Newport Trust Company 403(b)(7) Individual Custodial Account Agreement

Transcription

1 Newport Trust Company 403(b)(7) Individual Custodial Account Agreement

2 Newport Trust Company 403(b)(7) Individual Custodial Account Agreement This Newport Trust Company 403(b)(7) Individual Custodial Account Agreement sets forth the terms of the Account established by the Custodian on behalf of the Participant named in the Application. The Account is intended to constitute a contract that satisfies the requirements of 403(b)(7) of the Code and of 1.403(b)-3 of Treasury Regulations, and shall become effective November 4, 2017 (the Effective Date ). The terms of the Application are a part of this Agreement and are incorporated herein by reference. This Agreement amends and supersedes any prior Vanguard 403(b)(7) Custodial Account Agreement with respect to which Newport Trust Company has been designated as the successor Custodian. The Account is established pursuant to an Employer Plan. The Employer is solely responsible for maintaining and administering the Plan in compliance with the requirements of Code 403(b) and related Treasury Regulations. Any provisions of the Plan that purport to impose obligations or duties on the Custodian that are in addition to those set forth in this Agreement shall have no effect unless the Custodian has agreed in writing to assume such additional obligations or duties. In performing its duties under this Agreement, the Custodian will act upon directions it receives from the Recordkeeper, from a Participant or Beneficiary via the Recordkeeper, or from the Employer. Article I Definitions The following terms when used herein with initial capital letters shall be defined as follows: 1.1 Account. The custodial account established under this Agreement for the benefit of the Participant or Beneficiary. 1.2 Agreement. The Newport Trust Company 403(b)(7) Individual Custodial Account Agreement as set forth herein, including the provisions set forth in the Application and the Establishment Form, as such may be amended from time to time. 1.3 Application. The online Vanguard 403(b) Account Application executed by the Eligible Employee providing for the establishment of the Account in accordance with the terms and conditions of this Agreement. 1.4 Beneficiary. The individuals or entities designated in accordance with the provisions of 5.6 to receive any undistributed amounts credited to the Account upon the Participant s death. 1.5 Code. The Internal Revenue Code of 1986, as amended. 1.6 Custodian. Newport Trust Company, a New Hampshire chartered trust company, or any successor thereto appointed in accordance with the provisions of Elective Deferral. A contribution to the Account made by the Employer on behalf of the Participant pursuant to a salary reduction agreement, as described in Code 402(g)(3)(C). 1.8 Eligible Employee. An employee, as defined in Treasury Regulation 1.403(b)-2(b)(9), of the Employer who meets the eligibility requirements for participation under the Plan. 1.9 Eligible Retirement Plan. A plan described in 402(c)(8)(B) of the Code Eligible Rollover Distribution. Any distribution qualifying as an eligible rollover distribution under 402(c) of the Code, and the regulations thereunder Employer. An eligible employer, as described in Treasury Regulation 1.403(b)-2(b)(8), sponsoring the Plan under which the Account is being maintained ERISA. The Employee Retirement Income Security Act of 1974, as amended, and including any regulations issued thereunder Establishment Form. The Vanguard 403(b) Services Establishment Form executed by an authorized representative of the Employer evidencing the Employer s assent to the terms of this Agreement. 1

3 1.14 Exempt Plan. A Plan that is intended to be exempt from ERISA pursuant to Department of Labor regulation (f) Participant. The Eligible Employee, or former Eligible Employee, for whom an Account has been established and who has not received a distribution of his or her entire benefit under the Account Plan. The Employer s written plan which, in both form and operation, satisfies the requirements of 403(b) of the Code and the regulations thereunder and under which the Account is maintained Recordkeeper. The Vanguard Group, Inc. or any of its agents or assigns Recordkeeping Agreement. The Vanguard 403(b) Administrative and Recordkeeping Service Description executed by the Employer and the Recordkeeper Spouse. The person to whom the Participant was married at the time of the Participant s death Successor Beneficiary. The individuals or entities designated in accordance with the provisions of 5.6(c) to receive any undistributed amounts credited to the Account upon the death of the Beneficiary Vanguard Mutual Funds. One or more of the regulated investment companies of The Vanguard Group of Investment Companies that are available investments under this Agreement Vendor. A custodian that maintains 403(b)(7) custodial accounts or an insurance company that issues 403(b)(1) annuity contracts. Article II Establishment of Account Upon receipt in good order of the Application, the Establishment Form, and all other documentation required by the Custodian and/or the Recordkeeper, the Custodian shall establish an Account for the Participant. By submitting an Application and having an Account established by the Custodian, an Eligible Employee shall become a Participant and will be bound by the terms and conditions of this Agreement. The Custodian agrees to act as non-discretionary, directed custodian of the Account on the terms and conditions of this Agreement. As custodian of the Account, Custodian shall hold, invest and distribute all of the assets of the Account that are received by it in accordance with the terms of this Agreement. Article III Contributions 3.1 Acceptance by Custodian. Unless the Employer terminates the Custodian s status as an approved Vendor by written notification in accordance with 10.5, the Custodian shall accept and process contributions, exchanges, and transfers as provided in this Article III in the form of cash or other property acceptable to it in its sole discretion, provided all information necessary to process the contribution has been received in good order from the Recordkeeper or other third party. The Custodian will maintain safe custody of such money, securities and other property it actually receives for the Account. 