SECTION
403(B)(7)
CUSTODIAL
ACCOUNT
AGREEMENT
(LOGO)
XXX XXXXXXX
-----------
FUNDS
INTRODUCTION
The Xxx Xxxxxxx Funds, Inc. Section 403(b)(7) Custodial Account Agreement
("Custodial Account Agreement" or "Agreement") is intended for use in connection
with Section 403(b)(7) arrangements where the parties desire that all or part of
the contributions made to the arrangement be invested in shares of one or more
of the portfolios of the Xxx Xxxxxxx Funds, Inc. managed by Xxx Xxxxxxx Capital
Management, Inc. or Northern U.S. Government Money Market Fund. The Custodial
Account Agreement, and all funds held under the Agreement, are intended to
comply with, and be administered in accordance with, the provisions of the
Internal Revenue Code of 1986 ("Code") and, to the extent applicable, the
Employee Retirement Income Security Act of 1974 ("ERISA"), as such laws may be
amended and in effect from time to time.
ARTICLE I
ELIGIBILITY AND PARTICIPATION
ELIGIBLE EMPLOYEES
Section 403(b)(7) of the Code provides special retirement plan rules applicable
to employees of an Employer that is:
(1) an organization described in Section 501(c)(3) of the Code and that is
exempt from tax under Section 501(a) of the Code; or
(2) an educational organization as defined in Section 170(b)(1)(A)(ii) of the
Code if the educational organization is maintained by a State or a political
subdivision of a State or an agency or instrumentality of either.
ADOPTION OF CUSTODIAL ACCOUNT AGREEMENT
An Employee who performs services for an organization described in (1) or (2)
above may, adopt this Custodial Account Agreement. The Employee adopts the
Custodial Account Agreement by completing and signing the Account Application
and by delivering it (via first class mail or recognized courier service) to the
Custodian. The Custodial Account Agreement will become effective upon written
acceptance of the Account Application by the Custodian (or by its delegate or
agent). Although the Employer is not required to sign the Account Application,
the Employer will be deemed to have established the Custodial Account for the
benefit of the Employee as of the date on which the Employer transmits a
contribution (including, without limitation, a Salary Reduction contribution) to
the Custodian for the benefit of the Employee's account.
INCORPORATION OF DOCUMENTS
The Account Application and (if contributions will be made on a salary reduction
basis) the Salary Reduction Agreement between the Employer and the Employee, are
incorporated by reference and made a part of the Custodial Account Agreement.
ARTICLE II
CONTRIBUTIONS
IN GENERAL
Subject to the special limitations described in this Article II, the Employer
may contribute to the Custodial Account (in cash) for any taxable year, provided
that the amount of the contribution does not represent an "excess contribution"
as defined in Section 4973(c) of the Code.
LIMITATION ON SALARY REDUCTION CONTRIBUTIONS
The amount contributed to an Employee's Custodial Account in any calendar year
as a Salary Reduction Contribution shall not exceed the greater of $9,500 or the
limitation on elective deferrals in effect for such year under Section 402(g) of
the Code ($7,000, indexed for cost-of-living increases). The limitation
determined in accordance with the foregoing sentence is then reduced by the
amount of any Salary Reduction Contributions made during the calendar year by or
on behalf of the Employee under a qualified cash or deferred arrangement under
Section 401(k) of the Code, a simplified employee pension under Section 408(k)
of the Code, an eligible deferred compensation plan under Section 457 of the
Code, or another tax deferred annuity or custodial account under Section 403(b)
of the Code.
In the case of an individual who has completed at least fifteen (15) years of
service with an educational institution, hospital, home health service agency,
health and welfare service agency, church or convention or association of
churches, or a tax-exempt organization controlled by a church or convention or
association of churches as described in Section 414(e)(3)(B)(ii) of the Code
(collectively referred to as a "Qualified Organization"), the limitation on
Salary Reduction Contributions for any year as determined above shall be
increased by the least of the following amounts:
(1) $3,000;
(2) the difference (but not less than zero) between $15,000 and any amounts
excluded from gross income in prior years as a result of this special
"catch up" rule; and
(3) the difference (but not less than zero) between (A) $5,000 multiplied by the
number of years of service that the individual has with the Qualified
Organization, and (B) the amount of Salary Reduction Contributions made by
the Qualified Organization on behalf of the individual for prior taxable
years under a qualified cash or deferred arrangement under Section 401(k) of
the Code, a simplified employee pension under Section 408(k) of the Code, or
another tax deferred annuity or custodial account under Section 403(b) of
the Code.
