Date: May 2017 Review & Retain Important Informa on regarding Changes to Merrill Lynch Re rement Accounts Not Enrolled in a Merrill Lynch Investment Advisory Program We are wri ng to update you on planned changes to the services that Merrill Lynch and your advisor offer to certain types of brokerage re rement accounts as a result of the pending implementa on of the new Department of Labor Fiduciary Rule (DoL Rule). Since Merrill Lynch s founding more than 100 years ago, we have maintained a commitment to pu ng our clients interest first. This is why we support the DoL Rule, which is scheduled to become applicable on June 9, 2017 (the Applicability Date). Please note, however, that the Applicability Date may be pushed out subject to DoL regula on. The DoL Rule requires advisors to apply a fiduciary standard of care when making a recommenda on regarding clients Re rement Accounts. We welcome this new standard and were, in fact, among the first in the industry to lend our support to this ini a ve. The changes affect the following Re rement Account types enrolled in our brokerage pla orm: Individual Re rement Account (IRA) Re rement Selector Account (RSA ) Roth IRA RCMA Investment Only account IRRA Self-Direct Brokerage Advisor Advantage Account SEP IRA Self-Direct Brokerage Account through Ascensus and Ascensus Trust SIMPLE IRA Ins tu onal Trust & Custody Services Advised Brokerage Qualified BASIC Plan Account Preparing for the DoL rule Merrill Lynch already provides a fiduciary standard of care to those accounts serviced by your advisor that are enrolled in the Merrill Lynch Investment Advisory Program (MLIAP). In this investment advisory program, the advice and guidance is provided by your advisor on a fixed fee basis to remove poten al conflicted advice regarding compensa on earned. You also receive investment advisory services and ongoing monitoring of your investments. Your advisor stands ready to review your individual circumstances and provide informa on and guidance about these programs and their benefits and costs. What this means for your Re rement Accounts that are NOT enrolled in MLIAP or one of our other investment advisory programs Beginning on the Applicability Date, your exis ng brokerage Re rement Accounts that are not enrolled in Merrill Lynch s Investment Advisory Program or one of our other investment advisory programs will be subject to the following: Your Merrill Lynch account number will remain the same. Any exis ng securi es and cash will remain in the account un l you take ac on. Cash sweeps will con nue according to your exis ng instruc ons. Cash contribu ons and withdrawals from and into the account will be allowed (other than for RSA which has been closed to new funds). No new securi es purchases or transfers in of securi es in your exis ng account will be allowed. Sell transac ons and transfers of securi es out of the account will be allowed. In addi on, we will offer a limited purpose brokerage Re rement Account to enable you, aſter the Applicability Date, to hold cash and conduct limited securi es purchase and sell transac ons in certain investment products we determine to make available from me to me. Working with your advisor The text of the amendments to the Re rement Account agreements that are related to the DoL Rule and other changes are set forth in the a ached Amendment No fica on. If you would like a copy of the revised agreement for your Re rement Account, please contact your Merrill Lynch advisor. We encourage you to work with your Merrill Lynch advisor to be er understand the impacts of these changes on your exis ng accounts and what choices are available to you for the ongoing management of your Re rement Accounts. Some of these changes impact your specific investments and investment choices, like mutual funds and annui es, and may require ac on within a certain me frame. Thank you for allowing us to con nue to serve you and help you work toward your financial goals. If you have any ques ons, please contact your Merrill Lynch advisor. Merrill Lynch Wealth Management, Merrill Edge, and The Private Banking and Investment Group offer products and services made available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). Banking products are provided by Bank of America, N.A. and affiliated banks, members FDIC and wholly owned subsidiaries of Bank of America Corpora on. Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corpora on. 2017 Bank of America Corpora on. All rights reserved.
A en on Clients with an Individual Re rement Account (IRA), IRRA, Roth IRA, SEP IRA and SIMPLE IRA, Cash Management Account (CMA ), CMA SubAccount and CMA for Trust Account No fica on of changes to the services that Merrill Lynch offers to IRA, IRRA, Roth IRA, SEP IRA and SIMPLE IRA accounts (collec vely, Re rement Accounts ) and the Disclosure Statements, Custodial Agreements and related documents which govern the Re rement Account. Updates to the Client Rela onship Agreement Effec ve June 9, 2017, or such later date that the Department of Labor Fiduciary Rule becomes applicable to Re rement Account assets (the Applicability Date ), your Client Rela onship Agreement (CRA), which governs the Merrill Lynch brokerage accounts including the Re rement Accounts listed above, will be amended to include the following addi onal details regarding the services that Merrill Lynch offers to Re rement Accounts. The below verbiage will be added to the Terms and Condi ons of the CRA as a new Sec on 3, and Sec on 12 of the CRA will be renumbered to Sec on 13 and amended as outlined below. All other Sec ons of the CRA remain the same and will be renumbered accordingly. These are significant changes that you should discuss with your advisor. Also, if you would like a copy of the revised CRA, please contact your advisor. 1. The CRA will be amended to add the following content as a new Sec on 3: 3. OUR SERVICES REGARDING INDIVIDUAL RETIREMENT ACCOUNT (IRA), IRRA, ROTH IRA, SEP IRA AND SIMPLE IRA ACCOUNTS (collec vely Re rement Accounts) For Re rement Accounts opened prior to the Applicability Date: On and aſter June 9, 2017, or such later date that the Department of Labor Fiduciary Rule becomes applicable to Re rement Account assets (the Applicability Date ), any Re rement Account not enrolled in an investment advisory program will be subject to certain transac on restric ons, including, but not limited to, not being able to purchase securi es. You will be permi ed to hold or sell assets, including cash, that are held in your Re rement Account prior to that date and to make or receive cash contribu ons into, and make distribu ons from, your Re rement Account on and aſter that date. On and aſter the Applicability Date, purchases of securi es (other than as a result of your previously designated cash sweep) will not be allowed in your Re rement Account un l (i) you either enroll in an investment advisory program; or (ii) open a TABLE OF CONTENTS: Clients with IRA, IRRA, Roth IRA, SEP and SIMPLE, Cash Management Account (CMA ), CMA SubAccounts and CMA for Trust Accounts... 