3.2 Employer Contributions. The Custodian will allocate Employer contributions to the Participant s Account in accordance with directions received from the Employer via the Recordkeeper in a form and manner acceptable to the Recordkeeper and Custodian. Any contributions which are not vested shall be maintained in a deemed Code 403(c) account. Upon vesting, such contributions shall be subsumed into the Participant s Account. 3.3 Contribution Limitations. (a) Aggregation. To the extent required by 403(b) of the Code, for purposes of determining whether an applicable contribution limit has been exceeded, contributions to the Account under the Plan (excluding rollover contributions) shall be aggregated with contributions by the Employer for the Participant to all other 403(b)(7) custodial accounts or 403(b) annuity contracts under the Plan and all other plans, contracts or arrangements of the Employer. For purposes of the limits described in this 3.3, Employer means the Employer and any other entity that is treated as a single employer with the Employer under Code 414 and guidance issued thereunder. 2

4 (b) Elective Deferral Limit. Elective Deferrals and designated Roth contributions to the Participant s Account may not exceed the amount permitted under 402(g)(1) of the Code, as indexed periodically for cost-ofliving increases. Notwithstanding anything to the contrary in the foregoing, to the extent provided by the Plan, Elective Deferral and designated Roth contributions in excess of this limit may be made (i) by a qualified employee of a qualified organization to the extent permitted under Treasury Regulation 1.403(b)-4(c)(3) and (ii) by a Participant who will attain age 50 in the calendar year to the extent permitted under Treasury Regulation 1.403(b)-4(c)(2). (c) Maximum Annual Contribution Limit. In accordance with 1.403(b)-3(a)(9), the total annual additions made to the Participant s Account (excluding age 50 catch-up contributions under 414(v) of the Code) may not exceed the limit on annual additions imposed by 415 of the Code. (d) Excess Amounts. The Employer shall be solely responsible for following reasonable procedures to prevent excess deferrals and contributions to the Participant s Account, determining whether any contributions exceed the limits of this Article, and for ensuring that any excess amounts are timely corrected. The Custodian shall distribute excess deferrals, adjusted for any income or loss allocable thereto, upon the direction of the Recordkeeper, no later than the first April 15 following the close of the taxable year in accordance with 1.403(b)-4(f)(4). The Custodian shall also distribute excess contributions or other contributions made in violation of the nondiscrimination requirements under s 401(m) and 401(a)(4) of the Code or due to a mistake of fact, upon the direction of the Recordkeeper. 3.4 Rollover Contributions. The Custodian, upon the direction of the Recordkeeper, shall accept rollover contributions of an Eligible Rollover Distribution from an Eligible Retirement Plan to the extent the Plan provides for the receipt of such rollovers. Such contributions may include designated Roth contributions described in 402A of the Code or after-tax contributions, to the extent permitted under the Plan. Participant rollover contributions shall be made in a form and manner acceptable to the Recordkeeper. 3.5 Contract Exchanges. The Custodian, upon the direction of the Recordkeeper, shall accept contract exchanges from other Vendors made in accordance with Treasury Regulation 1.403(b)-10(b)(2) to the extent that the Plan provides for the receipt of such contract exchanges. 3.6 Plan-to-Plan Transfers. The Custodian, upon the direction of the Recordkeeper, shall accept plan-to-plan transfers made in accordance with Treasury Regulation 1.403(b)-10(b)(3), to the extent that the Plan provides for the receipt of such transfers. 3.7 Participant Responsibility. The Participant shall be responsible for ensuring that any rollover contribution, contract exchange, or plan-to-plan transfer pursuant to this Article is permissible under the terms of the Plan, and shall be responsible for any tax consequences that may result should any such rollover contribution, contract exchange, or plan-to-plan transfer be determined not to constitute a proper rollover contribution, contract exchange or plan-to-plan transfer under the Code and the regulations thereunder. 3.8 Qualified Military Service. Notwithstanding any provision of this Agreement to the contrary, contributions, benefits, and service credit with respect to qualified military service shall be provided in accordance with 414(u) of the Code. Article IV Investments 4.1 Investment of Account. (a) Investment Options. All contributions to the Account shall be invested exclusively in shares of Vanguard Mutual Funds. The Vanguard Mutual Funds made available for investment are subject to change from time to time, due to limitations imposed by the Vanguard Mutual Fund (fund closure, for example), direction of the Employer or other applicable fiduciary (except with respect to an Exempt Plan), and/or by the Custodian or Recordkeeper for administrative reasons. (b) Investment Direction. The Custodian shall invest the assets of the Account in accordance with instructions received from the Recordkeeper. If Participants and Beneficiaries have the right to direct the investment of their Plan accounts, they may provide investment directions to the Recordkeeper which shall remit those instructions to the Custodian. Participants and Beneficiaries will be solely responsible for their own investment losses that may occur as the result of such directions. The Custodian is not responsible for any losses caused by the acts, omissions, delays, or failure to act of any third party 3

