EXHIBIT 14.1
The Aquinas Funds Company Universal Individual Retirement
Account Custodial Agreement
Provisions Applicable to Regular IRAs Provisions
The following provisions of Articles I to VII are in the form
promulgated by the Internal Revenue Service in Form 5305-A for use in
establishing an individual retirement custodial account.
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) or 408(d)(3) of the Code 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) of the Code).
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 provisions 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
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, the 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 contribution or rollover
contributions may be accepted in the account.
5. In the case of 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
designated 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 sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue
Service and the Depositor as 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 the 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 on the
Adoption Agreement.
Provisions applicable to Xxxx IRAs
See Section 25 of Provisions applicable to both Regular IRAs and Xxxx
IRAs for information about the following provisions of Articles I to VII.
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 which is a qualified rollover
described in Section 408A(c)(6) of the Code.
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) of the Code).
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 coins issued
under specified statutes, coins issued under the laws of any state, and
certain gold, silver, platinum or palladium bullion.
Article IV.
1. Notwithstanding any provisions 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) as modified by
section 408A(c)(5).
2. Unless otherwise elected by the time distributions are required
to begin to the surviving spouse of the Depositor under paragraph 3, other
than in the case of a life annuity to the surviving spouse, life
expectancy of the surviving spouse shall be recalculated annually. Such
election shall be irrevocable as to the surviving spouse and shall apply
to all subsequent years. The life expectancy of a nonspouse beneficiary
may not be recalculated.
3. If the Depositor dies before his or her entire interest is
distributed to him or her, 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:
(a) Be distributed by the December 31 of the year containing the
fifth anniversary of the Depositor's death, or
(b) 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) 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.
4. In the case of 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 designated beneficiary.
Determine that initial life expectancy using the attained age of the
designated beneficiary as of such beneficiary's birthday in the year
distributions are required to commence.
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 section 408A(d)(3)(E) and regulations thereunder.
2. The Custodian agrees to submit reports to the Internal Revenue
Service and the Depositor as 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 408A and any 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 on the
Adoption Agreement.
RULES FOR ALL IRAS (REGULAR AND XXXX)
GENERAL INFORMATION
XXX Requirements
All IRAs must meet certain requirements. Contributions generally
must be made in cash. The XXX trustee or custodian must be a bank or
other person who has been approved by the Secretary of the Treasury. Your
contributions may not be invested in life insurance or collectibles or be
commingled with other property except in a common trust or investment
fund. Your interest in the account must be nonforfeitable at all times.
You may obtain further information on IRAs from any district office of the
Internal Revenue Service.
May I Revoke My XXX?
You may revoke a newly established Regular or Xxxx XXX at any time
within seven days after the date on which you receive this Disclosure
Statement. A Regular or Xxxx XXX established more than seven days after
the date of your receipt of this Disclosure Statement may not be revoked.
To revoke your Regular or Xxxx XXX, mail or deliver a written notice
of revocation to the Custodian at the address which appears at the end of
this Disclosure Statement. Mailed notice will be deemed given on the date
that it is postmarked (or, if sent by certified or registered mail, on the
date of certification or registration). If you revoke your Regular or
Xxxx XXX within the seven-day period, you are entitled to a return of the
entire amount you originally contributed into your Regular or Xxxx XXX,
without adjustment for such items as sales charges, administrative
expenses or fluctuations in market value.
INVESTMENTS
How Are My XXX Contributions Invested?
You control the investment and reinvestment of contributions to your
Regular or Xxxx XXX. Investments must be in one or more of the Fund(s)
available from time to time as listed in the Adoption Agreement for your
Regular or Xxxx XXX or in an investment selection form provided with your
Adoption Agreement or from the Fund Distributor or Service Company. You
direct the investment of your XXX by giving your investment instructions
to the Distributor or Service Company for the Fund(s). Since you control
the investment of your Regular or Xxxx XXX, you are responsible for any
losses; neither the Custodian, the Distributor nor the Service Company has
any responsibility for any loss or diminution in value occasioned by your
exercise of investment control. Transactions for your Regular or Xxxx XXX
will generally be at the applicable public offering price or net asset
value for shares of the Fund(s) involved next established after the
Distributor or the Service Company (whichever may apply) receives proper
investment instructions from you; consult the current prospectus for the
Fund(s) involved for additional information.
Before making any investment, read carefully the current prospectus
for any Fund you are considering as an investment for your Regular XXX or
Xxxx XXX. The prospectus will contain information about the Fund's
investment objectives and policies, as well as any minimum initial
investment or minimum balance requirements and any sales, redemption or
other charges.
Because you control the selection of investments for your Regular or
Xxxx XXX and because mutual fund shares fluctuate in value, the growth in
value of your Regular or Xxxx XXX cannot be guaranteed or projected.
Are There Any Restrictions on the Use of my XXX Assets?
The tax-exempt status of your Regular or Xxxx XXX will be revoked if
you engage in any of the prohibited transactions listed in Section 4975 of
the tax code. Upon such revocation, your Regular or Xxxx XXX is treated
as distributing its assets to you. The taxable portion of the amount in
your XXX will be subject to income tax (unless, in the case of a Xxxx XXX,
the requirements for a tax-free withdrawal are satisfied). Also, you may
be subject to a 10% penalty tax on the taxable amount as a premature
withdrawal if you have not yet reached the age of 59-1/2.
