401(k) SAVINGS & RETIREMENT PLAN 2018 (SARP)

Transcription

1 401(k) SAVINGS & RETIREMENT PLAN 2018 (SARP)

2 what s your plan? You ve got to have a plan. While life may seem pretty now, it s also important to think about your financial future. And the importance of saving for it. That s why you should consider investing in the L Brands, Inc. 401(k) Savings and Retirement Plan (the Plan or SARP ). You ll find all the important SARP information here in this book. We ll explain how the Plan works, how you enroll, how company contributions are made to your account, the various investment options offered through the SARP, and how to choose the investments that are right for you. So start reading! It s pretty simple, once you get the hang of it. This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.

3 table of contents 4 sarp: 401(k) savings and retirement plan 6 when can i enroll? 7 how do i get started? 8 ownership & options 9 investing 10 investment platform information 16 keeping tabs 16 on your desktop wellsfargo.com/retirementplan 18 rollovers & withdrawals 20 five reasons you should invest 22 additional information

4 sarp: 401(k) savings and retirement plan The SARP is a great way to accumulate the money you ll need for future retirement. This is a great plan that provides two key retirement features: 401(k) Savings with a Company Match and Retirement Contributions. 401(K) Savings with a Company Match This is one of the SARP s best features. You may begin saving in the 401(k) portion of the plan once you ve met the Plan s eligibility requirements. You can elect to save up to 75% of your pay 1 within current IRS limits (your 401(k) Savings ). And after you become eligible to receive company matching contributions (see next page), the first 4% of your pay that you save is matched 100% by the company and vests immediately (your Company 401(k) Match )! Retirement Contributions 2 The annual Retirement Contribution is the money that the company contributes to your SARP account regardless of whether you re contributing to the 401(k) or not. You read right free money! You have to meet the Plan s eligibility requirements plus work at least 1,000 hours during the calendar year; and be actively employed on December 31. How much the company contributes to your account depends on your pay for the year and how many years you ve worked for the company. And, here are four more great perks: 1 Whatever you save in your 401(k) is taken out of your paycheck via payroll deduction. How the Retirement Contribution Works In simple terms, if you make less than the Social Security Wage Base (SSWB) 3, your retirement contribution will either be 3% of your pay if you ve completed less than five Years of Vesting Service for the company or 4% of your pay if you ve completed five years or more of vesting service. If you earn over the SSWB, an additional contribution is made at 6% or 8% of your pay in excess of the SSWB depending upon your Years of Vesting Service. The company may, in its sole discretion, increase or decrease the percentage of pay the company contributes. PERCENT OF YOUR PAY THE COMPANY CONTRIBUTES AS A RETIREMENT CONTRIBUTION YEARS OF VESTING SERVICE 4 EARNINGS NOT ABOVE SOCIAL SECURITY WAGE BASE EARNINGS ABOVE SOCIAL SECURITY WAGE BASE Less than 5 years 3% 6% 5 or more years 4% 8% 2 Your payroll deduction is pretax, so not only is this convenient, but it can also reduce your current year income taxes. 3 You vest in the Company 401(k) Match immediately. 4 If you are age 50 or greater at any time before the end of the calendar year, and you have made the maximum 401(k) Savings contributions permitted by tax law or the Plan, you are eligible to make additional Catch-Up Contributions to the Plan for that calendar year. The maximum amount of Catch-Up Contributions you may make in 2018 is $6,000. 4

5 How Your Retirement Contribution, 401(K) Savings & Company 401(K) Match Add Up: The company will match the first 4% of your 401(k) Savings at 100%. But you don t have to stop at 4%! You can save up to a total of 75% of your pay, within IRS limits, and really max out your savings potential! The chart shows how your Retirement Contribution, 401(k) Savings, and the Company 401(k) Match all work together to help you reach your financial goals. A HYPOTHETICAL EXAMPLE You are a full-time Associate with less than 5 years of service who earns $30,000 a year 5 : YOUR 401(K) SAVINGS COMPANY 401(K) MATCH COMPANY RETIREMENT CONTRIBUTION You save 0% $0 + $0 + $900 (3% of $30,000) You save 4% $1,200 (or about $23/wk) + $1,200 (The Company matches the first 4% of pay you save) + $900 (3% of $30,000) TOTAL PER YEAR = $900 = $3,300 You save 15% $4,500 (or about $87/wk) + $1,200 (The Company matches the first 4% of pay you save) + $900 (3% of $30,000) = $6,600 You save 55% $17,500 (or about $317/wk) + $1,200 (The Company matches the first 4% of pay you save) + $900 (3% of $30,000) = $19,600 1 Pay is based on your base pay + overtime + bonuses while a Plan participant during the calendar year. The IRS limits annual pay which can be taken into consideration. The limit on pay for 2018 is $275, During the year in which you first become eligible to receive company contributions, your Retirement Contribution under the SARP will be prorated based on compensation earned after you become eligible to receive company contributions. 3 The Social Security Wage Base changes yearly. For 2018, it is $128, You will earn a Year of Vesting Service if you work at least 1,000 hours during the calendar year. See the ownership & options section on page 8 for more detail. 5 See page 6 for Plan eligibility information including when you become eligible to contribute to the Plan, and when you become eligible for company contributions. 5