5 affecting investment of assets. In making any investment of the assets of the Account, the Custodian shall act only in response to directions and instructions furnished by the Recordkeeper, in a manner deemed acceptable to the Custodian, and shall be under no duty to make any inquiry or investigation with respect thereto. If a contribution, rollover, contract exchange, or plan-to-plan transfer is not accompanied by investment instructions or if, in the opinion of the Custodian, the investment instructions are unclear, incomplete, or not in good order, such assets will be invested in accordance with the contribution allocation instructions currently in effect at the time the contribution, transfer, exchange, or rollover is received. If no contribution allocation instructions are in effect, the Participant directs that such amounts be invested in the Vanguard Target Retirement Fund that corresponds with the Participant's approximate year of retirement, assuming the approximate year of retirement is the year the Participant reaches age 65. If the Participant does not provide his or her birth date to the Recordkeeper, the Participant directs that such amount be invested in the Vanguard Target Retirement Income Fund. Notwithstanding the foregoing, except with respect to an Exempt Plan, the Employer may direct that such amount be defaulted into a different investment, as agreed upon with the Recordkeeper. The Participant is solely responsible for investment of the Account and any losses that may occur as a result of such investments. (c) Contract Exchanges. The Custodian, upon the direction of the Recordkeeper, shall accept instructions to exchange all or a portion of the Account for another 403(b) contract or custodial account under the Plan provided that (i) the Plan provides for the exchange, (ii) the Participant or Beneficiary has an accumulated benefit immediately after the exchange that is at least equal to the accumulated benefit immediately before the exchange (taking into account the accumulated benefit of that Participant or Beneficiary under both 403(b) contracts or custodial accounts immediately before the exchange), (iii) the assets being exchanged will remain subject to distribution restrictions that are not less stringent than those imposed on such assets prior to the exchange, and (iv) the Employer enters into an agreement with the issuer of the other contract as described in Treasury Regulation 1.403(b)-10(b)(2)(i)(C). (d) Transactional Errors. The Custodian must be notified in writing of any errors relating to the execution of investment instructions within sixty (60) days of the date such instructions were executed. Following the sixty (60) day period, Custodian s only duty shall be to invest the relevant assets on a current basis in accordance with the original investment instructions. (e) No Investment Advice. The Participant and the Employer agree that neither the Custodian, the Recordkeeper, nor any agents or affiliates thereof undertake to provide any advice with respect to the selection of Vanguard Mutual Funds to be made available as investment options or with respect to the investment of the Account and that the responsibility of the Custodian to invest in shares of a particular Vanguard Mutual Fund pursuant to the Participant's directions does not constitute an endorsement by the Custodian of that investment. 4.2 Loans. To the extent that (i) loans are permitted under the Plan, and (ii) the Plan s loan procedures are acceptable to the Recordkeeper, the Custodian, at the direction of the Recordkeeper upon the Participant s request, shall make a loan to a Participant from the assets of the Account. No loan from the Account shall be treated as a taxable distribution, except to the extent the Custodian is directed otherwise by the Recordkeeper. 4.3 Account Earnings. All dividends, capital gains distributions, and other earnings received by the Custodian on any shares of a Vanguard Mutual Fund held in the Account shall be automatically reinvested in additional shares of such Vanguard Mutual Fund. 4.4 Record Ownership; Voting of Shares. All shares of the Vanguard Mutual Funds held by the Custodian pursuant to this Agreement shall be registered in the name of the Custodian or its nominee. The Custodian shall direct the Recordkeeper to deliver to the Participant or Beneficiary fund prospectuses and updates thereto, as well as fund financial statements and reports, relating to the Vanguard Mutual Fund shares held in the Account. The beneficial owner of shares allocated to the Account grants to the Custodian the power to exercise on his or her behalf all voting rights associated with such shares, and directs such shares to be voted in accordance with the recommendations of the managers of the funds. Notwithstanding anything to the contrary in the preceding sentence, the Custodian may, in its sole discretion, solicit voting instructions from the beneficial owner by delivering to him or her a voting instruction form, and may vote shares in accordance with any voting instructions received by it from such beneficial owner. 4.5 Indicia of Ownership. Except as permitted by ERISA, the Custodian will not maintain the indicia of ownership of any assets of the Account outside the jurisdiction of the district courts of the United States. 4

6 Article V Distribution of Assets of Custodial Account 5.1 Limitations on Distributions. (a) Restrictions on Distributions of Amounts Other Than Elective Deferrals. Distribution of amounts other than Code 403(b) Elective Deferrals shall be made in accordance with the terms of the Plan and, except as otherwise permitted under Code 403(b) and applicable Treasury Regulations, shall not be made before the Participant: (i) Has a severance from employment (as defined in 1.403(b)-2(b)(19)); (ii) Attains age 59½; (iii) Becomes disabled (as defined under the terms of the Plan); or (iv) Dies. (b) Restrictions on Distributions of Elective Deferrals. Distribution of Code 403(b) Elective Deferrals shall be made in accordance with the terms of the Plan and, except as otherwise permitted under Code 403(b) and applicable Treasury Regulations, shall not be made before the Participant: (i) Has a severance from employment (as defined in 1.403(b)-2(b)(19)); (ii) Attains age 59½; (iii) Has a hardship within the meaning of Treasury Regulation 1.401(k)-1(d)(3); (iv) Becomes disabled (as defined under the terms of the Plan); or (v) Dies. Notwithstanding the above, with respect to rollover contributions and after-tax contributions accepted by the Custodian on or after the Effective Date, and earnings associated therewith, distributions may be made at any time, to the extent permitted under the Plan. (c) Hardship Withdrawals. Distributions on account of a hardship under Treasury Regulation 1.401(k)- 