Any investment in a collectible (for example, rare stamps) by your
Regular or Xxxx XXX is treated as a withdrawal; the only exception
involves certain types of government-sponsored coins or certain types of
precious metal bullion.
What Is A Prohibited Transaction?
Generally, a prohibited transaction is any improper use of the assets
in your Regular or Xxxx XXX. Some examples of prohibited transactions
are:
- Direct or indirect sale or exchange of property between you and
your Regular or Xxxx XXX.
- Transfer of any property from your Regular or Xxxx XXX to
yourself or from yourself to your Regular or Xxxx XXX.
Your Regular or Xxxx XXX could lose its tax exempt status if you use
all or part of your interest in your Regular or Xxxx XXX as security for a
loan or borrow any money from your Regular or Xxxx XXX. Any portion of
your Regular or Xxxx XXX used as security for a loan will be treated as a
distribution in the year in which the money is borrowed. This amount may
be taxable and you may also be subject to the 10% premature withdrawal
penalty on the taxable amount.
FEES AND EXPENSES
Custodian's Fees
The fees charged by the Custodian for maintaining either a Regular
XXX or a Xxxx XXX are listed in the Adoption Agreement.
General Fee Policies
- Fees may be paid by you directly, or the Custodian may deduct them
from your Regular or Xxxx XXX.
- Fees may be changed upon 30 days written notice to you.
- The full annual maintenance fee will be charged for any calendar year
during which you have a Regular or Xxxx XXX with us. This fee is not
prorated for periods of less than one full year.
- If provided for in this Disclosure Statement or the Adoption
Agreement, termination fees are charged when your account is closed
whether the funds are distributed to you or transferred to a
successor custodian or trustee.
- The Custodian may charge you for its reasonable expenses for services
not covered by its fee schedule.
Other Charges
- There may be sales or other charges associated with the purchase or
redemption of shares of a Fund in which your Regular XXX or Xxxx XXX
is invested. Before investing, be sure to read carefully the current
prospectus of any Fund you are considering as an investment for your
Regular XXX or Xxxx XXX for a description of applicable charges.
TAX MATTERS
What XXX Reports does the Custodian Issue?
The Custodian will report all withdrawals to the IRS and the
recipient on the appropriate form. For reporting purposes, a direct
transfer of assets to a successor custodian or trustee is not considered a
withdrawal.
The Custodian will report to the IRS the year-end value of your
account and the amount of any rollover (including conversions of a Regular
XXX to a Xxxx XXX) or regular contribution made during a calendar year, as
well as the tax year for which a contribution is made. Unless the
Custodian receives an indication from you to the contrary, it will treat
any amount as a contribution for the tax year in which it is received. It
is most important that a contribution between January and April 15th for
the prior year be clearly designated as such.
What Tax Information Must I Report to the IRS?
You must file Form 5329 with the IRS for each taxable year for which
you made an excess contribution or you take a premature withdrawal that is
subject to the 10% penalty tax, or you withdraw less than the minimum
amount required from your Regular XXX. If your beneficiary fails to make
required minimum withdrawals from your Regular or Xxxx XXX after your
death, your beneficiary may be subject to an excise tax and be required to
file Form 5329.
For Regular IRAs, you must also report each nondeductible
contribution to the IRS by designating it a nondeductible contribution on
your tax return. Use Form 8606. In addition, for any year in which you
make a nondeductible contribution or take a withdrawal, you must include
additional information on your tax return. The information required
includes: (1) the amount of your nondeductible contributions for that
year; (2) the amount of withdrawals from Regular IRAs in that year; (3)
the amount by which your total nondeductible contributions for all the
years exceed the total amount of your distributions previously excluded
from gross income; and (4) the total value of all your Regular IRAs as of
the end of the year. If you fail to report any of this information, the
IRS will assume that all your contributions were deductible. This will
result in the taxation of the portion of your withdrawals that should be
treated as a nontaxable return of your nondeductible contributions.
Which Withdrawals Are Subject to Withholding?
Xxxx XXX
Federal income tax will be withheld at a flat rate of 10% of any
taxable withdrawal from your Xxxx XXX, unless you elect not to have tax
withheld. Withdrawals from a Xxxx XXX are not subject to the mandatory
20% income tax withholding that applies to most distributions from
qualified plans or 403(b) accounts that are not directly rolled over to
another plan or XXX.
Regular XXX
Federal income tax will be withheld at a flat rate of 10% from any
withdrawal from your Regular XXX, unless you elect not to have tax
withheld. Withdrawals from a Regular XXX are not subject to the mandatory
20% income tax withholding that applies to most distributions from
qualified plans or 403(b) accounts that are not directly rolled over to
another plan or XXX.