6 when can i enroll? You will become eligible to participate and contribute to your 401(k) Savings on the first day of the month after: You are a full-time regular associate, and are at least 21 years old OR You are a part-time or seasonal associate, you are at least 21 years old, and you have completed your Year of Eligibility Service. Your Year of Eligibility Service is only a one-time requirement (unless you have incurred five or more consecutive breaks of service, as explained below). To reach this you must work a minimum of 1,000 hours during a year. If you have at least 1,000 hours during your first 12 months, you will have earned your Year of Eligibility Service on your anniversary date. If not, your hours will be counted on a calendar-year basis and you will fulfill your Year of Eligibility Service on December 31 of the first calendar year in which you have at least 1,000 hours. Generally, your hours include hours for which you are paid or are entitled to be paid for your work for L Brands, including certain types of PTO or leave of absence. The company will designate the employment classes that are eligible to participate in the Plan. You must be on L Brands domestic US-based payroll in order to participate. You are not eligible if you are an independent contractor or a leased employee. Company Contributions Your eligibility to receive Company 401(k) Match or the annual Retirement Contribution begins on the first day of the month after you have fulfilled your Year of Eligibility Service. If you are a part-time or seasonal associate, this is the same requirement as you have to be eligible to participate in the Plan. If you are a full-time regular associate, it may be a year or more after you are initially eligible to participate in the Plan before you are able to receive company contributions. In addition, to receive the annual Retirement Contribution for any year, you must have worked a minimum of 1,000 hours during that year and be actively employed on December 31. Rehires Should you become re-employed by L Brands and you were a SARP participant with a vested interest in your Plan account or you are rehired before you have five consecutive breaks in service, generally, you will be eligible to participate in the SARP as of the date of your rehire. Note: you must re-enroll in order to begin contributing 401(k) Savings to your account. In addition, if you are rehired before you have five consecutive breaks in service, you will be eligible to have any forfeitures resulting from your previous termination restored to your account. If after your previous termination, you took a distribution from your account, you must repay the distribution before your prior forfeitures will be restored. This repayment must be made no later than the earlier of the following dates Five years after the date you were first rehired or The last day of the five-year break in service period beginning on the date of your distribution. A forfeiture is determined based on the unvested portion of your Retirement Contributions. You will lose (forfeit) this unvested portion if you terminate employment. If you then have five or more consecutive breaks in service, you are no longer eligible to have your forfeitures restored. A break in service is any calendar year in which you work less than 500 hours. ELIGIBLE TO MAKE ASSOCIATE CONTRIBUTIONS ELIGIBLE TO EARN COMPANY CONTRIBUTIONS Full-time regular Immediate 6 After Year of Eligibility Service Part-time and seasonal After Year of Eligibility Service After Year of Eligibility Service 6 Full-time regular associates may contribute to the SARP starting with the later of (1) the first paycheck that occurs in the calendar month following the date of hire, or (2) as soon as administratively practicable. Keep in mind, it takes some time in the normal course of processing for new hire information to be set up in the L Brands payroll system and then communicated to Wells Fargo. 6

7 how do i get started? After you read this book, you will be ready to enroll. It s easy to get started. When you enroll for the first time, be ready to: 1. Elect the percent of pay you want to contribute 2. Designate the investment fund(s) for your account (see investment platforms on pages 10 through 15) If you re unsure how much you ll need to reach your financial goal, there are retirement modeling and investment strategy tools that can be found on the website. The investment options are also highlighted in this book on pages 10 through Designate a beneficiary(ies) for your account (you ll need their name, home address, date of birth and Social Security Number) You can enroll in the 401(k) and manage your SARP account through the Wells Fargo website or by calling the SARP Line. wellsfargo.com/retirementplan/enrollment Select Easy Enrollment to quickly enroll in options pre-selected by your employer. Select Personalized Enrollment to take a more active role in your retirement planning and select from a full menu of plan and investment options. SARP Line SARP (7277) After your initial enrollment you can call or log on anytime to manage your account, change or update your beneficiary information. More information on designating your beneficiary It s not something you may like to talk about, but in case something ever happens to you it s important to name a beneficiary(ies). This designation serves as the means of disbursing your account balance in the event of your death. A few things about beneficiaries You may select individual(s), an estate or a trust as a beneficiary. Be prepared to provide the name, home address, date of birth and Social Security Number of your beneficiary(ies). If you select an individual(s), you ll designate your beneficiary(ies) as primary or contingent. Contingent beneficiaries would receive the assigned percent allocation of the balance in the event the primary beneficiary(ies) cannot be located, predecease you in death or waives the right to the benefit. If you don t name a beneficiary or your beneficiary dies before you, your account automatically goes to your spouse, if any, or to your surviving children, surviving parents or estate as described the Plan. Spousal Consent: If you are legally married, your spouse is designated the sole beneficiary. To designate someone other than your spouse as a primary beneficiary to receive all or a portion of your account balance, your spouse must sign a consent waiver. The spousal consent waiver will be sent to you with instructions upon online completion of your designation. Until the signed and notarized consent is received, your designation will be considered pending. You may designate contingent beneficiaries without obtaining spousal consent. A confirmation will be sent to you following a beneficiary designation, change or spousal consent. 7