1 Updates to the Individual Re rement Account (IRA), Roth IRA, SEP IRA & SIMPLE IRA Custodial Agreements and Disclosure Statements... 3 Clients with BASIC Plan Accounts... 7 Clients with Re rement Selector Accounts (RSA)... 11 Clients with Merrill Edge Self-Directed Inves ng Accounts... 12 Par cipants with a Self-Direct Brokerage (SDB) Advisor Advantage Account in a qualified re rement plan record-kept on the Bank of America Merrill Lynch pla orm... 12 Advisor Alliance Plans and Par cipants with a Self-Direct Brokerage Accounts through Ascensus and Ascensus Trust... 13 Clients with Ins tu onal Trust & Custody Services Qualified Plan Accounts... 13 Clients with Re rement Cash Management Accounts (RCMA)... 14 Limited Purpose Re rement Account available only for certain eligible securi es transac ons and holdings; or (iii) your Re rement Account is converted to a Merrill Edge Self-Directed Inves ng (MESD) Re rement Account as explained below. For Re rement Accounts opened on or aſter the Applicability Date: In order to engage in securi es purchase transac ons and to receive certain other investment services, all Re rement Accounts which are opened on or aſter the Applicability Date must be (i) enrolled in a Merrill Lynch investment advisory program or (ii) opened as a Limited Purpose Re rement Account described below in this Sec on 3. Un l your Re rement Account is accepted into the Merrill Lynch investment advisory program you have selected for the purchase, holding and sales of investment securi es, or you open the Limited Purpose Re rement Account described below in this Sec on 3 for certain eligible securi es and cash assets, you will be subject to certain transac on restric ons, including but not limited to, not being able to purchase securi es. You will only be permi ed to hold or sell any assets in your Re rement Account, or make or receive cash contribu ons into, and make distribu ons from your Re rement Account, prior to such enrollment or account opening. No purchase transac ons will be allowed in your Re rement Account un l (i) you are enrolled in the selected investment advisory program under the terms of the agreement associated with the program; or (ii) for certain eligible securi es and cash assets, you open the Limited Purpose Re rement Account described below in this Sec on 3; or (iii) your Re rement Account is converted to an MESD Re rement Account, as described in the following paragraph. Consequences for not enrolling in an investment advisory program. If your Re rement Account is not enrolled in an investment advisory program or a Limited Purpose Re rement Account (for eligible securi es only) within 180 days from the opening date of your Re rement Account for any reason, including failure to execute and return the agreements and documenta on that we may require, then you acknowledge and agree that Merrill Lynch has the right 1 Con nued on page 2
to convert your Re rement Account to an MESD Re rement Account without no ce to you. If Merrill Lynch converts your Re rement Account to an MESD Re rement Account, or you elect to convert your eligible Re rement Account to an MESD Re rement Account, the addi onal terms in Sec on 13 will apply to your Re rement Account upon conversion. Ability to Open a Limited Purpose Re rement Account. You may open a Limited Purpose Re rement Account on or aſter the Applicability Date in order to hold cash that you have determined should remain uninvested and held outside of a Merrill Lynch investment advisory program. In addi on, you may open or u lize a Limited Purpose Re rement Account on or aſter the Applicability Date to hold and engage in certain limited transac ons in select securi es that Merrill Lynch may allow in this account, as it may determine in its sole discre on from me to me. This Limited Purpose Re rement Account will be specifically designated as a Limited Purpose account and will be restricted to the following ac vity: (i) receiving cash contribu ons or transfers of cash; (ii) holding cash assets (and any related sweep asset under the cash sweep program applicable to the Re rement Account); (iii) transferring cash to other Merrill Lynch accounts or to other persons or accounts in amounts designated and authorized by you; (iv) making cash withdrawals and distribu ons as determined by you from me to me; and (v) any transac onal ac vity permi ed by Merrill Lynch in the account. No securi es holdings or purchases will be allowed in this Limited Purpose Re rement Account except those (i) resul ng from the cash sweep program you have designated at the opening of your Limited Purpose Re rement Account or (ii) or permi ed by Merrill Lynch. You agree that the holding of cash in this Limited Purpose Re rement Account, whether based on informa on obtained from Merrill Lynch, your Advisor, or elsewhere, will be solely your own decision and based on your own evalua on and determina on respec ng your cash holdings in light of your personal financial situa on, purposes for the cash holding in such account, your cash needs for a par cular me period, your view of the market condi ons and risks and your preferences on how to hold and manage your cash assets. Notwithstanding anything in this Agreement to the contrary, Merrill Lynch may, in its sole discre on, permit the purchase of certain securi es in this Limited Purpose Re rement Account as it may designate from me to me. Your advisor will provide you the eligible investment ac vity for the Limited Purpose Re rement Account upon request. Any investments in this Limited Purpose account must be compa ble with our administra ve, opera onal and procedural requirements which may change from me to me. For all Re rement Accounts: Please speak with your advisor regarding all restric ons applicable to your Re rement Account. The services provided by, and terms and condi ons of, the investment advisory program you select will be described in addi onal documenta