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Exhibit 14
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Xxxxxxx Investment Management L.L.C.
INDIVIDUAL RETIREMENT ACCOUNT DISCLOSURE STATEMENT
CUSTODIAL ACCOUNT AGREEMENT
Xxxxxxx Investment Management L.L.C.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
DISCLOSURE STATEMENT
The following information is the disclosure statement required by Federal tax
regulations. You should read this Disclosure Statement, the Custodial Account
Agreement, and the prospectus for the Xxxxxxx Growth Fund in which your IRA
contributions will be invested.
REVOCATION OF YOUR IRA
You have the right to revoke your Xxxxxxx Growth Fund IRA ("Xxxxxxx XXX") and
receive the entire amount of your contribution by notifying PNC Bank, National
Association, the Custodian of your IRA, in writing within seven days of
establishment of your IRA. If you revoke your IRA within seven days, you are
entitled to a return of the entire amount paid by you, without adjustment for
such items as sales commission, administrative expenses, or fluctuations in
market value. If you decide to revoke your IRA, you should deliver or mail
notice to:
Regular Mail:
PNC Bank, National Association
c/o PFPC Inc.
Attn: The Xxxxxxx Funds, Inc., IRA
P.O. Box 8949
Wilmington, DE 19899-8949
Overnight Express:
PNC Bank, National Association
c/o PFPC Inc.
Attn: The Xxxxxxx Funds, Inc., IRA
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
0-000-000-0000
This notice should be signed by you and include the following:
1. the date;
2. a statement that you elect to revoke your Xxxxxxx XXX;
3. your Xxxxxxx XXX account number;
4. the date your Xxxxxxx XXX was established; and
5. your signature and your printed or typed name.
Mailed notice will be deemed given on the date that it is postmarked if it is
deposited in the United
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States mail, first class postage prepaid and properly addressed. This means that
if you mail your notice, it must be postmarked on or before the seventh day
after your Xxxxxxx XXX was opened. A revoked IRA will be reported to the
Internal Revenue Service and the Depositor on Forms 1099-R and 5498.
YOUR INDIVIDUAL RETIREMENT ACCOUNT (IRA)
You have opened a Xxxxxxx Growth Fund Individual Retirement Account which is an
account for the exclusive benefit of you and your beneficiaries, created by a
written instrument (the Custodial Account Agreement). The following requirements
apply to your Xxxxxxx XXX:
1. Contributions, transfers, and rollovers may be made only in "cash" by
check, draft, wire transfer, or other form acceptable to the Custodian;
2. The Custodian must be a bank;
3. No part may be invested in life insurance;
4. Your interest must be nonforfeitable (not subject to escheat laws);
5. The assets of the custodial account may not be mixed with other property
except in a common investment fund; and
6. You must begin receiving distributions from your account no later than
April 1 of the year following the year in which you become 70 1/2 years
old; and distribution must be completed over a period that is not longer
than the joint life expectancy of you and your beneficiary.
CONTRIBUTIONS
You may not contribute more than 100% of your compensation or earnings from
self-employment, and the maximum contribution is $2,000 per tax year. If your
spouse is not employed or earns less than you earn, you may also contribute to a
Spousal IRA. The maximum contribution to the Spousal IRA is the lesser of (a)
$2,000, or (b) the combined compensation of both spouses, minus the dollar
amount of the IRA contribution made by the compensated (or more highly
compensated) spouse.
EXCESS CONTRIBUTIONS
Amounts contributed to your IRA in excess of the allowable limit will be subject
to a nondeductible excise tax of 6% for each year until the excess is used up as
an allowable contribution (in a subsequent year) or returned to you. A
distribution of excess contributions must be included in your taxable income
when distributed, and may also be subject to the 10% excise tax on early
distributions discussed below. The 6% excise tax will not apply if the excess
contribution and earnings applicable to it are distributed by the due date for
your Federal Income Tax Return, including extensions. If such a distribution is
made by the due date of your tax return, only the earnings are taxable.