1(d)(3) are subject to the rules and restrictions set forth in that, and shall be available to the extent that the Plan permits hardship withdrawals. Such distributions may not exceed the aggregate dollar amount of elective deferrals held in his or her Account and any other custodial accounts or annuity contracts under the Plan (excluding post-1988 income thereon), reduced by the aggregate dollar amount of prior hardship distributions. A Participant receiving a hardship distribution is prohibited from making contributions to the Plan or any other plan of the Employer for the six-month period beginning on the date the hardship distribution is made. All decisions regarding eligibility for a hardship withdrawal shall be made by the Employer or other entity described in the Recordkeeping Agreement. For purposes of complying with the restrictions described in this 5.1, Employer means the Employer and any other entity that is treated as a single employer with the Employer under Code 414 and guidance issued thereunder. 5.2 Manner of Making Distributions. (a) General. The Custodian shall make distributions from the Account solely in accordance with the directions of the Recordkeeper and at such time and in such amount and form as the Recordkeeper shall direct, and shall have no duty to ascertain whether such instructions comply with the requirements of Code 403(b) or the terms of the Plan, or whether all required approvals and consents for such distribution have been obtained. All distributions shall be made in cash. In making any distributions from the Account, the Custodian shall be fully entitled to rely on the directions or authorization properly furnished to it in accordance with this 5.2. (b) Forms of Distribution. The Participant or Beneficiary may elect to have the distribution from the Account made in one or a combination of the following forms, subject to the provisions of the Plan and the requirements of 5.3 and 5.4: (i) Total distribution; (ii) Partial distribution; (iii) Monthly, quarterly, semiannual, or annual installments; or (iv) By the purchase and distribution of an annuity contract from an insurance company designated by the Participant providing for fixed or variable annuity payments over the life of the Participant, or the lives 5

7 of the Participant and his or her Spouse (or over a period not extending beyond the life expectancy of the Participant or the joint and last survivor life expectancy of the Participant and his or her Spouse). (c) Annuities; Spousal Consent. If the Plan is subject to Title I of ERISA, and unless the Plan is exempt from 205 of ERISA by reason of ERISA 205(b)(1)(C), the Employer is solely responsible for assuring that distributions comply with the annuity and spousal consent requirements of 205 of ERISA. (d) Distribution Upon Death of Participant. In the event the Participant dies before the complete distribution of the assets of the Account, the Participant s Beneficiary(ies) shall be entitled to receive all undistributed amounts credited to the Account. Distribution to the Beneficiary shall be made in the form of a total distribution, partial distribution, periodic installments, or annuity payments as elected by the Beneficiary, subject to the requirements of 5.4. Notwithstanding anything to the contrary in this paragraph (d), if the Plan is subject to Title I of ERISA and is not exempt from the requirements of 205 of ERISA by reason of 205(b)(1)(C), then the Employer is solely responsible for assuring that distributions comply with the requirements of 205 of ERISA, and that the Participant receives the written explanation required under ERISA 205(c)(3)(B) within the times provided therein. 5.3 Minimum Distributions During Participant s Lifetime. (a) General. In accordance with 403(b)(10) of the Code, distributions from the Account must satisfy the minimum distribution requirements under 401(a)(9) of the Code, when aggregated with distributions from other accounts and contracts of the Participant under the Plan. In accordance with Treasury Regulation 1.403(b)-6(e), the distribution rules in 401(a)(9) of the Code shall be applied to the Participant s Account in accordance with Treasury Regulation for purposes of determining required minimum distributions. (b) Required Beginning Date. If a Participant is a more than 5% owner (as defined in Code 416(i)(B)) in the Plan year ending in the calendar year he or she attains age 70-1/2, distributions shall commence no later than April 1 of the calendar year following the calendar year in which he or she attains age 70-1/2. For other Participants, distributions from the Account shall commence no later than April 1 of the calendar year following the calendar year in which the Participant attains age 70½ or the calendar year the Participant retires, whichever is later. (c) Annual Minimum Amount. The amount to be distributed each year, beginning with the calendar year in which the Participant attains age 70½ or retires (as applicable under paragraph (b) above) and continuing through the year of death, may not be less than the amount determined by dividing the value of the Account as of the end of the preceding year by the distribution period in the Uniform Lifetime Table in Q&A-2 of Treasury Regulation 1.401(a)(9)-9, using the Participant s age as of his or her birthday in such year. However, if the Participant s sole designated Beneficiary is his or her surviving Spouse and such Spouse is more than ten years younger than the Participant, then the distribution period is determined under the Joint and Last Survivor Table in Q&A-3 of Treasury Regulation 1.401(a)(9)-9, using the ages as of the Participant s and Spouse s birthdays in such year. (d) Timing of Minimum Distributions. The required minimum distribution for the year the Participant attains age 70½ or retires, whichever is applicable under paragraph (b) above, can be made as late as April 1 of the following year. The required minimum distribution for any other year must be distributed no later than December 31 of that calendar year. (e) Aggregation of 403(b)s. The Participant may satisfy the distribution requirements under 403(b)(10) of the Code by receiving a distribution from one 403(b) custodial account or annuity contract that is equal to the amount required to satisfy the minimum distribution requirements for two or more 403(b) custodial accounts or annuity contracts in accordance with Treasury Regulation 1.403(b)-6(e)(7). (f) Payment of Minimum Distribution Amount. The Custodian shall be fully entitled to rely on the Recordkeepeer s direction to initiate required minimum distribution payments and the Custodian assumes no responsibility for ensuring that such payments satisfy the distribution requirements under 401(a)(9) of the Code. (g) Value of Account. The value of the Account includes the amount of certain rollovers and transfers in accordance with Treasury Regulation 1.401(a)(9)-7. 6