ACCOUNT TERMINATION
You may terminate your Regular XXX or Xxxx XXX at any time after its
establishment by sending a completed withdrawal form, or a transfer
authorization form, to:
The Aquinas Funds
X.X. Xxx 000000
Xxxxxx Xxxx, XX 00000-0000
Your Regular XXX or Xxxx XXX with The Aquinas Funds will terminate
upon the first to occur of the following:
- The date your properly executed withdrawal form (as described
above) withdrawing your total Regular XXX or Xxxx XXX balance is
received and accepted by the Custodian or, if later, the termination
date specified in the withdrawal form.
- The date the Regular XXX or Xxxx XXX ceases to qualify under the
tax code. This will be deemed a termination.
- The transfer of the Regular XXX or Xxxx XXX to another
custodian/trustee.
- The rollover of the amounts in the Regular XXX or Xxxx XXX to
another custodian/trustee.
Any outstanding fees must be received prior to such a termination of
your account.
The amount you receive from your XXX upon termination of the account
will be treated as a withdrawal, and thus the rules relating to Regular
XXX or Xxxx XXX withdrawals will apply. For example, if the XXX is
terminated before you reach age 59-1/2, the 10% early withdrawal penalty
may apply to the taxable amount you receive.
XXX DOCUMENTS
Regular XXX
The terms contained in Articles I to VII of Part One of the The
Aquinas Funds Company Universal Individual Retirement Custodial Account
document have been promulgated by the IRS in Form 5305-A for use in
establishing a Regular XXX Custodial Account that meets the requirements
of Code Section 408(a) for a valid Regular XXX. This IRS approval relates
only to the form of Articles I to VII and is not an approval of the merits
of the Regular XXX or of any investment permitted by the Regular XXX.
Xxxx XXX
The terms contained in Articles I through VII of The Aquinas Funds
Company Universal Individual Retirement Account Custodial Agreement
provisions applicable to Xxxx IRAs have not been promulgated or approved
by the IRS. It is expected that, if the IRS issues a model form for
establishing a Xxxx XXX, the Custodian will adopt the provisions of such
model form as an amendment to such provision.
Based on our legal advice, The Aquinas Funds believes that the use of
a Universal Individual Retirement Account Information Kit such as this,
containing information and documents for both a Regular XXX or a Xxxx XXX,
will be acceptable. However, if the IRS makes a ruling, or if Congress
enacts legislation, disallowing the use of a "combined" approach such as
this, The Aquinas Funds will forward to you a Regular XXX or a Xxxx XXX
Kit (as appropriate) for you to read and, if necessary, an appropriate new
Adoption Agreement to sign. By adopting a Regular XXX or a Xxxx XXX using
these materials, you acknowledge this possibility and agree to this
procedure if necessary. In all cases, to the extent permitted, The
Aquinas Funds will treat your XXX as being opened on the date your account
was opened using the Adoption Agreement in this Kit.
ADDITIONAL INFORMATION
For additional information you may write to the following address or
call the following telephone number.
X.X. Xxx 000000, Xxxxxx Xxxx, XX 00000-0000 and
1-800-423-6369
Provisions applicable to both Regular IRAs and Xxxx IRAs
Article VIII.
1. As used in this Article VIII the following terms have the
following meanings:
"Account" or "Custodial Account" means the individual retirement
account established using the terms of either Part One or Part Two and, in
either event, Part Three of this The Aquinas Funds Company Universal
Individual Retirement Account Custodial Agreement and the Adoption
Agreement signed by the Depositor. The Account may be a Regular
Individual Retirement Account or a Xxxx Individual Retirement Account, as
specified by the Depositor. See Section 24 below.
"Custodian" means The Aquinas Funds Company.
"Fund" means any registered investment company which is advised,
sponsored or distributed by Sponsor; provided, however, that such a mutual
fund or registered investment company must be legally offered for sale in
the state of the Depositor's residence.
"Distributor" means the entity which has a contract with the Fund(s)
to serve as distributor of the shares of such Fund(s).
In any case where there is no Distributor, the duties assigned
hereunder to the Distributor may be performed by the Fund(s) or by an
entity that has a contract to perform management or investment advisory
services for the Fund(s).
"Service Company" means any entity employed by the Custodian or the
Distributor, including the transfer agent for the Fund(s), to perform
various administrative duties of either the Custodian or the Distributor.
In any case where there is no Service Company, the duties assigned
hereunder to the Service Company will be performed by the Distributor (if
any) or by an entity specified in the second preceding paragraph.
"Sponsor" means [insert fund management company or other fund entity
that is making Fund(s) available under this Agreement and has the power to
appoint a successor Custodian].
2. The Depositor may revoke the Custodial Account established
hereunder by mailing or delivering a written notice of revocation to the
Custodian within seven days after the Depositor receives the Disclosure
Statement related to the Custodial Account. Mailed notice is treated as
given to the Custodian on date of the postmark (or on the date of Post
Office certification or registration in the case of notice sent by
certified or registered mail). Upon timely revocation, the Depositor's
initial contribution will be returned, without adjustment for
administrative expenses, commissions or sales charges, fluctuations in
market value or other changes.
