Exhibit 14.3
FIDUCIARY FUNDS
SIMPLIFIED EMPLOYEE PENSION
INDIVIDUAL RETIREMENT ACCOUNTS CONTRIBUTION AGREEMENT
(Under Section 408(k) of the Internal Revenue Code)
____________________ makes the following agreement under the
(Business name -- employer)
terms of Section 408(k) of the Internal Revenue Code and the instructions
to this form.
The employer agrees to provide for discretionary contributions
in each calendar year to the Individual Retirement Accounts or Individual
Retirement Annuities (IRAs) of all eligible employees who are at least
______ years old (not over 21 years old) [see instruction "Who May
Participate"] and worked in at least ______ years (not over 1, 2 or 3
years) of the immediately preceding 5 years [see instruction "Who May
Participate"]. This [_] includes [_] does not include (check one)
employees covered under a collective bargaining agreement and [_] includes
[_] does not include (check one) employees whose total compensation during
the year is less than $363*.
_______
* This amount reflects the cost-of-living increase under Section
408(k)(8) effective 1-1-91. This amount is adjusted annually. Each
January, the IRS announces the increase, if any, in the Internal Revenue
Bulletin.
The employer agrees that contributions made on behalf of each
eligible employee will:
- Be made only on the first $222,220* of compensation.
- Be made in an amount that is the same percentage of
total compensation for every employee.
- Be limited to the smaller of $30,000 or 15% of
compensation.
- Be paid to the employee's IRA trustee, custodian, or
insurance company (for an annuity contract).
Signature of employer Date
By
INSTRUCTIONS FOR EMPLOYER
Purpose of Form. Form 5305-SEP (Model SEP) is used by an
employer to make an agreement to provide benefits to all employees under a
Simplified Employee Pension Plan (SEP) described in Section 408(k) of the
Internal Revenue Code. This form is NOT to be filed with the IRS.
What is SEP? A SEP provides an employer with a simplified way
to make contributions toward an employee's retirement income. Under a
SEP, the employer is permitted to contribute a certain amount (see below)
to an employee's Individual Retirement Account or Individual Retirement
Annuity (IRAs). The employer makes contributions directly to an IRA set
up by an employee with a bank, insurance company, or other qualified
financial institution. When using this form to establish a SEP, the IRA
must be a Model IRA established on IRS form or a master or prototype IRA
for which the IRS has issued a favorable opinion letter. Making the
agreement on this Form 5305-SEP does not establish an employer IRA as
described under Section 408(c).
This form may not be used by an employer who:
1. Currently maintains any other qualified
retirement plan.
2. Has maintained in the past a defined benefit
plan, even if now terminated.
3. Has any eligible employees for whom IRA's
have not been established.
4. Uses the services of leased employees (as
described in Section 414(n)).
5. Is a member of an affiliated service group
(as described in Section 414(m)), a
controlled group of corporations (as
described in Section 414(b)), or trades or
businesses under common control (as
described in Section 414(c)), UNLESS all
eligible employees of all the members of
such groups, trades, or businesses,
participate under the SEP.
This form should only be used if the employer will pay the cost
of the SEP contributions. This form is not suitable for a SEP that
provides for contributions at the election of the employee whether or not
made pursuant to a salary reduction agreement.
Who May Participate. Any employee who is at least 21 years old
and has performed "service" for the employer in at least 3 years of the
immediately preceding 5 years must be permitted to participate in the SEP.
However, you may establish less restrictive eligibility requirements if
you choose. "Service" is any work performed for you for any period of
time, however short. If you are a member of an affiliated service group,
a controlled group of corporations, or trades or businesses under common
control, "service" includes any work performed for any period of time for
any other member of such group, trades, or businesses. Generally, to make
the agreement, all eligible employees (including all eligible employees,
if any, of other members of an affiliated service group, a controlled
group of corporations, or trades or businesses under common control) must
participate in the plan. However, employees covered under a collective
bargaining agreement and certain nonresident aliens may be excluded if
Section 410(b)(3)(A) or 410(b)(3)(C) applies to them. Employees whose
total compensation for the year is less than $363* may be excluded.
______
* This amount reflects the cost-of-living increase under Section
408(k)(8) effective 1-1-91. This amount is adjusted annually. Each
January, the IRS announces the increase, if any, in the Internal Revenue
Bulletin.