In the event that an Employee determines that the amount contributed for any
calendar year exceeds the limitation on Salary Reduction Contributions, and if
the Employee notifies the Custodian in writing of such excess amount no later
than March 1 of the following calendar year, the Custodian will distribute such
excess amount (plus any income attributable thereto) to the Employee not later
than April 15 of the year following the year in which the excess Salary
Reduction Contributions were made. Neither the Investment Adviser nor the
Custodian shall have any responsibility for determining whether excess Salary
Reduction Contributions have been made or, if made, for distributing any excess
amount except in accordance with the specific written instructions of the
Employee.
LIMITATIONS ON TOTAL CONTRIBUTIONS
(EMPLOYER NON-ELECTIVE AND EMPLOYEE SALARY REDUCTION CONTRIBUTIONS)
The maximum amount of contributions (including Salary Reduction Contributions)
that may be contributed to an Employee's Custodial Account for any taxable year
shall not exceed the lesser of the Employee's:
(1) Exclusion Allowance computed in accordance with Section 403(b)(2) of the
Code, i.e., generally, twenty percent (20%) of the Employee's "includable
compensation" multiplied by the Employee's years of service, less all
contributions made in prior years; or
(2) Section 415 Limit, i.e., generally, the lesser of twenty five percent (25%)
of the individual's "compensation" for the limitation year (the calendar
year unless the Employer has designated a different year) or $30,000 (as
adjusted from time to time in accordance with Section 415(d) of the Code).
Salary Reduction Contributions generally reduce the Employee's "compensation"
and "includable compensation" for purposes of the foregoing limits.
An Employee who is employed by a Qualified Organization may elect to calculate
his total contribution limit in accordance with one of the alternative
limitations described in Section 415(c)(4) of the Code. In general, Section
415(c)(4) of the Code permits the Employee to elect:
(1) to insert, in lieu of the Section 415 Limit, an amount equal to the lesser
of (A) $15,000 or (B) twenty five percent (25%) of the Employee's
"includable compensation" plus $4,000;
(2) to disregard the Section 415 Limit, so that the Employee's total
contribution limit will equal the Employee's Exclusion Allowance; or
(3) for the year in which the Employee terminates employment, to replace the
Section 415 Limit with an amount equal to the lesser of (A) $30,000 (as
adjusted from time to time in accordance with Section 415(d) of the Code),
or (B) the amount of contributions which could have been, but were not, made
under Section 403(b) during the ten year period ending on the date of the
Employee's termination, determined by taking into account only the
Employee's period of employment with the Employer.
The alternate limitation elections described in Paragraphs (1), (2) and (3)
above are mutually exclusive and irrevocable, so that an Employee who elects one
of the alternate limitations may not thereafter utilize another of the alternate
limits. Further, the alternate limitation described in Paragraph (3) above may
be used only once by an Employee, rather than once with respect to each
Employer.
In the case of contributions other than Salary Reduction Contributions, an
Employee's "compensation" or "includable compensation" shall not exceed $150,000
or such other limit in effect for such year under Section 401(a)(17) of the
Code.
LIMITATION ON CUSTODIAN OR INVESTMENT ADVISER DUTIES AND RESPONSIBILITIES
Neither Xxx Xxxxxxx Capital Management, Inc. (the "Investment Adviser") nor the
Custodian shall be responsible for determining the amount that may be
contributed on behalf of the Employee, unless such obligation is explicitly
undertaken by separate written agreement. In addition, neither the Investment
Adviser nor the Custodian shall be responsible to recommend or compel Employer
contributions to the Custodial Account. The disposition of excess contributions
will be made in accordance with instructions from the Employer to the extent
such instructions are consistent with applicable law.
ROLLOVER OR TRANSFER CONTRIBUTIONS
The Employee or the Employer may transfer or cause to be transferred to this
Custodial Account, by rollover, direct rollover or direct transfer, assets
available from an existing annuity contract or custodial account established
under Section 403(b) of the Code for which previous contributions were made on
the Employee's behalf. In addition, a rollover, direct rollover or transfer may
be made from an individual retirement account or annuity established pursuant to
Section 408 of the Code, if the assets in the individual retirement account or
annuity are attributable solely to a previous rollover contribution to the
account or annuity from one or more annuity contracts or custodial accounts
established pursuant to Section 403(b) of the Code. Notwithstanding the
foregoing, if the Employer maintains a written Section 403(b) plan for which
this Custodial Account serves as a funding vehicle, any restrictions imposed by
the terms of such plan upon rollovers, direct rollovers, or transfers shall, to
the extent that they are inconsistent with the provisions of this paragraph,
take precedence over this paragraph.