The Depositor may certify in the Adoption Agreement that the
Depositor received the Disclosure Statement related to the Custodial
Account at least seven days before the Depositor signed the Adoption
Agreement to establish the Custodial Account, and the Custodian may rely
upon such certification.
3. All contributions to the Custodial Account shall be invested and
reinvested in full and fractional shares of one or more Funds. Such
investments shall be made in such proportions and/or in such amounts as
Depositor from time to time in the Adoption Agreement or by other written
notice to the Service Company (in such form as may be acceptable to the
Service Company) may direct.
The Service Company shall be responsible for promptly transmitting
all investment directions by the Depositor for the purchase or sale of
shares of one or more Funds hereunder to the Funds' transfer agent for
execution. However, if investment directions with respect to the
investment of any contribution hereunder are not received from the
Depositor as required or, if received, are unclear or incomplete in the
opinion of the Service Company, the contribution will be returned to the
Depositor, or will be held uninvested (or invested in a money market fund
if available) pending clarification or completion by the Depositor, in
either case without liability for interest or for loss of income or
appreciation. If any other directions or other orders by the Depositor
with respect to the sale or purchase of shares of one or more Funds for
the Custodial Account are unclear or incomplete in the opinion of the
Service Company, the Service Company will refrain from carrying out such
investment directions or from executing any such sale or purchase, without
liability for loss of income or for appreciation or depreciation of any
asset, pending receipt of clarification or completion from the Depositor.
All investment directions by Depositor will be subject to any minimum
initial or additional investment or minimum balance rules applicable to a
Fund as described in its prospectus.
All dividends and capital gains or other distributions received on
the shares of any Fund held in the Depositor's Account shall be (unless
received in additional shares) reinvested in full and fractional shares of
such Fund (or of any other Fund offered by the Sponsor, if so directed).
4. Subject to the minimum initial or additional investment, minimum
balance and other exchange rules applicable to a Fund, the Depositor may
at any time direct the Service Company to exchange all or a specified
portion of the shares of a Fund in the Depositor's Account for shares and
fractional shares of one or more other Funds. The Depositor shall give
such directions by written notice acceptable to the Service Company, and
the Service Company will process such directions as soon as practicable
after receipt thereof (subject to the second paragraph of Section 3 of
this Article VIII).
5. Any purchase or redemption of shares of a Fund for or from the
Depositor's Account will be effected at the public offering price or net
asset value of such Fund (as described in the then effective prospectus
for such Fund) next established after the Service Company has transmitted
the Depositor's investment directions to the transfer agent for the
Fund(s).
Any purchase, exchange, transfer or redemption of shares of a Fund
for or from the Depositor's Account will be subject to any applicable
sales, redemption or other charge as described in the then effective
prospectus for such Fund.
6. The Service Company shall maintain adequate records of all
purchases or sales of shares of one or more Funds for the Depositor's
Custodial Account. Any account maintained in connection herewith shall be
in the name of the Custodian for the benefit of the Depositor. All assets
of the Custodial Account shall be registered in the name of the Custodian
or of a suitable nominee. The books and records of the Custodian shall
show that all such investments are part of the Custodial Account.
The Custodian shall maintain or cause to be maintained adequate
records reflecting transactions of the Custodial Account. In the
discretion of the Custodian, records maintained by the Service Company
with respect to the Account hereunder will be deemed to satisfy the
Custodian's recordkeeping responsibilities therefor. The Service Company
agrees to furnish the Custodian with any information the Custodian
requires to carry out the Custodian's recordkeeping responsibilities.
7. Neither the Custodian nor any other party providing services to
the Custodial Account will have any responsibility for rendering advice
with respect to the investment and reinvestment of Depositor's Custodial
Account, nor shall such parties be liable for any loss or diminution in
value which results from Depositor's exercise of investment control over
his Custodial Account. Depositor shall have and exercise exclusive
responsibility for and control over the investment of the assets of his
Custodial Account, and neither Custodian nor any other such party shall
have any duty to question his directions in that regard or to advise him
regarding the purchase, retention or sale of shares of one or more Funds
for the Custodial Account.
8. The Depositor may in writing appoint an investment advisor with
respect to the Custodial Account on a form acceptable to the Custodian and
the Service Company. The investment advisor's appointment will be in
effect until written notice to the contrary is received by the Custodian
and the Service Company. While an investment advisor's appointment is in
effect, the investment advisor may issue investment directions or may
issue orders for the sale or purchase of shares of one or more Funds to
the Service Company, and the Service Company will be fully protected in
carrying out such investment directions or orders to the same extent as if
they had been given by the Depositor.
The Depositor's appointment of any investment advisor will also be
deemed to be instructions to the Custodian and the Service Company to pay
such investment advisor's fees to the investment advisor from the
Custodial Account hereunder without additional authorization by the
Depositor or the Custodian.
9. Distribution of the assets of the Custodial Account shall be
made at such time and in such form as Depositor (or the Beneficiary if
Depositor is deceased) shall elect by written order to the Custodian.
