INVESTORS RESEARCH SECTION 403(b)(7) CUSTODIAL ACCOUNT AGREEMENT
ARTICLE I
DEFINITIONS
1.1 Account: The custodial account established and maintained under this
Agreement on behalf of the Employee pursuant to Section 403(b)(7) of the Code.
1.2 Account Holder: The Employee, or, after the death of the Employee, the
Beneficiary of the Employee, or executor or administrator of the estate of the
Employee entitled to direct investment of assets held in the Account.
1.3 Agreement: The Investors Research Section 403(b)(7) Custodial Account
Agreement as set forth herein (and as it may be amended from time to time).
1.4 Application: The Application for the Investors Research Section
403(b)(7) Custodial Account executed by the Employee and the Custodian providing
for the establishment of the Account in accordance with the terms and conditions
of this Agreement.
1.5 Beneficiary: The person or persons designated in accordance with the
provisions of Article 5.6 to receive any undistributed amounts credited to the
Account upon the death of the Employee. No person(s) will be treated as a
Beneficiary hereunder until the Custodian has been provided with such
verification of the Employee's death as the Custodian deems necessary, and the
Custodian will incur no liability (including but not limited to liability for
investment losses or loss of appreciation) for not treating the Beneficiary or,
if applicable, the Executor or Administrator of the Employee's estate, as the
Account Holder until the Employee's death has been so verified, and the
Custodian has been provided with such verification as the Custodian deems
necessary of the identity of the person claiming to be Beneficiary or of the
valid appointment of the person claiming to be Executor or Administrator.
1.6 Code: The Internal Revenue Code of 1986, as amended, and including any
regulations or rulings issued thereunder.
1.7 Company: The Investors Research Fund. Contributions to the Account
shall be invested in one or more Funds which have an investment management,
distribution and/or service contract with the Company.
1.8 Custodian: Investors Fiduciary Trust Company or any successor thereto
appointed in accordance with the provisions of Article 8, provided that such
successor is either a bank or another person who satisfies the requirements of
Section 401(f)(2) of the Code.
1.9 Disability: A determination that the Employee is unable to engage in
any substantial gainful activity by reason of a medically determinable physical
or mental impairment which can be expected to result in death or to be of
long-continued and indefinite duration.
1.10 Employee: The individual who has executed the Application and who is
employed by the Employer on a full or part-time basis or who is a former or
retired employee of the Employer.
1.11 Employer: The employer that is:
(a) described in Section 501(c)(3) of the Code and exempt from
tax under Section 501(a) of the Code; or
(b) a State, a political subdivision of a State, or an agency or
instrumentality thereof, but only with respect to employees
who perform or have performed services for an educational
organization described in Section 170(b)(1)(A)(ii) of the
Code;
and, except with respect to an Account to which no contributions other than
rollovers or transfers are made, the Employer that has executed the Application.
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1.12 ERISA: The Employee Retirement Income Security Act of 1974, as
amended, including any regulations issued thereunder.
1.13 Financial Hardship: A determination that the Employee has an immediate
and heavy financial need requiring a distribution from the Account. Any
determination of the existence of a qualifying financial hardship on the part of
the Employee and the amount required to be distributed to meet the need created
by the hardship shall be made in accordance with the rules and regulations under
Section 403(b)(7) of the Code.
1.14 Fund(s): One or more of the regulated investment companies offered by
the Investors Research Fund, a Delaware corporation, as available investments
under this Agreement.
1.15 Salary Reduction Agreement: The Salary Reduction Agreement described
in Article 3.2.
1.16 Salary Reduction Contribution: The amount contributed by the Employer
to the Account in accordance with a Salary Reduction Agreement.
ARTICLE II
ESTABLISHMENT OF ACCOUNT
2.1 Purpose. This Agreement is intended to provide for the establishment
and administration of an Account to receive contributions by the Employer on
behalf of the Employee in accordance with Section 403(b)(7) of the Code or to
receive rollover contributions or transfers from another 403(b) annuity contract
or custodial account.
2.2 Establishment of Account. The Custodian shall establish and maintain
the Account for the benefit of the Employee according to the terms and
conditions of this Agreement. The name, address and social security number of
the Employee and Beneficiary are set forth on the Application, and it shall be
the obligation of the Account Holder to notify the Custodian of any changes
thereto. The Application and, if applicable, the Salary Reduction Agreement, are
incorporated herein by reference. The Account will become effective upon
acceptance by or on behalf of the Custodian, as evidenced by written
confirmation to the Employee.
ARTICLE III
CONTRIBUTIONS
3.1 Contributions. The Employer shall make Salary Reduction Contributions
to the Account on behalf of the Employee in accordance with the Salary Reduction
Agreement between the Employer and the Employee as described in Article 3.2,
subject to the limitations of Articles 3.4, 3.5, and 3.6.
