disclosure and custodial agreement simple retirement ... · simple retirement account/individual...

SIMPLE Retirement Account/Individual Retirement Account | 1

Inform

ation A

bou

t Your A

ccoun

ts

DISCLOSURE—PAgE 1

ABOUT YOUR SRA/IRA—PAgE 1

Revoking Your SRA/IRA—page 2

Eligibility—page 2

Contributions—page 2

Rollovers and Transfers—page 3

Distributions—page 5

Beneficiaries—page 8

INVESTINg YOUR SRA/IRA—PAgE 9

Investments—page 9

Cash Balances—page 10

SIPC Insurance and Additional Coverage—page 10

ABOUT TAXES—PAgE 11

Loss of Tax Status—page 11

Penalties—page 11

Other Tax Issues—page 14

ABOUT FEES—PAgE 15

Annual Custodial Fees—page 15

Other Fees—page 15

IRS APPROVAL—PAgE 16

CUSTODIAL AgREEMENT—PAgE 17

PROTOTYPE SIMPLE RETIREMENT ACCOUNT PLAN—PAgE 26

RETIREMENT ASSET SAVINgSPROgRAM—PAgE 35

MERRILL LYNCH STATEMENT LINK SERVICE—PAgE 42

The following pages contain the agreementand disclosures governing, including disclo-sures required by federal law, governing yourSRA/IRA.

Merrill Lynch PrototypeSIMPLE Retirement Account Plan

THIS MERRILL LYNCH PROTOTYPE SIMPLERETIREMENT ACCOUNT PLAN CANNOT BEUSED BY AN EMPLOYER FOR ANY CALENDARYEAR IF IT (OR A PREDECESSOR EMPLOYER)OR AN AFFILIATE MAINTAINED A QUALIFIEDPLAN AS DEFINED IN SECTION 219(G)(5)(A)OR (B) OF THE INTERNAL REVENUE CODEWITH RESPECT TO WHICH CONTRIBUTIONSWERE MADE, OR BENEFITS ACCRUED,FORSERVICE IN ANY CALENDAR YEAR IN THEPERIOD BEGINNING WITH THE CALENDARYEAR THE PROTOTYPE SIMPLE PLANBECOMES EFFECTIVE AND ENDING WITH THECALENDAR YEAR OF DETERMINATION, OTHERTHAN A QUALIFIED PLAN MAINTAINED SOLELYFOR COLLECTIVELY BARGAINED EMPLOYEESAND SUCH EMPLOYEES MAY NOT PARTIC-IPATE IN THE PROTOTYPE SIMPLE PLAN.

մեe Merrill Lynch Prototype SIMPLE Plan asset forth in this booklet has been approved bythe Internal Revenue Service. Approval by theIRS, however, is a determination as the form,not the merits, of this prototype plan.

About Your SRA/IRA

[1] Your SIMPLE Retirement Account/IndividualRetirement Account (SRA/IRA) is anattractive means of accumulating tax-advan-taged assets for retirement. Your SRA/IRA is acustody account established for the exclusivebenefit of you and your beneficiaries for whichMerrill Lynch acts as custodian. Your right tothe balance in your SRA/IRA cannot beforfeited at any time.

Disclosure and Custodial Agreement

SIMPLE Retirement Account/Individual Retirement Account (SRA/IRA)

2 | SIMPLE Retirement Account/Individual Retirement Account

[2] մեe basic rules and benefits of your Merrill Lynch SRA/IRA, as well as importantlegal and federal tax information, are providedin this Disclosure Statement. However, theMerrill Lynch SIMPLE Retirement AccountCustodial Agreement is the primary documentgoverning your Merrill Lynch SRA/IRA and willgovern in the case of any difference betweenthese documents.