ARTICLE III
INVESTMENT OF CONTRIBUTIONS
EMPLOYEE INVESTMENT ELECTION
All contributions made to the Custodial Account shall be used by the Custodian
to purchase shares of one or more of the portfolios of the regulated investment
company known as the Xxx Xxxxxxx Funds, Inc. For purposes of this Custodial
Account, each such portfolio will be referred to as an "Investment Company," and
the shares of each Investment Company will be referred to as "Investment Company
Shares." The Employee (or the Employee's beneficiary, executor or administrator)
may direct the Custodian to invest his or her Custodial Account in the shares of
the Investment Companies or other regulated investment companies as may be made
available by the Investment Adviser in the future. The Employee (or the
Employee's beneficiary, executor or administrator) may direct the Custodian to
transfer all or any part of his or her Custodial Account assets from one
Investment Company to another at any time. In directing the Custodian the
Employee (or the Employee's beneficiary, executor or administrator) shall
designate a percentage allocation to any or all of the then available Investment
Companies, subject to the rules of such Investment Company with respect to
minimum investment or allocation. Any changes in the allocation of future
contributions or current Custodial Account assets will be effective only when
the Custodian receives appropriate instructions from the Employee (or the
Employee's beneficiary, executor or administrator). Such instructions may be
given by the Employee either in writing and in such form as may be acceptable to
the Custodian, or (if available) by use of the telephone system maintained for
such purpose by the Custodian or its agent. By giving such instructions to the
Custodian, the Employee will be deemed to have acknowledged receipt of the
current prospectus of any Investment Company in which the Employee instructs the
Custodian to invest. In the event no direction is made, or if in the opinion of
the Custodian the directions received are not clear, the Custodian will invest
all contributions in the Xxx Xxxxxxx Mid-Cap Fund or such other fund as the
Investment Adviser may from time to time designate, until further notice or
clarifying written instructions are received from the Employee. All dividends
and capital gains shall be reinvested in additional Investment Company Shares.
All Investment Company Shares acquired by the Custodian shall be registered in
the name of the Custodian or its nominee.
CUSTODIAN RELIANCE AND DUTY
The Custodian and its agents may conclusively rely upon and shall be protected
in acting upon any direction, instruction or order from the Employee or any
other written notice, request, or instrument believed by it to be genuine and to
have been properly executed and, so long as the Custodian acts in good faith, in
taking or omitting to take any other action.
The Custodian shall have no duty to question the directions of the Employee (or
the Employee's beneficiary, executor or administrator), regarding the investment
of the assets in the Custodial Account or to advise such persons regarding such
investments, nor shall the Custodian, the Investment Adviser, or any affiliates
of either, be liable for any loss that results from the exercise of control
(whether by action or inaction) over the Custodian Account by the Employee (or
the Employee's beneficiary, executor or administrator).
ARTICLE IV
DISTRIBUTION OF CUSTODIAL ACCOUNT
DISTRIBUTION EVENTS
The Custodian shall have no responsibility for making distribution from the
Custodial Account prior to receipt of an executed distribution election form,
which shall be in such form and completed in such manner as the Custodian may
prescribe. Distribution from the Employee's Custodial Account shall not be made
prior to the date on which one of the following events has occurred:
(1) The Employee has attained age 59 1/2;
(2) The Employee has separated from service with the Employer;
(3) The Employee has become disabled; or
(4) The Employee has died.
To the extent that the Employer's Section 403(b) program allows, distribution of
the portion of the Employee's Custodial Account attributable to Salary Reduction
Contributions (but not including any earnings thereon) also may be made in the
event of the Employee's financial hardship. A substantial financial hardship
shall exist if the Employee incurs an immediate and heavy financial need that
cannot be met by other resources reasonably available to the Employee. The
Employee's financial hardship must be certified to by the Employer in accordance
with the standards for financial hardship promulgated from time to time by the
Internal Revenue Service for application to Section 403(b) arrangements. In no
event shall the Custodian or the Investment Adviser certify to the Employee's
hardship.
Distributions prior to age 59 1/2 may be subject to a ten percent (10%)
additional tax under Section 72(p) of the Code.
The Employer, in its Section 403(b) document, may provide for distribution later
than the time of the foregoing events, and to the extent that the events
specified in the Employer's plan are consistent with the minimum distribution
requirements of Section 403(b)(10) of the Code, the terms of the Employer's plan
shall govern. The Employer's plan may not, however, specify payment prior to the
occurrence of one or more of the events described above.
For purposes of Paragraph (3) above, the Employee shall be considered disabled
if he or she is disabled within the meaning of Section 72(m)(7) of the Code,
meaning that the Employee 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.
FORM OF DISTRIBUTION
The Employee may elect a form of distribution from among the following
alternatives:
(1) A single sum payment in cash;
(2) A specified dollar amount as directed by the Employee from time to time;
(3) Monthly, quarterly, or annual installment payments over a period not
extending beyond the life expectancy of the Employee; or
(4) Monthly, quarterly, or annual installment payments over a period not
extending beyond the joint and last survivor life expectancy of the Employee
and his or her beneficiary.