3.2 Salary Reduction Agreement. The Salary Reduction Agreement shall be a
legally binding agreement between the Employer and the Employee whereby the
Employee agrees to take a reduction in salary or to forego an increase in salary
with respect to amounts earned after the agreement's effective date, and whereby
the Employer agrees to contribute the amount of salary reduced or foregone by
the Employee to the Account. The Salary Reduction Agreement may be terminated at
any time by the Employee with respect to amounts not yet earned by the Employee.
3.3 Limitations in General. The Employee shall compute and determine the
maximum amount that may be contributed on behalf of the Employee in accordance
with the Employee's exclusion allowance, as defined in Section 403(b)(2) of the
Code, and in accordance with the applicable limitations under Section 415(c) of
the Code and, if applicable, in accordance with Section 402(g) of the Code.
Neither the Custodian nor the Company shall have any liability or responsibility
with respect to such computations or determinations, or for any tax imposed on
any excess contributions that exceed the limitations or exclusion allowance,
which matters are solely the responsibility of the Employee.
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3.4 Contribution Limitations.
(a) No amount shall be contributed on behalf of the Employee for any
limitation year in excess of the applicable limitations of
Section 415(c) of the Code. In the absence of a special election
by the Employee under Section 415(c)(4) of the Code, the amount
contributed shall not exceed the lesser of:
(i) $30,000 (or, if greater, one-fourth the defined benefit plan
dollar limitation in effect under Section 415(b)(1) of the
Code for the limitation year); or
(ii) 25 percent of the Employee's compensation (within the
meaning of Section 415(c)(3) of the Code) for the limitation
year.
(b) The term "limitation year" shall mean the calendar year, unless
the Employee elects to change the limitation year to another
twelve-month period by attaching a statement to his or her
federal income tax return in accordance with the regulations
under Section 415 of the Code. If the Employee is in control
(within the meaning of Code Section 414(b) or (c), as modified by
Code Section 415(h)) of the Employer, the limitation year shall
be the same as the limitation year of the Employer under Section
415 of the Code.
(c) If the Employer or any affiliated employer as described in
Section 415(h) of the Code makes contributions on behalf of the
Employee to any other custodial account or annuity contract
described in Section 403(b) of the Code, then the contributions
to such annuity contract shall be combined with the contributions
to the Account for purposes of the limitations of subsection (a).
If the Employee is covered by a qualified plan sponsored by an
entity controlled by the Employee, then contributions to such a
plan shall also be included for the purposes of the limitations
of subsection (a).
3.5 Exclusion from Gross Income. For federal tax purposes, the Employee may
exclude from gross income for any taxable year the Employer contributions that
are made to the Account to the extent such contributions do not exceed the
Employee's exclusion allowance under Section 403(b)(2) of the Code for the
taxable year (and all other applicable limitations, including those set forth in
Sections 3.4 and 3.7).
3.6 Excess Contributions. Any excess contributions (as defined in Section
4973(c) of the Code) that are made to the Account shall be subject to the six
percent excise tax of Section 4973(a) of the Code. Neither the Custodian nor the
Company shall have any duty or responsibility for determining whether any
contributions to the Account are excludable from the Employee's gross income, or
for assuring that any contributions to the Account do not constitute excess
contributions for purposes of Code Section 4973. The disposition of excess
contributions will be made in accordance with instructions from the Employer, if
the Employee has not separated from service, or otherwise, from the Employee.
The Employer or Employee providing such instructions is responsible for
determining that they are consistent with applicable law.
3.7 Limitation on Salary Reduction Contributions.
(a) Employer contributions that are made to the Account pursuant
to a Salary Reduction Agreement shall not exceed the amount
of $10,000, or such greater amounts as may be permitted with
respect to the Employee for the taxable year under Section
402(g)(5) of the Code, reduced by the aggregate amounts
contributed in any calendar year at the election of the
Employee to any qualified cash and deferred arrangement
described in Section 401(k) of the Code, any simplified
employee pension described in Section 408(k)(6) of the Code,
any Simple XXX described in Section 408(p) of the Code, and
any eligible deferred compensation plan described in Section
457 of the Code.
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(b) Notwithstanding any provision of this Agreement to the
contrary, if the Employee determines that an amount
contributed during a taxable year to the Account exceeds the
limitation set forth in subsection (a), and no later than
March 1 of the following taxable year notifies the Custodian
in writing of the excess amount the Employee has determined,
then the Custodian shall distribute such excess amount, plus
any income or minus any losses allocable thereto, to the
Employee no later than the following April 15. The Employee
shall have the sole responsibility for timely determining
any excess deferrals to the Account and notifying the
Custodian in accordance with these procedures.
(c) Neither the Custodian nor the Company shall have any duty or
responsibility for determining whether any contributions to
the Account constitute excess deferrals as described in
Section 402(g)(2)(A) of the Code, or for assuring that any
excess deferrals are timely distributed in accordance with
the procedures of Section 402(g)(2)(A) of the Code.