[3] Merrill Lynch does not act as your tax or legaladvisor with respect to your SRA/IRA. Werecommend that you consult your lawyer,accountant, or other tax advisor if you havequestions beyond the scope of the infor-mation contained in this Disclosure, especiallyin regard to how your SRA/IRA affects yourestate or tax planning. You should alsoconsult your tax advisor regarding the taxconsequences involving your SRA/IRA for thelaws of the particular state, locality or foreigncountry where you live, as this Disclosurecovers only U.S. federal tax matters andcertain states, localities and foreign countriesmay have significantly different tax rules.

[4] For example, certain states may not allow stateincome tax exclusions for the higher level ofcontributions, or the additional types ofrollovers permitted under the federal TaxCode aer 2001. You may also refer to theappropriate year’s edition of Internal RevenueService Publication 590, “IndividualRetirement Arrangements (IRAs),” (or anyreplacement publication).

[5] To obtain more information on the servicesyour Merrill Lynch SRA/IRA provides to you,please contact your Merrill Lynch financialadvisor or a Service Representative.

REVOKINg YOUR SRA/IRA

[6] If you are receiving this disclosure as a resultof your initial opening of your SRA/IRA, youhave the right to revoke your SRA/IRA andreceive a refund of any amount given to us foryour SRA/IRA within seven calendar days aeryou receive this disclosure agreement, or 14calendar days from the mailing date of thedisclosure agreement.

[7] If you revoke your SRA/IRA within this period,the amount returned to you would not includean adjustment for any sales commissions,administrative expenses or other fees or fluc-tuations in market value.

[8] You must revoke in writing to:

Manager, Retirement Plan New AccountsMerrill Lynch, Pierce, Fenner & Smith Inc.1700 American Blvd MSC 0703Pennington, NJ 08534-4128

[9] Make sure your notice is postmarked, certifiedor registered prior to the end of the revocationperiod.

[10] If you have any questions, contact yourfinancial advisor or a Service Representativeat 1.800.MERRILL.

ELIgIBILITY

[11] If you are eligible to participate in youremployer’s SIMPLE, you (or your employer)may set up an SRA/ IRA. Your employer maymake contributions to your SRA/IRA on yourbehalf, as long as the contributions are madeunder your employer’s SIMPLE. If you are self-employed, you may also establish an SRA/IRAif you have adopted a SIMPLE.

CONTRIBUTIONS

[12] Your SRA/IRA will accept the following types ofcontributions:

• Contributions made by your employer (cashonly) (or yourself, if you are self-employed)on your behalf under your employer’sSIMPLE by check, money order, orelectronic funds transfer acceptable to us.

• Transfers or rollovers of cash, securities, orother assets from another SRA/IRA.

• մեe only contributions allowed to be madeto an SRA/IRA are contributions under a“qualified salary reduction arrangement”under your employer’s SIMPLE, whichmeans you may not make annualtraditional, Roth or Coverdell EducationSavings Account contributions or rollovercontributions from such types of IRAs toyour SRA/IRA.


Inform

ation A

bou

t Your A

ccoun

ts

[13] You and your employer are responsible for determining the eligibility of your contributions.Should we discover we have received anexcess contribution, we will return the excesscontribution to you only aer receiving writtenauthorization from you.

Contribution reports[14] Each year we will send to you (or your benefici-

aries) and to the IRS an IRS Form 5498providing a valuation of your SRA/IRA at theend of the prior year. We will also send areport of your SRA/IRA contributions for theprior year made through April 15 of thecurrent year. If we do not receive a contributionand/or rollover deposit that is reportable onForm 5498 for a particular year, we will not senda separate form to you; your SRA/IRA valuationwill be reported to you on your year-end Merrill Lynch account statement.

[15] Upon request, Merrill Lynch will submit a Form5498 for the year of your death to yourexecutor reporting the end-of-year valuation ofyour SRA/IRA. Because any amount reportedon a beneficiary’s Form 5498 would not bereported on the Form 5498 for the estate, thevalue reported on the Form 5498 for theestate would generally be zero. Your executorhas the right to request in writing a date-of-death valuation, which will be furnished withina reasonable time (generally 90 days).