8 ownership & options What s vesting? In a nutshell, vesting simply means ownership. The amount of your SARP account you could take with you if you were to leave the company depends upon your years of service (vesting). Over time, you vest in a larger percentage of your SARP account and, therefore, can take more with you. 401(K) Savings and Match You will vest immediately in all of your 401(k) Savings, Catch-Up Contributions, and Company 401(k) Match, as well as related investment earnings. Retirement Contributions You will become partially vested in your Retirement Contributions after two Years of Vesting Service and will gradually become fully vested over your first six Years of Vesting Service in accordance with the following schedule. If you were first hired on or after January 1, 2010, you will be credited with one year of vesting service for each calendar year in which you complete 1,000 hours of service. If you were hired prior to January 1, 2010, you will be credited one year of vesting service for each calendar year in which you complete 500 hours of service. (If you incur five or more consecutive breaks in service, your Years of Vesting Service will be determined in accordance with the terms of the Plan.) So Here s How It Works: Example Retirement Contributions Account Balance $4,000 Leave company after 4 years of Vested Service = 60% vested x.60 Amount the company contributed that you can take with you $2,400 The remainder of your account ($1,600) will be forfeited. See when can I enroll? on page 6 for more information about forfeitures and restoral of your forfeitures if you are rehired. (Remember, you are always 100% vested in your 401(k) Savings, Catch-Up Contributions, and Company 401(k) Match.) This illustration is hypothetical and is not meant to guarantee any specific account balance. Additionally, you will become 100% vested in your Retirement Contributions, and related investment earnings, upon reaching age 65, becoming disabled, or death. YEARS OF VESTING SERVICE 4 PERCENT VESTED 1 0% 2 20% 3 40% 4 60% 5 80% 6 or more 100% You re in Charge Now here s something you should know: you choose the investments for your 401(k) Savings, Company 401(k) Match and Retirement Contributions. 7 Information on your SARP investment fund options and how to select them is all ahead...so keep reading! 7 If you don t choose investment elections, your account will automatically default to the age appropriate T. Rowe Price Retirement Fund based on your date of birth and a retirement age of 65. 8

9 investing How to pick what s right for you: You ve heard how great your SARP is But now, what do you do? Ask yourself these questions: 1. How much do you know about investing? Whether you re a novice or you once worked on Wall Street, there s an Investment Platform for you! 2. What s your time horizon? When do you need your money? Are you five years or 35 years away from your savings goal? 3. What s your comfort level with risk? Can you ride the market or will the ups and downs keep you up at night? One general rule is that the closer you are to needing to access your retirement savings, the less risk you should take. If you are still many years away from needing to access your retirement savings you may be willing to tolerate more risk. 4. Ready? Let s go! Review your Investment Options carefully The SARP is intended to be a plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ), and the related Department of Labor regulations. As a result, the company (or the Retirement Plan Committee) must provide you with detailed information about your SARP investment options. This means you are in charge of determining how to invest your 401(k) Savings, Company 401(k) Match, Retirement Contributions, and Catch-Up Contributions (if any). The company, the Retirement Plan Committee, and the Trustee are not liable for any losses that are the direct and necessary result of the choices you make. If you don t make investment elections, any contributions into your account will automatically default to the age appropriate T. Rowe Price Retirement Fund based on your date of birth and a retirement age of 65, as described to the right. PARTICIPANT S BIRTHDATE On or before December 31, 1942 January 1, 1943 to December 31, 1947 January 1, 1948 to December 31, 1952 January 1, 1953 to December 31, 1957 January 1, 1958 to December 31, 1962 January 1, 1963 to December 31, 1967 January 1, 1968 to December 31, 1972 January 1, 1973 to December 31, 1977 January 1, 1978 to December 31, 1982 January 1, 1983 to December 31, 1987 January 1, 1988 to December 31, 1992 January 1, 1993 or later AGE BASED DEFAULT FUND T. Rowe Price Retirement 2005 Active F T. Rowe Price Retirement 2010 Active F T. Rowe Price Retirement 2015 Active F T. Rowe Price Retirement 2020 Active F T. Rowe Price Retirement 2025 Active F T. Rowe Price Retirement 2030 Active F T. Rowe Price Retirement 2035 Active F T. Rowe Price Retirement 2040 Active F T. Rowe Price Retirement 2045 Active F T. Rowe Price Retirement 2050 Active F T. Rowe Price Retirement 2055 Active F T. Rowe Price Retirement 2060 Active F 9