8 5.4 Minimum Distributions After the Participant s Death. In the event the Participant dies prior to the complete distribution of the Account, the remaining balance of the Account will be distributed to the Beneficiary at such time and in such manner as the Beneficiary shall direct, in a form and manner acceptable to the Recordkeeper, subject to the following rules: (a) Participant Dies Before Required Beginning Date. If the Participant dies before his or her required beginning date, the Participant s interest must be distributed at least as rapidly as follows: (i) If the designated Beneficiary is someone other than the Participant s surviving Spouse, the entire interest must be distributed, starting by December 31 of the calendar year following the calendar year of the Participant s death, over the remaining life expectancy of the designated Beneficiary (with such life expectancy of the designated Beneficiary determined using the age of the Beneficiary as of his or her birthday in the year following the year of the Participant s death), or, if the Plan permits and the Beneficiary so elects, in accordance with paragraph (a)(iii) below. (ii) If the Participant s sole designated Beneficiary is the Participant s surviving Spouse, the entire interest must be distributed, starting by December 31 of the calendar year following the calendar year of the Participant s death (or by the end of the calendar year the Participant would have attained age 70½, if later), over such Spouse s life, or, if the Plan permits and the Beneficiary so elects, in accordance with paragraph (a)(iii) below. If the surviving Spouse dies before distributions are required to begin, the remaining interest must be distributed, starting by December 31 of the calendar year following the calendar year of the Spouse s death, over the Spouse s designated Beneficiary s remaining life expectancy determined using such Beneficiary s age as of his or her birthday in the year following the death of the Spouse, or, if the Plan permits and the Beneficiary so elects, in accordance with paragraph (a)(iii) below. If the surviving Spouse dies after distributions are required to begin, any remaining interest will be distributed over the Spouse s remaining life expectancy determined using the Spouse s age as of his or her birthday in the year of the Spouse s death. (iii) If there is no designated Beneficiary, or if the Plan permits and the Beneficiary so elects, in lieu of the distribution method described in paragraphs (a)(i) or (a)(ii) above, the remaining interest must be distributed by the end of the calendar year containing the fifth anniversary of the Participant s death (or of the Spouse s death in the case of the surviving Spouse s death before distributions are required to begin under paragraph (a)(ii) above). (iv) The amount that must be distributed under paragraphs (a)(i) or (ii) above is the amount determined by dividing the value of the Account as of the end of the preceding year by the remaining life expectancy specified in such paragraph. Life expectancy is determined using the Single Life Table in Q&A-1 of Treasury Regulation 1.401(a)(9)-9. If distributions are being made to a surviving Spouse as the sole designated Beneficiary, such Spouse s remaining life expectancy for a year is the number in the Single Life Table corresponding to such Spouse s age in the year. In all other cases, remaining life expectancy for a year is the number in the Single Life Table corresponding to the Beneficiary s age in the year specified in paragraph (a)(i) or (ii) and reduced by one for each subsequent year. (b) Participant Dies On or After Required Beginning Date. If the Participant dies on or after the required beginning date, the remaining portion of his or her interest in the Account must be distributed at least as rapidly as follows: (i) If the designated Beneficiary is someone other than the Participant s surviving Spouse, the remaining interest must be distributed over the remaining life expectancy of the designated Beneficiary or the remaining life expectancy of the Participant, whichever is longer. The Participant s remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year, and the Beneficiary s remaining life expectancy is determined using the Beneficiary s age as of his or her birthday in the year following the year of the Participant s death, reduced by one for each subsequent year. (ii) If the Participant s sole designated Beneficiary is the Participant s surviving Spouse, the remaining interest will be distributed over the longer of (A) the remaining life expectancy of the Participant, determined using the age of the Participant in the year of death, reduced by one for each subsequent year, or (B) the remaining life expectancy of the surviving Spouse, determined using the age of the Spouse as of his or her birthday in the year following the year of the Participant s death, reduced by one for each subsequent year. Any interest remaining after such Spouse s death will be distributed 7

