THE HENLOPEN FUND
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
The following constitutes an agreement establishing an
Individual Retirement Account (under Section 408(a) of the Internal
Revenue Code) between the Depositor and the Custodian.
ARTICLE I
The Custodian may accept additional cash contributions on behalf
of the Depositor for a tax year of the Depositor. The total cash
contributions are limited to $2,000 for the tax year unless the
contribution is a rollover contribution described in Section 402(c) (but
only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3), or an
employer contribution to a simplified employee pension plan as described
in Section 408(k). Rollover contributions before January 1, 1993, include
rollovers described in Section 402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4),
403(b)(8), 408(d)(3), or an employer contribution to a simplified employee
pension plan as described in Section 408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account
is nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life
insurance contracts, nor may the assets of the custodial account be
commingled with other property except in a common trust fund or common
investment fund (within the meaning of Section 408(a)(5)).
2. No part of the custodial funds may be invested in
collectibles (within the meaning of Section 408(m)) except as otherwise
permitted by Section 408(m)(3) which provides an exception for certain
gold and silver coins and coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the
contrary, the distribution of the Depositor's interest in the custodial
account shall be made in accordance with the following requirements and
shall otherwise comply with Section 408(a)(6) and Proposed Regulations
Section 1.408-8, including the incidental death benefit provisions of
Proposed Regulations Section 1.401(a)(9)-2, the provisions of which are
herein incorporated by reference.
2. Unless otherwise elected by the time distributions are
required to begin to the Depositor under Paragraph 3, or to the surviving
spouse under Paragraph 4, other than in the case of a life annuity, life
expectancies shall be recalculated annually. Such election shall be
irrevocable as to the Depositor and the surviving spouse and shall apply
to all subsequent years. The life expectancy of a nonspouse beneficiary
may not be recalculated.
3. The Depositor's entire interest in the custodial account
must be, or begin to be, distributed by the Depositor's required beginning
date, April 1 following the calendar year end in which the Depositor
reaches age 70 1/2. By that date, the Depositor may elect, in a manner
acceptable to the Custodian, to have the balance in the custodial account
distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially
equal monthly, quarterly, or annual payments over the life of the
Depositor.
(c) An annuity contract that provides equal or substantially
equal monthly, quarterly, or annual payments over the joint and last
survivor lives of the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a
specified period that may not be longer than the Depositor's life
expectancy.
(e) Equal or substantially equal annual payments over a
specified period that may not be longer than the joint life and last
survivor expectancy of the Depositor and his or her designated
beneficiary.
4. If the Depositor dies before his or her entire interest is
distributed to him or her, the entire remaining interest will be
distributed as follows:
(a) If the Depositor dies on or after distribution of his or
her interest has begun, distribution must continue to be made in
accordance with Paragraph 3.
(b) If the Depositor dies before distribution of his or her
interest has begun, the entire remaining interest will, at the election of
the Depositor or, if the Depositor has not so elected, at the election of
the beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year
containing the fifth anniversary of the Depositor's
death, or
(ii) Be distributed in equal or substantially equal
payments over the life or life expectancy of the
designated beneficiary or beneficiaries starting by
December 31 of the year following the year of the
Depositor's death. If, however, the beneficiary is
the Depositor's surviving spouse, then this
distribution is not required to begin before December
31 of the year in which the Depositor would have
turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting
the requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Depositor's required beginning date, even though payments may actually
have been made before that date.
(d) If the Depositor dies before his or her entire interest has
been distributed and if the beneficiary is other than the surviving
spouse, no additional cash contributions or rollover contributions may be
accepted in the account.
5. In the case of a distribution over life expectancy in equal
or substantially equal annual payments, to determine the minimum annual
payment for each year, divide the Depositor's entire interest in the
custodial account as of the close of business on December 31 of the
preceding year by the life expectancy of the Depositor (or the joint life
and last survivor expectancy of the Depositor and the Depositor's
designated beneficiary, or the life expectancy of the designated
beneficiary, whichever applies). In the case of distributions under
Paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and designed
beneficiary as of their birthdays in the year the Depositor reaches age 70
1/2. In the case of a distribution in accordance with Paragraph 4(b)(ii),
determine life expectancy using the attained age of the designated
beneficiary as of the beneficiary's birthday in the year distributions are
required to commence.
6. The owner of two or more individual retirement accounts may
use the "alternative method" described in Notice 88-38, 1988-1 C.B. 524,
to satisfy the minimum distribution requirements described above. This
method permits an individual to satisfy these requirements by taking from
one individual retirement account the amount required to satisfy the
requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare any reports required
under Section 408(i) and Regulations Section 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal
Revenue Service and the Depositor prescribed by the Internal Revenue
Service.