10 investment platform information Investment Platforms are levels designed to help you discover your approach toward investing. They re kind of like a guide to choosing an investment style... You can choose one or mix any of the three. Check it out and see which one sounds like you... Platform One: Pre-Mixed Options You may be a first-time investor, or maybe you want to take an easier route to selecting your SARP investment options. You might understand some basic investing principles, but aren t quite sure how to go about assembling a portfolio of your own. If this sounds like you, take a look at Platform One highlighted on this page and page 11. Platform Two: You Call the Shots You like to choose, have options, and you know something about investing and different types of investment options. You want to have a variety of options when it comes to investing, yet you don t want to be overwhelmed by too many fund choices. Among other investment options, this is where you can find the L Brands, Inc. Common Stock Fund. If this sounds like you, then take a look at Platform Two highlighted on pages 12 and 13. Platform Three: Assemble Your Own Portfolio You are a knowledgeable investor and have a higher tolerance for risk. You want to add a new dimension to your investment strategy. You want to take full advantage of what the market has to offer. When it comes to planning for your future, you want a diverse set of investment options of your own choosing. If this sounds like you, then take a look at Platform Three highlighted on page 15. Fees Please see Participant Fees on pages 23 and 24 for information on fund expenses and other fees related to the investment options available under these Platforms. Platform One T. Rowe Price Retirement Funds What are they? The T. Rowe Price Retirement Funds are Target Date Funds. Target Date Funds are predetermined portfolios that are particularly attractive to first-time investors, investors uncomfortable with customizing their portfolios, or investors who simply want to spend less time reviewing their investments. Platform One offers you 12 Target Date Funds that are designed based upon the amount of time until your retirement and the amount of risk you re willing to take. Each fund is a collective fund, managed by T. Rowe Price. As with any investment, there is no guarantee each fund will achieve its objective. Which is right for you? Each of the 12 Target Date Funds offers a different level of risk and potential return to match 12 broad time horizons. Because every investor is unique, the choices you make will reflect your goals, your time horizon, your risk tolerance and other individual factors. Which funds are right for you depends on your individual circumstances. Can I only choose from these 12 funds? Only if you want to. Target Date Funds are intended for investors to allocate 100% of their contributions to the fund that best suits their time until retirement. When you choose to invest in one of these funds, you no longer have to worry about selecting the most appropriate investments or choosing the correct mix of investments for your time horizon it has been determined for you. However, if you choose to, you may invest only a portion of your account in a Target Date Fund and invest the rest in one or more of the funds offered under Platform Two or Three. Keep in mind that your SARP investment elections are of your own making. You may choose any combination of investments from each of the three platforms. This means you may assemble a SARP portfolio consisting of any combination from the Target Date Funds in Platform One, the Core Funds in Platform Two, or the Self-Directed Brokerage Account in Platform Three. It s all up to you. Investments in retirement plans do not guarantee a profit or return of principal. The information contained herein has been provided by your plan sponsor, is for educational purposes only and does not constitute investment, financial, tax or legal advice. Please contact your personal investment, financial, tax or legal advisor regarding your specific needs and situation. Investments in stocks, bonds, mutual funds, commingled trusts and other securities: NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE 10

11 T. Rowe Price Retirement Target Date Trusts Investment Objective: The Trust seeks to provide the highest total return over time consistent with an emphasis on both capital growth and income. The Trust invests in underlying commingled T. Rowe Price Trusts, each one emphasizing a different market sector. Over time, the Trust s allocation to bonds will increase and its allocation to stocks will decrease. The Trust will reach its final most conservative allocation of approximately 20% stocks 30 years after reaching its target date. Percent (%) YEARS TO TARGET DATE YEARS PAST TARGET DATE Stocks Bonds FUND NAME INVESTMENT OBJECTIVE EXPENSE RATIO T. Rowe Price Retirement 2005 Active F The fund normally invests 34% in stocks and 66% in bonds..43% T. Rowe Price Retirement 2010 Active F The fund normally invests 39% in stocks and 61% in bonds..43% T. Rowe Price Retirement 2015 Active F The fund normally invests 47% in stocks and 53% in bonds..43% T. Rowe Price Retirement 2020 Active F The fund normally invests 57% in stocks and 43% in bonds..43% T. Rowe Price Retirement 2025 Active F The fund normally invests 65% in stocks and 35% in bonds..43% T. Rowe Price Retirement 2030 Active F The fund normally invests 72% in stocks and 28% in bonds..43% T. Rowe Price Retirement 2035 Active F The fund normally invests 77% in stocks and 23% in bonds..43% T. Rowe Price Retirement 2040 Active F The fund normally invests 82% in stocks and 18% in bonds..43% T. Rowe Price Retirement 2045 Active F The fund normally invests 83% in stocks and 17% in bonds..43% T. Rowe Price Retirement 2050 Active F The fund normally invests 83% in stocks and 17% in bonds..43% T. Rowe Price Retirement 2055 Active F The fund normally invests 84% in stocks and 16% in bonds..43% T. Rowe Price Retirement 2060 Active F The fund normally invests 85% in stocks and 15% in bonds..43% Investments in stocks, bonds, mutual funds, commingled trusts and other securities: NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE 11