Such election shall be made in writing in such form as shall be acceptable to
the Custodian. After attaining age 70 1/2, certain restrictions may apply to the
Employee's ability to change the period over which payments are made. In no
event shall the Custodian or the Investment Adviser have any responsibility for
determining, or giving advice with respect to, the form of benefit, life
expectancies or minimum distribution requirements.
If the Employee fails to elect any of the methods of distribution described
above within the time specified for such election, the Custodian may distribute
the Employee's Custodial Account in the form of a single sum cash payment by the
April 1 following the calendar year in which the Employee attains age 70 1/2.
Except as otherwise required by Section 403(b)(10) of the Code, the amount of
the monthly, quarterly or annual installment payments shall be determined by
dividing the entire interest of the Employee in the Custodial Account at the
close of the prior year by the number of years remaining in the period specified
by the Employee's election.
MINIMUM DISTRIBUTION REQUIREMENTS
The Employee must receive distributions from the Custodial Account in accordance
with Regulations prescribed by the Secretary of the Treasury pursuant to Section
403(b)(10) of the Code which are hereby incorporated by reference, or in the
absence of such regulations, in accordance with Section 401(a)(9) of the Code.
In general, these provisions require that certain minimum distributions must
commence not later than the April 1 of the calendar year following the calendar
year in which the Employee attains age 70 1/2 (the "required beginning date").
For any Employee who attained age 70 1/2 prior to January 1, 1988, the
Employee's "required beginning date" is the April 1 of the calendar year
following the calendar year of the Employee's retirement or attainment of age
70 1/2, whichever occurs later.
Life expectancies are computed by use of Tables V and VI of Section 1.72-9 of
the Income Tax Regulations, or any updated tables published by the Internal
Revenue Service for this purpose. Unless the Employee (or his spouse) elects not
to have life expectancy recalculated, the Employee's life expectancy (and the
life expectancy of the Employee's spouse, if applicable) will be recalculated
annually using their attained ages as of their birthdays in the year for which
the minimum annual payment is being determined. The life expectancy of the
designated beneficiary (other than the spouse) will not be recalculated. Any
such election to recalculate or not to recalculate life expectancies shall be
irrevocable as to the Employee and spouse as of the required beginning date, and
may not thereafter be changed. The minimum annual payment may be made in a
series of installments (e.g., monthly, quarterly, etc.) as long as the total
payments for the year made by the date required are not less than the minimum
amounts required.
If the Employee dies before his entire interest in the Custodial Account is
distributed to him, the remaining undistributed balance of such interest shall
be distributed to the beneficiary or beneficiaries, if any, designated by the
Employee. If no valid designation of a beneficiary shall have been made,
distribution shall be made to the Employee's surviving spouse, or the Employee's
estate, in that order.
If the Employee dies on or after the required beginning date, the beneficiary
must continue to receive distributions at least as rapidly as under the payment
method in effect at the Employee's death.
If the Employee dies prior to the required beginning date, the beneficiary may
elect, in writing, to receive the distribution in one of the following forms:
(1) A single sum payment in cash made by the December 31 of the year containing
the fifth anniversary of the Employee's death; or
(2) Monthly, quarterly, or annual payments commencing not later than the
December 31 following the year of the Employee's death over a period not to
exceed the life expectancy of the beneficiary.
Notwithstanding the foregoing, if the beneficiary is the Employee's spouse,
distributions may be delayed until the December 31 of the year in which the
Employee would have attained age 701/2. A beneficiary must receive distributions
from the Custodial Account in accordance with the regulations prescribed by the
Secretary of the Treasury pursuant to Section 403(b)(10) of the Code, including
the incidental death benefit requirements, which are hereby incorporated by
reference, or in the absence of such Regulations, in accordance with Section
401(a)(9) of the Code and the regulations thereunder.
BENEFICIARY
The Employee may designate a beneficiary or beneficiaries (which may include a
trust or the Employee's estate), and may, in addition, name a contingent
beneficiary. Such designation shall be made in writing in a form acceptable to
the Custodian. The Employee may, at any time, revoke his or her designation of a
beneficiary or change the beneficiary by filing notice of such revocation or
change with the Custodian, provided that no such designation or change in
designation executed by the Employee prior to death may be filed with the
Custodian more than thirty (30) days following the Employee's death.