on that will be provided to you. This will include a separate agreement that you are required to sign and return to Merrill Lynch. If at any me on or aſter the Applicability Date, your Re rement Account s enrollment in an investment advisory program is terminated, either by you or Merrill Lynch, your Re rement Account will become subject to transac on restric ons, including, but not limited to, not being able to make purchase transac ons, and any others provided to you by your advisor or Merrill Lynch. Consequences for termina on from an investment advisory program. If your Re rement Account is not re-enrolled in an investment advisory program, where eligible, enrolled in a Limited Purpose Re rement Account or converted to an MESD Re rement Account within 90 days from the date your Re rement Account is terminated from an investment advisory program, then you acknowledge and agree that Merrill Lynch has the right to convert your Re rement Account to an MESD Re rement Account without no ce to you. Un l you take ac on to convert to an MESD Re rement Account or enroll in a Merrill Lynch investment advisory program or, where eligible, a Limited Purpose Re rement Account, you will only be permi ed to hold or sell assets in your Re rement Account, or make or receive cash contribu ons into, and make distribu ons from, your Re rement Account during such period, but purchases will not be allowed in your Re rement Account. If Merrill Lynch converts your Re rement Account to an MESD Re rement Account, or you elect to convert your eligible Re rement Account to an MESD Re rement Account, the addi onal terms in Sec on 13 will apply to your Re rement Account upon conversion. 2. The CRA will be amended to add the following last two paragraphs of Sec on 13 and such Sec on is restated in its en rety as follows: 13. Conversion to Merill Edge Self-Directed Inves ng (MESD) Certain Accounts may be eligible to convert to an MESD Account. If your Account is converted to an MESD Account, the addi onal terms in subsec on (a) below, will apply to your Account upon conversion. (a) TERMS APPLICABLE TO MERRILL EDGE SELF-DIRECTED INVESTING ACCOUNTS Upon conversion to MESD, your Account will be subject to the terms of the MESD Client Rela onship Agreement ( CRA ) and MESD Terms of Service ( TOS ). To obtain a copy of those documents, please contact your financial advisor or visit www.merrilledge.com/cra and www.merrilledge.com/tos. Copies of the MESD CRA and TOS will be provided to you upon conversion of your Account to MESD. MESD is designed for U.S.-based investors who wish to make their own investment choices in a Merrill Lynch brokerage account. Neither Merrill Lynch, nor MESD, nor any Merrill Lynch or MESD representa ve, will provide you with investment advice, including any recommenda on, or offer any opinion regarding the suitability of any security, order, transac on, or strategy in your MESD Account, or 2 Con nued on page 3
monitor your investments or the appropriateness of your account or service level, or alert you to any recommended change to your investments, investment accounts, or services. Neither Merrill Lynch nor MESD, nor any Merrill Lynch or MESD representa ve or agent, will provide you with any tax or legal advice. No Merrill Lynch Research opinion, Independent Research opinion, the inclusion of a security on any list, or any informa on provided to you either on the Merrill Edge website or by mail or any other means cons tutes a recommenda on to you to purchase, hold or sell any investment. You agree that any transac ons executed through your MESD Account, whether based on informa on obtained from Merrill Lynch or elsewhere, will be solely your own decision and based on your own evalua on of your personal financial situa on, needs, and investment objec ve(s). In addi on to retaining the sole responsibility for investment decisions, you understand and agree that you are responsible for knowing the rights and terms of all securi es in your Account, specifically including valuable rights that expire unless the holder takes ac on. This includes, but is not limited to, warrants, stock rights, conver ble securi es, bonds, and securi es subject to a tender or exchange offer. You understand and agree that Merrill Lynch accepts no obliga on to no fy you of any upcoming expira on or redemp on dates, or, except as required by applicable law or regula on, to take any ac on on your behalf without specific instruc ons from you. You also agree that all dividends and interest payments credited to your Account shall accumulate rather than be paid to you upon receipt, but shall be subject to your withdrawal from me to me upon request for a check or other funds transfer. You hereby acknowledge and agree that none of Merrill Lynch, MESD, or any Merrill Lynch or MESD representa ve will act as a fiduciary within the meaning of sec on 4975(e)(3) of the Internal Revenue Code, sec on 3(21) of the Employee Re rement Income Security Act, or under any state law, with respect to your Account aſter it is converted to MESD, or has made any recommenda ons to you to open or transfer assets to an MESD account. Moreover, you understand and acknowledge that Merrill Lynch generally believes that all re rement investors benefit from the receipt of ongoing, professional investment advice designed to help them meet their investment goals through a Merrill Lynch investment advisory program. By entering into an MESD arrangement, through conversion or otherwise, you understand and agree that you will not be receiving any such professional investment advice, recommenda ons or management from us or any of our representa ves and we have not recommended that you fund or transfer assets into an MESD account or otherwise convert your Account into an MESD account. Updates to the Tradi onal Individual Re rement Account (IRA), Roth IRA, SEP IRA & SIMPLE IRA Custodial Agreements and Disclosure Statements Effec ve June 9, 2017, or such later date that the Department of Labor Fiduciary Rule becomes applicable to Re rement Account assets (the Applicability Date ), the Custodial Agreements, Disclosure Statements and related documents which govern your Re rement Account will be amended as outlined below to be consistent with the Client Rela onship Agreement (CRA) changes noted above and as to other ma ers. These are significant changes that you should discuss with your advisor. If you would like a copy of the revised Disclosure Statements & Custodial Agreements and related documents (for no charge), please contact your advisor. TRADITIONAL IRA ACCOUNTS Tradi onal IRA Custodial Agreement. The following changes will be made, such changes affec ng the IRA, SEP and SEP Plus accounts: 1. Throughout the document, Merrill Lynch s Advisory Program is updated to be renamed Merrill Lynch investment advisory program and the term Financial Advisor is updated to be renamed advisor. 