or the availability of any Plan features. Changes in contract status Neither your participation in the Plan, nor your rights to your account guarantees your continued contractual relationship with Farmers entities. Some changes in contract status, such as termination for cause, may result in your account being distributed earlier than you planned. This could result in a significant tax liability. Irrevocable trust We have placed assets to pay Plan benefits in an irrevocable trust. This trust provides you a measure of protection, shielding assets for your sole benefit in the event of a change of control in the ownership or management of applicable Farmers entities. Furthermore, the trust partitions assets so that they may not be used for any purpose other than to pay out your account balance, except in the event of a Farmers entity’s bankruptcy or insolvency. In those cases, trust assets are treated like all other corporate assets and are subject to the claims of Farmers’ general creditors. Right to amend or terminate the plan We have the right to amend or terminate the Plan, in whole or in part, at any time. No amendment or termination of the Plan will retroactively reduce any amounts allocated to your account. If you have questions about the Plan, contact the Farmers Deferred Compensation Helpline at 800.487.0042, Monday – Friday, 6:00 a.m. – 6:00 p.m. Pacific Time.
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