12 Platform Two Core Investment Options What are they? The Core Options are for investors who want a variety of investments to choose from, and are comfortable assembling their own portfolio. Platform Two offers you 11 investment options covering a wide variety of asset categories and risk levels. You ll also find the L Brands, Inc. Common Stock Fund. Review each investment carefully, considering the fund s investment goals, asset category and investment approach to determine how it might fit into your overall strategy. How does it work? The approach to your investment selections is the same (review your time horizon, risk tolerance and savings goals), but with Platform Two, you now have greater flexibility to design your own savings portfolio. Here you select your funds and asset categories and you choose how to weight your portfolio. (This just means you choose how much money to put into each fund, within any combination of the categories.) Page 14 provides investment mix samples sorted by risk tolerance. Can you only invest in these? Only if you want to. Keep in mind that your SARP investment elections are of your own making. You may choose any combination of investments from each of the three Platforms. This means you may assemble a SARP portfolio consisting of any combination from the Target Date Funds in Platform One, the Core Funds in Platform Two or the Self-Directed Brokerage Account in Platform Three. It s all up to you. 12

13 Here are your funds for Platform Two: Included in this kit are the fund fact sheets for the Core Investment Options in the SARP. These fact sheets contain additional information on each investment option, including expanded descriptions of the investment approach, investment philosophy, investment manager details and performance information. Lower Risk/ Return Potential Higher Risk/ Return Potential FUND NAME/ASSET CLASS SARP Stable Value Fund 8 Stable Value Metropolitan West Total Return Bond Fund (I) Bond Vanguard Total Bond Market Index (I) Intermediate Term Bond Dodge & Cox Stock Large Value Vanguard Institutional Index (I) Large Blend PRIMECAP Odyssey Growth Large Growth Vanguard Mid Cap Index (I) Mid-Cap Blend Vanguard Small Cap Index (I) Small Blend Vanguard Total International Stock Index Foreign Large Blend Artisan International Investor Shares Foreign Large Growth The L Brands, Inc. Common Stock Fund Company Stock 9 INVESTMENT OBJECTIVE The Fund s objective is to produce a stable and predictable return while avoiding negative returns. In most market environments, it should provide investors with a higher return than a money market fund while striving to maintain liquidity for participant-initiated transactions and safety of principal. The investment seeks to maximize long-term total return. The fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets in investment grade fixed income securities or unrated securities that are determined by the Adviser to be of similar quality. Up to 20% of the fund s net assets may be invested in securities rated below investment grade. The fund also invests at least 80% of its net assets plus borrowings for investment purposes in fixed income securities it regards as bonds. The investment seeks the performance of Bloomberg Barclays U.S. Aggregate Float Adjusted Index. Bloomberg Barclays U.S. Aggregate Float Adjusted Index represents a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States-including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities-all with maturities of more than 1 year. All of its investments will be selected through the sampling process, and at least 80% of its assets will be invested in bonds held in the index. The investment seeks long-term growth of principal and income; a secondary objective is to achieve a reasonable current income. The fund invests primarily in a diversified portfolio of equity securities. It will invest at least 80% of its total assets in equity securities, including common stocks, depositary receipts evidencing ownership of common stocks, preferred stocks, securities convertible into common stocks, and securities that carry the right to buy common stocks. The fund may invest up to 20% of its total assets in U.S. dollar-denominated securities of non-u.s. issuers traded in the United States that are not in the S&P 500. The investment seeks to track the performance of a benchmark index that measures the investment return of largecapitalization stocks. The fund employs an indexing investment approach designed to track the performance of the Standard & Poor s 500 Index, a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. The investment seeks to provide long-term capital appreciation. The fund invests primarily in the common stocks of U.S. companies, emphasizing those companies with the potential for above average earnings growth. It may invest in stocks across all market sectors and market capitalizations. Although it has historically invested primarily in large- and mid-capitalization companies, it has also invested a significant portion of its assets in small-cap stocks. The investment seeks to track the performance of a benchmark index that measures the investment return of mid-capitalization stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Mid Cap Index, a broadly diversified index of stocks of mid-size U.S. companies. The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. The investment seeks to track the performance of a benchmark index that measures the investment return of small-capitalization stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Small Cap Index, a broadly diversified index of stocks of small U.S. companies. The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. The investment seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in developed and emerging markets, excluding the United States. The fund employs an indexing investment approach designed to track the performance of the FTSE Global All Cap ex US Index, a float-adjusted marketcapitalizationweighted index designed to measure equity market performance of companies located in developed and emerging markets, excluding the United States. The index includes approximately 5,800 stocks of companies located in over 45 countries. The investment seeks maximum long-term capital growth. The fund invests primarily in developed markets but also may invest up to 35% of the fund s total assets at market value at the time of purchase in emerging and less developed markets. Under normal market conditions, it is substantially fully invested in common stocks and similar securities, and invests at least 65% of its net assets at market value at the time of purchase in securities of non-u.s. companies. The Fund allows employees to directly participate in the future of the company through stock ownership. 8 While the fund seeks to maintain relative stability of principal, the fund is not a money market fund. The fund s value may fluctuate due to changes in interest rates and changes in the value of securities in which the fund invests. Investments in the fund, when redeemed, may be worth more or less than their original cost. 9 Due to lack of diversification, an investment in employer stock involves more risk than other funds. Fund information is obtained from reliable sources, including the mutual fund companies, but is not guaranteed as to completeness or accuracy. Provider shall not be liable for any errors in content or for any actions taken in reliance thereon. An investor should consider the funds investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information about the investment company can be found in the fund prospectus. To obtain a copy of the prospectus, please contact the fund company or call a Retirement Services Representative. Please read the prospectus carefully before investing. Wells Fargo Bank, N.A. and its affiliates, employees, agents and representatives do not act as investment advisors or investment fiduciaries with respect to the selection of participant directed investment options of any plan. The plan sponsor, plan investment committee or other plan fiduciary has made an independent decision about which funds to include in the plan. 13