2. Paragraph 12 revise the exis ng paragraph to read: If we ever resign as custodian, we will no fy you in wri ng at your last known address at least thirty (30) days in advance of our resigna on. You acknowledge and agree that, upon your receipt of no ce of our resigna on as your custodian: (i) you will have the right to select your successor custodian, provided that you have given us wri en instruc on to transfer your IRA assets to another IRA custodian or trustee in advance of the effec ve date of our resigna on; (ii) if you have not provided us with instruc ons regarding your preferred successor custodian, we may, in our sole discre on and without further no ce to you, designate a successor custodian (including one affiliated with us) on your behalf; and (iii) in the event no successor custodian is designated by you (including in par cular if we appoint a successor custodian on your behalf), we may liquidate without further no ce to you all of the assets in your account, and all proceeds from such liquida on will be either (a) transferred to the successor custodian or (b) sent to your last known address in the form of a check. Please note that in the event we liquidate any of your assets, any outstanding obliga ons and/or debit balance you may owe in your IRA Account, including any annual and closing fees, will be deducted by Merrill Lynch prior to any checks being issued. Addi onally, the liquida on of any security may incur fees, including mutual fund con ngent deferred sales charges, or other applicable liquida on fees, which also will be paid with the proceeds of your liquidated assets. 3. Paragraph 37 replace You can invest your IRA assets with Your IRA can invest ; and add in certain cases to the end of the third bullet regarding investments in mutual funds. 4. Paragraph 38 add a new first sentence to read: All investments must be compa ble with Merrill Lynch s administra ve and opera onal requirements and procedures of the account system through which your IRA is administered which may change from me to me. 5. Paragraph 70 revise the second and third sentences to read: Unless you re enrolled in a Merrill Lynch investment advisory program or, on or aſter June 9, 2017, or such later 3 Con nued on page 4
date that the Department of Labor Fiduciary Rule becomes applicable to Re rement Account assets (the Applicability Date ), Merrill Lynch provided you with a recommenda on to enroll in a Merrill Lynch investment advisory program (a Program Enrollment Recommenda on ), we are also not responsible for reviewing the assets in your IRA or making recommenda ons on buying, selling or transferring any assets. In addi on, we re not liable for failing to act if you don t give us direc ons. No Merrill Lynch Research opinion, Independent Research opinion, the inclusion of a security on any list, or any informa on provided to you either on the Merrill Edge website or by mail or any other means cons tutes a recommenda on to you to purchase, hold or sell any investment nor should you view Merrill Lynch as providing impar al investment advice to you by reason of making such research, opinions, lists or informa on available to you. 6. Paragraph 71 revise the exis ng paragraph to read: We provide no advice on the investment consequences involving your IRA, unless provided under a separate agreement and we re not liable for any taxes or other consequences of your investment decisions or direc ons. In addi on, we provide no advice on the tax or other consequences involving your IRA and we are not liable for any taxes or other consequences of your decisions or direc ons. 7. Paragraph 72 revise the first sentence to read: We re not responsible for the validity of any annuity held in your IRA or the failure of any insurance company to make annuity payments. 8. Paragraph 78, 4th bullet add the following aſter the word award : unless, in an eligible case, a joint request for an explained decision has been submi ed by all par es to the panel at least 20 days prior to the first scheduled hearing date. 9. Paragraph 78, 5th bullet replace will typically with may and under the 7th bullet update agreement to Agreement. 10. Replace paragraph 80 with the following: Any arbitra on pursuant to this provision shall be conducted only before the Financial Industry Regulatory Authority, Inc. (FINRA) or an arbitra on facility provided by any other exchange of which Merrill Lynch is a member, and in accordance with the respec ve arbitra on rules then in effect in FINRA or such other exchange. 11. Add the following as a new Paragraph 81 and renumber the remaining sec ons accordingly: You may elect in the first instance whether arbitra on shall be conducted before FINRA or another exchange of which Merrill Lynch is a member, but if you fail to make such elec on by registered le er addressed to Merrill Lynch at the office where you maintain your Account before the expira on of five days aſter the receipt of a wri en request from Merrill Lynch to make such elec on, then Merrill Lynch may make such elec on. 12. Add the following as a new paragraph 84 and renumber the remaining sec ons accordingly: This agreement does not prohibit or restrict you from reques ng arbitra on of a dispute in the FINRA arbitra on forum as specified by FINRA rules. 13. Add a new paragraph 87 to read: In connec on with any arbitra on brought in accordance with this Agreement for the avoidance of doubt, effec ve the Applicability Date, the pre-dispute arbitra on provision contained in this document shall be interpreted, and specifically limited, in order to avoid a viola on of the US Department of Labor s Best Interest Contract Exemp on with respect to a Program Enrollment Recommenda on. Tradi onal IRA Disclosure Statement. For the Tradi onal IRA Disclosure Statement, conforming changes will be made, consistent with the updated CRA and the Custodial Agreement, including the following: 1. Paragraph 39 add the following sentences to the end thereof to read: You can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own. You can, however, con nue to make as many trustee-to-trustee transfers between IRAs as you want. 2. Paragraph 80 delete this paragraph and renumber the exis ng Paragraphs accordingly. 