Depositor acknowledges that any distribution of a taxable amount from the
Custodial Account (except for distribution on account of Depositor's
disability or death, return of an "excess contribution" referred to in
Code Section 4973, or a "rollover" from this Custodial Account) made
earlier than age 59-1/2 may subject Depositor to an "additional tax on
early distributions" under Code Section 72(t) unless an exception to such
additional tax is applicable. For that purpose, Depositor will be
considered disabled if Depositor can prove, as provided in Code Section
72(m)(7), that Depositor is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or be of long-
continued and indefinite duration. It is the responsibility of the
Depositor (or the Beneficiary) by appropriate distribution instructions to
the Custodian to insure that any applicable distribution requirements of
Code Section 401(a)(9) and Article IV above are met. If the Depositor (or
Beneficiary) does not direct the Custodian to make distributions from the
Custodial Account by the time that such distributions are required to
commence in accordance with such distribution requirements, the Custodian
(and Service Company) shall assume that the Depositor (or Beneficiary) is
meeting the minimum distribution requirements from another individual
retirement arrangement maintained by the Depositor (or Beneficiary) and
the Custodian and Service Company shall be fully protected in so doing.
The Depositor (or the Depositor's surviving spouse) may elect to comply
with the distribution requirements in Article IV using the recalculation
of life expectancy method, or may elect that the life expectancy of the
Depositor and/or the Depositor's surviving spouse, as applicable, will not
be recalculated; any such election may be in such form as the Depositor
(or surviving spouse) provides (including the calculation of minimum
distribution amounts in accordance with a method that does not provide for
recalculation of the life expectancy of one or both of the Depositor and
surviving spouse and instructions for withdrawals to the Custodian in
accordance with such method). Notwithstanding paragraph 2 of Article IV,
unless an election to have life expectancies recalculated annually is made
by the time distributions are required to begin, life expectancies shall
not be recalculated. Neither the Custodian nor any other party providing
services to the Custodial Account assumes any responsibility for the tax
treatment of any distribution from the Custodial Account; such
responsibility rests solely with the person ordering the distribution.
10. The Custodian assumes (and shall have) no responsibility to make
any distribution except upon the written order of Depositor (or
Beneficiary if Depositor is deceased) containing such information as the
Custodian may reasonably request. Also, before making any distribution or
honoring any assignment of the Custodial Account, Custodian shall be
furnished with any and all applications, certificates, tax waivers,
signature guarantees and other documents (including proof of any legal
representative's authority) deemed necessary or advisable by Custodian,
but Custodian shall not be responsible for complying with any order or
instruction which appears on its face to be genuine, or for refusing to
comply if not satisfied it is genuine, and Custodian has no duty of
further inquiry. Any distributions from the Account may be mailed, first-
class postage prepaid, to the last known address of the person who is to
receive such distribution, as shown on the Custodian's records, and such
distribution shall to the extent thereof completely discharge the
Custodian's liability for such payment.
11. (a) The term "Beneficiary" means the person or persons
designated as such by the "designating person" (as defined
below) on a form acceptable to the Custodian for use in
connection with the Custodial Account, signed by the
designating person, and filed with the Custodian. The form
may name individuals, trusts, estates, or other entities as
either primary or contingent beneficiaries. However, if
the designation does not effectively dispose of the entire
Custodial Account as of the time distribution is to
commence, the term "Beneficiary" shall then mean the
designating person's estate with respect to the assets of
the Custodial Account not disposed of by the designation
form. The form last accepted by the Custodian before such
distribution is to commence, provided it was received by
the Custodian (or deposited in the U.S. Mail or with a
reputable delivery service) during the designating person's
lifetime, shall be controlling and, whether or not fully
dispositive of the Custodial Account, thereupon shall
revoke all such forms previously filed by that person. The
term "designating person" means Depositor during his/her
lifetime; after Depositor's death, it also means
Depositor's spouse, but only if the spouse elects to treat
the Custodial Account as the spouse's own Custodial Account
in accordance with applicable provisions of the Code.
(b) When and after distributions from the Custodial Account to
Depositor's Beneficiary commence, all rights and
obligations assigned to Depositor hereunder shall inure to,
and be enjoyed and exercised by, Beneficiary instead of
Depositor.
12. (a) The Depositor agrees to provide information to the
Custodian at such time and in such manner as may be
necessary for the Custodian to prepare any reports required
under Section 408(i) or Section 408A(d)(3)(E) of the Code
and the regulations thereunder or otherwise.
(b) The Custodian or the Service Company will submit reports to
the Internal Revenue Service and the Depositor at such time
and manner and containing such information as is prescribed
by the Internal Revenue Service.
(c) The Depositor, Custodian and Service Company shall furnish
to each other such information relevant to the Custodial
Account as may be required under the Code any regulations
issued or forms adopted by the Treasury Department
thereunder or as may otherwise be necessary for the
administration of the Custodial Account.
(d) The Depositor shall file any reports to the Internal
Revenue Service which are required of him by law (including
Form 5329), and neither the Custodian nor Service Company
shall have any duty to advise Depositor concerning or
monitor Depositor's compliance with such requirement.