INCOME TAX DEDUCTION
Your contribution may be deductible on your Federal Income Tax Return. However,
there is a phase-out of the IRA deduction if either you or your spouse (if you
file a joint return) is an active participant in an employer-sponsored
retirement plan. The IRA deduction is reduced proportionately as adjusted gross
income increases from $25,000 to $35,000 for a single individual, $40,000 to
$50,000 for a married couple filing a joint return, or from $0 to $10,000 for a
married individual who is an active participant and files a separate return. The
amount of the reduction is equal to 20% of the amount by which your adjusted
gross income exceeds the $25,000, $40,000, and $0 amounts, respectively. Your
contributions in excess of the permitted deduction will be nondeductible
contributions.
TAXATION OF DISTRIBUTIONS
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The income of your IRA is not taxed until the money is distributed to you.
Distributions are taxable as ordinary income when received except that the
amount of any distribution representing non-deductible contributions is not
taxed.
In general, you may "rollover" a distribution from another IRA, an eligible
rollover distribution from your employer's qualified plan, or distributions from
certain tax deferred annuities or accounts. If a distribution is rolled over,
i.e. deposited to your IRA within 60 calendar days of receipt, the amount rolled
over is not taxable. The IRS enforces the 60-day time limit strictly. You may
rollover a portion of a distribution in which case the remainder will be subject
to tax. The IRS requires that distributions from your employer's qualified plan
have 20% of the distribution withheld for income tax unless your money is
transferred in a direct asset transfer to an eligible retirement plan such as
another qualified plan or IRA. The rules regarding rollovers are complex and you
should consult your tax adviser prior to rolling over all or part of a
distribution.
Distributions under $10 will not be reported to you on IRS Form 1099-R after
December 31, 1996, as allowed under IRS regulations. However, you must still
report these distributions to the IRS on IRS Form 1040 as well as other forms
which may be required to properly file your tax return.
PENALTY TAX ON CERTAIN TRANSACTIONS
Excess Contributions
If you make an excess contribution to your IRA and it is not corrected on a
timely basis, an excise tax of 6% is imposed on the excess amount. This tax will
apply each year to any part or all of the excess which remains in your account.
Early Distributions
Your receipt or use of any portion of your account before you attain age 59 1/2
is considered an early distribution unless the distribution is a result of death
or disability or is rolled over. The amount of any early taxable distribution
(excluding any amount representing a return of nondeductible contributions) is
subject to a penalty tax equal to 10% of the distribution. A pre-age 59 1/2
taxable distribution will be exempt from the 10% penalty tax if it is part of a
scheduled series of substantially equal payments over your life, or over the
joint life expectancy of you and a beneficiary, or if it was made because you
became disabled, or if it is used specifically for deductible medical expenses
which exceed 7.5% of your adjusted gross income, or if it is used for health
insurance cost due to your unemployment (consult IRS Publication 590 for
specifics on these exceptions.) If you request a distribution in the form of a
series of substantially equal payments, and you modify the payments before 5
years have elapsed and before attaining age 59 1/2, the 10% additional income
tax will apply retroactively to the year payments began through the year of such
modification. This 10% penalty is in addition to any Federal income tax that is
owed at distribution.
Required Distributions
You are required to begin receiving minimum distributions from your IRA no later
than April 1 following the calendar year in which you reach the age of 70 1/2.
The distribution may be paid either in installments, or in a lump sum. The
installments may be paid over your life, or over the joint and last survivor
life expectancy of you and your designated beneficiary. If the amount
distributed during a taxable year is less than the minimum amount required to be
distributed, the recipient is subject to a
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penalty tax equal to 50% of the difference between the amount distributed and
the amount required to be distributed.
Excess Distributions
If you receive more than $155,000 in a calendar year (as of 1996, subject to
annual cost-of-living adjustments) from certain retirement plans, a 15% tax is
imposed on the amount in excess of that amount. (Special rules may apply to
benefits accumulated prior to August 1, 1986.) All distributions from IRAs,
qualified retirement plans, and tax-sheltered annuities must be added together
for purposes of this excise tax.
There are several possible favorable elections that may reduce or eliminate this
tax. The rules are very complicated. You should consult a competent tax adviser.