14 Investment Types What they are STOCKS BONDS STABLE VALUE INVESTMENT 10 Ownership in a large, small or mid-sized U.S. or international company. Loans to government entities or corporations in exchange for interest payments. Short-term investments that seek to preserve the money invested. Risk/potential return Higher risk, higher potential return Medium risk, medium return Lower risk, lower return Key Risk Market risk: Prices swings could lead to losing some of the money you invest. Business risk: A company could go out of business or perform poorly. Interest risk: As rates rise, bond prices fall. Credit risk: A bond issuer might not repay money to the bondholders. Inflation risk: As prices over time, your purchasing power could shrink. Deciding on the Right Mix Selecting among the different types of investments to create a mix that makes sense for your situation is called asset allocation. The combination that you choose affects both your investment risk and your investment return, so it s important to find the mix that is right for the type of investor you are. Choose the pie chart that most matches your description. Each gives an example of a mix of funds that might suit a Conservative, Moderate or Aggressive investor who is at least years or 26 years or more from retirement. Discover Your Investor Profile See which of the following descriptions most closely fits your situation. Conservative: Maintaining a fairly stable account balance and having a clear idea of what your investments are likely to earn is more important to you than pursuing higher return potential. 16 to 25 YEARS UNTIL RETIREMENT Conservative Moderate Aggressive 50% 20% 30% 12% 18% 70% 80% 8% 12% 26 YEARS OR MORE UNTIL RETIREMENT Conservative Moderate Aggressive 70% 12% 18% 80% 8% 12% 90% 4% 6% Moderate: You are willing to accept some fluctuation in the value of your investments in order to pursue higher return potential. Aggressive: You are willing to assume a higher degree of fluctuation in the value of your investments to pursue growth opportunities. Stable Value Investments Bonds Stock The asset allocation portfolios are based on generally accepted investment theories and take into account historic returns of different asset classes over defined periods of time and an assumed retirement age of 65. The asset allocation portfolios are intended to provide you with general information that may be helpful as you consider your investment options. They are not intended to offer advice about which investments to choose or how much to allocate to any particular investment option in your plan. When applying the portfolios to your own situation, you should consider your other assets, income and investments (for example, equity in your home, IRA investments, savings accounts and interests in other qualified and non-qualified plans) in addition to your interest in the Plan. 10 While the fund seeks to maintain relative stability of principal, the fund is not a money market fund. The fund s value may fluctuate due to changes in interest rates and changes in the value of securities in which the fund invests. Investments in the fund, when redeemed, may be worth more or less than their original cost. Investments in retirement plans do not guarantee a profit or return of principal. The information contained herein has been provided by your plan sponsor, is for educational purposes only and does not constitute investment, financial, tax, or legal advice. Please contact your personal investment, financial, tax, or legal advisor regarding your specific needs and situation. 14