Amount of Contributions. You are not required to make any
contributions to an employee's SEP-IRA in a given year. However, if you
do make contributions, you must make them to the IRAs of all eligible
employees, whether or not they are still employed at the time
contributions are made. The contributions made must be the same
percentage of each employee's total compensation (up to a maximum
compensation base of $222,220*). The contributions you make in a year for
any one employee may not be more than the smaller of $30,000 or 15% of
that employee's total compensation (figured without considering the
SEP-IRA contributions).
For this purpose, compensation includes:
- Amounts received for personal services actually
performed (see Regulation Section 1.219-1(c); and
- Earned income defined under Section 401(c)(2).
You may no discriminate in favor of any employee who is highly
compensated if you use this Form 5305-SEP.
Under this form you may not integrate your SEP contributions
with, or offset them by, contributions made under the Federal Insurance
Contributions Act (FICA).
Currently, employers who have established a SEP using this
agreement and have provided each participant with a copy of this form,
including the questions and answers below, are not required to file the
annual information returns, Forms 5500, 5500-E/R, or 5500EZ for the SEP.
Deducting Contributions. You may deduct all contributions to a
SEP subject to the limitations of Section 404(h). This SEP is maintained
on a calendar year basis and contributions to the SEP are deductible for
your taxable year with or within which the calendar year ends.
Contributions made for a particular taxable year and contributed by the
due date of your income tax return (including extensions) shall be deemed
made in that taxable year.
Making the Agreement. This agreement is considered made when
(1) IRAs have been established for all of your eligible employees, (2) you
have completed all blanks on the agreement form without modification, and
(3) you have given all eligible employees copies of the agreement form,
instructions, and questions and answers.
Keep the agreement form with your records; do not file it with
the IRS.
INFORMATION FOR THE EMPLOYEE
The information provided below explains what a Simplified
Employee Pension Plan (SEP) is, how contributions are made, and how to
treat your employer's contributions for tax purposes.
Please read the questions and answers carefully. For more
specific information, also see the agreement form and instructions to your
employer on this form.
Questions and Answers
1. Q. What is a Simplified Employee Pension, or SEP?
A. A SEP is a retirement income arrangement under which
your employer may contribute any amount each year up to the smaller of
$30,000 or 15% of your compensation into your own Individual Retirement
Account/Annuity (IRA).
Your employer will provide you with a copy of the agreement
containing participation requirements and a description of the basis upon
which employer contributions may be made to your IRA.
All amounts contributed to your IRA by your employer belong to
you, even after you separate from service with that employer.
2. Q. Must my employer contribute to my IRA under the SEP?
A. Whether or not your employer makes a contribution to
the SEP is entirely within the employer's discretion. If a contribution
is made under the SEP, it must be allocated to all the eligible employees
according to the SEP agreement. The SEP specifies that the contribution
on behalf of each eligible employee will be the same percentage of
compensation (excluding compensation higher than $222,220*) for all
employees.
______
* This amount reflects the cost-of-living increase under Section
408(k)(8) effective 1-1-91. This amount is adjusted annually. Each
January, the IRS announces the increase, if any, in the Internal Revenue
Bulletin.
3. Q. How much may my employer contribute to my SEP-IRA in
any year?
A. Under the Model SEP (Form 5305-SEP) that your employer
has adopted, your employer will determine the amount of contribution to be
made to your IRA each year. However, the contribution for any year is
limited to the smaller of $30,000 or 15% of your compensation for that
year. The compensation used to determine this limit does not include any
amount which is contributed by your employer to your IRA under the SEP.
The agreement does not require an employer to maintain a particular level
of contributions. It is possible that for a given year no employer
contribution will be made on an employee's behalf.
Also see Question 5.
4. Q. How do I treat my employer's SEP contributions for my
taxes?
A. The amount your employer contributes for years
beginning after 1986 is excludable from your gross income subject to
certain limitations including the lesser of $30,000 or 15% of compensation
mentioned in 1A above and is not includible as taxable wages on your Form
W-2.
5. Q. May I also contribute to my IRA if I am a participant
in a SEP?
A. Yes. You may still contribute the lesser of $2,000 or
100% of your compensation to an IRA. However, the amount which is
deductible is subject to various limitations.
See also Question 11.
6. Q. Are there any restrictions on the IRA I select to
deposit my SEP contributions in?