ROLLOVERS AND TRANSFERS

Tax-free transfers between IRAs[16] You may authorize a direct transfer of assets

into your Merrill Lynch SRA/IRA from anotherSRA/IRA without incurring taxes or penalties,thereby preserving their tax-deferred status.

[17] Note that a direct transfer must be madebetween SRA/IRA custodians or trustees and youmay not receive the assets in your name.

[18] You may not make tax-free transfers from:

• Traditional IRAs

• Roth IRAs (except for recharacterizationsdiscussed on page 5)

[19] մեe rules regarding direct transfers of SRA/IRAassets also apply to direct transfers from your

Merrill Lynch SRA/IRA into another SRA/IRA oran eligible traditional IRA.

Rollovers between IRAs[20] You may roll over assets you withdraw from

one SRA/IRA to another SRA/IRA subject tothe following rules:

• You must complete the rollover within 60 daysof the initial withdrawal or distribution. մեe IRSmay waive this requirement if you candemonstrate a cause for the delay beyondyour reasonable ability to control, such as acasualty or disaster;

• You may make only one tax-free rollover from aSRA/IRA from which or to which you made aprior rollover in any one-year period measuredfrom the date of the first distribution;

• You can make only one rollover from aSRA/IRA to another (or the same) IRA in any12-month period, regardless of the number ofIRAs you own. You can, however, continue tomake as many trustee-to-trustee transfersbetween IRAs as you want;

• If you are the beneficiary, you may roll overassets from your deceased spouse’s SRA/IRA.You are not permitted to roll over assets froman inherited SRA/IRA if you are a non-spousebeneficiary;

• You may not roll over required minimumdistributions;

• Substantially Equal Periodic Payments maynot be rolled over; and

• You must report rollovers on your IRS Form1040 for the year in which the rollover wascompleted.

[21] You may roll over assets to a traditional IRAfrom a SRA/IRA only aer you have been aparticipant for two or more years in a SIMPLEmaintained by your employer or for otherreasons are not subject to the 25% penalty onpremature withdrawals.

[22] մեe rules also apply to transfers from SIMPLEindividual retirement annuities and torollovers of assets from your Merrill LynchSRA/IRA into another SRA/IRA or an eligibletraditional IRA.


Conversions to a Roth IRA[23] You may roll over assets from an SRA/IRA to a

Roth IRA as long as, for years prior to 2010,your modified AGI for the year of the with-drawal is less than $100,000, not includingthe rollover and two years have passed sinceyou first became a participant in a SIMPLEmaintained by your employer or for otherreasons you are not subject to the 25%penalty on premature withdrawals. SuchSRA/IRA to Roth IRA rollovers are frequentlycalled “conversions.” You may also excluderequired minimum distributions from traditionalIRAs or employer retirement plans from yourmodified AGI for this purpose.

[24] Calculate your modified AgI by locating the“adjusted gross income” line on your IRS Form1040 and subtracting applicable deductionsas provided for in the instructions to IRS Form1040, including:

• IRA deductions

• Foreign earned income exclusions

• Foreign housing exclusions or deductions

• Interest exclusions on U.S. savings bondsused to pay higher education expenses

• Adoption assistance program exclusions

• Deductions for qualified education loaninterest

[25] If you receive Social Security benefits, use theworksheets in IRS Publication 590 to calculateyour modified AGI.

