Kentucky Farmers Bank (KFB) (as agent or IRA trustee) offers the same investment management services for Personal Agency Accounts, traditional IRAs, Roth IRAs, and IRA Rollovers as it does for Personal Trust Accounts and Estates. These services are for the individual that is presently seeking experienced stock and bond investment management or mutual fund selection through KFB. Based on your instructions as to your needs, the time period until you anticipate using or being dependent on these funds, and your comfort level with fluctuations in the market, an account objective is determined. The account is then managed in the agreed upon manner. Periodically, initiated by KFB or at your request, subsequent meetings take place in which account performance and account objectives are reviewed. The account can be terminated by either you or KFB, or automatically at your death. Please note that these accounts are not FDIC insured, have no bank guarantee, and may lose value. As the investment manager, KFB will generally perform the following duties for you (the principal):

• Accept possession of your assets
• Accept the transfer of your 401(k) or other retirement plan distributions
• Provide safekeeping for the assets
• Collect income and payments due the account
• Settle, buy and sell investments at KFB's discretion according to the objectives established for your account
• Meet with you periodically to review performance and objectives
• Provide periodic statements of account activities
• Provide tax information on account activities

CUSTODY ONLY AND SELF-DIRECTED ACCOUNTS FOR PERSONAL AND RETIREMENT ASSETS

Kentucky Farmers Bank (KFB) (as custodian) offers custody only services for personal, traditional IRAs, Roth IRAs, IRA rollovers and employee benefit accounts. This service is for the individual who wants assistance in the clerical work associated with managing assets but wants to make his or her own investment decisions. As custodian, KFB will, as a rule, exercise no investment management or advisory responsibilities for your account and will be generally limited to performing the following duties for you (the principal):

• Accepting possession of your assets
• Accepting the transfer of your 401(k) or other retirement plan distributions
• Providing safekeeping for the assets
• Collecting income and payments due the account
• Providing periodic statements of account activities
• Providing tax information on account activities
• Settling, buying and selling investments at the principal's (your) direction

A trust is a legal arrangement in which Kentucky Farmers Bank (KFB) (the trustee) manages property (the trust property) transferred to KFB pursuant to your (the grantor's) written instructions (the trust agreement or the (trust document). In trust agreements you name beneficiaries such as yourself, your spouse, your heirs, future generations, a charity, and/or even an institution. You can choose when the trust begins and when the trust ends. You and your attorney can write a trust that can be changed or terminated by you in the future (revocable) or a trust that no one can change (irrevocable). Trust agreements often have different instructions for the current income distributions (current beneficiaries) than for the final distribution of trust property in the future (remainderment beneficiaries and trust termination). Remember, you may write a trust to address present concerns, to last multiple generations, and/or even as a permanent endowment for a charity or an institution.

Some Common Objectives for Trusts are:

• Investment management
• Tax planning
• Charitable giving
• Preserve the wealth you have accumulated
• Provide for present or future personal inability to manage financial affairs (pay bills & maintain records) or to protect assets.
• Manage financial affairs for heirs that are unable or unwilling to protect and manage their assets. Such as: a minor, an incompetent, a spendthrift, or other incapacitated person.
• Control gifts to a child beyond age 18
• Smooth transition of benefits for loved ones
• Provide different and specific benefit instructions for different groups of loved ones. Such as parents, current spouse, children, children living with a former spouse, and/or step-children
• Possible avoidance of some fees in your estate
• Possible avoidance of undue publicity of your estate

Generally, KFB, as trustee performs the following duties for you (the grantor):

• Accepts possession of your assets
• Titles the property in the name of the trust and when appropriate the trust's tax ID number
• Provides safekeeping for the assets
• Collects income and payments due the account
• Settles, buys and sells investments at the trustee's (KFB's) discretion according to the objectives as indicated or implied in the trust agreement
• Meets with beneficiaries to review the relationship and the account activity
• Reviews beneficiary requests and expenses as to compliance with trust agreement (your instructions)
• Files trust tax returns
• Provides tax information to beneficiaries
• Provides periodic statements of activities to current beneficiaries

Legal counsel is recommended when writing a trust. The trustee instructions (trustee powers) should be clearly defined in the trust agreement. It is also recommended that KFB, as the named trustee, review the trust agreement prior to your signing of the trust document.

Kentucky Farmers Bank can be named by you (the testator) in your will as executor of your estate. An executor is named in a will to settle your estate and to perform any other legal and reasonable instructions in your will. An executor's professional duties include:

• Having the will accepted by a court of competent jurisdiction
• Collecting, securing, and valuing assets
• Paying expenses, debts, and taxes
• Reviewing claims against estate
• Filing tax returns
• Managing assets during the settlement (probate) period
• Receiving tax releases from proper authorities
• Distributing assets as instructed in your will
• Preparing the final accounting

Additional notes:
An administrator is appointed by the court to settle the estate of a person who died leaving no valid will (intestate). Without a will to follow, the administrator must carry out its functions solely in accordance with state intestacy laws. The laws may or may not be the same as you wish your instructions to be. Kentucky Farmers Bank can be nominated to the court by related parties to carry out the duties of administrator.

Kentucky Farmers Bank can be named as "successor executor" in your will should your first choice be unable or unwilling to serve. This designation is often used in wills to ensure a named executor carries out your (the testator) instructions.

Kentucky Farmers Bank is available to act as "agent" for a named executor. As agent, KFB would relieve or assist the executor in carrying out their duties.

Legal counsel is recommended when writing a will. It is also helpful to review your will and assets with your named executor before or at the time you sign your will.

KFB bases its fees on the service provided, the asset type, the market value, number of account holdings, and/or the account activity. Fee schedules and fee estimates are available by appointment or by request. Please call Ms. Morrison (606) 929-5055 or Mr. Webb (606) 929-5056.

KFB classifies assets into three categories for acceptance and fee calculation.

• Standard Assets
  • Mutual Funds
  • Stocks (Common or Preferred)
  • Bonds (Government, Municipal, CMOs & Corporate)
  • Money Market Mutual Funds
  • Certificates of deposit
    
  • US Treasury Securities
  • US Savings Bonds (EE & I)
  • Government Agency Securities (Fixed rate & Variable rate)
  • KFB Deposit Program*
  • KFB Common Funds
    
• Non-standard Assets (subject to KFB review and approval)
  • Investment Real Estate
  • Limited partnerships
  • Closely Held Businesses
  • Mortgages
• KFB cash deposits, deposit program, & certificate of deposits receive a fee discount