13. (a) Depositor retains the right to amend this Custodial Account
document in any respect at any time, effective on a stated
date which shall be at least 60 days after giving written
notice of the amendments (including its exact terms) to
Custodian by registered or certified mail, unless Custodian
waives notice as to such amendment. If the Custodian does
not wish to continue serving as such under this Custodial
Account document as so amended, it may resign in accordance
with Section 17 below.
(b) Depositor delegates to the Custodian the Depositor's right
so to amend, provided (i) the Custodian does not change the
investments available under this Custodial Agreement and
(ii) the Custodian amends in the same manner all agreements
comparable to this one, having the same Custodian,
permitting comparable investments, and under which such
power has been delegated to it; this includes the power to
amend retroactively if necessary or appropriate in the
opinion of the Custodian in order to conform this Custodial
Account to pertinent provisions of the Code and other laws
or successor provisions of law, or to obtain a governmental
ruling that such requirements are met, to adopt a prototype
or master form of agreement in substitution for this
Agreement, or as otherwise may be advisable in the opinion
of the Custodian. Such an amendment by the Custodian shall
be communicated in writing to Depositor, and Depositor
shall be deemed to have consented thereto unless, within 30
days after such communication to Depositor is mailed,
Depositor either (i) gives Custodian a written order for a
complete distribution or transfer of the Custodial Account,
or (ii) removes the Custodian and appoints a successor
under Section 17 below.
Pending the adoption of any amendment necessary or
desirable to conform this Custodial Account document to the
requirements of any amendment to any applicable provision
of the Internal Revenue Code or regulations or rulings
thereunder, the Custodian and the Service Company may
operate the Depositor's Custodial Account in accordance
with such requirements to the extent that the Custodian
and/or the Service Company deem necessary to preserve the
tax benefits of the Account.
(c) Notwithstanding the provisions of subsections (a) and (b)
above, no amendment shall increase the responsibilities or
duties of Custodian without its prior written consent.
(d) This Section 13 shall not be construed to restrict the
Custodian's right to substitute fee schedules in the manner
provided by Section 16 below, and no such substitution
shall be deemed to be an amendment of this Agreement.
14. (a) Custodian shall terminate the Custodial Account if this
Agreement is terminated or if, within 30 days (or such
longer time as Custodian may agree) after resignation or
removal of Custodian under Section 17, Depositor or
Sponsor, as the case may be, has not appointed a successor
which has accepted such appointment. Termination of the
Custodial Account shall be effected by distributing all
assets thereof in a single payment in cash or in kind to
Depositor, subject to Custodian's right to reserve funds as
provided in Section 17.
(b) Upon termination of the Custodial Account, this custodial
account document shall have no further force and effect
(except for Sections 15(f), 17(b) and (c) hereof which
shall survive the termination of the Custodial Account and
this document), and Custodian shall be relieved from all
further liability hereunder or with respect to the
Custodial Account and all assets thereof so distributed.
15. (a) In its discretion, the Custodian may appoint one or more
contractors or service providers to carry out any of its
functions and may compensate them from the Custodial
Account for expenses attendant to those functions. In the
event of such appointment, all rights and privileges of the
Custodian under this Agreement shall pass through to such
contractors or service providers who shall be entitled to
enforce them as if a named party.
(b) The Service Company shall be responsible for receiving all
instructions, notices, forms and remittances from Depositor
and for dealing with or forwarding the same to the transfer
agent for the Fund(s).
(c) The parties do not intend to confer any fiduciary duties on
Custodian or Service Company (or any other party providing
services to the Custodial Account), and none shall be
implied. Neither shall be liable (or assumes any
responsibility) for the collection of contributions, the
proper amount, time or tax treatment of any contribution to
the Custodial Account or the propriety of any contributions
under this Agreement, or the purpose, time, amount
(including any minimum distribution amounts), tax treatment
or propriety of any distribution hereunder, which matters
are the sole responsibility of Depositor and Depositor's
Beneficiary.
(d) Not later than 60 days after the close of each calendar
year (or after the Custodian's resignation or removal), the
Custodian or Service Company shall file with Depositor a
written report or reports reflecting the transactions
effected by it during such period and the assets of the
Custodial Account at its close. Upon the expiration of 60
days after such a report is sent to Depositor (or
Beneficiary), the Custodian or Service Company shall be
forever released and discharged from all liability and
accountability to anyone with respect to transactions shown
in or reflected by such report except with respect to any
such acts or transactions as to which Depositor shall have
filed written objections with the Custodian or Service
Company within such 60 day period.
(e) The Service Company shall deliver, or cause to be
delivered, to Depositor all notices, prospectuses,
financial statements and other reports to shareholders,
proxies and proxy soliciting materials relating to the
shares of the Fund(s) credited to the Custodial Account.
No shares shall be voted, and no other action shall be
taken pursuant to such documents, except upon receipt of
adequate written instructions from Depositor.