The 15% excess distribution tax has been suspended for distributions received in
1997, 1998 and 1999.
ADDITIONAL INFORMATION ON DISTRIBUTIONS
An IRA distribution request form is available from the Custodian, and should be
obtained and used to request any distribution from your IRA.
PROHIBITED TRANSACTIONS
If you or your beneficiary engage in any prohibited transaction (such as any
sale, exchange, borrowing, or leasing of any property between you and the
account; or any other interference with the independent status of the account),
the account will lose its exemption from tax and be treated as having been
distributed to you. The value of the entire account will be includable in your
gross income. If you are under age 59 1/2, you would also be subject to the 10%
penalty tax on early distributions.
If you or your beneficiary use (pledge) all or any part of your IRA as security
for a loan, then the portion so pledged will be treated as if distributed to
you, and will be taxable to you as ordinary income, and subject to a 10% penalty
tax if you have not attained age 59 1/2 during the year which you make such a
pledge.
INCOME TAX WITHHOLDING
The Custodian is required to withhold income tax from any distribution from your
IRA to you at the rate of 10% unless you choose not to have tax withheld. You
may elect out of withholding by advising the Custodian in writing, prior to the
distribution, that you do not want tax withheld from the distribution. This
election may be made on IRS Form W-4P, or any other form acceptable to the
Custodian. If you do not elect out of tax withholding, you may direct the
Custodian to withhold an additional amount of tax in excess of 10%.
ADDITIONAL INFORMATION
For more detailed information, you may obtain Publication 590, Individual
Retirement Arrangements (IRAs) from any district office of the Internal Revenue
Service or by calling 0-000-XXX-XXXX.
Any IRA transaction may have tax consequences; consult your tax adviser to
obtain information about the tax consequences in connection with your particular
circumstances.
INFORMATION ABOUT YOUR INVESTMENTS
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A mutual fund investment involves investment risks, including possible loss of
principal. In addition, growth in the value of your account is neither
guaranteed nor projected due to the characteristics of a mutual fund investment.
Detailed information about the shares of each mutual fund available for
investment by your Xxxxxxx XXX must be furnished to you in the form of a
prospectus. The method for computing and allocating annual earnings is set forth
in the prospectus. (See prospectus section entitled "Dividends, Distributions
and Taxes.") If you made an initial contribution of $1,000 on the first day of a
calendar year and no further investment during that year, your contribution
would also be subject to certain costs and expenses which would reduce any yield
you might obtain from your investment. (See the prospectus section entitled
"Shareholder and Fund Expenses and Costs" and the sections referred to therein.)
For further information regarding expenses, earnings, and distributions, see the
Fund's financial statements, prospectus and/or statement of additional
information.
FEES AND CHARGES
The charges in connection with your Xxxxxxx XXX are set forth in the
Application. The Custodian may also charge a service fee in connection with any
distribution from your IRA.
IRS APPROVED FORM
Your Xxxxxxx XXX is the Internal Revenue Service's model custodial account
contained in IRS Form 5305-A. Certain additions have been added in Article VIII
of the form. By following this form, your Xxxxxxx XXX meets the requirements of
the Internal Revenue Code. However, the IRS has not endorsed the merits of the
investments allowed under the IRA. Form 5305-A may also be used by qualifying
employers in conjunction with Form 5305-SEP to establish a simplified employee
pension plan (SEP) on behalf of employees. If your IRA is part of a SEP, details
regarding SEPs should also be provided by your employer.
CUSTODIAL ACCOUNT AGREEMENT
(Under Section 408(a) of the Internal Revenue Code - Form 5305-A (Revised
October 1992))
The Depositor (Contributor) whose name appears in the accompanying Application
is establishing an Individual Retirement Account (IRA) (under section 408(a) of
the Internal Revenue Code of 1986, as amended, the "Code") to provide for his or
her retirement and for the support of his or her beneficiary(ies) after death.
The Custodian, PNC Bank, National Association, has given the Depositor the
disclosure statement required under Treasury Regulations section 1.408-6.
The Depositor and the Custodian make the following agreement:
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a simplified employee pension plan as described in section
408(k).