A. Under the SEP that is approved by IRS, contributions
must be made to either a Model IRA which is executed on an IRS form or a
master or prototype IRA for which IRS has issued a favorable opinion
letter.
7. Q. What if I don't want a SEP-IRA?
A. Your employer may require that you become a
participant in such an arrangement as a condition of employment. However,
if the employer does not require all eligible employees to become
participants and an eligible employee elects not to participate, all other
employees of the same employer may be prohibited from entering into a
SEP-IRA arrangement with that employer. If one or more eligible employees
do not participate and the employer attempts to establish a SEP-IRA
agreement with the remaining employees, the resulting arrangement may
result in adverse tax consequences to the participating employees.
8. Q. Can I move funds from my SEP-IRA to another
tax-sheltered IRA?
A. Yes, it is permissible for you to withdraw, or
receive, funds from your SEP-IRA, and no more than 60 days later, place
such funds in another IRA, or SEP-IRA. This is called a "rollover" and may
not be done without penalty more frequently than at one-year intervals.
However, there are no restrictions on the number of times you may make
"transfers" if you arrange to have such funds transferred between the
trustees, so that you never have possession.
9. Q. What happens if I withdraw my employer's contribution
from my IRA?
A. If you don't want to leave the employer's contribution
in your IRA, you may withdraw it at any time, but any amount withdrawn is
includible in your income. Also, if withdrawals occur before attainment
of age 59-1/2 and not on account of death or disability, you may be subject
to a penalty tax.
10. Q. May I participate in a SEP even though I'm covered by
another plan?
A. An employer may not adopt this IRS Model SEP (Form
5305-SEP) if the employer maintains another qualified retirement plan or
has ever maintained a qualified defined benefit plan. However, if you
work for several employers you may be covered by a SEP of one employer and
a different SEP or pension or profit-sharing plan of another employer.
Also see Questions 11 and 12.
11. Q. What happens if too much is contributed to my SEP-IRA
in one year?
A. Any contribution that is more than the yearly
limitations may be withdrawn without penalty by the due date (plus
extensions) for filing your tax return (normally April 15th), but is
includible in your gross income. Excess contributions left in your
SEP-IRA account after that time are subject to a 6% excise tax.
Withdrawals of those contributions may be taxed as premature withdrawals.
Also see Question 10.
12. Q. Do I need to file any additional forms with the IRS
because I participate in a SEP?
A. No.
13. Q. Is my employer required to provide me with information
about SEP-IRA's and the SEP agreement?
A. Yes, your employer must provide you with a copy of the
executed SEP agreement (Form 5305-SEP), these Questions and Answers, and
provide a statement each year showing any contribution to your IRA.
Also see Question 4.
14. Q. Is the financial institution where I establish my IRA
also required to provide me with information?
A. Yes, it must provide you with a disclosure statement
which contains the following items of information in plain, nontechnical
language:
(1) the statutory requirements which relate to your
IRA;
(2) the tax consequences which follow the exercise of
various options and what those options are;
(3) participation eligibility rules and rules on the
deductibility and nondeductibility of retirement savings;
(4) the circumstances and procedures under which you
may revoke your IRA, including the name, address, and telephone
number of the person designated to receive notice of revocation
(this explanation must be prominently displayed at the beginning
of the disclosure statement);
(5) explanations of when penalties may be assessed
against you because of specified prohibited or penalized
activities concerning your IRA; and
(6) financial disclosure information which:
(a) either projects value growth of
your IRA under various contribution and
retirement schedules, or describes the
method of computing and allocating annual
earnings and charges which may be assessed;
(b) describes whether, and for what
period, the growth projections for the plan
are guaranteed, or a statement of the
earnings rate and terms on which the
projection is based;
(c) states the sales commission to be
charged in each year expressed as a
percentage of $1,000; and
(d) states the proportional amount of
any nondeductible life insurance which may
be a feature of your IRA.
See Publication 590, Individual Retirement Arrangements (IRA's)
available at most IRS offices, for a more complete explanation of the
disclosure requirements.
In addition to this disclosure statement, the financial
institution is required to provide you with a financial statement each
year. It may be necessary to retain and refer to statements for more than
one year in order to evaluate the investment performance of the IRA and in
order that you will know how to report IRA distributions for tax purposes.