(f) Depositor shall always fully indemnify Service Company,
Distributor, the Fund(s), Sponsor and Custodian and save
them harmless from any and all liability whatsoever which
may arise either (i) in connection with this Agreement and
the matters which it contemplates, except that which arises
directly out of the Service Company's, Distributor's,
Fund's, Sponsor's or Custodian's bad faith, gross
negligence or willful misconduct, (ii) with respect to
making or failing to make any distribution, other than for
failure to make distribution in accordance with an order
therefor which is in full compliance with Section 10, or
(iii) actions taken or omitted in good faith by such
parties. Neither Service Company nor Custodian shall be
obligated or expected to commence or defend any legal
action or proceeding in connection with this Agreement or
such matters unless agreed upon by that party and
Depositor, and unless fully indemnified for so doing to
that party's satisfaction.
(g) The Custodian and Service Company shall each be responsible
solely for performance of those duties expressly assigned
to it in this Agreement, and neither assumes any
responsibility as to duties assigned to anyone else
hereunder or by operation of law.
(h) The Custodian and Service Company may each conclusively
rely upon and shall be protected in acting upon any written
order from Depositor or Beneficiary, or any investment
advisor appointed under Section 8, or any other notice,
request, consent, certificate or other instrument or paper
believed by it to be genuine and to have been properly
executed, and so long as it acts in good faith, in taking
or omitting to take any other action in reliance thereon.
In addition, Custodian will carry out the requirements of
any apparently valid court order relating to the Custodial
Account and will incur no liability or responsibility for
so doing.
16. (a) The Custodian, in consideration of its services under this
Agreement, shall receive the fees specified on the
applicable fee schedule. The fee schedule originally
applicable shall be the one specified in the Adoption
Agreement or Disclosure Statement, as applicable. The
Custodian may substitute a different fee schedule at any
time upon 30 days' written notice to Depositor. The
Custodian shall also receive reasonable fees for any
services not contemplated by any applicable fee schedule
and either deemed by it to be necessary or desirable or
requested by Depositor.
(b) Any income, gift, estate and inheritance taxes and other
taxes of any kind whatsoever, including transfer taxes
incurred in connection with the investment or reinvestment
of the assets of the Custodial Account, that may be levied
or assessed in respect to such assets, and all other
administrative expenses incurred by the Custodian in the
performance of its duties (including fees for legal
services rendered to it in connection with the Custodial
Account) shall be charged to the Custodial Account. If the
Custodian is required to pay any such amount, the Depositor
(or Beneficiary) shall promptly upon notice thereof
reimburse the Custodian.
(c) All such fees and taxes and other administrative expenses
charged to the Custodial Account shall be collected either
from the amount of any contribution or distribution to or
from the Account, or (at the option of the person entitled
to collect such amounts) to the extent possible under the
circumstances by the conversion into cash of sufficient
shares of one or more Funds held in the Custodial Account
(without liability for any loss incurred thereby).
Notwithstanding the foregoing, the Custodian or Service
Company may make demand upon the Depositor for payment of
the amount of such fees, taxes and other administrative
expenses. Fees which remain outstanding after 60 days may
be subject to a collection charge.
17. (a) Upon 30 days' prior written notice to the Custodian,
Depositor or Sponsor, as the case may be, may remove it
from its office hereunder. Such notice, to be effective,
shall designate a successor custodian and shall be
accompanied by the successor's written acceptance. The
Custodian also may at any time resign upon 30 days' prior
written notice to Sponsor, whereupon the Sponsor shall
notify the Depositor (or Beneficiary) and shall appoint a
successor to the Custodian. In connection with its
resignation hereunder, the Custodian may, but is not
required to, designate a successor custodian by written
notice to the Sponsor or Depositor (or Beneficiary), and
the Sponsor or Depositor (or Beneficiary) will be deemed to
have consented to such successor unless the Sponsor or
Depositor (or Beneficiary) designates a different successor
custodian and provides written notice thereof together with
such a different successor's written acceptance by such
date as the Custodian specifies in its original notice to
the Sponsor or Depositor (or Beneficiary) (provided that
the Sponsor or Depositor (or Beneficiary) will have a
minimum of 30 days to designate a different successor).
(b) The successor custodian shall be a bank, insured credit
union, or other person satisfactory to the Secretary of the
Treasury under Code Section 408(a)(2). Upon receipt by
Custodian of written acceptance by its successor of such
successor's appointment, Custodian shall transfer and pay
over to such successor the assets of the Custodial Account
and all records (or copies thereof) of Custodian pertaining
thereto, provided that the successor custodian agrees not
to dispose of any such records without the Custodian's
consent. Custodian is authorized, however, to reserve such
sum of money or property as it may deem advisable for
payment of all its fees, compensation, costs, and expenses,
or for payment of any other liabilities constituting a
charge on or against the assets of the Custodial Account or
on or against the Custodian, with any balance of such
reserve remaining after the payment of all such items to be
paid over to the successor custodian.
(c) Any Custodian shall not be liable for the acts or omissions
of its predecessor or its successor.
18. References herein to the "Internal Revenue Code" or "Code" and
sections thereof shall mean the same as amended from time to time,
including successors to such sections.
19. Except where otherwise specifically required in this Agreement,
any notice from Custodian to any person provided for in this Agreement
shall be effective if sent by first-class mail to such person at that
person's last address on the Custodian's records.