3.8 Rollover Contributions and Transfers.
(a) The Employee shall be permitted to make a rollover
contribution to the Account of an amount received by the
Employee that is attributable to participation in another
annuity contract or custodial account described in Section
403(b) of the Code, provided such rollover contribution
complies with all requirements of Section 403(b)(8) or
Section 408(d)(3)(A)(iii) of the Code, whichever is
applicable.
(b) The Custodian may accept a direct transfer of assets to the
Account on behalf of the Employee from another annuity
contract or custodial account described in Section 403(b) of
the Code to the extent permitted by the Code and the
regulations and rulings thereunder. The Employee shall not
request or initiate a transfer (or a rollover) from a
contract or account containing distribution restrictions
that are more restrictive than those provided in Article V.
The Employee shall not request or initiate a transfer from a
contract or account covered by ERISA, unless the transferee
Account is part of an employee benefit plan which provides
distribution restrictions which meet the requirements of
Section 205 of ERISA and the regulations thereunder with
respect to any amount transferred.
(c) Neither the Custodian nor the Company shall have any duty or
responsibility for determining whether any rollover
contribution or transfer of assets by or on behalf of the
Employee pursuant to this Article 3.8 is a proper rollover
contribution or transfer of assets under the Code, or for
the tax treatment to the Employee of any transfer or
rollover.
(d) To the extent permitted under applicable law, the Account
Holder reserves the right to transfer or rollover any or all
of the assets of the Account to such other form of annuity
contract or custodial account described in Section 403(b) of
the Code or to such Individual Retirement Account (XXX) or
other plan established pursuant to Section 408 of the Code
as the Employee may determine, upon written instructions to
the Custodian, in a form acceptable to the Custodian;
provided, however that the Custodian shall have no
responsibility for the tax treatment to the Account Holder
of any such transfer or rollover.
(e) The Custodian shall not be liable for losses arising from
the acts, omissions, or delays or other inaction of any
party transferring assets to the Account or receiving assets
transferred from the Account pursuant to this Article, or
for determining or inquiring into whether any account or
annuity transferring assets to or receiving assets from the
Account complies with all applicable requirements of the
Code and IRS rulings or for the tax or other consequences of
noncompliance.
3.9 Manner of Making Contributions. All contributions to the Account shall
be paid directly to the Custodian. Contributions may be made by check or bank
wire. Contributions shall be preceded or accompanied by written instructions
directing the investment of the amount contributed on behalf of the Employee in
accordance with Article 4.1.
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ARTICLE IV
INVESTMENTS
4.1 Investment of Account. All contributions to the Account and all assets
in the Account shall be invested in the Fund(s) in accordance with instructions
given to the Custodian by the Account Holder in a manner acceptable to the
Custodian. Such instructions shall remain in effect until changed by the Account
Holder in a manner acceptable to the Custodian. By giving any such instructions,
the Account Holder will be deemed to have acknowledged receipt of the then
current prospectus of any Fund in which the Account Holder instructs the
Custodian to invest such contributions or assets. If the Custodian receives any
contribution to the Account that is not accompanied by acceptable instructions
directing its investment, the Custodian may hold or return all or a part of the
contribution uninvested (or invested in a money market fund if available)
without liability for loss of income or appreciation pending receipt of
acceptable instructions.
4.2 Investment Advice. The Account Holder agrees that neither the Custodian
nor the Company undertake to provide any advice with respect to the investment
of the Account, and that the responsibility of the Custodian to invest in shares
of a particular Fund pursuant to the directions of the Account Holder does not
constitute an endorsement by the Custodian of that Fund. The Account Holder will
have sole power and responsibility for the investment of the Account in shares
of one or more Funds selected by the Account Holder. Neither the Custodian nor
the Company shall be liable for any loss that results from the exercise of
control over the Account by the Account Holder.
4.3 Account Earnings. All dividends, capital gains distributions and other
earnings received by the Custodian on any shares of a Fund held in the Account
shall be automatically reinvested in additional shares of such Fund.
4.4 Investment Exchanges. The Account Holder may direct the Custodian to
redeem any or all shares of any Fund that are held in the Account and to
reinvest the proceeds in any other Fund available under this Agreement. Any such
directions shall be given in a manner acceptable to the Custodian. If any such
directions are incomplete or ambiguous, the Custodian will not carry out such
directions until the incompleteness or ambiguity is resolved, and the Custodian
will have no liability for loss of income or appreciation pending the resolution
of such incompleteness or ambiguity. By giving any such directions, the Account
Holder will be deemed to have acknowledged receipt of the then current
prospectus of any Fund in which the Account Holder instructs the Custodian to
reinvest such proceeds. Any such exchange transaction shall conform with the
provisions of the current prospectus for the applicable Fund.
