UMB MANAGED ROTH IRA DISCLOSURE STATEMENT AND IRA TRUST AGREEMENT

Transcription

1 UMB MANAGED ROTH IRA DISCLOSURE STATEMENT AND IRA TRUST AGREEMENT B A N K

2 TABLE OF CONTENTS Disclosure Statement UMB Managed Roth Individual Retirement Trust Account UMBIA Investment Advisory Roth IRA Agreement Scout Portfolio IRA Agreement

3 DISCLOSURE STATEMENT Power to revoke For a period of seven days following the date on which you enter into a Roth IRA Trust Agreement with UMB Bank, n.a. as Trustee, you have the right to revoke the trust. To effect a revocation, please write Retirement Services, UMB Bank, n.a., P.O. Box , Kansas City, Missouri , or call In the event notice is mailed, the postmark date (or date of certification or registration, if sent by certified or registered mail) will be deemed the date of delivery, provided that normal mailing procedures are followed. If you revoke your account, you are entitled to a return of the entire amount deposited to your account without reduction for any fees, expenses or commissions and without any adjustment for any investment gain or loss. Legal requirements with respect to your IRA 1. The Trustee must be a bank, such as UMB Bank, n.a. (UMB), or other institution (or person) that has satisfied the Secretary of the Treasury that it is able to administer your account in accordance with tax laws. 2. Contributions, except for rollover contributions, must be in cash. 3. You may contribute a combined total to all of your IRAs (including your Roth IRAs) for any taxable year up to the lesser of 100% of your compensation or the applicable contribution limit of $3,000 for 2004, $4,000 for years 2005 through 2007 and $5,000 for If you are age 50 or above, the contribution limits are increased to $3,500 in 2004, $4,500 for 2005, $5,000 for 2006 through 2007 and $6,000 for None of the funds of your account may be invested in life insurance contracts. In addition, none of the funds may be invested in collectibles with the exception of certain gold, silver, and platinum coins, coins issued under the laws of any state, and certain bullion. 5. Your interest in the balance of the account cannot be forfeited. 6. With the exception of investments in a common trust fund or common investment fund such as a mutual fund, no assets of your account may be commingled. 7. You are not required to take distributions from your Roth IRA during your lifetime. After your death, your Roth IRA balance must be distributed to the beneficiary(ies) according to Required Minimum Distribution rules. 8. You may not pledge any part of your account as security for a loan. If you use all or any part of your account as security for a loan, the portion used for that purpose is treated as though it were distributed to you and you must include that amount in your gross income for the year in which that transaction takes place. If the pledge occurs prior to your attaining age 59 1 /2, an additional penalty equal to 10% of the amount included in your taxable income is added to your tax liability. 9. You may not borrow from your Roth IRA. 10. Tax laws prohibit certain transactions between a disqualified person and your account. A disqualified person includes among others: you, a beneficiary of your account, members of your family or of the beneficiaries family or any business in which a controlling interest is held by any of these individuals. The purpose of the prohibited transactions rules is to protect the interests of Roth IRA Owners by prohibiting dealings between the Roth IRA and persons who may have conflicts of interest with the Roth IRA. If either you or your beneficiary engages in a prohibited transaction, your Roth IRA will lose its tax exemption and its full value will be added to your other taxable income for the year in which the transaction takes place. If any of these transactions occur prior to your attaining age 59 1 /2, an additional penalty equal to 10% of the amount included in your taxable income is added to your tax liability. Contributions How much can I contribute to my Roth or Traditional IRA? Your contribution may be made to a Roth IRA, a Traditional IRA or a combination of either. As mentioned previously, you can only contribute up to the lesser of 100% of your compensation or the contribution limit. Compensation includes wages, commissions, salaries, tips, professional fees, bonuses, alimony and other amounts you receive for providing personal services. In addition, your ability to make a Roth IRA contribution may be limited according to your Adjusted Gross Income (AGI). If your AGI falls below the Threshold level, you can make a full contribution to your Roth IRA. If your AGI is over the Phase-out level, you cannot make a contribution to your Roth IRA. If your AGI falls in between these two levels, your contribution limit is reduced proportionately. Spousal IRA contributions A separate contribution limit applies to both you and your spouse, but if you file a joint return, the compensation of both you and your spouse can be combined to support the maximum Roth IRA contribution limit. This is true even if one spouse has no compensation. Filing Status Threshold Phase-out Married Filing Jointly/ $150,000 $160,000 Qualifying Widower Married Filing Separately and you $0 $10,000 lived with your spouse at any time during the year Single, Head of Household or $95,000 $110,000 Married Filing Separately if you did not live with your spouse at any time during the year 1

4 Example: John Doe and his wife Jane are under the age of 50 and file a joint return. They have an AGI of $152,000 in The difference between the AGI ($152,000) and the applicable threshold level ($150,000) is $2,000. You divide $2,000 by $10,000 (difference between Threshold and Phase-out levels) and get a phase-out of 20%. You multiply the applicable contribution limit ($3,000) by 20% and get $600. You then subtract $600 from the applicable contribution limit ($3,000) to get $2,400. Therefore, John Doe is entitled to contribute up to $2,400 to his Roth IRA for Jane Doe would also be entitled to contribute up to $2,400 to her Roth IRA for 2004 based upon the same formula. Your contribution may be made anytime during the year (and up to your tax return due date for the taxable year, not including extensions). Unlike a Traditional IRA, there are no age limits for contributions to a Roth IRA. In other words, contributions may be made to a Roth IRA after age 70 1 /2, if you