[26] մեe portion of a conversion that would beincludible in your gross income if withdrawnwill be included in your gross income.However, conversions are not subject to the10% penalty tax for early withdrawals. մեefollowing rules apply:

• You must deposit the amount to your Roth IRAwithin 60 days of your SRA/IRA withdrawal.For distributions before 2011, the IRS maywaive this requirement if you can demonstratea cause for the delay beyond your reasonableability to control, such as a casualty ordisaster;

• մեe “only one tax-free rollover in any one-yearwaiting period” rules applicable to SRA/IRArollovers do not apply to conversions;

• You may not convert distributions from aninherited SRA/IRA. However, a spouse solebeneficiary may be able to treat the SRA/IRAas the spouse’s and then convert;

• You may not convert required minimumdistributions (see Distributions aer age 701/2, page6);

• You may not convert assets to a Roth IRA ifyou are married and filing separate incometax returns, unless you and your spouse livedapart for more than a year;

• Assets converted to a Roth IRA are thereaersubject to the rules governing Roth IRAs; and

• You are responsible for determining youreligibility to make a conversion.

[27] If you have been making substantially equalperiodic payments exempt from the 10%premature distribution penalty (seeDistributions before Age 59 1/2, below) priorto a conversion, they will be subject to aretroactive penalty unless you continuemaking such withdrawals from your Roth IRAuntil the later of:

• Five years from the date the periodicwithdrawals began; or

• մեe earlier of your attainment of age 59 1/2,becoming disabled or your death.

[28] In general, direct transfers from an SRA/IRA toa Roth IRA made by the custodians or trusteesare treated as conversions for tax purposes. Ifyour SRA/IRA assets were previously recharac-terized from a Roth IRA, there is a minimum 30-day waiting period before you may reconvertthem, and you may not make two such conver-sions of the same assets in one calendar year.

Rollovers to employer retirement plans[29] In general, if two years have passed since you

first became a participant in a SIMPLEmaintained by your employer or for otherreasons you are not subject to the 25%penalty on premature withdrawals, you mayroll over all or part of distributions you receivefrom your SRA/IRA into your employer’sretirement plan including a section 457(b)eligible State deferred compensation plan,provided the plan accepts rollovercontributions.


Inform

ation A

bou

t Your A

ccoun

ts

[30] You may roll over distributions of any kind,including cash, securities or other property,provided they are accepted by youremployer’s retirement plan. Any portion ofassets sold but not rolled over will be subject totax.

[31] If you are the beneficiary, you may roll overdistributions from your deceased spouse’sSRA/IRA. You are not permitted to roll overassets from an inherited SRA/IRA if you are anon-spouse beneficiary. (See Beneficiaries,page 8.)

[32] As with other rollover situations, rollovers toemployer retirement plans must be completedwithin 60 days. մեe IRS may waive the 60-daytime limit if you can demonstrate a cause forthe delay beyond your reasonable ability tocontrol, such as a casualty or disaster.

A note on recharacterizations[33] մեe special rule that permits you to

“recharacterize” contributions made to onetype of IRA as contributions made to anothertype of IRA does not apply to employercontributions (including pre-tax contributions)made under your employer’s SIMPLE to yourSRA/IRA. Once employer contri butions aremade to your SRA/IRA they may not be“recharacterized” as contributions to anothertype of IRA.

Exceptions:

• If you make a mistake and roll over or transferamounts from your traditional IRA to yourSRA/ IRA, you may recharacterize the rolloveror transfer as a contribution to anothertraditional IRA.

• You may recharacterize mistaken rolloversand transfers from your traditional IRA bycausing the trustee or custodian of yourSRA/IRA to transfer the mistaken amountsplus earnings to the trustee or custodian ofyour traditional IRA. You must do so before thedate you are required to file your income taxreturn (with extensions) for the year in whichyou made the contributions. մեe rollover ortransfer will be treated as a contribution to thetraditional IRA.

[34] Conversions from SRA/IRAs to Roth IRAs areeligible to be recharacterized. To effect arecharacterization, you must give complete

and timely instructions to the custodians ortrustees of both the SRA/IRA and Roth IRAand report the converted amount as havingbeen contributed to the SRA/IRA for the yearin which the conversion was made. Tax-freetransfers or rollovers between SRA/IRAs, fromSRA/IRAs to traditional IRAs or to employerretirement plans and employer contributionsto SEP IRAs may not be recharacterized.However, a tax-free transfer or rolloverbetween SRA/IRAs or from an SRA/IRA to atraditional IRA will not disqualify you fromrecharacterizing an annual traditional IRAcontribution or conversion contribution to aRoth IRA.