15 Platform Three In addition to the core retirement plan investment options, the SARP offers the Wells Fargo Self-Directed Brokerage Account (SDA). The SDA allows you to establish a separate investment account within your SARP account. Designed for knowledgeable investors, the SDA offers expanded investment flexibility and control over how you choose to invest your money. With an SDA, you direct your investments, matching them to your own personal investment strategy. Wells Fargo SDA highlights Access to a wide range of investment choices outside the core options available in your retirement plan. 11 Ability to trade the securities of your choice, according to your personal investment strategy. 12 Access to online trading tools, real-time market information, research, educational material, and more. Easy movement of your money between your core retirement plan options and your brokerage account. Investment points to keep in mind While an SDA offers additional investment opportunities, it takes time and research to manage your own investments. Depending on the securities you choose, investments within an SDA may be riskier than investments offered within the SARP. Also, additional fees may apply. As you consider whether an SDA makes sense for you, take time to understand both the advantages and responsibilities associated with investing in a self-directed brokerage account. The SDA option may be appropriate for you if: You are comfortable making investment choices outside the investment options currently provided by the SARP. You want a variety of investment choices for your long-term savings goals. You are comfortable with the risk of the investments you are selecting. You are willing to do your own research and education and to actively manage your own account. Getting Started A $1,000 minimum initial transfer from your account balance is required to fund your SDA. Once your initial SDA balance is established, you can make future contributions and transfers in any amount, up to 100% of your core account. You choose how much of your SARP account balance goes into your SDA. Keep in mind that your SARP investment elections are of your own making. You may choose any combination of investments from each of the three Platforms. This means you may assemble a SARP portfolio consisting of any combination from the Target Date Funds in Platform One, the Core Funds in Platform Two or the Self-Directed Brokerage Account in Platform Three. It s all up to you. For more information, sign on to wellsfargo.com/retirementplan Transfer to your SDA You can transfer money from your core account to your SDA via the Wells Fargo website or by calling the SARP Line. Your money will be automatically invested in the SDA cash sweep investment until you direct it to other investments within your SDA. Transfer from your SDA You can transfer money from your SDA back to your core account using the same process as described above. However, before transferring money out of your SDA, you ll need to have sufficient funds in your SDA cash sweep investment for the transfer to take place. This may require you to liquidate investments within your SDA to increase your balance in the SDA cash sweep investment. Transfers from the SARP Stable Value Fund Asset cannot be transferred from the SARP Stable Value Fund directly to your SDA. Your SDA is considered a competing fund within the SARP Stable Value Fund. If you wish to transfer assets currently invested in your SARP Stable Value Fund into your SDA, you must first transfer assets out of that fund into a non-competing fund, such as an equity fund. This money must remain in the non-competing fund for at least 90 days before you can transfer those assets into your SDA. Types of Investments You may structure your portfolio as aggressively or conservatively as you choose. In general, you can invest in: Stocks listed on any of the three major stock exchanges Bonds including U.S. Government, corporate, and other fixed income securities Mutual funds from hundreds of well-known fund families, including many no-load funds Exchange Traded Funds (ETFs) are a security that tracks an index, a commodity or a basket of assets like an index fund but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold. Managing your SDA With an SDA, you get online brokerage services, powerful tools, and research everything the independent investor needs. You will have access to your account 24 hours a day, 7 days a week. Once you establish an SDA, you will have several different ways of accessing and managing your account, including the Wells Fargo website and wellsfargo.com/retirementplan. If you are a Wells Fargo banking customer, you will be able to link your SDA to your other accounts and view all of your accounts at-a-glance. 11 The core options in your retirement plan refers to the traditional fund and investment options within your retirement account. This term is used in contrast to your SDA or a brokerage account. The Wells Fargo Self-Directed Brokerage Account (SDA) is offered through Wells Fargo Advisors, LLC (member SPIC) a registered broker-dealer and separate non-bank affiliate of Wells Fargo & Company. 12 Your plan may have limitations on which types of securities in which you can invest in your SDA. There are fees associated with investing in the SDA. Depending on the rules that govern your plan, this may include annual account fees and brokerage commissions and fees. To set up an account, call the SARP Line: SARP 15

16 keeping tabs Want to know how your account is doing? Ultimate Update: Daily Valuation The market value of your account is updated each business day. By signing on to the website at wellsfargo.com/retirementplan or calling the SARP Line at SARP (7277), you ll be able to see how your account is doing everyday! And, when the New York Stock Exchange is open, you can also change your investment elections and the amount you contribute to the Plan! The Lowdown: Quarterly Statements You ll receive a detailed quarterly statement after the end of each quarter. You may elect to receive an online statement with notification when your statement is available on the website each quarter. You also have another option of electing to receive a paper statement to be mailed to your home address annually, after the end of your plan s third quarter. on your desktop wellsfargo.com/retirementplan Just sign on at wellsfargo.com/ retirementplan With this great website from Wells Fargo you can access general retirement information: Interactive tools to help you determine your savings needs and goals Basic 401(k) and retirement planning education A convenient glossary of terms Regularly updated information about mutual fund performance Risk Tolerance Quiz Online seminars for key financial topics Check Your Plan By signing on to wellsfargo.com/retirementplan you ll be able to find out: Your SARP account balance How your funds are doing Your current investment elections Any recent account activity Information on withdrawals or distributions You can also change the following: How your existing account balance is invested Your future investment elections Your 401(k) Savings rate Your website password Your beneficiary If you are accessing your account online for the first time, select the First Time User link under the Sign On box. You ll need your Social Security number (SSN), date of birth, and address to get started. Other accounts: If you have other Wells Fargo accounts that you access online, like a checking or savings account, you can enter the same username and password that you use to access your other Wells Fargo accounts into the account sign on box. That s it! Remember to keep your Username and password confidential, so no one can access your account but you! You can change your personal password anytime you like. 16