satisfy the other eligibility requirements. What happens if I contribute in excess of my contribution limit? An excess contribution is any contribution amount that exceeds your contribution limit, excluding rollover and transfer amounts. A tax equal to 6% of the amount of the excess contribution is imposed for each taxable year that the excess contribution has not been withdrawn. If excess contributions are withdrawn (including income attributed to that excess) prior to the due date for your tax return for that year plus six months, the 6% penalty tax will not be imposed on the excess amount. The income associated with this excess contribution refund will be taxable and is also subject to a 10% penalty tax unless you are older than age 59 1 /2 or are disabled. Tax deductions and credits Can I deduct my contributions? Contributions to a Roth IRA are not tax deductible. What is the contribution deadline? A contribution must be made no later than the deadline for filing your federal tax return (not including extensions). For most calendar year taxpayers this deadline will be April 15. If you make a contribution in between January 1 and April 15, you may designate the contribution as either a contribution for the current or prior year. Can I receive a tax credit? You may be eligible to receive a tax credit for your Traditional IRA or Roth IRA contributions in 2002 through 2006 (unless this credit is extended by Congress). This credit may not exceed $1,000 in a given year. This tax credit will not prevent you from taking any other tax deduction that may apply. You may be eligible for this tax credit if you are: age 18 or older as of the close of the taxable year, and not a dependent of another taxpayer, and not a full-time student. The credit is based upon your income (see chart below), and will range from 0 to 50 percent of eligible contributions. In order to determine the amount of your contributions, add all of the contributions made to your Traditional or Roth IRA and reduce these contributions by any distributions that you have taken during the testing period. The testing period begins two years prior to the year for which the credit is sought and ends on the tax return due date (including extensions) for the year for which the credit is sought. In order to determine your tax credit, multiply the applicable percentage from the chart below by the amount of your contributions that do not exceed $2,000. Filing Status Over Not Over Applicable % Joint Return $0 $30,000 50% $30,000 $32,500 20% $32,500 $50,000 10% $50,000 0% Head of Household $0 $22,500 50% $22,500 $24,375 20% $24,375 $37,500 10% $37,500 0% All other Cases $0 $15,000 50% $15,000 $16,250 20% $16,250 $25,000 10% $25,000 0% Consolidating your retirement plan money Can I combine all of my retirement plan money into a single Roth IRA? Your Roth IRA may only accept rollovers or transfers from other Roth IRAs. Your Roth IRA can t accept rollovers from Traditional IRAs or other non-roth IRA Retirement Plans. Roth IRA-to-Roth IRA rollovers are limited to one during each 12-month period. Direct transfers from a Roth IRA to another Roth IRA are not counted as a rollover and thus not counted against the limit. If the funds are distributed to you, you have 60 days from the date you receive the distribution to complete the rollover of the funds to the Roth IRA. Transfers and rollovers to and from your Roth IRA are not considered taxable distributions. Traditional IRAs can be converted into a Roth IRA (see below). How do I convert a Traditional IRA into a Roth IRA? You can convert your Traditional IRA into a Roth IRA if you satisfy the following: You file your taxes as Single, Married Filing Jointly or Head of Household. You cannot convert if your status is Married Filing Separately unless you have lived apart from your spouse for the entire year. You don t have a modified AGI in excess of $100,000. If you are 70 1 /2 or older, you must take your required minimum distribution prior to converting. If you are currently taking substantially equal periodic payments from your Traditional IRA, these payments need to continue under the Roth IRA. 2

5 You can convert your Traditional IRA into a Roth IRA by rolling over a distribution from an IRA into a Roth IRA within 60 days of receiving the distribution or you can request a transfer directly from the IRA to the Roth IRA. Your current IRA Trustee can also redesignate your IRA as a Roth IRA. An IRA conversion transfer is not considered a rollover for purposes of the one rollover per 12- month period rule. A successful conversion amount will be subject to income taxes but it will not be subject to the 10% premature distribution penalty. Once you make the conversion, you should keep the money in the Roth IRA for 5 years, beginning with the year of your first conversion. If you take a distribution of converted funds during this time period, you will be subject to the 10% premature distribution penalty. If I make a contribution to a Roth IRA, can I change my mind and recharacterize this contribution as a Traditional IRA contribution, and vice versa? You are allowed to recharacterize a contribution made to one type of IRA (either Traditional or Roth) as if it were actually a contribution made to a different type of IRA (Traditional or Roth). You can do this by transferring the contribution, together with all net income attributable to the contribution from the first IRA that received the contribution to the second IRA. Your current Trustee can also recharacterize your contribution. A recharacterization must be completed by the due date for filing your tax return plus six months (for the year in which the contribution was made). A recharacterization transfer is not considered a rollover for purposes of the one rollover per 12-month period rule. If you decide to recharacterize after you have filed your tax return, you can still elect to recharacterize by amending your return within six months of the due date. To assist you in completing a recharacterization, call for a UMB Retirement Services Recharacterization Form. Example: You receive a $100,000 distribution from a Traditional IRA on December 31, 2004, and convert it to a Roth IRA on February 28, You file your 2004 federal income tax return prior to April 15, Your deadline for recharacterizing the contribution from a Roth IRA back to a Traditional IRA is six months after the due date for filing your 2004 federal income