9 over such Spouse s remaining life expectancy determined using the Spouse s age as of his or her birthday in the year of the Spouse s death, reduced by one for each subsequent year. (iii) If there is no designated Beneficiary as of September 30 of the year following the year of the Participant s death, the remaining interest will be distributed over the Participant s remaining life expectancy determined in the year of the Participant s death, reduced by one for each subsequent year. (iv) The amount to be distributed each year under paragraph (b)(i), (ii), or (iii), beginning with the calendar year following the calendar year of the Participant s death, is the amount determined by dividing the value of the Account as of the end of the preceding year by the remaining life expectancy specified in such paragraph. Life expectancy is determined using the Single Life Table in Q&A-1 of 1.401(a)(9)- 9. (c) Designated Beneficiary for Minimum Distribution Purposes. The designated Beneficiary for purposes of determining the distribution period for required minimum distributions after the Participant s death is determined in accordance with Treasury Regulation 1.401(a)(9)-4. In general, the Participant s designated Beneficiary for required minimum distribution purposes is determined based on the Beneficiaries designated as of the date of the Participant s death who remain Beneficiaries as of September 30 of the calendar year following the Participant s death. Upon direction from the Recordkeeper, each multiple Beneficiary may receive his, her, or its interest as a separate account, within the meaning of Regulation 1.401(a)(9)-8, Q&A-3, to the extent permissible by law. (d) Death of Beneficiary. If the Beneficiary dies while receiving payments from the Account, all remaining benefits to which the Beneficiary was entitled shall be distributed to the Successor Beneficiary at least as rapidly as distributions were required to be made to the Beneficiary under 5.4(a) and 5.4(b) above. 5.5 Automatic Rollover. To the extent provided under the terms of the Plan, a distribution may be made without the Participant s consent if the Participant s total Account balance under the Plan (as determined by the Employer) does not exceed the amount described in 411(a)(11) of the Code. Any such distribution shall be made in accordance with 401(a)(31) of the Code at the direction of the Recordkeeper in accordance with Employer instructions. 5.6 Designation of Beneficiary. (a) General Rules. The Participant may designate from time to time any person or persons, entities, such as a trust, or other recipient as his or her primary and/or contingent Beneficiaries. Any Beneficiary designation by the Participant shall be provided to the Recordkeeper, shall be made in a form and manner prescribed by or acceptable to the Recordkeeper, and shall be effective only when received by the Recordkeeper during the Participant s lifetime. The Participant may change or revoke his or her Beneficiary designation at any time prior to his or her death by making a new Beneficiary designation with the Recordkeeper. Any such change will revoke all prior Beneficiary designations submitted to the Recordkeeper in their entirety. Participant agrees that in the event of a dispute as to the Beneficiary of the Account, the Recordkeeper can rely on direction of the Employer. In the event the Employer is unable or unwilling to provide such direction, the Participant agrees that the Recordkeeper may ask a court of competent jurisdiction to resolve the dispute and to recover its costs of doing so, including reasonable attorney s fees, from the Account. (b) Minors. If upon the death of the Participant a Beneficiary who has not attained the age of majority is entitled to receive any undistributed assets of the Account, the Custodian may, at the direction of the Recordkeeper in its absolute discretion, transfer assets to an inherited Account for the benefit of the minor Beneficiary. So long as the Beneficiary is a minor, such inherited Account shall be controlled by such person or persons demonstrated to the Recordkeeper s satisfaction to be authorized to act on behalf of the minor, such as the guardian, conservator, or other legal representative of such Beneficiary; the parent to such Beneficiary; a custodian appointed under a Uniform Gifts to Minors Act, Uniform Transfers to Minors Act, or similar act; a person appointed by the Participant to act as an authorized representative for such minor Beneficiary with respect to the Account in a writing filed with the Recordkeeper, in the Participant s last will and testament as admitted to probate, or in a trust document as to which the Participant is grantor; or to any person having control or custody of such minor Beneficiary. Any minor Beneficiary shall be deemed to be a minor until such Beneficiary reaches the age of majority under the law of the state of the minor s domicile with respect to the right to own mutual funds and other investments. 8

10 (c) Rights of Beneficiaries Upon Participant s Death. In addition to rights otherwise conferred upon Beneficiaries under this Agreement, all individual Beneficiaries shall be entitled to designate Successor Beneficiaries of their inherited Account. Any Successor Beneficiary designation by the Beneficiary shall be made in accordance with the provisions of paragraph (a) above. 5.7 Responsibility of Custodian (a) Identification of Beneficiaries. The Recordkeeper shall be responsible for determining the identity or interest of any Beneficiary, and the Custodian is fully entitled to rely on any such determinations of the Recordkeeper. It is the responsibility of the Beneficiary or the personal representative of the Participant or of the Beneficiary to notify the Recordkeeper of the death of the Participant or Beneficiary, and to provide the Recordkeeper with such documentation as the Recordkeeper deems necessary to transfer ownership of the Account. The Participant agrees that the Custodian and the Recordkeeper shall have no liability for, and shall be fully indemnified against, any cost or damage they incur in connection with their good faith reliance upon such representations. (b) Further Obligations. The Participant and Beneficiary agree that they are solely responsible for (i) the legal effect of any disclaimer or renunciation made by any Beneficiary to the Account, or (ii) the enforcement of any legal obligation, including tax obligations, of the Participant or any Beneficiary, and shall indemnify the Custodian against any cost or damage it incurs in connection with the aforementioned responsibilities. Except with respect to this 5.7(b), the terms of any Beneficiary designation accepted by the Recordkeeper shall control over the terms of this Agreement to the extent of any inconsistency. (c) Additional Information. The Custodian reserves the right to request such additional information and documentation from the Recordkeeper as the Custodian deems may be needed in respect of establishment, maintenance, and distribution of the Account. 