[35] You are not limited on the number of recharac-terization transfers you may make in a year. մեeIRS may grant extensions for recharacterizinginvalid conversions to taxpayers who providesufficient evidence they acted reasonably and ingood faith.

DISTRIBUTIONS

[36] You have the right to withdraw assets fromyour SRA/IRA at any time. Amounts in cash,securities or other assets withdrawn from yourSRA/IRA for you or your beneficiaries arecalled “distributions.” Distributions aresubject to the rules contained in the Tax Codeand to the terms of the Custodial Agreement.

[37] Generally, SRA/IRA distributions will be taxedas ordinary income. No special capital gainsor averaging treatment is available. Unlessyou or your beneficiaries indicate otherwiseon the form we provide, we will deduct federaland possibly state income taxes beforepayment.

[38] You must report any taxable distributions onyour federal income tax return. Examples ofnon-taxable distributions that do not have tobe reported include tax-free transfers androllovers (see page 3).

[39] You should consult your accountant or taxadvisor on how to time withdrawals to meetyour financial needs, while at the same timetaking into consideration your tax situation.մեe rules governing rollovers and distributionsare complex. You should consult with yourlegal or tax advisor to determine whether


distributions from your qualified retirementplan may be rolled over and which option isbest for you.

Distributions before age 59 1/2[40] Any distributions made before you reach age

59 1/2 from your SRA/IRA will be subject toordinary income taxes and a 10% penalty taxunless you meet an exception.

[41] մեe 10% penalty is increased to 25% forpremature distributions made from yourSRA/IRA maintained in connection with youremployer’s SIMPLE plan, unless two yearshave passed since you first became a partic-ipant in a SIMPLE maintained by youremployer.

[42] You are exempt from the prematuredistribution penalty if any of the followingapply:

• You are totally and permanently disabled;

• You take distributions in “substantially equalperiodic payments”;

• Your beneficiary or estate receivesdistributions from your SRA/IRA in the event ofyour death;

• You are unemployed and the distributions donot exceed amounts paid for healthinsurance;

• մեe distributions do not exceed yourdeductible medical expenses;

• մեe distributions do not exceed your “qualifiedhigher education expenses” for yourself, yourspouse, your children or grandchildren;

• մեe distribution is a “qualified first-timehomebuyer distribution”; or

• մեe distribution is on account of an IRS taxlevy.

[43] Each of these exceptions is complex. մեeexceptions are explained in more detail in“Penalty for premature distributions”, page11, and “Additional notes on exemptions”,page 12. We advise you to consult your legalor tax advisor before taking a distribution inreliance upon them.

Distributions aer age 59 1/2[44] Once you reach the age of 59 1/2, distribu-

tions from your SRA/IRA will be subject only toordinary income taxes. Between ages 59 1/2

and 70 1/2 you may take distributionswithout penalty.

Distributions aer age 70 1/2[45] Once you reach age 70 1/2, the Tax Code

mandates that you start required minimumdistributions (RMDs) for the year you reachage 70 1/2 and each subsequent year. RMDsmust begin in the calendar year you reachthat age, or no later than April 1 of thefollowing year (your required beginning date or“RBD”). If you wait, however, until thefollowing year to make the first RMD, you willhave to make a second RMD before the end ofthat year.

[46] If you prefer, you may purchase an annuitycontract that makes payments at least equalto your RMD.

[47] While making your RMD, you may stillwithdraw any additional amounts you desirefrom your SRA/IRA.