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ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance contracts,
nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within the
meaning of section 408(m)) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be
made in accordance with the following requirements and shall otherwise
comply with section 408(a)(6) and Proposed Regulations section 1.408-8,
including the incidental death benefit provisions of Proposed Regulations
section 1.401(a)(9)-2, the provisions of which are incorporated by
reference.
2. Unless otherwise elected by the time distributions are required to begin to
the Depositor under paragraph 3, or to the surviving spouse under paragraph
4, other than in the case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Depositor and the surviving spouse and shall apply to all subsequent years.
The life expectancy of a nonspouse beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be, or begin
to be, distributed by the Depositor's required beginning date (April 1
following the calendar year end in which the Depositor reaches age 701/2).
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:
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(a)If the Depositor dies on or after distribution of his or her interest has
begun, distribution must continue to be made in accordance with paragraph
3.
(b)If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the Depositor
or, if the Depositor has not so elected, at the election of the beneficiary
or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or
beneficiaries starting by December 31 of the year following the
year of the Depositor's death. If, however, the beneficiary is the
Depositor's surviving spouse, then this distribution is not
required to begin before December 31 of the year in which the
Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Depositor's required beginning date, even though payments may actually have
been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in
the account.
5. In the case of a distribution over life expectancy in equal or substantially
equal annual payments, to determine the minimum annual payment for each
year, divide the Depositor's entire interest in the Custodial account as of
the close of business on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and last survivor expectancy
of the Depositor and the Depositor's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies). In the case of
distributions under paragraph 3, determine the initial life expectancy (or
joint life and last survivor expectancy) using the attained ages of the
Depositor and 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 section 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor prescribed by the Internal Revenue Service.
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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 Depositor and the Custodian.
ARTICLE VIII
1. All funds in the custodial account (including earnings) shall be invested in
shares of beneficial interest of any one or more of the regulated investment
companies managed by the company listed on the Application Form contained in
this package or any of its subsidiaries or affiliates, and which have been
designated by such company as eligible for investment under this custodial
account, which investment companies shall be collectively referred to as the
"Funds" and which shares shall be collectively referred to as "Fund Shares."
Fund Shares shall be purchased at the public offering value for Fund Shares
next to be determined after receipt of the contribution by the Custodian or
its agent.
2. The shareholder of record of all Fund Shares shall be the Custodian or its
nominee.
3. The Depositor shall, from time to time, direct the Custodian to invest the
funds of his/her custodial account in Fund Shares. Any funds which are not
directed as to investment will be returned to the Depositor without being
deemed to have been contributed to his/her custodial account. The Depositor
shall be the beneficial owner of all Fund Shares held in the custodial
account, and the Custodian shall not vote any such shares except upon
written direction of the Depositor.
4. The Custodian agrees to forward, or to cause to be forwarded, to every
Depositor the then-current prospectus(es) of the Funds, as applicable, which
have been designated by the Custodian as eligible for investment under the
custodial account and selected by the Depositor for such investment, and all
notices, proxies and related proxy soliciting materials applicable to said
Fund Shares received by it.
5. Each Depositor shall have the right by written notice to the Custodian to
designate or to change a beneficiary to receive any benefit to which such
Depositor may be entitled in the event of his/her death prior to the
complete distribution of such benefit. If no such designation is in effect
on the Depositor's death, or if the designated beneficiary has predeceased
the Depositor, the beneficiary shall be the Depositor's estate.
6. (a) The Custodian shall have the right to receive rollover contributions
as described in Article I of this Agreement. The Custodian reserves the
right to refuse to accept any property which is not in the form of cash.
(b) The Custodian, upon written direction of the Depositor and after
submission to the Custodian of such documents as it may reasonably require,
shall transfer the assets held under this Agreement (reduced by (1) any
amounts referred to in paragraph 8 of this Article VIII and (2) any amounts
required to be distributed during the calendar year of transfer) to a
qualified retirement plan (except cash contributions from the Depositor
described in Article I), to a successor individual retirement
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account, to an individual retirement annuity for the Depositor's benefit, or
directly to the Depositor.