5.8 Domestic Relations Orders. A distribution from the Account to an alternate payee pursuant to a qualified domestic relations order (QDRO) as defined in 414(p) of the Code (or pursuant to a domestic relations order in the case of a church or government plan) is permitted without regard to whether the Participant has had a severance from employment or any other event permitting a distribution to be made. Distributions pursuant to a domestic relations order shall be made upon the receipt of instructions from the Recordkeeper, in a form and manner acceptable to the Custodian. 5.9 Direct Rollovers and Plan-to-Plan Transfers From the Custodial Account. (a) Direct Rollovers. A distributee may elect, in a form and manner acceptable to the Recordkeeper, to have all or a portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the distributee in a direct rollover. The portion of any Eligible Rollover Distribution consisting of designated Roth contributions may be rolled over only to another designated Roth account under a retirement plan described in 402A(e)(1) that provides for designated Roth contributions or to a Roth IRA described in 408A of the Code. To the extent a portion of the distribution would be excluded from gross income if it were not rolled over, if that portion of the distribution is to be rolled over to an Eligible Retirement Plan that is not an IRA, the rollover must be accomplished through a direct rollover of the distribution to a plan qualified under Code 401(a) or a 403(b) plan that agrees to separately account for the amount not includible in income. A nonspouse Beneficiary of a deceased Participant who is a designated beneficiary as defined in 401(a)(9)(E) of the Code, may directly roll all or a portion of an Eligible Rollover Distribution into an inherited IRA in accordance with 402(c)(11) of the Code. (b) Plan-to-Plan Transfers. To the extent that the Plan provides for plan-to-plan transfers, all or a portion of a Participant s or Beneficiary s Account may be transferred to another 403(b) plan in accordance with 1.403(b)-10(b)(3). In addition, the Participant s Account may be transferred to a defined benefit plan that is a governmental plan (as defined in 414(d) of the Code) for the purchase of permissible service credits, or for repayment of contributions and earnings previously refunded upon a forfeiture of a service credit in accordance with 403(b)(13) of the Code. (c) Direction by Recordkeeper. The Custodian shall distribute funds from the Account to effectuate a direct rollover or a plan-to-plan transfer only upon receipt of instructions from the Recordkeeper in a form acceptable to the Custodian. 9

11 Article VI Responsibilities and Duties of Custodian 6.1 Exclusive Benefit. The Custodian shall discharge its duties hereunder solely in the interest of the Participants and their beneficiaries for the exclusive purpose of providing benefits to Participants and for defraying reasonable expenses of administering the Account. The assets of the Account shall not be subject to the claims of the Employer's creditors nor otherwise diverted or returned to the Employer except as specifically permitted under the terms of the Plan and applicable law, nor subjected in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary. Any attempt by the Participant or Beneficiary to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or otherwise dispose of any right to distributions hereunder shall be void, except as otherwise required by law. The interest of the Participant in the balance of the Account shall at all times be nonforfeitable and nontransferable (except with respect to a transfer to an alternate payee or to a Beneficiary), subject to the provisions of 3.2 regarding vesting schedules applicable to certain Employer contributions. Notwithstanding anything to the contrary in this 6.1, the Custodian shall comply with any domestic relations order in accordance with the procedures set forth in Article V of this Agreement. 6.2 Nondiscretionary Powers of the Custodian. Pursuant to instruction from the Recordkeeper, the Custodian shall have the following nondiscretionary powers: (a) To invest and reinvest the principal and income of the Account in Vanguard Mutual Funds and keep the same invested without distinction between principal and income; (b) With any cash at any time held by it, to purchase or subscribe for any authorized investment and to retain such authorized investment in the Account; (c) To make disbursements out of the Account to such persons, in such manner, in such amounts, and for such purposes as the Recordkeeper may direct; (d) To sell for cash or on credit, convert, redeem, exchange for another authorized investment, or otherwise dispose of any authorized investment at any time held by it; (e) To retain uninvested all of any part of the Account for which investment instructions have not been received, it being understood that Custodian shall not be required to pay interest on any such uninvested balance; (f) To engage such agents, actuaries, accountants, attorneys, investment advisors or managers, subcustodians and such other advisors, and, anything contained herein to the contrary notwithstanding, to engage in such legal or administrative proceedings as are deemed reasonably required in connection with the administration of the Account, and to compensate any persons so engaged at such wages, fees, remuneration consideration or otherwise, and upon such terms and conditions as Custodian shall deem reasonable under the circumstances. Unless otherwise noted in this Agreement, such compensation shall be a charge upon the Account and shall in no event be deducted from any compensation payable to Custodian; (g) To cause any investment in the Account to be registered in, or transferred into, its name as Custodian, or the name of its nominee or nominees or to retain them unregistered or in form permitting transfer by delivery, but the books and records of Custodian shall at all times show that all such investments are part of the Account; and (h) To execute, as Custodian, any declarations or certificates pertaining to the Account that may be required under any tax law(s) or governmental regulation(s) now or hereafter without prior approval of the Participant or Employer. 6.3 Reports. Subject to the provisions of this Agreement, the Custodian shall keep accurate and detailed records of all contributions, investments, distributions and other transactions with respect to the Account and submit such reports and records to (a) the Recordkeeper as may be necessary for the Recordkeeper to fulfill its obligations with respect to the Account or the Plan under which it is maintained or (b) the Employer as may be necessary for the Employer to fulfill its obligations with respect to the Plan as are imposed upon it by the Internal Revenue Service or the Department of Labor. The Custodian shall file tax reports with the Internal Revenue Service as required with respect to the Account, including IRS Form 1099-R. 10