4.5 Record Ownership; Voting of Shares. All Fund shares acquired by the
Custodian pursuant to this Agreement shall be registered in the name of the
Custodian or its nominee. The Custodian shall mail or transmit to the Account
Holder's address of record all notices, prospectuses, financial statements,
proxies and proxy soliciting materials relating to the shares held in the
Account. The Custodian shall not vote any such shares except in accordance with
written instructions received from the Account Holder, provided however, that
the Custodian may, in the absence of instructions, vote "present" for the sole
purpose of allowing such shares to be counted for establishment of a quorum at a
shareholder's meeting.
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ARTICLE V
DISTRIBUTION OF ASSETS OF ACCOUNT
5.1 Request for Distribution. The Custodian shall distribute the assets of
the Account to the Employee upon receipt by the Custodian of a written request
for distribution submitted by the Employee, in a form acceptable to the
Custodian, subject to the limitations of Article 5.2.
5.2 Limitations on Distributions. Except as may otherwise be provided in
Article 3.6 or Article 3.7(b), the assets of the Account shall not be
distributed to the Employee before the Employee attains age 59-1/2 unless the
Employee has:
(a) separated from the service of the Employer,
(b) incurred a Disability, or
(c) encountered Financial Hardship.
Any distribution that is made to the Employee for reason of Financial Hardship
shall not exceed the amount of Employer contributions made to the Account
pursuant to a salary reduction agreement with the Employee, excluding earnings
thereon.
5.3 Method of Distribution. Subject to the limitations of this Article 5,
the Employee may elect to have distribution of the assets of the Account made in
one or a combination of the following ways:
(a) lump-sum payment; or
(b) monthly, quarterly or annual installment payments over a
period certain not to exceed the life expectancy of the
Employee or the joint and last survivor life expectancy of
the Employee and his or her Beneficiary in a manner that
satisfies the minimum distribution requirements of Article
5.4.
If no election of the method of distribution is made by the Employee within 30
days of receipt by the Custodian of the written request for distribution
referred to in Article 5.1, the Custodian shall make such distribution to the
Employee in a lump-sum payment of cash.
5.4 Minimum Distribution Requirements Prior to Death of Employee.
(a) Commencement of Distributions. Notwithstanding any provision
of this Agreement to the contrary, distribution of the
Account shall commence no later than the "Required Beginning
Date". For any Employee who attained age 70-1/2 after
December 31, 1996 or before January 1, 1988, the Required
Beginning Date is the April 1 following the calendar year in
which the Employee attains age 70-1/2 or terminates
employment, whichever is the later. For any Employee who
attained age 70-1/2 in 1988 and had not retired by January
1, 1989, the Required Beginning Date is April 1, 1990. For
any other Employee who attained age 70 and 1/2 after
December 31, 1987 and before January 1, 1997, the Required
Beginning Date is the April 1 following the calendar year in
which the Employee attains age 70-1/2 regardless of whether
the Employee has then retired. Notwithstanding the preceding
paragraph, effective January 1, 1997, the Required Beginning
Date for an Employee (other than an Employee who is a five
percent owner, as defined in Section 416 of the Code, of the
Employer with respect to the year in which the Employee
attains age 70-1/2) is the April 1 following the calendar
year in which the Employee attains age 70-1/2 or retires
from the Employer, whichever is later. [If an Employee is
still employed by the Employer after January 1, 1997, and he
is receiving required distributions in accordance with the
preceding paragraph but would not be required to receive
distributions under the preceding sentence, the Employee may
file an election with the Custodian to cease minimum
required distributions under the preceding paragraph; and
such Employee may resume distributions by filing a written
request with the Custodian under Section 5.1 above at the
time required by the preceding sentence. In the case of an
Account which contains Direct Contributions, the election in
the preceding sentence will apply only if the Employer
consents thereto in a written consent filed with the
Custodian.]
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(b) Minimum Amounts to be Distributed. The minimum amount
distributed to the Employee for each taxable year, beginning
no later than the Required Beginning Date under subsection
(a) above, must equal or exceed the minimum distribution
required under Sections 401(a)(9) and 403(b)(10) of the Code
and must meet the incidental death benefit requirement of
the regulations under Section 401(a)(9).
5.5 Distribution Upon Death of Employee. In the event the Employee dies
prior to the complete distribution of the assets of the Account, all assets
remaining in the Account shall be distributed to the Employee's Beneficiary in a
lump-sum payment or in monthly, quarterly or annual installment payments over a
specified period as selected in writing by the Beneficiary in accordance with
the following rules:
(a) Where Distribution Had Already Commenced. If distribution to
the Employee had already commenced and the Employee died
after the Employee's Required Beginning Date, the assets of
the Account shall be distributed to the Beneficiary at least
as rapidly as under the method of distribution in effect
prior to the Employee's death.
(b) Five-Year Rule. If the Employee died before the Employee's
Required Beginning Date, the assets of the Account shall be
distributed to the Beneficiary by December 31 of the
calendar year which contains the fifth anniversary of the
death of the Employee.
(c) Exception for Distributions Over Life Expectancy.