ARTICLE VI
Notwithstanding any other articles which may be added or
incorporated, the provisions of Articles I through III and this sentence
will be controlling. Any additional articles that are not consistent with
Section 408(a) and related regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with
the provisions of the Code and related regulations. Other amendments may
be made with the consent of the persons whose signatures appear below.
ARTICLE VIII
1. Investment of Account Assets. (a) All contributions to the
custodial account shall be invested in shares of The Henlopen Fund or, if
available, any other regulated investment company or companies for which
Xxxxxx Associates, Inc. serves as investment advisor or designates as
being eligible for investment ("Investment Company"). Shares of stock of
an Investment Company shall be referred to as "Investment Company Shares."
To the extent that two or more funds are available for investment,
contributions shall be invested in accordance with the Depositor's
investment election.
(b) Each contribution to the custodial account shall identify
the Depositor's account number and be accompanied by a signed statement
directing the investment of that contribution. The Custodian may return
to the Depositor, without liability for interest thereon, any contribution
which is not accompanied by adequate account identification or an
appropriate signed statement directing investment of that contribution.
(c) Contributions shall be invested in whole and fractional
Investment Company Shares at the price and in the manner such shares are
offered to the public. All distributions received on Investment Company
Shares, including both dividends and capital gains distributions, held in
the custodial account shall be reinvested in like shares. If any
distribution of Investment Company Shares may be received in additional
like shares or in cash or other property, the Custodian shall elect to
receive such distribution in additional like Investment Company Shares.
(d) All Investment Company Shares acquired by the Custodian
shall be registered in the name of the Custodian or its nominee. The
Depositor shall be the beneficial owner of all Investment Company Shares
held in the custodial account and the Custodian shall not vote any such
shares, except upon written direction of the Depositor, timely received,
in a form acceptable to the Custodian. The Custodian agrees to forward to
the Depositor each prospectus, report, notice, proxy and related proxy
soliciting materials applicable to Investment Company Shares held in the
custodial account received by the Custodian.
(e) The Depositor may, at any time, by written notice to the
Custodian, in a form acceptable to the Custodian, redeem any number of
shares held in the custodial account and reinvest the proceeds in the
shares of any other Investment Company upon the terms and within the
limitations imposed by the then current prospectus of such other
Investment Company in which the Depositor elects to invest. By giving
such instructions, the Depositor will be deemed to have acknowledged
receipt of such prospectus. Such redemptions and reinvestments shall be
done at the price and in the manner such shares are then being redeemed or
offered by the respective Investment Company.
2. Amendment and Termination. (a) Xxxxxx Associates, Inc.
may amend the Custodial Account (including retroactive amendments) by
delivering to the Custodian and to the Depositor written notice of such
amendment setting forth the substance and effective date of the amendment.
The Custodian and the Depositor shall be deemed to have consented to any
such amendment not objected to in writing by the Custodian or Depositor,
as applicable, within thirty (30) days of receipt of the notice, provided
that no amendment shall cause or permit any part of the assets of the
custodial account to be diverted to purposes other than for the exclusive
benefit of the Depositor or his or her beneficiaries.
(b) The Depositor may terminate the custodial account at any
time by delivering to the Custodian a written notice of such termination.
(c) The custodial account shall automatically terminate upon
distribution to the Depositor or his or her beneficiaries of its entire
balance.
3. Taxes and Custodial Fees. Any income taxes or other taxes
levied or assessed upon or in respect of the assets or income of the
custodial account and any transfer taxes incurred shall be paid from the
custodial account. All administrative expenses incurred by the Custodian
in the performance of its duties, including fees for legal services
rendered to the Custodian in connection with the custodial account, and
the Custodian's compensation shall be paid from the custodial account,
unless otherwise paid by the Depositor or his or her beneficiaries.
Sufficient shares shall be liquidated from the custodial account to pay
such fees and expenses.
The Custodian's fees are set forth in a schedule provided to the
Depositor. Extraordinary charges resulting from unusual administrative
responsibilities not contemplated by the schedule will be subject to such
additional charges as will reasonably compensate the Custodian. Fees for
refund of excess contributions, transferring to a successor trustee or
custodian, or redemption/reinvestment of Investment Company Shares will be
deducted from the refund or redemption proceeds and the remaining balance
will be remitted to the Depositor, or reinvested or transferred in
accordance with the Depositor's instructions.
4. Reports and Notices. (a) The Custodian shall keep
adequate records of transactions it is required to perform hereunder.
After the close of each calendar year, the Custodian shall provide to the
Depositor or his or her legal representative a written report or reports
reflecting the transactions effected by it during such year and the assets
and liabilities of the Custodial Account at the close of the year.