tax return, i.e. October 15, If you decide to recharacterize the contribution, then on your federal income tax return for 2004 you would treat the original amount of $100,000 as having been contributed back to the Traditional IRA and not the Roth IRA. A timely recharacterization of a Roth IRA conversion will negate the tax liability that would otherwise occur. An election to recharacterize a contribution cannot be revoked after the transfer. If I make a contribution to a Traditional IRA, convert the contribution to a Roth IRA, change my mind and recharacterize this contribution as a Traditional IRA contribution; can I change my mind again and reconvert back to a Roth IRA? You may not reconvert that amount back to a Roth IRA until the beginning of the taxable year following the year in which the conversion to the Roth IRA was completed, or, if later, the end of a 30-day period that begins on the date that the transfer back to a Traditional IRA is completed. Failed conversion A failed conversion is one where the $100,000 AGI limit is not satisfied, or when a reconversion is made before the time permissible. A failed conversion can be recharacterized and treated as a contribution back to your Traditional IRA. If there is a failed conversion that is not recharacterized: The failed conversion is treated as a distribution from the Traditional IRA. The amount of the conversion is treated as a contribution to the Roth IRA which is subject to a contribution limit. If the contribution limit is exceeded, the excess amount is treated as an excess contribution and a 10% penalty will apply, unless an exception applies. Distributions What are the tax consequences of taking a distribution from your Roth IRA? The funds in your Roth IRA are not subject to income tax while they are in the account. The amounts that you contribute are always eligible to be distributed tax-free. The earnings can be distributed tax-free if you take a qualified distribution. In order to take a qualified distribution, you must satisfy a five-year holding period (beginning on January 1 of the year you make your first contribution, rollover, transfer or conversion to a Roth IRA) and the distribution must be for one of the following four reasons: 1. Your distribution is made on or after the date you reach age 59 1 /2. 2. Your distribution is made because you are disabled. 3. Your distribution is made to a beneficiary or to your estate after your death. 4. You take a qualified first-time homebuyer distribution. The five-year holding period applies to you in respect to all of your respective Roth IRAs and is only calculated once. Therefore if you open a Roth IRA in 2002, your holding period runs through 2006 for this Roth IRA and any other Roth IRA you may open in your lifetime. Withdrawals prior to age 59 1 /2 If you have not yet reached age 59 1 /2 when a withdrawal is made, an additional 10% excise tax must be paid on the amount withdrawn that exceeds the amount of your contributions. After age 59 1 /2, you may make such withdrawals as you wish, free of this penalty tax. Distributions prior to age 59 1 /2 will not be subject to the penalty if your distribution is made for any of the following reasons: Death of IRA Owner Disability of IRA Owner A qualifying rollover or direct transfer The timely withdrawal of an excess contribution (although any earnings attributed to such excess contribution refunded is subject to the tax) A payment included in a series of substantially equal periodic payments (at least annually) made over your life expectancy or the joint life expectancies of you and your beneficiary. Please note that if you are currently receiving substantially equal periodic payments, you will be assessed an additional 10% excise tax if you break the periodic payments before the later of five years or attaining the age of 59 1 /2. 3

6 Medical expenses in excess of 7.5% of your Adjusted Gross Income A withdrawal for the payment of health insurance premiums for certain individuals Any withdrawal used to pay qualified higher education expenses of yourself, your spouse, or any child or grandchild of yourself or your spouse Any withdrawal used to pay qualified acquisition costs of a first-time homebuyer Distribution resulting from an IRS levy Nonqualified distributions from your Roth IRA Nonqualified distributions are includible in gross income only to the extent that the distribution, when added to all prior distributions form your Roth IRAs, exceeds your total contributions to your Roth IRAs. If your Roth IRA contributions consist of both conversion and regular contributions, distributions are treated as coming first from regular contributions, then from conversion amounts and finally from earnings. All of your Roth IRAs must be aggregated for these calculations. Can I name a beneficiary for my IRA? You have the right to designate one or more beneficiaries to whom your Account, or any undistributed portion thereof, is to be paid in the event of your death. You may also, at any time, revoke a prior beneficiary designation and, if desired, designate different individuals as beneficiaries. You may designate your beneficiaries in the Adoption Agreement, on provided forms or on any acceptable form to the Trustee. In the absence of a valid beneficiary designation, your Roth IRA will be distributed to your surviving legal spouse, but if none, then to your surviving natural and adoptive children in equal shares, but if none, then to the personal representative of your estate. You should understand that in certain states your spouse s consent may be necessary if you wish to name a person other than, or in addition to, your spouse as beneficiary or to change an existing beneficiary designation. Please discuss this matter with your attorney before making such a beneficiary designation. Where reasonable doubt exists as to the proper course of action in regard to payment of the Roth IRA upon your death, a court of competent jurisdiction will determine the proper course of action. All costs and expenses (including time expended by the Trustee) in such cases will be charged against your account. Whenever any distribution is payable to a minor or to a person known by the Trustee to be under a legal disability, the Trustee in its absolute discretion may make all or any part of such distribution to: A legal guardian or conservator for such person A custodian under the Uniform Transfers to Minors Act, including