Notwithstanding the foregoing, in the event the Employee is married at the time
of his or her death, the beneficiary shall be the Employee's surviving spouse
unless such spouse has consented in writing to the designation of an alternative
beneficiary after notice of the spouse's rights and such consent was witnessed
by a notary public or representative of the Employer. In the event no valid
designation of beneficiary is on file with the Employer or the Custodian at the
date of death or no designated beneficiary survives the Employee, the Employee's
spouse shall be deemed the beneficiary; in the further event the Employee is
unmarried or his or her spouse does not survive him or her, the Employee's
estate shall be deemed to be his or her beneficiary.
DIRECT ROLLOVER OPTION
In the case of any distribution from this Custodial Account that constitutes an
"eligible rollover distribution" as defined in Section 402(c)(4) of the Code,
the Custodian shall provide the Employee or beneficiary with the option of (A)
receiving the distribution directly, (B) having the distribution transferred to
an individual retirement account or eligible 403(b) program that accepts such
"direct rollovers," or (C) to the extent required under regulations issued by
the Secretary of the Treasury, a combination of (A) and (B).
If the Employee or beneficiary timely elects the transfer option and provides
the Custodian with such information as the Custodian may prescribe regarding the
transferee plan or account, including the name of the transferee plan or account
and identity of the trustee or custodian, the distribution amount shall be
transferred to the successor trustee or custodian in a "direct rollover" in
accordance with Sections 403(b)(10) and 401(a)(31) of the Code. The Custodian
may elect to accomplish the "direct rollover" by delivering to the Employee or
beneficiary a check, for the full amount of the distribution, but made payable
to the trustee or custodian of the transferee plan or account. The Employee or
beneficiary shall then be responsible for delivering the check to the trustee or
custodian or the transferee plan.
If the Employee or beneficiary elects payments made directly to the Employee or
beneficiary, distribution shall be accomplished by delivering to the Employee or
beneficiary a check, for the amount of the distribution less applicable required
withholding, made payable to the Employee or beneficiary.
If the Employee or beneficiary fails to make a timely election, or if the
participant or beneficiary elects the transfer option but fails to provide the
Custodian with appropriate information to enable the Custodian to implement the
transfer, the Custodian shall, subject to applicable consent requirements, cause
the Employee's or beneficiary's distribution to be paid directly to the Employee
or beneficiary, less applicable required withholding.
The Custodian need not offer the "direct rollover" option in the case of any
distribution that has been exempted from the "direct rollover" requirements
under rules and regulations issued (whether in proposed, temporary or final
form) by the Secretary of the Treasury. In addition, the Custodian may
promulgate additional rules and regulations, including rules and regulations
governing the time by which elections must be made, that it determines to be
necessary or desirable to administer this provision.
The Custodian shall not be responsible for the tax consequences resulting from
an Employee's election between receiving a distribution directly or having the
distribution transferred to an individual retirement account or eligible 403(b)
program in a "direct rollover."
RESPONSIBILITIES OF CUSTODIAN
The Custodian does not assume and shall not have any responsibility to make any
distribution except in accordance with written instructions received by the
Custodian. In addition, no distribution shall be made unless and until the
Custodian shall have been furnished with all certificates, signature guarantees
and other documents (including proof of any legal representative's authority)
that the Custodian may have requested.
TAX WITHHOLDING
Any distribution made by the Custodian from the Custodial Account shall be
subject to withholding in accordance with applicable law.
ARTICLE V
ADMINISTRATION
IN GENERAL
The Custodian shall perform solely the duties assigned to the Custodian
hereunder; provided that the Custodian may contract with affiliates of the
Custodian or other parties for the performance of certain services. The
Custodian shall not be deemed to be a fiduciary in carrying out the following
duties:
(1) Receiving contributions pursuant to the provisions of this Plan.
(2) Holding, investing and reinvesting the contributions in Investment Company
Shares.
(3) Registering any property held by the Custodian in its own name, or in
nominee or bearer form that will pass delivery.
(4) Making distributions from the Custodial Account in cash.
VOTING
The Custodian shall mail to the Employee all proxies, proxy soliciting
materials, and periodic reports or other communications that may come into the
Custodian's possession by reason of its custody of Investment Company Shares.
The Employee shall vote the proxy, notwithstanding the fact that the Custodian
may be the registered owner of the Investment Company Shares, and the Custodian
shall have no further liability or responsibility with respect to the voting of
such shares.
REPORTS
The Custodian shall keep accurate and detailed account of its receipts,
investments and disbursements. As soon as practicable after December 31st each
year, and whenever required by Regulations adopted by the Internal Revenue
Service under the Act or the Code, the Custodian shall file with the Employee a
written report of the Custodian's transactions relating to the Custodial Account
during the period from the last previous accounting, and shall file such other
reports with the Internal Revenue Service as may be required by its Regulations
(but not including any reports that may be required to be filed by the
Employer).