Notwithstanding subsection (b) above, the assets of the
Account may be distributed to the Beneficiary in installment
payments over a period certain not exceeding the
Beneficiary's life expectancy, provided such distribution
commences by December 31 of the calendar year immediately
following the year of the Employee's death or, if the
Beneficiary is the surviving spouse of the Employee, by
December 31 of the later of (1) the calendar year
immediately following the calendar year in which the
Employee died or (2) the calendar year in which the Employee
would have attained age 70- 1/2.
In determining the minimum amounts required to be distributed under Section 5.4
or this Section 5.5, life expectancies of the Employee and/or the Employee's
spouse may be recalculated annually in accordance with applicable regulations,
but only if the Employee and/or the Employee's spouse specifically so provide in
writing; life expectancies of any person other than the Employee or the
Employee's spouse will not be recalculated. Notwithstanding any provision of
this Agreement to the contrary, to the extent permitted under regulation, ruling
procedures or notice of the Internal Revenue Service, the minimum distribution
calculated in accordance with Code sections 403(b)(10) and 401(a)(9) may be
taken from any 403(b) annuity or account of the Employee. The Custodian will
have no responsibility for determining the required time or amount of any
distribution required under such Code sections, but will make distributions only
in accordance with the proper directions by the Account Holder; the Custodian
will have no liability for not making a distribution in the absence of such
directions and may assume that the Account Holder is satisfying any applicable
minimum distribution requirement from another 403(b) annuity or custodial
account. If the Beneficiary dies while receiving payments from the Account, all
remaining assets in the Account shall be distributed as soon as practicable to
the estate of the Beneficiary.
5.6 Designation of Beneficiary. The Employee may from time to time
designate any person, persons or entity as the Beneficiary who shall receive any
undistributed assets held in the Account at the time of the Employee's death.
Any Beneficiary designation by the Employee shall be made on a form prescribed
by the Custodian (or in another written designation acceptable to the
Custodian), and shall be effective only when filed with the Custodian during the
lifetime of the Employee. If the Employee fails to designate a Beneficiary in
the manner provided above, or if the Beneficiary designated by the Employee
predeceases the Employee, the assets of the Account shall be distributed upon
the death of the Employee in the following order of priority: first to the
employee's surviving spouse, if any, and second, to the estate of the Employee.
Notwithstanding the foregoing, if this Agreement constitutes part of an
"employee benefit plan" under ERISA, then the Beneficiary of a married Employee
must be the spouse of the Employee, unless the spouse of the Employee consents
in writing to designation of a different Beneficiary and such consent
acknowledges the effect of the designation, specifies the nonspouse Beneficiary
designated, and is witnessed by a notary public. Furthermore, such a designation
of a nonspouse Beneficiary may be changed to a different nonspouse Beneficiary
only if the spouse of the Employee provides a new consent that meets all
requirements of the preceding sentence.
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5.7 Distributions Pursuant to Qualified Domestic Relations Orders or Other
Court Orders. In the case of an Account that is part of an "employee pension
benefit plan" (as defined in ERISA), nothing in this Agreement shall prohibit
distribution to any person in accordance with the terms of a "qualified domestic
relations order" as defined in Section 206(d) of ERISA. The Custodian will make
payments in accordance with an apparently valid order or judgment of a court
binding on the Custodian. The Account Holder will be responsible to direct the
Custodian whether or not to contest, defend against or appeal any such order or
judgment (subject to the last sentence of Section 6.5).
5.8 Payments to Incompetent Persons. If an amount is payable to a person
believed by the Custodian to be a minor or otherwise legally incompetent, the
Custodian may make such payment to the parent, a legal guardian, committee or
other legal representative (however or wherever appointed), or any person having
control or custody of such person, and any such payment will fully discharge the
Custodian to the extent of the payment.
5.9 Direct Rollovers. This Article 5.9 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of this Agreement to the
contrary that would otherwise limit a distributee's election under this section,
a distributee may elect, at the time and in the manner prescribed by the
Custodian and fund transfer agent, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. For the purpose of this section, the following
definitions apply:
(a) Eligible rollover distribution: An eligible rollover is any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required to comply with the minimum
distribution and incidental death benefit requirements of
section 401(a)(9) and 403(b)(10) of the Code; and the
portion of any distribution that is not includible in gross
income. An eligible rollover distribution also does not
include any other amounts that may be excluded under
regulations, procedures, notices, or rulings interpreting
the term eligible rollover distribution under sections
401(a)(31), 402, or 403(b) of the Code.
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in
section 408(b) of the Code, or another 403(b) annuity or
403(b)(7) custodial account, that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
(c) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(d) Direct rollover: A direct rollover is a payment by the plan
to the eligible retirement plan specified by the
distributee.
(e) The Custodian and fund transfer agent may prescribe
reasonable procedures for the election of direct rollovers
under this section, including, but not limited to,
requirements that the distributee provide the Custodian with
adequate information, including, but not limited to: the
name of the eligible retirement plan to which the rollover
is to be made; a representation that the recipient plan is
an individual retirement plan or a 403(b) annuity or
403(b)(7) custodial account, as appropriate; acknowledgment
from the recipient plan that it will accept the direct
rollover; and any other information necessary to make the
direct rollover.