any custodian designated by the Trustee if such designation is permitted by applicable law A parent of such person Such person directly Following your death, your beneficiary(ies) also has the right to name beneficiaries, unless restricted by applicable law or regulations. If a beneficiary (other than the Depositor s surviving spouse who chooses to treat the Roth IRA as their own) should die while receiving distributions without having made a valid beneficiary designation, the Trustee shall, upon receipt of notice of the death of such beneficiary, distribute such Account to the estate of such beneficiary. How do distributions proceed following my death? After your death, your beneficiaries are required to take Required Minimum Distributions that are determined according to the status of your beneficiary(ies). The following describes how your account will be distributed after your death. If the amount distributed to a beneficiary of your Roth IRA following your death is less than the required distribution, a penalty tax of 50% of the difference between the actual distribution and the required distribution will be imposed. If you die with a nonspousal beneficiary: Your beneficiary(ies) will receive minimum distributions based upon the single life expectancy of your oldest beneficiary. Your beneficiary(ies) also has the option to avoid taking minimum distributions if the entire account is distributed by the end of the fifth year that follows the year of your death. If you die with a spousal beneficiary as your sole beneficiary: The Roth IRA will be treated as his or her own, with no distribution required to be made to the spouse. Will I be liable for income tax due as a result of a divorce decree transfer? The general rule is that you will be liable for income tax and any penalties on any amount distributed from your Roth IRA to meet the obligation specified in a divorce decree. The transfer may be structured so as to avoid taxation to you if the requirements of Code section 408(d)(6) are met. Those requirements are: A written court order clearly specifying the amount to be transferred into a Roth IRA of the former spouse A direct transfer of the funds to the Roth IRA of the former spouse Trustee to assume you are a calendar-year taxpayer unless otherwise Informed Unless and until specifically notified that you make your federal income tax returns on another basis, UMB will assume for all purposes, including the preparation and furnishing of accounting statements, reports, etc., that such tax returns are made on the basis of calendar years. Trustee not legal advisor or tax counselor; you should consult your own advisors UMB and UMB Investment Advisors expressly disclaim any right, duty, authority or responsibility to furnish legal or tax advice relating to your Roth IRA, including but not limited to present or future tax consequences to you or others which may result from the establishment or maintenance of your account, the permissible amount or deductibility of contributions, the effect of withdrawals, the selection of payment options or beneficiaries, any matters pertaining to prohibited transactions, and any other matter whatsoever. You are advised and encouraged to consult with professional counsel of your own selection respecting all such matters. 4

7 Investment of account Your UMB Managed Roth IRA will be managed and invested by UMB Investment Advisors (UMBIA). You have two management options with UMBIA from which to choose the UMBIA Investment Advisory Election or the Scout Portfolio Election. UMBIA Investment Advisory Election UMBIA will consult with you regarding your investment objectives and make recommendations for an investment program for your Roth IRA designed to meet those objectives. You determine the degree of investment discretion to be exercised by UMBIA by selecting either a Discretionary Account or a Non-Discretionary Account. With a Discretionary Account, UMBIA will have complete discretion in investing the assets comprising your Roth IRA, limited only by applicable Treasury Department and other regulations governing Roth Individual Retirement Accounts. With a Non-Discretionary Account, UMBIA will from time to time make recommendations regarding securities which it believes should be purchased or sold, but will make no purchase, sale or other transaction except upon your instructions. To take advantage of the UMBIA Investment Advisory Election, please complete the enclosed Election Form and return to UMB Bank, n.a., Attn: Retirement Services. Scout Portfolio Election With this election, you select an investment goal for your Roth IRA from among a number of investment categories. Each of these investment categories consists of various mixes of UMB Scout mutual funds into which your Roth IRA will be invested. UMBIA will have complete discretion to reallocate the assets comprising your Roth IRA at any time by changing the mix of UMB Scout Funds within the investment category you selected. You may change the investment objectives for your Roth IRA at any time, in which case you will be assigned to a different investment category by UMBIA. If you are interested in the Scout Portfolio Election, you will first of all need to complete the enclosed Scout Portfolio Investor Profile Worksheet. This worksheet can assist you in selecting an investment category by clarifying your investment goals and objectives. You then need to complete the enclosed Scout Portfolio Roth IRA Election Form and then return both the Investor Profile Worksheet and the Election Form to UMB Bank, n.a., Attn: Retirement Services. Financial disclosure The future value of your Roth IRA will depend on the investment decisions made by you or your investment advisor. No guarantees of any nature concerning growth projections, earnings rates or future security values are made. All ordinary expenses related to directed security transactions, such as brokerage commissions on purchases and sales, are expenses of the Trust Account and will be charged directly to the Account. UMB charges an annual fee and other charges for its services as set forth elsewhere in this Disclosure Statement. UMB will advise you of any changes in its fee schedule from time to time. Where separately billed and paid such fees are deductible to the extent that they constitute ordinary and necessary expenses for management of the Roth IRA, but are subject to the 2% floor on miscellaneous itemized