12 As soon as reasonably practical after the close of each reporting period, and within ninety (90) days after the resignation or removal of the Custodian, the Custodian shall deliver to the Employer a written statement of account of all investments, receipts and disbursements, and all other financial transactions relating to the Account, including the value of the assets held therein. Upon the expiration of ninety (90) days from the date of filing such account, the Custodian shall be forever released and discharged from all liability as to all items and matters included in such accounting as if settled by the decree of a court of competent jurisdiction, except with respect to any such action or transaction to which the Employer shall, within such ninety (90) day period, file written objections with the Custodian. Assets of the Account shall be valued as of each valuation date at fair market value as determined by the Custodian based upon prices which are obtained directly from the Vanguard Mutual Fund or from quotation services. The Custodian makes no representation or warranty regarding the accuracy of prices obtained from such sources, the relationship of quoted prices to actual value, the duration that quoted prices may continue to be available from such sources, or the likelihood of any increase or decrease in quoted prices or actual values. 6.4 Information Sharing. The Participant understands and agrees that the Custodian, the Recordkeeper, and any agents thereof may share information about the Account (including, but not limited to, data related to contribution amounts, distributions, and withdrawals) with the Employer or with other entities at the direction of the Employer or as otherwise required by law. The Participant further understands and agrees that the Custodian, the Recordkeeper, and any agents thereof, may share information about the Account with each other as well as with the following: (a) their officers, employees and directors who have a business need to know such information; and (b) their attorneys, accountants, consultants, agents, affiliates, independent contractors, or professional advisors who (i) have a business need to know such information and (ii) are subject to fiduciary, professional or written obligations of confidentiality. 6.5 Limitations on Responsibilities and Duties. The Custodian shall not be responsible for the collection of contributions provided for under this Agreement, the selection of the investments for the Account, the purpose or propriety (under the Plan, the Code, ERISA or otherwise) of any contribution or transfer to, or distribution from, the Account that is made at the direction of the Recordkeeper in a form or manner deemed acceptable to the Custodian, or any other action properly taken at the direction of the Recordkeeper, the Employer, and/or other authorized representative in accordance with the terms and conditions of this Agreement. The Custodian shall be under no obligation to determine the accuracy or propriety of any such directions received from the Recordkeeper or the Employer and shall be fully protected in acting in accordance therewith. In the event of any ambiguous or conflicting instructions to, or adverse claims or demands upon, the Custodian, the Custodian shall be entitled, at its option, to refuse to comply with any such instruction, claim or demand as long as such ambiguity or conflict shall continue, and in so refusing the Custodian may elect not to make any payment or other disposition of assets held pursuant to this Agreement. The Custodian shall not be or become liable in any way for its failure or refusal to comply with any such ambiguous or conflicting instructions or adverse claims or demands, and it shall be entitled to continue to so refrain from acting until such ambiguous, conflicting or adverse demands (a) have been resolved and it has been notified in writing thereof or (b) have finally been determined in a court of competent jurisdiction. 6.6 Limitation of Liability; Indemnification of Custodian. The Custodian shall have no liability for any losses arising out of delays in performing the services which it renders under this Agreement, when such delays result from events beyond its control, including without limitation, interruption of the business of the Custodian due to acts of God, acts of governmental authority, acts of war, terrorism, riots, civil commotions, insurrections, labor difficulties (including, but not limited to, strikes and other work slippages due to slow-downs), unauthorized access to its systems, or any action of any courier or utility, mechanical or other malfunction, or electronic interruption. The Custodian shall not be liable for any act, omission or determination made under this Agreement except for its gross negligence or willful misconduct in performing its obligations hereunder. In no event shall the Custodian be liable for any act taken or not taken by it in good faith at the direction of the Recordkeeper, the Employer, the Participant or other authorized representative. The Custodian shall not be obligated or expected to commence or defend any legal action or proceeding in connection with this Agreement unless agreed upon by the Custodian and Participant, and unless fully indemnified for so doing to the Custodian s satisfaction. To the fullest extent permitted by law, the Employer, the Participant and any authorized representative of either shall at all times fully indemnify and save harmless the Custodian, its successors, and assigns, and their respective officers, directors, employees and agents, from any and all liability with respect to any claim arising 11