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ARTICLE VI
RESPONSIBILITIES AND DUTIES OF CUSTODIAN
6.1 Asset Retention. The Custodian shall hold all contributions to the
Account which are received by it subject to the terms and conditions of this
Agreement and for the purposes set forth herein. The Custodian shall be
responsible only for such assets as shall actually be received by it.
6.2 Records and Reports. The Custodian shall file such reports with the
Internal Revenue Service as may be required to be filed by the Custodian (not
including such reports as may be required to be filed by the Employer or, if
applicable, the plan administrator) under Treasury Regulations. The Custodian,
the Employer, Employee and Beneficiary shall furnish to one another such
information relevant to the Account as may be required in connection with such
reports. The Custodian will also furnish the Employee (or Beneficiary if the
Employee is deceased) with annual or more frequent reports showing all
transactions in the Account during the period covered by the report and the
number of shares of each Fund held in the Account at the end of the period
covered by such report. Unless the Employee (or Beneficiary, where applicable)
sends the Custodian written objection to any such report within 60 days after
its receipt, the Employee (or Beneficiary, where applicable) shall be deemed to
have approved such report, and in such case the Custodian shall be forever
released and discharged from all liability and accountability to anyone with
respect to all matters and things included therein. The Custodian may seek a
judicial settlement of its accounts. In any such proceeding, the only necessary
party thereto in addition to the Custodian shall be the Employee.
6.3 Limitations on Responsibilities and Duties.
(a) The Custodian shall not be responsible in any way for the
timing, amount or collection of contributions provided for
under this Agreement, the selection of the investments for
the Account, the timing, amount or purpose or propriety of
any distribution made pursuant to Article 5 hereof, or the
tax consequences of any such transaction to the Employee or
Beneficiary, or any other action taken at the direction of
the Employee (or Beneficiary or Employer, where applicable).
The Custodian shall not be obliged to take any action
whatsoever with respect to the Account except upon receipt
of directions in a form acceptable to the Custodian from the
Employee (or Beneficiary or Employer, where applicable). The
Custodian shall be under no obligation to determine the
accuracy or propriety of any such directions and shall be
fully protected in acting in accordance therewith. The
Custodian will be fully protected in acting in reliance upon
any document, order or other direction believed by it to be
genuine and properly given. The Custodian will have no
responsibility if the Custodian does not act in the absence
of proper instructions, or if the Custodian believes any
document, order or other direction is not genuine or
properly given, or on the basis of any incomplete or
ambiguous document, order or other direction until such
incompleteness or ambiguity is resolved to the Custodian's
satisfaction.
(b) The Custodian is an agent appointed by the Company to
perform solely the duties assigned to it under the
Agreement, it being acknowledged that certain of such duties
may be performed by the Custodian in any event pursuant to
one or more other contractual arrangements or relationships.
The Custodian shall not be deemed to be a fiduciary under
ERISA in carrying out its duties.
(c) The Employer shall be solely responsible for assuring
compliance at all times with the nondiscrimination
requirements of Code section 403(b)(12) (whether or not the
Account holds any Direct Contributions) and the Custodian
shall not be responsible in any way for such compliance. If
the Account holds any Direct Contributions, the Employer
shall be solely responsible for compliance with all
applicable requirements of the Code (including the non-
discrimination requirements of Code Section 403(b)(12)
applicable to such Direct Contributions) and ERISA.
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(d) The Custodian will have no liability to the Account Holder
for transferring any amount to a state authority in
accordance with any law relating to escheat or abandoned or
unclaimed property.
(e) It is hereby agreed that, subject to the provisions of
applicable law, no person other than the Account Holder may
institute or maintain any action or proceeding against the
Custodian.
6.4 Indemnification of Custodian. The Account Holder and the successors of
the Account Holder, including any executor or administrator of the Account
Holder, shall, to the fullest extent permitted by law, at all times fully
indemnify and save harmless the Custodian, its successors and assigns from any
and all claims, actions, or liabilities arising from investments or
distributions made or actions taken at the direction of the Account Holder, and
from any and all other liability whatsoever (including without limitation all
reasonable expenses incurred in defending against or settlement of such claims,
actions or liabilities) which may arise in connection with this Agreement or the
Account, except liability arising from the gross negligence or willful
misconduct of the Custodian.