deductions. FDIC insurance on bank deposits held in your Roth IRA Bank deposits held as assets of your Roth IRA are insured by the FDIC; however, these deposits are subject to certain limitations. Deposits at the same financial institution in any combination of IRAs, self-directed Keogh Plan accounts, 457 Plan accounts (for state and local government plans and not-for-profit organizations) and self-directed defined contribution retirement plans will be added together, and insured up to $100,000 in the aggregate. Termination of this account UMB may resign at any time upon 30 days notice in writing to you and may be removed by you at any time upon 30 days written notice. In either such event, you must appoint a qualified successor trustee or a qualified custodian to whom UMB, upon receipt of written acceptance of the appointment, shall transfer the assets (less any amounts deemed necessary for payment of fees, costs or expenses) and records of your account. If, within 30 days after UMB s resignation or removal, you have not appointed a successor trustee or custodian which has accepted such appointment, UMB may pay the assets constituting the Roth IRA to you. Duty to file tax returns In any year in which you incur liability for a penalty tax by reason of making excess contributions, by making early withdrawals (premature distributions), or by failure to withdraw the minimum amount from your account, you are obligated to file IRS Form 5329, Return for Individual Retirement Arrangement Taxes, with your Form 1040 at the time it is filed. Internal Revenue Service approval The UMB Managed Roth Individual Retirement Trust Agreement is comprised of nine articles. The first eight articles constitute IRS Form 5305-R, Roth Individual Retirement Trust Account. Under Treasury Department regulations, prototype trusts which use the provisions of this form are considered to meet the requirements of the Internal Revenue Code. The addition of Article IX by UMB does not negate the approved status of this prototype. Internal Revenue Service approval relates only to the form of the document and does not represent a determination of the merits of the program or of any investments which may be employed therein. Additional information Additional information about Roth individual retirement accounts is contained in IRS Publication 590, which can be obtained from the office of the District Director of Internal Revenue or online at 5

8 Fees The following shall constitute charges upon the Account and shall be paid by the Trustee out of the Account unless, and to the extent, paid by the Grantor: (a) All taxes of whatever kind or character that may be imposed, levied or assessed under existing or future laws upon or in respect of the Account, or upon the Trustee in its capacity as such, or upon the assets or income of the Account; (b) All expenses incurred by the Trustee in the performance of its duties hereunder, including the fees of attorneys, accountants and other persons engaged by the Trustee for services in connection with the Account; and (c) The fees and other compensation of the Trustee for its services described in the Disclosure Statement, in the amounts agreed upon from time to time by the Grantor and Trustee. Fees will be calculated and accrued on a monthly basis and billed as of the last business day of each calendar year. If not paid within 60 days of the date billed, it will be assumed you wish the fees to be deducted from the cash balance, if any, of the account. If paid by you separately, fees paid to UMB and/or UMBIA may be deductible, but are subject to the 2% floor on miscellaneous itemized deductions. This fee may be changed upon 30 days prior written notice to you. Annual fees applicable to Roth IRAs managed pursuant to UMBIA investment advisory election Where the UMBIA Investment Advisory Election Form is in effect, an annual fee will be charged based on the fair market value of the assets and equivalent to:.90 of 1% on the first $ 500, of 1% on the next 500, of 1% on the next 4,000, of 1% on the next 5,000, of 1% on all over 10,000,000 Minimum Annual Fee: $ 2,500 In accounts using the UMB Scout Funds as part of the investment strategy, those assets invested in the Scout Funds are excluded from the schedule noted above since the fees for those Funds are charged and collected by the Funds themselves. Annual fees applicable to Roth IRAs managed pursuant to Scout portfolio election When the Scout Portfolio Election is in effect, an annual administrative and recordkeeping fee of $150 per year is billed as of the last day of each calendar year. If not paid within 60 days of the date billed, it will be assumed you wish the fees to be deducted from the cash balance, if any, of the account. If paid by you separately, fees paid to UMB and/or UMBIA may be deductible, but are subject to the 2% floor on miscellaneous itemized deductions. This fee may be changed upon 30 days prior written notice to you. Other fees 1. In addition to the foregoing, a reasonable hourly charge (except as otherwise noted) will be made for the following activities: (a) Handling directed investment transactions involving real estate, limited partnerships, limited liability companies (LLCs) or other non-conventional investment securities. (b) Preparing and filing any tax returns (where necessitated by reason of investments which generate unrelated business income). (c) Terminating an account and distributing all assets to you or transferring the account to a successor trustee or custodian (except for your seven-day right of revocation) with a minimum termination fee of $100 and a maximum termination fee of $200 per account. (d) Searching and tracking down beneficiaries and beneficiary information following your death, including court costs for determining the proper course of action. (e) Providing other extraordinary services at your request or instigation. 2. In addition to the hourly charge for time expended in handling transactions involving limited partnerships and LLCs, a fee of $500 will be charged annually for each limited partnership and LLC. 3. In addition to the hourly charge for time expended in handling transactions involving real estate, a minimum fee of $300 will be charged annually for each parcel of real estate held by the IRA. 4. Subject to the hourly charge, a minimum fee of $50 shall be charged for each Investment Directive prepared by UMB at your direction to complete a transaction involving an investment not eligible for processing through a securities depository such as the Depository Trust & Clearing Corporation. 5. An annual fee of $150 will be charged for the collection of payments from notes, mortgages and rent. 6. A reasonable per item charge will apply to the payment of bills, invoices and expenses associated with real estate, properties, buildings or the like. 7. The Trustee reserves the right to require you to maintain a cash balance in the IRA equal to one-year s estimated fee if the account holds investments such as real estate, limited partnerships, LLCs, promissory notes, non-publicly traded stocks or bonds, or other illiquid investments. 8. In addition to the foregoing, an annual charge of $250 will apply to each account holding investments such as gold coins or bullion that require special safekeeping. 6