17 at your fingertips SARP Just dial SARP (7277). With this toll-free automated system, there are tons of features and information. You can: Enroll in your SARP Get your account balance Get information on your current investment elections including their performance Get available withdrawal and distribution information Also, you can change: Your future investment elections How your existing account balance is invested Your 401(k) Savings rate Your Personal Identification Number (PIN) And there s more... Any point along the way, you may also speak with a retirement service representative (available every business day from 7:00 a.m. to 11:00 p.m., Eastern Standard Time.) They can help you with things like: Enrollment information and processing Basic Plan information Description of (but not advice about) investment options Investment option price and performance Posting date and amount of your last contribution Rollover instructions How to get a Self-Directed Brokerage Account Enrollment Kit Withdrawal and distribution information Don t forget Initially, your PIN will be the last 4-digits of your Social Security number. You will immediately be asked to change it to something only you know. Remember, it s your secret code to accessing your information! 17

18 rollovers & withdrawals Here is some more information on how great and flexible your SARP is. It s sort of like the fine print, offering information on what to do with your SARP if you ever leave us or what you can do if you have a 401(k) balance with another employer s Plan. If you have any questions, you can always call the SARP Line and speak to a Service Representative. Moving In: Rollovers If you had a 401(k) plan or profit-sharing plan at your last job, certain distributions from that plan can be deposited into the SARP. This is called a rollover. You also may rollover a distribution you receive from a 403(b) plan, a governmental 457 plan, or even a Traditional IRA. You don t have to wait until you are eligible to enroll in the SARP to make a rollover contribution. For information on how to do this, visit the website at wellsfargo.com/retirementplan, or call the toll-free SARP Line ( SARP (7277). Moving Out: Three Choices If you leave L Brands, Inc., you can take all of your 401(k) Savings, Company 401(k) Match, and Catch-Up Contributions, plus the vested portion of your company Retirement Contributions, with you. Keep in mind that the value of your investment options will fluctuate. Here are your options after separation: 1. You may leave your money in the SARP and continue to manage your investments (providing your account balance remains $1,000 or more). Generally, the IRS will require you to begin taking annual minimum distributions once you are years old. 2. You may request a direct rollover of your total vested account balance to your new employer s qualified plan (if permitted by that plan s rules) or an Individual Retirement Account (IRA or Roth IRA). There is no penalty for doing this. 3. You can receive a lump sum payment (in cash and/or company stock) of your total vested account balance. But, be aware that there may be significant tax consequences for doing this. The Plan recordkeeper is required to withhold 20% of your distribution as a prepayment of some or all of the federal income taxes you might owe. Along with this may be a state tax, plus if you re under the age of , you may be subject to an additional 10% early withdrawal penalty. To keep your money tax-deferred, you may roll the money into another tax-deferred investment vehicle (such as an IRA or another employer s qualified plan) within 60 days of receiving your lump sum distribution from the SARP. Please note if you choose a 60-day rollover, you must use other funds to replace the 20% withheld, or the portion withheld will be taxed and, if you re under the age of , will be subject to the 10% additional income tax on early distributions (unless an exception applies). If You Have To: In-service Withdrawals There are four types of withdrawals you can take from the SARP while you are still employed. Before you consider any type of withdrawal, it s important to keep in mind that withdrawals are typically taken out only for emergencies. Withdrawals, including hardship withdrawals, are taxable and if you re under age of , you re most likely subject to the IRS 10% early withdrawal penalty. Contact the Wells Fargo Distribution Support Team at or your tax or financial advisor to understand withdrawal financial implications. Please note that before you take an in-service withdrawal that includes any balance in a Self-Directed Brokerage Account (SDA), you will first need to transfer your applicable SDA investments back to a fund alternative(s) provided within Platform One or Two In-Service Withdrawal If you are age or greater, you may withdraw any or all of your vested account balance (all types of contributions and their earnings) for any reason. You do not have to be 100% vested in order to take an Age In-Service Withdrawal. There is a $500 minimum and there are no frequency restrictions. Early In-Service Withdrawal If you are an active associate with at least six Years of Vesting Service (100% vested), you may take an Early In-Service Withdrawal of any or all of the portion of your account attributable to Retirement Contributions made before 2009 (including earnings). Retirement Contributions made after 2008 are not eligible for Early In-Service Withdrawal. There is a $500 minimum and there are no frequency restrictions. If you meet these requirements, you may take Early In-Service Withdrawals for any reason no questions asked. Previous Employer Rollover or Prior After-Tax Amounts You may withdraw any or all of previous employer rollover amounts or prior after-tax contributions at anytime provided you have made prior after-tax contributions and/or rollover contributions from a previous employer into your SARP account. Only the earnings portion of your after-tax balance is taxable since you already paid taxes on the contribution portion prior to investing it will not be taxed again. Roth rollover withdrawal amounts may or may not be taxable, based on how long the account has been held. There is no minimum requirement or frequency restrictions. 18