Unless the Employee sends the Custodian written objection to a report within
sixty (60) days after its receipt, the Employee shall be deemed to have approved
such report, and, in such case the Custodian shall be forever released and
discharged with respect to all matters and things included therein. The
Custodian may seek a judicial settlement of its accounts. In any such proceeding
the only necessary party thereto in addition to the Custodian shall be the
Employee.
WRITTEN NOTICES
All written notices or communications to the Employee or the Employer shall be
effective when sent by first class mail to the last known address of the
Employee or the Employer on the Custodian's records. All written notices or
communications to the Custodian shall be mailed or delivered to the Custodian at
its designated mailing address, and no such written notice of communications
shall be effective until the Custodian's actual receipt thereof. The Custodian
shall be entitled to rely conclusively upon, and shall be fully protected in any
action taken by it in good faith in reliance upon the authenticity of signatures
contained in all written notices or other communications which it receives and
which appear to have been sent by the Employee, the Employer, or any other
person.
INDEMNIFICATION AND LIMITATION ON LIABILITY
The Employee, Employer, and Custodian intend that the Custodian shall have and
exercise no discretion, authority or responsibility as to any investment in
connection with the Custodial Account, and the Custodian shall not be
responsible in any way for the tax treatment of any contribution or
distribution, or for any other action or nonaction taken pursuant to the
Employee's or Employer's direction or that of the Employee's beneficiary,
executor or administrator. The Employee who directs the investment of his or her
Custodial Account shall bear sole responsibility for the suitability of any
directed investment and for any adverse consequences arising from such an
investment.
The Custodian shall have no responsibilities other than those provided for
herein or in ERISA or Code and shall not be liable for a mistake in judgment,
for any action taken (or not taken) in good faith, or for any loss that is not a
result of its gross negligence, except as provided in ERISA or the Code.
The Employee (and the Employee's beneficiary, executor or administrator) shall
indemnify and hold the Custodian harmless from and against any liability that
the Custodian, the Investment Adviser, their agents, affiliates, successors,
assigns, officers, directors and employees may incur in connection with the
Custodial Account, unless arising from the Custodian's own gross negligence or
willful misconduct or from a violation of the provisions of ERISA or Regulations
promulgated thereunder.
The Custodian shall be under no duty to question any direction of the Employee
with respect to the investment of contributions, or to make suggestions to the
Employee with respect to the investment, retention or disposition of any
contributions or assets held in the Custodial Account. The Custodian and
Investment Adviser shall have no duty to give effect to an investment direction
from anyone other than the Employee (or the Employee's beneficiary, executor or
administrator). However, the Custodian and Investment Adviser may, in their
discretion, establish procedures pursuant to which the Employee (or the
Employee's beneficiary, executor or administrator) may delegate to a third party
any or all of the Employee's power and duties hereunder, not including the
authority to execute the Account Application or a beneficiary designation form.
EXPENSES
The Custodian shall be paid out of the Custodial Account for expenses of
administration, including the fees of counsel employed by the Custodian relating
directly to administration of or claims against or on behalf of the Custodial
Account, taxes, and its fees for maintaining the Custodial Account which are set
forth in the Account Application or in accordance with any schedule of fees
subsequently adopted by the Custodian. The Custodian may sell Investment Company
Shares and use the proceeds of sale to pay the foregoing expenses.
RESIGNATION AND REMOVAL
The Investment Adviser may remove the Custodian at any time. The Custodian may
resign as Custodian of any Employee's Custodial Account upon sixty (60) days'
prior notice to the Investment Adviser.
Upon the removal or resignation of the Custodian, the Investment Adviser may,
but shall not be required to, appoint a successor custodian under this Custodial
Agreement, provided that the successor custodian satisfies the requirements of
Section 401(f)(2) of the Code. The Custodian shall transfer the assets of the
Custodial Account, together with copies of relevant books and records, to the
successor custodian, provided that the Custodian is authorized to reserve such
sum of money or property as it may deem advisable for payment of any fees or
other liabilities constituting a charge on or against the assets of the
Custodial Account. The Custodian shall not be liable for the acts or omissions
of any successor to it. If no successor custodian is appointed by the Investment
Adviser, the Custodial Account shall be terminated in accordance with Article
VII.
ARTICLE VI
THE INVESTMENT ADVISER
The Employee and the Employer delegate to the Investment Adviser the following
powers with respect to the Custodial Account: to remove the Custodian and select
a successor Custodian; and to amend the Custodial Account as provided in Article
VII hereof.
The powers herein delegated to the Investment Adviser shall be exercised by such
officer thereof as the Investment Adviser may designate from time to time.