3. Paragraph 106 (now paragraph 105) revise the first sentence to read: We will waive your IRA Custodial fees for the me that your IRA is enrolled in a Merrill Lynch investment advisory program. ROTH IRA ACCOUNTS Roth IRA Custodial Agreement. The following changes will be made: 1. Paragraph 40 add the following phrase to the end of the first sentence:, including the direc on to enroll in a Merrill Lynch investment advisory program. 2. Paragraph 41 revise the exis ng paragraph to read: Your Roth IRA may invest in one or more investment alterna ves we offer, subject to any rules we may reasonably establish, or your Roth IRA may sell any such assets and reinvest the proceeds. All investments must be compa ble with our administra ve and opera onal requirements which may change from me to me. 3. Paragraph 45 revise the exis ng paragraph to read: You may enroll your Roth IRA in a Merrill Lynch investment advisory program as provided under a separate agreement. Except under a separate agreement, Merrill Lynch will not have discre onary authority or control with respect to the investment of your Roth IRA assets, nor will it provide advice or recommenda ons for your Roth IRA investments. You may, however, enroll, under a separate agreement, your Roth IRA in a Merrill Lynch investment advisory program to receive these types of services. Moreover, on or aſter June 9, 2017, or such later date that the Department of Labor Fiduciary Rule becomes applicable to Re rement Account assets (the Applicability Date ), Merrill Lynch may make a recommenda on (i) to enroll your Roth IRA in a Merrill Lynch investment advisory program or (ii) for certain securi es and assets, to open a Limited Purpose Re rement Account. 4 Con nued on page 5
4. Paragraph 46 revise the exis ng paragraph to read: Except for a Program Enrollment Recommenda on made on or aſter the Applicability Date, or as provided under a separate agreement, we have no duty to determine or advise you or any other person of the investment consequences resul ng from your or their ac ons involving your Roth IRA and we are not liable for the investment consequences of your or their ac ons, or of our ac ons following your direc ons, or of our failing to act in the absence of your or their direc ons. In addi on, we have no duty to determine or advise you or any other person of the tax or other consequences resul ng from your or their ac ons involving your Roth IRA and we are not liable for the tax or other consequences of your or their ac ons, or of our ac ons following your direc ons, or of our failing to act in the absence of your or their direc ons. 5. Paragraph 47 replace We at the beginning of the paragraph with Except as provided under a separate agreement, we. 6. Paragraph 48 revise the exis ng paragraph to read: Unless you are enrolled in a Merrill Lynch investment advisory program or, on or aſter the Applicability Date, we provided you with a Program Enrollment Recommenda on, we are not responsible for reviewing the assets in your Roth IRA or for making recommenda ons on acquiring, retaining or selling any assets. No Merrill Lynch Research opinion, Independent Research opinion, the inclusion of a security on any list, or any informa on provided to you either on the Merrill Edge website or by mail or any other means cons tutes a recommenda on to you to purchase, hold or sell any investment nor should you view Merrill Lynch as providing impar al investment advice to you by reason of making such research, opinions, lists or informa on available to you. 7. Paragraph 58 revise the first sentence to read: We are not responsible for the validity of any annuity held in your Roth IRA or the failure of any insurance company to make annuity payments. 8. Paragraphs 72, 73 & 74 delete these paragraphs and add a new Paragraph 72 that reads as follows: If we ever resign as custodian, we will no fy you in wri ng at your last known address at least thirty (30) days in advance of our resigna on. You acknowledge and agree that, upon your receipt of no ce of our resigna on as your custodian: (i) you will have the right to select your successor custodian, provided that you have given us wri en instruc on to transfer your Roth IRA assets to another Roth IRA custodian or trustee in advance of the effec ve date of our resigna on; (ii) if you have not provided us with instruc ons regarding your preferred successor custodian, we may, in our sole discre on and without further no ce to you, designate a successor custodian (including one affiliated with us) on your behalf; and (iii) in the event no successor custodian is designated by you (including in par cular if we appoint a successor custodian on your behalf), we may liquidate without further no ce to you all of the assets in your account, and all proceeds from such liquida on will be either (a) transferred to the successor custodian or (b) sent to your last known address in the form of a check. Please note that in the event we liquidate any of your assets, any outstanding obliga ons and/or debit balance(s) you may owe in your Roth IRA Account(s), including any annual and closing fees, will be deducted by Merrill Lynch prior to any checks being issued. Addi onally, the liquida on of any security may 5 incur fees, including mutual fund con ngent deferred sales charges, or other applicable liquida on fees, which also will be paid with the proceeds of your liquidated assets. 9. Paragraph 89, add the following as a new sentence and renumber the remaining sec ons accordingly: This Agreement does not prohibit or restrict you from reques ng arbitra on of a dispute in the FINRA arbitra on forum as specified in FINRA rules. 10. Paragraph 90 add a new sentence to the end thereof to read: In connec on with any arbitra on brought in accordance with this agreement for the avoidance of doubt, effec ve the Applicability Date, the pre-dispute arbitra on provision contained in this document shall not be interpreted as a viola on of the US Department of Labor s Best Interest Contract Exemp on with respect to a Program Enrollment Recommenda on. Roth IRA Disclosure Statement. For the Roth IRA Disclosure Statement, conforming changes will be made consistent with the updated CRA and the Custodial Agreement, including the following: 1. Paragraph 82 (now paragraph 81) delete the following: You may withdraw from RASP any me and reinvest the money in the broad range of investments available (see Investments) through your Financial Advisor, a Service Associate, or our automated investment service (for which you will have to enroll). In addi on, delete Merrill Lynch & Co., Inc. 2. Add a new Paragraph 129 to read: We will waive your Roth IRA Custodial fee for the me that your IRA is enrolled in a Merrill Lynch investment advisory program. 