9 9. The Trustee reserves the right to change any of the fees set forth above upon 30 days written notice to you. 10. Scout Investment Advisors, Inc., a subsidiary of UMB Bank, n.a., receives annual management fees for serving as manager and investment advisor of the UMB Scout Funds, based upon a percentage of each Fund s average daily net assets. In the case of investments in these Funds by IRAs managed pursuant to the UMBIA Investment Advisory Election Form, these fees are in lieu of the other asset charge that would normally apply if such money were invested in another manner. In the case of IRAs managed pursuant to the Scout Portfolio Election Form, these fees are separate from, and in addition to, the $150 administrative and record-keeping fee described above. More information regarding the management fee paid to the bank and other charges and expenses internal to the UMB Scout Funds is contained in the funds prospectus (which you are advised to read prior to investing). The UMB Scout Funds are distributed by UMB Distribution Services, LLC, a subsidiary of UMB Financial Corporation. 7

10 UMB MANAGED ROTH INDIVIDUAL RETIREMENT TRUST ACCOUNT (Under Section 408A of the Internal Revenue Code) This Agreement is made between UMB Bank, n.a. (hereinafter referred to as Trustee ) and the individual (hereinafter referred to as Grantor ) who signs the accompanying Adoption Agreement. The Grantor whose name appears on the Adoption Agreement is establishing a Roth individual retirement account (Roth IRA) under section 408A of the Code for the exclusive benefit of the individual or his or her beneficiaries. The Grantor is establishing (or adopting an amendment to) a Roth individual retirement account (under section 408(a) of the Internal Revenue Code) for the exclusive benefit of the individual or his or her beneficiaries. The Trustee has given the Grantor the disclosure statement required under the Income Tax Regulations under of the Regulations. Unless the accompanying Adoption Agreement is signed by Grantor to adopt an amended and restated IRA, Grantor has made an initial cash contribution to the IRA concurrently with the execution of the Adoption Agreement. The Grantor and Trustee make the following agreement. Article I Except in the case of a rollover contribution described in section 408A(e), a recharacterized contribution described in section 408A(d)(6), or an IRA Conversion Contribution, the trustee will accept only cash contributions up to $3,000 per year for tax years 2002 through That contribution limit is increased to $4,000 for tax years 2005 through 2007 and $5,000 for 2008 and thereafter. For individuals who have reached the age of 50 before the close of the tax year, the contribution limit is increased to $3,500 per year for tax years 2002 through 2004, $4,500 for 2005, $5,000 for 2006 and 2007, and $6,000 for 2008 and thereafter. For tax years after 2008, the above limits will be increased to reflect a cost-of-living adjustment, if any. Article II 1. The annual contribution limit described in Article I is gradually reduced to $0 for higher income levels. For a single grantor, the annual contribution is phased out between adjusted gross income (AGI) of $95,000 and $110,000; for a married grantor filing jointly, between AGI of $150,000 and $160,000; and for a married grantor filing separately, between AGI of $0 and $10,000. In the case of a conversion, the trustee will not accept IRA Conversion Contributions in a tax year if the grantor s AGI for the tax year the funds were distributed from the other IRA exceeds $100,000 or if the grantor is married and files a separate return. Adjusted gross income is defined in section 408A(c)(3) and does not include IRA Conversion Contributions. 2. In the case of a joint return, the AGI limits in the preceding paragraph apply to the combined AGI of the grantor and his or her spouse. Article III The grantor s interest in the balance in the trust account is nonforfeitable. Article IV 1. No part of the trust account funds may be invested in life insurance contracts, nor may the assets of the trust 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 trust account 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, silver, and platinum coins, coins issued under the laws of any state, and certain bullion. Article V 1. If the grantor dies before his or her entire interest is distributed to him or her and the grantor s surviving spouse is not the designated beneficiary, the remaining interest will be distributed in accordance with (a) below or, if elected or there is no designated beneficiary, in accordance with (b) below: (a) The remaining interest will be distributed, starting by the end of the calendar year following the year of the grantor s death, over the designated beneficiary s remaining life expectancy as determined in the year following the death of the grantor. (b) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the grantor s death. 2. The minimum amount that must be distributed each year under paragraph 1(a) above is the account value at the close of business on December 31 of the preceding year divided by the life expectancy (in the single life table in Regulations section 1.401(a)(9)-9) of the designated beneficiary using the attained age of the beneficiary in the year following the year of the grantor s death and subtracting 1 from the divisor for each subsequent year. 3. If the grantor s surviving spouse is the designated beneficiary, such spouse will then be treated as the grantor. Article VI 1. The grantor agrees to provide the trustee with all information necessary to prepare any reports required by sections 408(i) and 408A(d)(3)(E), Regulations sections and , or other guidance published by the Internal Revenue Service (IRS). 2. The trustee agrees to submit to the IRS and the grantor the reports prescribed by the IRS. Article VII Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through IV and this sentence will be controlling. Any additional articles inconsistent with section 408A, the related regulations, and other published guidance will be invalid. 8