Any amounts received or transferred by the Custodian under this paragraph 6
shall be accompanied by such records and other documents as the Custodian
deems necessary to establish the nature, value and extent of the assets and
of the various interests therein.
7. Without in any way limiting the foregoing, the Depositor hereby irrevocably
delegates to the Custodian the right and power to amend at any time and from
time to time the terms and provisions of this Agreement and hereby consents to
such amendments, provided they shall comply with all applicable provisions of
the Code, the Treasury regulations there-under and with any other governmental
law, regulation or ruling. Any such amendments shall be effective when the
notice of such amendments is mailed to the address of the Depositor indicated by
the Custodian's records.
8. Any income taxes or other taxes of any kind whatsoever levied or assessed
upon or in respect of the assets of the custodial account or the income arising
therefrom, any transfer taxes incurred, all other administrative expenses
incurred, all other administrative expenses incurred by the Custodian in the
performance of its duties including fees for legal services rendered to the
Custodian, and the Custodian's compensation may be paid by the Depositor and,
unless so paid within such time period as the custodian may establish, shall be
paid from the Depositor's custodial account. The Custodian reserves the right to
change or adjust its compensation upon 30 days' advance notice to the Depositor.
9. The benefits provided hereunder shall not be subject to alienation,
assignment, garnishment, attachment, execution or levy of any kind, and any
attempt to cause such benefits to be so subjected shall not be recognized,
except to such extent as may be required by law.
10. The Custodian may rely upon any statement by the Depositor when taking any
action or determining any fact or question which may arise under this Custodial
Agreement. The Depositor hereby agrees that the Custodian will not be liable for
any loss or expense resulting from any action taken or determination made in
reliance on such statement. The Depositor assumes sole responsibility for
assuring that contributions to the custodial account satisfy the limits
specified in the appropriate provisions of the Code.
11. The Custodian may resign at any time upon 30 days' written notice to the
Depositor and may be removed by the Depositor at any time upon 30 days' written
notice to the Custodian. Upon the resignation or removal of the Custodian, a
successor Xxxxxxxxx shall be appointed within 30 days of such resignation notice
and in the absence of such appointment, the Custodian shall appoint a successor
unless the Agreement be sooner terminated. Any successor Custodian shall be a
bank (as defined in section 408(n) of the Code) or such other person found
qualified to act as a Custodian under an individual account plan by the
Secretary of the Treasury or his delegate. The appointment of a successor
Xxxxxxxxx shall be effective upon receipt by the Custodian of such successor's
written acceptance which shall be submitted to the Custodian and the Depositor.
Within 30 days of the effective date of a successor Xxxxxxxxx's appointment, the
Custodian shall transfer and deliver to the successor Custodian applicable
account records and assets of the custodial account (reduced by any unpaid
amounts referred to in paragraph 8 of this Article VIII). The successor
Custodian shall be subject to the provisions of this Agreement (or any successor
thereto) on the effective date of its appointment.
12. Notwithstanding any provision hereof to the contrary, for taxable years in
which contributions to
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the custodial account are to qualify as contributions to a Spousal Individual
Retirement Account, the provisions of this Paragraph (12) of Article VIII shall
apply. In addition to the Depositor's contribution as set forth in Article I,
the Depositor may also contribute to a Spousal Individual Retirement Account if
the Depositor's spouse is not employed or earns less than the Depositor earns. A
separate custodial account shall be established under this Agreement in the name
of the spouse, who shall thereafter be deemed to be the Depositor with respect
to such separate custodial account. The maximum contribution to the Spousal
Individual Retirement Account for a given tax year shall not exceed the lesser
of:
(i) $2,000, or
(ii) The combined compensation of both spouses, minus the dollar amount
of the IRA contribution made by the compensated (or more highly
compensated) spouse.
13. The Custodian shall, from time to time, in accordance with instructions in
writing from the Depositor, make distributions out of the custodial account
to the Depositor in the manner and amounts as may be specified in such
instructions (reduced by any amounts referred to in Article VIII, paragraph
8). An IRA distribution request form is available from the Custodian, and
should be obtained and used to request any distribution from your IRA.