20. Depositor or Depositor's Beneficiary shall not have the right or
power to anticipate any part of the Custodial Account or to sell, assign,
transfer, pledge or hypothecate any part thereof. The Custodial Account
shall not be liable for the debts of Depositor or Depositor's Beneficiary
or subject to any seizure, attachment, execution or other legal process in
respect thereof except to the extent required by law. At no time shall it
be possible for any part of the assets of the Custodial Account to be used
for or diverted to purposes other than for the exclusive benefit of the
Depositor or his/her Beneficiary except to the extent required by law.
21. When accepted by the Custodian, this Agreement is accepted in
and shall be construed and administered in accordance with the laws of the
state where the principal offices of the Custodian are located. Any
action involving the Custodian brought by any other party must be brought
in a state or federal court in such state.
If in the Adoption Agreement, Depositor designates that the Custodial
Account is a Regular XXX, this Agreement is intended to qualify under Code
Section 408(a) as an individual retirement Custodial Account and to
entitle Depositor to the retirement savings deduction under Code Section
219 if available. If in the Adoption Agreement Depositor designates that
the Custodial Account is a Xxxx XXX, this Agreement is intended to qualify
under Code Section 408A as a Xxxx individual retirement Custodial Account
and to entitle Depositor to the tax-free withdrawal of amounts from the
Custodial Account to the extent permitted in such Code section.
If any provision hereof is subject to more than one interpretation or
any term used herein is subject to more than one construction, such
ambiguity shall be resolved in favor of that interpretation or
construction which is consistent with the intent expressed in whichever of
the two preceding sentences is applicable.
However, the Custodian shall not be responsible for whether or not
such intentions are achieved through use of this Agreement, and Depositor
is referred to Depositor's attorney for any such assurances.
22. Depositor should seek advice from Depositor's attorney regarding
the legal consequences (including but not limited to federal and state tax
matters) of entering into this Agreement, contributing to the Custodial
Account, and ordering Custodian to make distributions from the Account.
Depositor acknowledges that Custodian and Service Company (and any company
associated therewith) are prohibited by law from rendering such advice.
23. If any provision of any document governing the Custodial Account
provides for notice, instructions or other communications from one party
to another in writing, to the extent provided for in the procedures of the
Custodian, Service Company or another party, any such notice, instructions
or other communications may be given by telephonic, computer, other
electronic or other means, and the requirement for written notice will be
deemed satisfied.
24. The legal documents governing the Custodial Account are as
follows:
(a) If in the Adoption Agreement the Depositor designated the
Custodial Account as a Regular XXX under Code Section
408(a), the provisions of Part One and Part Three of this
Agreement and the provisions of the Adoption Agreement are
the legal documents governing the Depositor's Custodial
Account.
(b) If in the Adoption Agreement the Depositor designated the
Custodial Account as a Xxxx XXX under Code Section 408A,
the provisions of Part Two and Part Three of this Agreement
and the provisions of the Adoption Agreement are the legal
documents governing the Depositor's Custodial Account.
25. Articles I through VII of Part One of this Agreement are in the
form promulgated by the Internal Revenue Service as Form 5305-A. It is
anticipated that, if and when the Internal Revenue Service promulgates
changes to Form 5305-A, the Custodian will amend this Agreement
correspondingly.
Articles I through VII of Part Two of this Agreement have not been
promulgated or approved by the Internal Revenue Service. It is
anticipated that, if and when the Internal Revenue Service promulgates a
model form to establish a Xxxx XXX Custodial Account, the Custodian will
amend this Agreement to substitute the provisions of such model Xxxx XXX
Custodial Account form for the provisions of Part Two of this Agreement,
and the Depositor specifically consents to such amendment in accordance
with Section 13(b) hereof.
If, due to changes in the applicable tax laws, or ruling of the
Internal Revenue Service, it is established that the use of the Adoption
Agreement or this Agreement do not establish a Regular XXX or a Xxxx XXX
(as the case may be), the Custodian will furnish the Depositor with
replacement documents and the Depositor will if necessary sign such
replacement documents. Depositor acknowledge and agrees to such
procedures and to cooperate with Custodian to preserve the intended tax
treatment of the Account.
26. If the Depositor maintains an Individual Retirement Account
under Code section 408(a), Depositor may convert or transfer such other
XXX to a Xxxx XXX under Code section 408A using the terms of this
Agreement and the Adoption Agreement by completing and executing the
Adoption Agreement and giving suitable directions to the Custodian and the
custodian or trustee of such other XXX. Alternatively, the Depositor may
convert or transfer such other XXX to a Xxxx XXX by use of a replay card
or by telephonic, computer or electronic means in accordance with
procedures adopted by the Custodian or Service Company intended to meet
the requirements of Code section 408A, and the Depositor will be deemed to
have executed the Adoption Agreement and adopted the provisions of this
Agreement and the Adoption Agreement in accordance with such procedures.
27. The Depositor acknowledges that he or she has received and read
the current prospectus for each Fund in which his or her Account is
invested and the Individual Retirement Account Disclosure Statement
related to the Account. The Depositor represents under penalties of
perjury that his or her Social Security number (or other Taxpayer
Identification Number) as stated in the Adoption Agreement is correct.