6.5 Liability of Custodian. The Custodian's liability under this Agreement
and matters which it contemplates shall be limited to matters arising from the
Custodian's gross negligence or willful misconduct. The Custodian shall be
entitled to rely conclusively upon, and shall be fully protected in any action
or nonaction taken in reliance upon, any written notices or other communications
or instruments believed by the Custodian to be genuine and to have been properly
executed. The Custodian shall not under any circumstances be responsible for the
timing, purpose, or propriety of any contribution or of any distribution made
hereunder, nor shall the Custodian incur any liability or responsibility for any
tax imposed on account of any such contribution or distribution. The Custodian
shall not be obligated or expected to commence or defend any legal action or
proceeding in connection with this Agreement unless agreed upon by the Custodian
and Account Holder, and unless fully indemnified for so doing to the
satisfaction of the Custodian.
ARTICLE VII
FEES AND EXPENSES OF THE CUSTODIAN
7.1 Compensation of Custodian. In consideration for its services hereunder,
the Custodian shall be entitled to receive the applicable fees specified in the
Application. The Custodian may substitute a revised fee schedule from time to
time. The Custodian shall be entitled to such reasonable additional fees as it
may from time to time determine for services required of it and not clearly
identified on the fee schedule. The Employee acknowledges that the Custodian's
ability to earn income on amounts held in non-interest bearing accounts has been
taken into consideration in establishing the Custodian's fees. The Employee
agrees that the Custodian shall be entitled to retain any such income as a part
of its agreed compensation hereunder, and such income shall not be or become a
part of the Fund.
7.2 Charges Upon the Account. Any income taxes or other taxes of any kind
whatsoever that may be levied or assessed upon or in respect of the Account
(including any transfer taxes incurred in connection with the investment and
reinvestment of Account assets), expenses, fees and administrative costs
incurred by the Custodian in the performance of its duties (including fees for
legal services rendered to the Custodian), and the Custodian's compensation as
determined under Article 7.1 shall constitute a charge upon the assets of the
Account. At the Custodian's option, such fees, taxes or expenses shall be paid
from the Account or by the Account Holder. The Custodian may redeem Fund shares
and use the proceeds of redemption to pay such fees, taxes or expenses, and the
Custodian will have no liability for loss of income or appreciation as a result
of the Custodian's selection of Fund shares to be redeemed under this sentence.
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ARTICLE VIII
RESIGNATION OR REMOVAL OF CUSTODIAN
8.1 Resignation or Removal. The Custodian may resign at any time by written
notice to the Company which shall be effective 30 days after delivery thereof.
The Company shall appoint a successor Custodian who shall accept such
appointment in a writing provided to the Custodian and Account Holder within
such 30-day period. The Custodian may be removed by the Company at any time upon
30 days written notice to the Custodian, provided that the Company designates a
successor Custodian that accepts such appointment by a writing provided to the
Account Holder and the Custodian within such 30-day period. Upon such
resignation or removal, the Custodian shall transfer and deliver all assets of
the Account and copies of all records relative thereto to the successor
Custodian appointed by the Company, provided such successor Custodian has in
writing accepted this Agreement as it is or may be then amended. Notwithstanding
the foregoing, the Custodian is authorized to reserve such sum of money as it
may deem advisable for payment of all of its fees, compensation, costs and
expenses, or for payment of any other liability constituting a charge on or
against the assets of the Account or on or against the Custodian, and where
necessary may liquidate shares in the Account for such payments in accordance
with the last sentence of Section 7.2. Any balance of such reserve remaining
after the payment of all such items shall be paid over to the successor
Custodian.
8.2 Liability for Successor's Acts. Upon its resignation or removal, the
Custodian shall not be liable for the acts or omissions of any successor
Custodian. Upon the transfer of assets of the Account to a successor Custodian,
the resigning or removed Custodian shall be relieved of all further liability
with respect to this Agreement, the Account and the assets thereof.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Amendment of Agreement.
(a) The Account Holder, Employer, and Custodian hereby delegate
to the Company the power to amend this Agreement, including
any retroactive amendment necessary for the purpose of
conforming the Agreement to the requirements of the Code.
The Company shall deliver written notice of any such
amendment to the Account Holder, Custodian and any Employer
who is party to this Agreement.
(b) No amendment to this Agreement shall cause or permit: any
part of the assets of the Account to be used for, or
diverted to, purposes other than for the exclusive benefit
of the Employee or Beneficiary, except with regard to
payment of the expenses of the Custodian and the Company as
authorized by the provisions of this Agreement and except to
the extent required by law; the Employee to be deprived of
any accrued benefits under this Agreement unless such
amendment is required for the purpose of conforming the
Agreement to the requirements of any law, government
regulation or ruling; or the imposition of any additional
duties or obligations on the Custodian without its written
consent.
9.2 Termination of Agreement. This Agreement shall terminate when all
assets in the Account have been distributed or otherwise transferred out of the
Account. Upon completion of such distribution, the Custodian shall be released
from all further liability with respect to all amounts so paid to the extent
permitted by applicable law. However, the provisions of this Agreement
protecting the Custodian or limiting the liability of the Custodian, including
specifically but without implied limitation Section 6.4, will survive the
termination of this Agreement.