11 Article VIII This agreement will be amended as necessary to comply with the provisions of the Code, the related regulations, and other published guidance. Other amendments may be made with the consent of the persons whose signatures appear below. Article IX Section 1 Investment of account 1. The Grantor has the sole authority and discretion, fully and completely, to select and to direct the investment of all assets in the trust account (hereinafter the Account ). Notwithstanding the foregoing, the Grantor may at any time delegate investment authority to an investment advisor. Upon the Trustee s receipt of written directions from the Grantor, the Trustee shall accept and rely upon instructions from any such investment advisor in regard to the investment of the assets comprising the Account in the same manner and to the same degree as if Grantor had furnished such instructions. 2. The Trustee shall comply promptly with all investment directions from the Grantor or the Grantor s designated investment advisor, providing such directions are clearly stated and in a form acceptable to the Trustee. The Trustee shall have neither the right nor duty to inquire into the propriety of any such direction nor into its effect upon the Account or the beneficiary or beneficiaries thereof, nor to apply to a court for instructions notwithstanding the fact that the Trustee has, or with reasonable inquiry should have, actual or constructive notice that any action taken or omitted pursuant to, or as a result of, the exercise of such directive power constitutes, or may constitute, a breach of the terms of the Account or a violation of any law applicable to the investment of the funds held hereunder. Any such direction so given the Trustee shall be deemed to be continuing until revoked or modified by a subsequent direction in writing, notwithstanding the occurrence of any event or other development of which the Trustee has or should have knowledge. The Trustee shall not be liable or responsible for any loss resulting to the Account or to any present or future beneficiary thereof by reason of: (a) Any sale or investment made or other action taken pursuant to and in accordance with the direction of Grantor or the Grantor s designated investment advisor; or (b) The retention of any asset, including cash, the acquisition or retention of which has been directed by the Grantor or the Grantor s designated investment advisor; provided, however, that nothing contained herein shall be construed to relieve the Trustee of liability or responsibility for the gross negligence or willful misconduct of itself or UMB Investment Advisors. 3. The Trustee shall have no duty to bring any claim, suit or other action in connection with any investment in the Account. The Grantor agrees to indemnify and hold the Trustee harmless from and against all costs and expenses (including attorney s fees) incurred by the Trustee in connection with any litigation, claim or other action involving any investment in the Account in which the Trustee is named as a necessary party or at the request of the Grantor. 4. The Grantor accepts full responsibility to vote all certificates of stock held hereunder and to vote special or general proxies. Grantor, may, however, appoint an investment advisor as Grantor s attorney-in-fact to execute any such proxies. 5. If the Grantor s initial contribution to the Account is in the form of cash, the Trustee may invest the contribution in its own bank account, in one or more of the taxable UMB Scout Money Market Fund portfolios selected by the Grantor, or in another fixed-income medium, pending further investment, unless the Trustee has received other instructions from the Grantor. At the Grantor s option, the Trustee will keep all cash invested on a daily basis through the Trustee s automated cash management system, through use of one or more of the taxable UMB Scout Money Market Fund portfolios. If the Grantor s initial contribution is in the form of assets in-kind, the Trustee shall retain the assets pending instructions from the Grantor. 6. Subject to the right and duty of the Grantor to direct the investments of the Account, the Trustee shall have full authority and power: (a) To sell, assign, exchange, convey or otherwise transfer, lease, mortgage or otherwise encumber, improve, abandon, alter or raze any part or all of the securities or other property of the Account upon such terms and conditions as the Grantor shall direct, and no person dealing with the Trustee shall be bound to see to the application of the purchase money or inquire into the validity, expediency or propriety of any such transaction; (b) To exercise any conversion privilege or subscription right available in connection with any securities or property of the Account, and to consent to, and participate in, the reorganization, consolidation, merger or readjustment of the finances of any corporation, company, association, partnership or other issuer of any of the securities which may be held hereunder, and to exercise any option or options and make any agreement or subscription and pay expenses, assessments or subscriptions in connection therewith; (c) To sue or defend any suit or legal proceeding by or against the Account and to compromise, settle, submit to arbitration, or adjust any suit or legal proceeding, claim, debt, damage, or undertaking due or owing from or to the Account but the Trustee shall not be obligated to take any action which would subject it to expense or liability unless it be first indemnified in an amount and manner satisfactory to it or be furnished with funds sufficient, in its sole judgment, to cover the same; (d) To acquire and hold any securities or other property of the Account without disclosing its fiduciary capacity, or in the name of any other person, with or without a power of attorney for transfer thereto attached; (e) To employ attorneys, accountants and others as it may deem advisable for the best interest of the Account, and to pay their reasonable expenses and compensation out of the Account; 9