Notwithstanding the provisions of Article IV above, the Custodian assumes
(and shall have) no responsibility to make any distribution to the Depositor
(or the Depositor's beneficiary if the Depositor is deceased) unless and
until such written instructions specify the occasion for such distribution
and the elected manner of distribution, except as set forth in the second
part of this paragraph (13) below, with respect to age 70 1/2 distributions.
Prior to making any such distribution from the custodial account, the
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 the
Custodian, but the Custodian shall not be liable for complying with written
instructions which appear on their face to be genuine, or for refusing to
comply if not satisfied such instructions are genuine, and assumes no duty
of further inquiry. Upon receipt of proper written instructions as required
above, the Custodian shall cause the assets of the custodial account to be
distributed in cash and/or in kind, as specified in such written order.
The Depositor may select as a method of distribution under Article IV,
paragraph 3, option (a), (d), or (e); but may not select option (b) or (c),
notwithstanding description of such in Article IV. If the Depositor requests
age 701/2 distribution by timely written instruction but does not choose any
of the methods of distribution described above by the April 1st following
the calendar year in which he or she reaches age 70 1/2, distribution to the
Depositor will be made in accordance with Article IV, paragraph 3, option
(d). If the Depositor does not request age 70 1/2 distribution from the
custodial account by timely written instruction, or does not specify a
method of calculating the amount of the age 70 1/2 distribution which the
Depositor will be taking from another IRA(s), calculation of the current
year Required Minimum Distribution amount which cannot be transferred or
rolled over to another IRA will be made in accordance with Article IV,
paragraph 3, option (d).
14. Distribution of the assets of the custodial account shall be made in
accordance with the provisions of Article IV as the Depositor (or the
Depositor's beneficiary if the Depositor is deceased) shall elect by
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written instructions to the Custodian; subject, however, to the provisions
of sections 401(a)(9), 408(a)(6) and 403(b)(10) of the Code, the regulations
promulgated thereunder, and the following:
(i) The recalculation of life expectancy of the Depositor and/or the
Depositor's spouse may be made only at the written election of the
Depositor. The recalculation of life expectancy of the surviving spouse
shall only be made at the written election of the surviving spouse.
(ii) If the Depositor dies before his/her entire interest in the
custodial account has been distributed, and if the designated beneficiary of
the Depositor is the Depositor's surviving spouse, the spouse may treat the
custodial account as his/her own individual retirement arrangement. This
election will be deemed to have been made if the surviving spouse makes a
regular IRA contribution to the custodial account, makes a rollover to or
from such custodial account, or fails to receive a payment from the
custodial account within the appropriate time period applicable to the
deceased Depositor under section 401(a)(9)(B) of the Code.
(iii) With respect to distributions in calendar years beginning in or
after 1989, if the Depositor's designated beneficiary is not his/her spouse,
then distributions to the Depositor and his/her beneficiary commencing with
the Depositor's required beginning date shall comply with the minimum
distribution incidental benefit requirement.
The provisions of this paragraph (14) of Article VIII shall prevail over the
provisions of Article IV to the extent the provisions of this paragraph (14) are
permissible under proposed and/or final regulations promulgated by the Internal
Revenue Service.
15. In the event any amounts remain in the custodial account after the death of
the Depositor, the rights of the Depositor hereunder shall thereafter be
exercised by his or her beneficiary.
16. The Custodian is authorized to hire agents (including any transfer agent
for Fund Shares) to perform certain duties hereunder.
17. This Agreement shall terminate coincident with the complete distribution of
the assets of the Depositor's account.
18. All notices to be given by the Custodian to the Depositor shall be deemed
to have been given when mailed to the address of the Depositor indicated by
the Custodian's records.
19. The Custodian shall not be responsible for any losses, penalties or other
consequences to the Depositor or any other person arising out of the making
of, or the failure to make, any contribution or withdrawal.