Neither an Investment Company, the Investment Adviser, nor any officer,
director, board, committee, employee or member of any Investment Company or of
the Investment Adviser shall have any responsibility with regard to the
administration of this Custodial Account (or any Employer plan that utilizes
this Custodial Account as a funding vehicle) except as provided in this Article
VI, and none of them shall incur any liability of any nature to the Employee or
beneficiary or other person in connection with any act done or omitted to be
done in good faith in the exercise of any power or authority herein delegated to
the Investment Adviser.
The Employee and the Employer agree to indemnify and hold the Investment
Companies and the Investment Adviser harmless from and against any and all
liabilities and expenses, including attorneys' and accountants' fees, incurred
in connection with the exercise of, or omission to exercise, any of the powers
delegated to it under this Article, except such liabilities and expense as may
arise from the Investment Adviser's and/or Investment Company's gross negligence
or willful misconduct.
If the Investment Adviser shall hereafter determine that it is no longer
desirable for it to continue to exercise any of the powers hereby delegated to
it, it may relieve itself of any further responsibilities hereunder by notice in
writing to the Employee at least sixty (60) days prior to the date on which it
proposes to discontinue the exercise of the powers delegated to it.
ARTICLE VII
AMENDMENT AND TERMINATION
The Employee, the Employer and the Custodian delegate to the Investment Adviser
the power to amend this Plan (including retroactive amendments).
The Employee or the Employer may amend the Account Application by submitting to
the Custodian a copy of such amended Account Application, and evidence
satisfactory to the Custodian that the Employer's Section 403(b)(7) program, as
amended by such amended Application, will continue to qualify under the
provisions of Section 403(b)(7) of the Code.
No amendment shall be effective if it would cause or permit: (A) any part of the
Custodial Account to be diverted to any purpose that is not for the exclusive
benefit of the Employee and his or her beneficiaries; (B) the Employee to be
deprived of any portion of his or her interest in the Custodial Account; or (C)
the imposition of an additional duty on the Custodian without its consent.
The Employer reserves the right to terminate further contributions to this
Custodial Account. The Employee may terminate further Salary Reduction
Contributions to the Custodial Account by entering into a revised agreement with
his or her Employer, so long as the form and the timing of the revised agreement
is in accordance with the rules applicable to Section 403(b) arrangements. The
Employee also reserves the right to transfer the assets of his or her Custodial
Account to such other form of Section 403(b) retirement plan as he or she may
determine, upon written instructions to the Custodian in such form as the
Custodian may reasonably require. The appointment of the successor custodian in
accordance with Article VI shall not be a termination of the Custodial Account,
nor shall the amendment of the Custodial Account by the Investment Adviser be a
termination of the Account.
Following termination of the Custodial Account, the Custodian shall distribute
all assets of the Custodial Account to the Employee. There shall be no liability
on the part of the Custodian or the Investment Adviser for any tax consequences
to the Employee (or the Employee's beneficiary, executor or administrator)
resulting from such termination distribution.
ARTICLE VIII
DISCRIMINATION REQUIREMENTS
NON-DISCRIMINATION REQUIREMENTS
Section 403(b) of the Code requires that tax sheltered annuity and custodial
account arrangements (other than arrangements maintained by a church or
convention or association of churches) satisfy certain participation and non-
discrimination requirements.
In general, Salary Reduction Contributions made pursuant to an Employee's
election are eligible for exclusion from income only if the Employer has
established a program that provides all employees the opportunity to make Salary
Reduction Contributions of at least $200 per year. For this purpose, the
Employer may exclude from consideration: (A) employees who fail to satisfy
minimum age and service requirements (to the extent such requirements are
adopted by the Employer in accordance with Section 403(b)(12) and 410(b) of the
Code for use in its plan); (B) employees who are participants in an eligible
deferred compensation plan under Section 457 of the Code, qualified cash or
deferred arrangement under Section 401(k) of the Code (to the extent the
Employer may maintain such a plan) or another Section 403(b) plan or
arrangement; (C) employees normally working less than 20 hours per week; (D)
employees who are non-resident aliens; (E) certain student employees performing
services described in Section 3121(w)(3)(A) of the Code; and (F) any other
employees that may be excluded in accordance with rules and regulations
promulgated by the Secretary of the Treasury.
Non-elective contributions made by the Eligible Employer must satisfy the
participation and non-discrimination requirements of Section 403(b)(12)(A)(i) of
the Code.
RESPONSIBILITY FOR COMPLIANCE WITH DISCRIMINATION STANDARDS
Neither the Custodian nor the Investment Adviser shall have any responsibility
for determining whether contributions that are or may be made to this Custodial
Account are being made pursuant to a plan that satisfies applicable non-
discrimination requirements under the Code or any other law, or for advising the
Employee, the Employer, or any other person with respect to such requirements.