(b) All communications or notices shall be deemed to be given
upon receipt by the Custodian at Post Office Box 701, Milwaukee, Wisconsin
53201-0701 or the Depositor at his most recent address shown in the
Custodian's records. The Depositor agrees to advise the Custodian
promptly, in writing, of any change of address.
5. Designation of Beneficiary. The Depositor may designate a
beneficiary or beneficiaries to receive benefits from the custodial
account in the event of the Depositor's death. In the event the Depositor
has not designated a beneficiary, or if all beneficiaries shall predecease
the Depositor, the following persons shall take in the order named:
(a) The spouse of the Depositor;
(b) If the spouse shall predecease the Depositor or if the
Depositor does not have a spouse, then to the Depositor's estate.
The Depositor may also change or revoke any previously made
designation of beneficiary. Any designation or change or revocation of a
designation shall be made by written notice in a form acceptable to and
filed with the Custodian, prior to the complete distribution of the
balance in the custodial account. The last such designation on file at
the time of the Depositor's death shall govern. If a beneficiary dies
after the Depositor, but prior to receiving his or her entire interest in
the custodial account, the remaining interest in the custodial account
shall be paid to the beneficiary's estate.
6. Multiple Individual Retirement Accounts. In the event the
Depositor maintains more than one individual retirement account (as
defined in Section 408(a)) and elects to satisfy his or her minimum
distribution requirements described in Article IV above by making a
distribution for another individual retirement account in accordance with
Paragraph 6 thereof, the Depositor shall be deemed to have elected to
calculate the amount of his or her minimum distribution under this
custodial account in the same manner as under the individual retirement
account from which the distribution is made.
7. Inalienability of Benefits. Neither the benefits provided
under this custodial account nor the assets held therein shall be subject
to alienation, assignment, garnishment, attachment, execution or levy of
any kind and any attempt to cause such benefits or assets to be so
subjected shall not be recognized except to the extent as may be required
by law.
8. Rollover Contributions and Transfers. The Custodian shall
have the right to receive rollover contributions and to receive direct
transfers from other custodians or trustees. All contributions must be
made in cash or check.
9. Conflict in Provisions. To the extent that any provisions
of this Article VIII shall conflict with the provisions of Articles IV, V
and/or VII, the provisions of this Article VIII shall govern.
10. Applicable State Law. This custodial account shall be
construed, administered and enforced according to the laws of the State of
Wisconsin.
11. Resignation or Removal of Custodian. The Custodian may
resign at any time upon thirty (30) days notice in writing to the
Investment Company. Upon such resignation, the Investment Company shall
notify the Depositor, and shall appoint a successor custodian under this
Agreement. The Depositor or the Investment Company at any time may remove
the Custodian upon 30 days written notice to that effect in a form
acceptable to and filed with the Custodian. Such notice must include
designation of a successor custodian. The successor custodian shall
satisfy the requirements of section 408(h) of the Code. Upon receipt by
the Custodian of written acceptance of such appointment by the successor
custodian, the Custodian shall transfer and pay over to such successor the
assets of and records relating to the Custodial Account. The Custodian is
authorized, however, to reserve such sum of money as it may deem advisable
for payment of all its fees, compensation, costs and expenses, or for
payment of any other liability constituting a charge on or against the
assets of the Custodial Account or on or against the Custodian, and where
necessary may liquidate shares in the Custodial Account for such payments.
Any balance of such reserve remaining after the payment of all such items
shall be paid over to the successor Custodian. The Custodian shall not be
liable for the acts or omissions of any predecessor or successor custodian
or trustee.
12. Limitation on Custodian Responsibility. The Custodian will
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. Further, the
Custodian shall not incur any liability or responsibility in taking or
omitting to take any action based on any notice, election, or instruction
or any written instrument believed by the Custodian to be genuine and to
have been properly executed. The Custodian shall be under no duty of
inquiry with respect to any such notice, election, instruction, or written
instrument, but in its discretion may request any tax waivers, proof of
signatures or other evidence which it reasonably deems necessary for its
protection. The Depositor and the successors of the Depositor including
any executor or administrator of the Depositor shall, to the extent
permitted by law, indemnify the Custodian and its successors and assigns
against any and all claims, actions or liabilities of the Custodian to the
Depositor or the successors or beneficiaries of the Depositor 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 Custodial
Account, except those due to the Custodian's own bad faith, gross
negligence or willful misconduct. The Custodial shall not be under any
duty to take any action not specified in this Agreement, unless the
Depositor shall furnish it with instructions in proper form and such
instructions shall have been specifically agreed to by the Custodian, or
to defend or engage in any suit with respect hereto unless it shall have
first agreed in writing to do so and shall have been fully indemnified to
its satisfaction.