3. Paragraph 134 delete the following or if any account in the household is enrolled in the Mutual Fund Advisory Program. SEP ACCOUNTS and SEP PLUS ACCOUNTS SEP/SEP Plus Custodial Agreement. The changes noted above for the Tradi onal IRA Custodial Agreement apply to SEP and SEP Plus accounts as this agreement governs these accounts as well. SEP/SEP Plus Disclosure Statements. The following changes will be made: 1. Sec on V (SEP) revise the first sentence to read: A custodial fee is charged each year on your SEP/IRA, but will be waived for the me that your SEP/IRA is enrolled in a Merrill Lynch investment advisory program. 2. Sec on VIII (SEP Plus) revise the first sentence to read: A custodial fee is charged each year on your SEP/IRA, but will be waived for the me that your SEP/IRA is enrolled in a Merrill Lynch investment advisory program. SEP/SEP Plus Adop on Agreements. The following address change will be made: Street address of the SEP/SEP Plus prototype sponsor replace 1400 Merrill Lynch Drive, MSC 0403 with 1400 American Blvd, MSC 0403. Con nued on page 6
SIMPLE IRA ACCOUNTS SIMPLE IRA Custodial Agreement. The following changes will be made: 1. Paragraph 32 add the following phrase to the end of the first sentence:, including the direc on to enroll in a Merrill Lynch investment advisory program. 2. Paragraph 33 revise the exis ng paragraph to read: Your SRA/IRA may invest in one or more investment alterna ves we offer, subject to any rules we may reasonably establish, or your SRA/IRA may sell any such assets and reinvest the proceeds. All investments must be compa ble with our administra ve and opera onal requirements, which may change from me to me. 3. Paragraph 37 revise the exis ng paragraph to read: You may enroll your SRA/IRA in a Merrill Lynch investment advisory program, as provided under a separate agreement. Except under a separate agreement, Merrill Lynch will not have discre onary authority or control with respect to the investment of your SRA/IRA assets, nor will it provide advice or recommenda ons for your SRA/IRA investments. You may however enroll, under a separate agreement, your SRA/IRA in a Merrill Lynch investment advisory program to receive these types of services. Moreover, on or aſter June 9, 2017, or such later date that the Department of Labor Fiduciary Rule becomes applicable to Re rement Account assets (the Applicability Date ), Merrill Lynch may make a recommenda on (a Program Enrollment Recommenda on ): (i) to enroll your SRA/IRA in a Merrill Lynch investment advisory program or (ii) for certain securi es and assets, to open a Limited Purpose Re rement Account. 4. Paragraph 38 revise the exis ng paragraph to read: Except for a Program Enrollment Recommenda on made on or aſter the Applicability Date, or as provided under a separate agreement, we have no duty to determine or advise you or any other person of the investment consequences resul ng from your or their ac ons involving your SRA/IRA and we are not liable for the investment consequences of your or their ac ons, or of our ac ons following your direc ons, or of our failing to act in the absence of your or their direc ons. In addi on, we have no duty to determine or advise you or any other person of the tax or other consequences resul ng from your or their ac ons involving your SRA/IRA and we are not liable for the tax or other consequences of your or their ac ons, or of our ac ons following your direc ons, or of our failing to act in the absence of your or their direc ons. 5. Paragraph 39 replace We at the beginning of the paragraph with Except as provided under a separate agreement, we. 6. Paragraph 40 revise the exis ng paragraph to read: Unless you are enrolled in a Merrill Lynch investment advisory program, or, on or aſter the Applicability Date, we provided you with a Program Enrollment Recommenda on to enroll in a Merrill Lynch investment advisory program, we are not responsible for reviewing the assets in your SRA/IRA or for making recommenda ons on acquiring, retaining or selling any assets. No Merrill Lynch Research opinion, Independent Research opinion, the inclusion of a security on any list, or any informa on provided to you either on the Merrill Edge website or by mail or any other means cons tutes a recommenda on to you to purchase, hold or sell any investment nor should you view Merrill Lynch as providing impar al investment advice to you by reason of making such research, opinions, lists or informa on available to you. 7. Paragraph 49 delete the phrase you direct us to purchase. 8. Paragraph 50 revise the first sentence to read: We are not responsible for the validity of any annuity held in your SRA/ IRA or the failure of any insurance company to make annuity payments. 9. Paragraph 54 revise the second bullet to read: Merrill Lynch investment advisory program fees, when applicable;. 10. Paragraph 62, 63 & 64 delete these paragraphs and add a new Paragraph 62 that reads as follows: If we ever resign as custodian, we will no fy you in wri ng at your last known address at least thirty (30) days in advance of our resigna on. You acknowledge and agree that, upon your receipt of no ce of our resigna on as your custodian: (i) you will have the right to select your successor custodian, provided that you have given us wri en instruc on to transfer your SRA/IRA assets to another SRA/ IRA custodian or trustee in advance of the effec ve date of our resigna on; (ii) if you have not provided us with instruc ons regarding your preferred successor custodian, we may, in our sole discre on and without further no ce to you, designate a successor custodian (including one affiliated with us) on your behalf; and (iii) in the event no successor custodian is designated by you (including in par cular if we appoint a successor custodian on your behalf), we may liquidate without further no ce to you all of the assets in your account, and all proceeds from such liquida on will be either (a) transferred to the successor custodian or (b) sent to your last known address in the form of a check. Please note that in the event we liquidate any of your assets, any outstanding obliga ons and/or debit balance you may owe in your SRA/IRA account, including any annual and closing fees, will be deducted by Merrill Lynch prior to any checks being issued. Addi onally, the liquida on of any security may incur fees, including mutual fund con ngent deferred sales charges, or other applicable liquida on fees, which also will be paid with the proceeds of your liquidated assets. 