20. In addition to the reports required by paragraph (2) of Article V, the
Custodian shall periodically cause to be mailed to the Depositor in respect
of each such period an account of all transactions affecting the custodial
account during such period and a statement showing the custodial account as
of the end of such period. If, within 60 days after such mailing, the
Depositor has not given the Custodian written notice of any exception or
objection thereto, the periodic accounting shall be deemed to have been
approved and, in such case or upon the written approval of the Depositor,
the Custodian shall be released, relieved and discharged with respect to
all matters and statements set forth in such accounting as though the
account had been settled by judgment or decree of a court of
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competent jurisdiction.
21. In performing the duties conferred upon the Custodian by the Depositor
hereunder, the Custodian shall act as the agent of the Depositor. The
parties do not intend to confer any fiduciary duties on the Custodian and
none shall be implied. The Custodian shall not be liable (and does not
assume any responsibility) for the collection of contributions, the
deductibility or the propriety of any contribution under this Agreement,
the selection of any Fund Shares for this custodial account, or the purpose
or propriety of any distribution made in accordance with Article IV and
Paragraph 13, 14 or 15 of Article VIII, which matters are the sole
responsibility of the Depositor or the Depositor's beneficiary, as the case
may be.
22. The Custodian shall be responsible solely for the performance of those
duties expressly assigned to it in this Agreement and by operation of law.
The Custodian shall have no duty to account for deductible contributions
separately from nondeductible contributions, unless required to do so by
applicable law. In determining the taxable amount of a distribution, the
Depositor shall rely only on his or her Federal tax records, and the
Custodian shall withhold Federal income tax from any distribution from the
custodial account as if the total amount of the distribution is includable
in the Depositor's income.
23. Except to the extent superseded by Federal law, this Agreement shall be
governed by, and construed, administered and enforced according to, the
laws of the Commonwealth of Pennsylvania, and all contributions shall be
deemed made in Pennsylvania.
GENERAL INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
Purpose of Form
Form 5305-A is a model custodial account agreement that meets the requirements
of section 408(a) and has been automatically approved by the IRS. An individual
retirement account (IRA) is established after the form is fully executed by both
the individual (Depositor) and the Custodian and must be completed no later than
the due date of the individual's income tax return for the tax year (without
regard to extensions). This account must be created in the United States for the
exclusive benefit of the Depositor or his or her beneficiaries.
Individuals may rely on regulations for the Tax Reform Act of 1986 to the extent
specified in those regulations.
Do not file Form 5305-A with the IRS. Instead, keep it for your records.
For more information on IRAs, including the required disclosure you can get from
your custodian, get Pub. 590, Individual Retirement Arrangements (IRAs).
Definitions
Custodian. The Custodian must be a bank or savings and loan association, as
defined in section 408(n), or any person who has the approval of the IRS to act
as custodian.
Depositor. The Depositor is the person who establishes the custodial account.
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Identifying Number
The Depositor's social security number will serve as the identification number
of his or her IRA. An employer identification number is required only for an IRA
for which a return is to be filed to report unrelated business taxable income.
An employer identification number is required for a common fund created for
IRAs.
IRA for Nonworking Spouse
Form 5305-A may be used to establish the IRA custodial account for a nonworking
spouse.
Contributions to an IRA custodial account for a nonworking spouse must be made
to a separate IRA custodial account established by the nonworking spouse.
SPECIFIC INSTRUCTIONS
Article IV. Distributions made under this article may be made in a single sum,
periodic payment, or a combination of both. The distribution option should be
reviewed in the year the Depositor reaches age 70 1/2 to ensure that the
requirements of section 408(a)(6) have been met.
Article VIII. Article VIII and any that follow it may incorporate additional
provisions that are agreed to by the Depositor and Custodian to complete the
agreement. They may include, for example, definitions, investment powers, voting
rights, exculpatory provisions, amendment and termination, removal of the
Custodian, Custodian's fees, state law requirements, beginning date of
distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the Depositor, etc. Use additional pages if
necessary and attach them to this form.
Note. Form 5305-A may be reproduced and reduced in size for adoption to passbook
purposes.
Custodian:
PNCBank, N.A.
P.O. Box 8949
Wilmington, DE 19899
Distributor:
Xxxxxxx & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