Further, neither the Custodian nor the Investment Adviser shall have any
responsibility or liability for adverse tax consequences or any other
consequences that may result from contributions being made to this Custodial
Account where the underlying Employer plan or program fails to satisfy
applicable legal requirements.
ARTICLE IX
MISCELLANEOUS PROVISIONS
QUALIFIED DOMESTIC RELATIONS ORDER
In the case of a Custodial Account that is part of an "employee pension benefit
plan" under ERISA, the Custodian shall make distributions in accordance with the
terms of a "qualified domestic relations order" as defined in Section 206(d) of
ERISA, provided that the Employer (or its duly appointed plan administrator)
shall be responsible for determining the qualified status of the order and
distribution shall be made by the Custodian only upon receipt of written
direction from the Employer (or its duly appointed plan administrator) that the
order is a "qualified domestic relations order" for purposes of ERISA.
ASSIGNMENT AND ALTERATION
The interest of the Employee in the Custodial Account shall be held for the
exclusive benefit of the Employee or his or her beneficiary, and shall not be
assigned or transferred by the Employee, nor shall it be subject to alienation,
assignment, garnishment, attachment, execution or levy of any kind, except as
described above in connection with "qualified domestic relations orders," except
with regard to payment of the expenses of the Custodian or its agent as
authorized by the provisions of this Custodial Agreement, and except as
otherwise required by law.
GOVERNING LAW
This Custodial Agreement shall be governed by the laws of the state of Missouri,
except to the extent that such laws are superseded by federal laws or
regulations.
EFFECT ON OTHER 403(B) ARRANGEMENTS
This Custodial Account shall not prevent the Employee or the Employer from
making contributions toward another Section 403(b) annuity contract or Section
403(b)(7) custodial account, provided that the aggregate contributions to or
under such annuity contracts or custodial accounts and under this Custodial
Account shall not exceed the maximum permissible amounts as determined pursuant
to Article III hereof. Neither the Custodian nor the Investment Adviser shall
have any responsibility for monitoring compliance with the maximum contribution
limitations.
ESTABLISHMENT OF CUSTODIAL ACCOUNT BY FORMER EMPLOYEE
To the extent authorized by the Internal Revenue Service as being permissible
under Section 403(b) of the Code, a former Employee who is eligible for a
distribution from his or her Employer's Section 403(b) program may, without the
consent of his or her former Employer, adopt this Custodial Account for the
purpose of receiving a rollover contribution from the prior Employer's Section
403(b) Plan, or from the Custodial Account through which such plan is funded. In
any such event, however, no additional Salary Reduction Contributions or
Employer non-elective contributions shall be made to this Custodial Account
unless a subsequent employer consents to the former Employee's adoption of the
Custodial Account.
DEFINITIONS
As used in this Custodial Account Agreement, the following terms have the
meaning set forth below, unless a different meaning is clearly required by the
context.
(1) "Code" means the Internal Revenue Code of 1986, as amended.
(2) "Custodial Account" means the custodial account established hereunder for
the benefit of the Employee.
(3) "Custodian" shall mean UMB Bank, n.a., c/o Sunstone Financial Group, Inc.,
X.X. Xxx 0000, Xxxxxxxxx, XX 00000-0000.
(4) "Employee" means the person named in the Account Application.
(5) "Employer" means the employer organization named in the Account Application.
(6) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
(7) "Investment Adviser" shall mean Xxx Xxxxxxx Capital Management, Inc., or any
successor or affiliate thereto.
(8) "Investment Company" means the portfolios of the Xxx Xxxxxxx Funds, Inc. or
such other regulated investment companies whose investment Adviser is Xxx
Xxxxxxx Capital Management, Inc., or its successors or affiliates, and whose
shares are authorized (under the terms of the prospectus of the investment
company, and subject to any limitations imposed by the Employer's plan) for
purchase under this Agreement.
(9)"Salary Reduction Contributions" means contributions made pursuant to a
written agreement between the Employee and the Employer, and by which the
Employee's salary for future services is reduced and the amount of such
reduction is contributed by the Employer to the Custodial Account.
SCHEDULE OF FEES
The Custodian will charge the following fees for servicing your 403(b)(7)
account:
---------------------------------------------------------------------
Annual maintenance fee $15 per account
---------------------------------------------------------------------
Distribution (including rollover or direct transfers) $15 each
---------------------------------------------------------------------
Refund of excess contribution $15 each
---------------------------------------------------------------------
Any outgoing wire transfer $10 each
---------------------------------------------------------------------
The annual maintenance fee will be deducted from your account on the last
business day of each September. The charge for refund of excess contribution
will be deducted from your account at the time of the refund. These fees are
subject to change.
XXX XXXXXXX FUNDS
X.X. XXX 0000
XXXXXXXXX, XX 00000-0000