11. Paragraph 78 (now paragraph 76) add the following as a new paragraph 78 and renumber the remaining paragraphs accordingly: This Agreement does not prohibit or restrict you from reques ng arbitra on of a dispute in the FINRA arbitra on forum as specified in FINRA rules. 12. Paragraph 78 (now paragraph 77) add the following at the end of the new paragraph 77: In connec on with any arbitra on brought in accordance with this Agreement for the avoidance of doubt, effec ve the Applicability Date, the pre-dispute arbitra on provision contained in this document shall not be interpreted as a viola on of the US Department of Labor s Best Interest Contract Exemp on with respect to a Program Enrollment Recommenda on. 6 Con nued on page 7
SIMPLE IRA Disclosure Statement. For the SIMPLE IRA Disclosure Statement, conforming changes will be made consistent with the updated CRA and the Custodial Agreement, including the following: 1. Paragraph 20 add a new bullet aſter the second bullet to read: You can make only one rollover from a SRA/IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own. You can, however, con nue to make as many trustee-to-trustee transfers between IRAs as you want. 2. Paragraph 82 delete en re paragraph and renumber subsequent paragraphs. 3. Paragraph 119 (now paragraph 118) revise the exis ng paragraph to read: The custodial fee for an SRA/IRA will be waived for the me that your SRA/IRA is enrolled in a Merrill Lynch investment advisory program. 4. Paragraph 124 (now paragraph 123) add : any Merrill Lynch investment advisory programs, and Merrill Lynch Direct, Sec on 529/NextGen, MLESA, SEP, SIMPLE and stock op on exercise accounts will also not be charged the fee to the end of the first sentence; and delete the last sentence. 5. Paragraph 133 (now paragraph 132) add the following aſter the text in the first and second bullet: (not available for MESD). Merrill Lynch Prototype SIMPLE Re rement Account Plan Employer s Adop on Agreement. The following address change will be made: Update address of Merrill Lynch to: 1400 American Blvd, MSC 0403, Pennington, NJ 08534-4128. A en on Clients with BASIC Plan Accounts No fica on of changes to the services that Merrill Lynch offers to BASIC accounts and to the Custodial Agreement which governs the BASIC Re rement Accounts Effec ve June 9, 2017, or such later date that the Department of Labor Fiduciary Rule becomes applicable to Re rement Account assets (the Applicability Date ), the BASIC (Keogh) Plan Account Custodial Agreement the BASIC (Keogh) Plan Account Custodial Agreement ( BASIC Custodial Agreement ) to the Merrill Lynch Prototype Defined Contribu on Plan and Trust (Base Document #03), and related Adop on Agreements ( Prototype Plan ), which governs your BASIC Re rement Account, will be amended to include addi onal details regarding the services that Merrill Lynch offers to BASIC plan accounts. These are significant changes that you should discuss with your advisor. If you would like a copy of the revised Custodial Agreement, please contact your advisor. Pursuant to Ar cle 11.1.1 of the Prototype Plan and Sec on 15 of the Custodial Agreement en tled Amendments, the Sponsor hereby adopts this Amendment on behalf of all Primary Employers. This amendment is effec ve the Applicability Date. This amendment supersedes any provisions of the Prototype Plan and Custodial Agreement to the extent to which they are inconsistent with the provisions of this Amendment. The sec ons in the Custodial Agreement referenced below shall be amended as indicated. Each adop ng employer is urged to consult with its own a orney with regard to the Prototype Plan and the suitability of the Prototype Plan to its circumstance. The sec ons in the BASIC Custodial Agreement referenced below will be amended as indicated. 1. A new Sec on 1 will be added, to read as follows, and the exis ng Sec ons shall be renumbered accordingly: 1. OUR SERVICES For BASIC plan accounts opened prior to the Applicability Date: On June 9, 2017, or such later date that the Department of Labor Fiduciary Rule becomes applicable to Re rement Account Assets (the Applicability Date ), any BASIC plan account not enrolled in an investment advisory program will be subject to certain transac on restric ons, including, but not limited to, not being able to purchase securi es. You will be permi ed to hold or sell assets, including cash, that are held in your BASIC plan account prior to that date, and to make or receive cash contribu ons into, and make distribu ons from, your BASIC plan account on and aſter that date. On and aſter the Applicability Date, purchases will not be allowed in your BASIC plan account un l (i) you either enroll in a Merrill Lynch investment advisory program; (ii) you have opened a Limited Purpose BASIC plan account available only for certain eligible securi es transac ons and holdings; or (iii) you convert your BASIC plan account for any reason, (including a failure to execute and return the agreements and documenta on that we may require), to a Merrill Edge Self-Directed Inves ng (MESD) BASIC plan account. For BASIC plan accounts opened on or aſter the Applicability Date: All BASIC plan accounts which are opened on or aſter the Applicability Date must be (i) enrolled in a Merrill Lynch investment advisory program; (ii) opened as a Limited Purpose Account described below; or (iii) opened as a Merrill Edge Self-Directed Inves ng (MESD) BASIC plan account in order to engage in securi es purchase transac ons. BASIC plan accounts maintained on the MESD pla orm are not subject to the transac on restric ons described herein. However, if you elect to enroll in a Merrill Lynch investment advisory program (rather than an MESD BASIC plan account), or open a Limited Purpose Re rement Account for certain eligible securi es and for cash assets described below in this sec on 1, your BASIC plan account will be subject to certain restric ons before it is accepted into the Merrill Lynch investment advisory program you select or it is opened as Limited Purpose Re rement Account. These restric ons include, but are not limited to, not being able to purchase securi es. You will be permi ed 7 Con nued on page 8