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ARTICLE X
MISCELLANEOUS
10.1 Retirement Plan Provisions Shall Control. In the event contributions
are being made to the Account pursuant to any retirement plan or program
sponsored by the Employer, to the extent any provisions of this Agreement are
inconsistent with such retirement plan or program, the provisions of the
Employer's retirement plan or program shall control, provided:
(a) such provisions are not contrary to the rules and
regulations under Section 403(b)(7) of the Code; and
(b) such provisions do not impose any additional
responsibilities or duties on the Custodian without its
prior written consent. The Employer shall be responsible for
delivering the most recent copy of any such retirement plan
or program to the Custodian.
10.2 ERISA Requirements. If this Agreement is determined to constitute part
of an "employee benefit plan" established or maintained by the Employer subject
to Title I of ERISA, then the Employer shall be solely responsible for assuring
such employee benefit plan complies at all times with the requirements of Title
I of ERISA. In such a case, the Employer (or a person designated by the
Employer) will be the "plan administrator" of such employee benefit plan for
purposes of ERISA. Neither the Custodian nor the Company will be the "plan
administrator" of such employee benefit plan for purposes of ERISA.
10.3 Exclusive Benefit. The assets of the Account shall not be used for, or
diverted to, purposes other than for the exclusive benefit of the Employee or
his or her Beneficiary. The assets of the Account shall not be subject to the
claims of the creditors of the Employer.
10.4 Nonforfeitability and Nontransferability. The interest of the Employee
in the balance of the Account shall at all times be nonforfeitable and
nontransferable. All rights under this Agreement are enforceable solely by the
Employee or his or her Beneficiary, or any duly authorized representative of the
Employee or Beneficiary.
10.5 Nonalienation. The assets of the Account shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, attachment, garnishment, execution, or levy of any kind,
either voluntary or involuntary, except with regard to payment of expenses of
the Custodian as authorized by the provisions of the Agreement and except to the
extent required by law.
10.6 Notices. Any notice, accounting, or other communication which the
Custodian may give to the Employer or the Account Holder shall be deemed given
when mailed to the Employee at the latest address which has been furnished to
the Custodian. Any notice or other communication which the Employer or Account
Holder may give to the Custodian shall not become effective until actual receipt
of said notice by the Custodian.
10.7 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of Missouri, to the extent not preempted by Federal
law. No provision of this Agreement shall be construed to conflict with any
provision of an Internal Revenue Service regulation, ruling, release, or other
order which affects, or could affect, the terms of this Agreement or its
compliance with the requirements of Section 403(b)(7) of the Code. The Account
Holder (and, if applicable, the Employer) agree that any legal action brought
against the Custodian by any other party must be brought in a state or federal
court located in the judicial district in which the principal offices of the
Custodian are located.
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IMPORTANT INFORMATION ABOUT YOUR INVESTORS RESEARCH 403(b)(7) ACCOUNT
Dear Investors Research 403(b)(7) Account Holder:
Recent legislation makes some changes in the tax law rules for the
403(b)(7) custodial accounts. The main changes for 403(b)(7) accounts are as
follows:
Previously, an employee could make only one salary reduction agreement (or
one modification to an existing salary reduction agreement) in a calendar year.
Now, an employee may (subject to any reasonable limitations imposed by his
employer) change his/her salary reduction agreement as often as he wishes. The
only requirement is that any change may relate only to compensation to be earned
in the future (i.e. future pay periods), not to any pay already earned at the
effective date of the change.
The current tax law rule requiring an employee to start receiving
distributions from his 403(b)(7) account on the April 1 following the calendar
year in which the employee reaches age 70-1/2 has been changed. Under the new
rule, distributions must start by the April 1 following the year in which the
employee reaches age 70-1/2 or retires, whichever is later. This change is
effective as of January 1, 1997.
The method for calculating the maximum 403(b)(7) contribution by an
employee has changed. First, the limit on voluntary salary reductions by an
individual (including both salary reduction contributions to a 403(b)(7) account
or to a 401(k) plan) has been increased from $9,500 in 1997 to $10,000 in 1998.
Second, the definition of "compensation" for purposes of calculating certain
other limits on an individual's contribution have been changed. Starting in
1998, compensation before salary reductions will be used to determine these
other contribution limits. These changes in general will result in eligible
employees being able to make larger 403(b)(7) contributions in 1998.
The tax law rule imposing a 15% penalty tax on very large withdrawals from
tax-favored retirement arrangements, including 403(b)(7) custodial accounts,
IRAs and qualified employer-sponsored plans has been repealed. A related 15%
penalty tax on large accumulations remaining in such tax-favored arrangements at
an individual's death has also been repealed.
Enclosed is an amendment and restatement of your 403(b)(7) Account
Agreement. This amendment revises your Agreement to reflect the new tax law
changes and to make other technical or clarifying changes. You do not need to
sign anything or return anything to us.
It is our pleasure to serve your retirement planning needs by continually
revising the documentation for your 403(b)(7) account as tax laws and other
legal rules change.
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