12 (f) To make, execute and deliver, as Trustee, any and all instruments in writing necessary or proper for the effective exercise of any of the Trustee s powers as stated herein or otherwise necessary to accomplish the purpose of the Account; (g) To determine what is principal and what is income of the Account and to allocate or apportion receipts, gains, losses and expenses as between principal and income; (h) To maintain such part of the Account in cash as may be deemed advisable or expedient (with no requirement to pay interest on such cash balances nor on cash in its hands pending investment); and to invest all or part of the assets of the Account in deposits in its own banking department, or in any other bank or similar financial institution supervised by the United States or any State, provided such deposits bear a reasonable rate of interest. (i) To invest and reinvest the Account in such evidences of indebtedness, evidences of ownership, time deposits or other time deposit accounts issued or maintained by UMB Bank, n.a. or any of its affiliates, securities, mutual funds (including the UMB Scout family of funds), other personal property and real property, to sell options to purchase a security held in the Account and to purchase the right to sell any security as the Grantor or the Grantor s designated investment advisor directs. The trustee has power to invest and reinvest according to the Grantor or the Grantor s designated agent direction without regard to any restrictions of the law of any jurisdiction applicable to investments by fiduciaries. 7. All investment direction and investment advisory agreements provided by the IRA Grantor or beneficiary will continue until revoked by the IRA Grantor or beneficiary, even after the death of the IRA Grantor or beneficiary. Section 2 Beneficiary designations 1. At any time and from time to time the Grantor shall have the right to designate one or more beneficiaries to whom distribution of the Account, or the previously undistributed portion thereof, shall be made in the event of his or her death prior to the complete distribution of the Account. Following the death of the Grantor, all rights of the Grantor shall extend to Grantor s beneficiary. Any such beneficiary designation shall be deemed legally valid only when submitted fully complete, duly executed, and on a form provided by or acceptable to the Trustee. Subject to the preceding sentences, any such beneficiary designation shall be effective upon receipt by the Trustee prior to the death of the Grantor. Any such beneficiary designation may be revoked by the Grantor at any time, and shall be automatically revoked upon receipt by the Trustee of a subsequent beneficiary designation or beneficiary designations in valid form bearing a later execution date. 2. The Grantor understands that in certain states the consent of the Grantor s spouse may be necessary if the Grantor wishes to name a person other than, or in addition to, such spouse as beneficiary or to change an existing beneficiary designation, and that the Grantor is advised to consult with his or her own attorney before making such a beneficiary designation. The Grantor represents and warrants that each beneficiary designation submitted to the Trustee satisfies all legal requirements under applicable law and, on behalf of Grantor, Grantor s heirs and estate, Grantor indemnifies and holds the Trustee harmless from and against any and all claims, damages, liabilities, and costs (including attorney s fees) arising as a result of the Trustee s payment of the account in accordance with such beneficiary designation. 3. In the absence of a valid beneficiary designation on file with the Trustee at the time of the Grantor s death, the Trustee shall, upon receipt of notice of the death of the Grantor supported by a certified copy of the death certificate or other appropriate evidence of the fact of death satisfactory to the Trustee, make distribution of the Account to the default beneficiary or beneficiaries of the Grantor in the order of preference shown below. The default beneficiaries below shall be permitted to use Article V for purposes of determining the beneficiary distribution period. (a) To the Grantor s legal spouse; but if no such legal spouse shall survive the Grantor, then to (b) The surviving natural and adoptive children of the Grantor in equal shares per capita and not per stirpes; but if there shall be no such surviving child or children, then to (c) The personal representative of the estate of the Grantor. Following the death of the Grantor, if a beneficiary (other than the Grantor s surviving spouse who is treated as the Grantor of the Account under the terms of Section 3 of Article V) should die while receiving distributions under the provisions of section 1(a) or 1(b) of Article V, without having made a valid beneficiary designation, the Trustee shall, upon receipt of notice of the death of such beneficiary, distribute such Account to the estate of such beneficiary. 4. The Trustee shall have no duty, obligation or responsibility to make any inquiry or conduct any investigation concerning the identification, address or legal status of any individual or individuals alleging the status of beneficiary (designated or otherwise), nor to make inquiry or investigation concerning the possible existence of any beneficiary not reported to the Trustee within a reasonable period after the notification of the Grantor s death and previous to the distribution of the Account. The Trustee may conclusively rely upon the veracity and accuracy of all matters reported to it by any source ordinarily presumed to be knowledgeable respecting the matters so reported. With respect to any distribution made by reason of the death of the Grantor, the Trustee shall have no higher duty than the exercise of good faith, shall incur no liability by reason of any action taken in reliance upon erroneous, inaccurate or fraudulent information reported by any source assumed to be reliable, or by reason of incomplete information in its possession at the time of such distribution. Upon full and complete distribution of the Account pursuant to the provisions of this Section, the Trustee shall be fully and forever discharged from all liability respecting such Account. 10