to hold or sell any assets in your BASIC plan account or make distribu ons prior to any such enrollment or account opening, but no purchases transac on will be allowed in your BASIC plan account un l (i) you are enrolled in the selected Merrill Lynch investment advisory program under the terms of the agreement associated with the program; or (ii) for certain eligible securi es and cash assets, you have opened a Limited Purpose Re rement Account described below in this Sec on 1; or (iii) your BASIC plan account is converted to an MESD BASIC plan account, as described in the following paragraph. Consequences for not enrolling in a Merrill Lynch investment advisory program. If your BASIC plan account is not enrolled in a Merrill Lynch investment advisory program within 180 days from the opening date of your BASIC plan account, for any reason, including failure to execute and return the agreements and documenta on that we may require, then Merrill Lynch has the right to convert your BASIC plan account to an MESD BASIC plan account without no ce to you. If Merrill Lynch converts your BASIC plan account to an MESD BASIC plan account for any reason, or you elect to convert your eligible BASIC plan account to an MESD BASIC plan account, the addi onal terms in subsec on (a) below, will apply to your BASIC plan account upon conversion. Ability to Open a Limited Purpose BASIC Plan Account. You may open a BASIC plan account on or aſter the Applicability Date in order to hold cash that you have determined should remain uninvested and held outside a Merrill Lynch investment advisory program. In addi on, you may open or u lize a BASIC plan account on or aſter the Applicability Date to hold and engage in certain purchase and sale transac ons in select securi es that Merrill Lynch may allow in this account, as it may determine in its sole discre on from me to me. This BASIC Plan account will be specifically designated as a Limited Purpose account and will be restricted to the following ac vity: (i) receiving cash contribu ons or transfers of cash; (ii) holding cash assets (and any related sweep asset under the cash sweep program applicable to the BASIC plan account; (iii) transferring cash to other Merrill Lynch accounts or to other persons or accounts and in amounts designated and authorized by you; (iv) making cash withdrawals and cash distribu ons as determined by you from me to me; and (v) any transac onal ac vity permi ed by Merrill Lynch in the account. No securi es holdings or purchases will be allowed in this Limited Purpose BASIC plan account except those: (i) resul ng from the cash sweep program you have designated as part of opening your BASIC plan account or (ii) permi ed by Merrill Lynch. You agree that the holding of cash in this Limited Purpose BASIC plan account, whether based on informa on obtained from Merrill Lynch, your Advisor, or elsewhere, will be solely your own decision and based on your own evalua on and determina on respec ng your cash holdings in light of your personal financial situa on, purposes for the cash holding in such account, your cash needs for a par cular me period, your view of the market condi ons and risks and your preferences on how to hold and manage your cash assets. 8 Notwithstanding anything in this Agreement to the contrary, Merrill Lynch may, in its sole discre on, permit the purchase of certain securi es in this Limited Purpose account as it may designate from me to me. Your advisor will provide you the eligible investment ac vity for the Limited Purpose account upon request. Any investments in this Limited Purpose account must be compa ble with our administra ve, opera onal and procedural requests which may change from me to me. For all BASIC plan accounts: Please speak with your advisor regarding all restric ons applicable to your BASIC plan account. If you select a Merrill Lynch investment advisory program, the services provided by, and terms and condi ons of, the Merrill Lynch investment advisory program you select will be described in addi onal documenta on that will be provided to you. This will include a separate agreement that you are required to sign and return to Merrill Lynch. If at any me on or aſter the Applicability Date, your BASIC plan account s enrollment in a Merrill Lynch investment advisory program is terminated, either by you or Merrill Lynch, your BASIC plan account will become subject to transac on restric ons, including, but not limited to, not being able to make purchases transac ons, and any others provided to you by your advisor or Merrill Lynch. Consequences for termina on from a Merrill Lynch investment advisory program. If your BASIC plan account is not re-enrolled in an investment advisory program or, where eligible, moved to a Limited Purpose BASIC account, or converted to an MESD BASIC plan account within 90 days from the date your BASIC plan account is terminated from a Merrill Lynch investment advisory program, then you acknowledge and agree that Merrill Lynch has the right to convert your BASIC plan account to an MESD BASIC plan account without no ce to you. Un l you take ac on to convert to an MESD BASIC plan account or, where eligible, moved to a Limited Purpose BASIC account, or enroll in a Merrill Lynch investment advisory program, you will only be permi ed to hold or sell assets in your BASIC plan account, or make or receive cash contribu ons into, and make distribu ons from your BASIC plan account, during such period, but purchases will not be allowed in your BASIC plan account. If Merrill Lynch converts your BASIC plan account to an MESD BASIC plan account for any reason, or you elect to convert your eligible BASIC plan account to an MESD BASIC plan account, the addi onal terms in subsec on (a) below, will apply to your BASIC plan account upon conversion. (a) Terms Applicable to Merrill Edge Self-Directed Inves ng Accounts: Upon conversion to MESD, your BASIC plan account will be subject to the terms of the BASIC Custodial Agreement and MESD Terms of Service ( TOS ). Copies of the BASIC Custodial Agreement and TOS will be provided to you upon conversion of your BASIC plan account to MESD. MESD is designed for U.S.-based investors who wish to make their own investment choices in a Merrill Lynch brokerage account. Neither Merrill Lynch, nor MESD, nor any Merrill Lynch or MESD representa ve, will act Con nued on page 9