[48] Your RMD amount will depend on whether the1987 Tax Code proposed regulations (“1987Regulations”), the 2001 Tax Code proposedregulations (“2001 Regulations”) or 2002 TaxCode final regulations (“2002 Regulations”)apply. In general, the 2002 Regulations applyto distributions made in 2003 or later. Youcan choose any of the three regulations for2002 distributions. In most cases, the 2002Regulations result in a smaller RMD amount.մեis disclosure statement describes theminimum distribution rules provided in the2002 Regulations.

[49] If you fail to make the RMD, you may besubject to a penalty tax of 50% on thedifference between your RMD amount andyour actual distribution amount (see Penaltyfor not taking minimum distributions, page 13).

How to calculate your minimum distribution

during your lifetime[50] To calculate your minimum distribution, divide

your SRA/IRA balance (the fair market value ofyour SRA/IRA, plus any transfers, rollovers orrecharacterizations to your SRA/IRA that areoutstanding, as of the preceding December31st) by the distribution period, as shown in:

• Uniform Lifetime Table or


Inform

ation A

bou

t Your A

ccoun

ts

• Joint and Last Survivor Table (if your spouse isyour sole beneficiary and is more than 10years younger than you).

To use the spousal calculation, your spousemust, generally, be your sole designatedbeneficiary for the entire year. You will alsoqualify if your spouse is your soledesignated beneficiary on January 1 of theyear and your designated beneficiarychanges, during the year, because you oryour spouse dies or you divorce.

Use the appropriate U.S. Treasury tables(which can be found at www.irs.gov or in IRSPublication 590 “Individual RetirementArrangements”) when determining your lifeexpectancy for SRA/IRA purposes.

[51] Your minimum distribution must be recalcu-lated annually, based on your current age (andthat of your primary beneficiary for spousebeneficiaries who are more than 10 yearsyounger). You must calculate the minimumdistribution separately for each SRA/IRA youown.

[52] You are responsible for determining theminimum distribution amounts. We will,generally, supply you with our calculation ofyour minimum distribution. To do this, wemust have your correct age on file and anaccurate valuation of all your investments. Wewill use the Uniform Lifetime Table, unless ourrecords show your SRA/IRA qualifies for thespousal calculation. Our calculation will notadjust your balance for outstanding rollovers,transfers or recharacterizations. You are stillresponsible for determining the accuracy ofyour SRA/IRA balance and of the minimumwithdrawal. Generally, we will not supply acalculation of the minimum distributionamount to your beneficiaries aer your death.

[53] You must notify us when you want to receivethis payment. You may set up a periodicpayment plan under which you can conve-niently spread the distributions throughoutthe year. To learn more about RMD calcula-tions, call 1.800.MERRILL to request a copy ofthe “Guide to Calculating Minimum Distribu-tions from a Traditional IRA.”

Distributions aer your death[54] Following your death, the remaining balance

in your SRA/IRA will be distributed to yourbeneficiaries (see Beneficiaries, page 8) withsimilar minimum distribution requirements.Subject to those minimum distributionrequirements and restrictions imposed byyour beneficiary designation, your beneficiarymay withdraw assets from your SRA/IRA atany time. մեe identity of your “designatedbeneficiary” and whether your death occursbefore or aer your RBD will govern how yourbeneficiaries calculate their minimum distri-butions.

[55] For the purpose of determining requiredminimum distributions, your designated bene-ficiary is determined as of September 30th ofthe year following the year of your deathbased on your beneficiaries as of your date ofdeath who remain beneficiaries as of thedetermination date. A designated beneficiarymust be an individual, (a natural personrather than an estate, charity or a trust). Ifcertain requirements are met, however, bene-ficiaries of a trust, that is the beneficiary ofyour SRA/IRA, will be treated as yourSRA/IRA’s beneficiaries for the purpose ofdetermining your designated beneficiary. Ifyour SRA/IRA has multiple beneficiaries andone is not an individual, you will not have adesignated beneficiary. However, if all yourbeneficiaries are individuals, the oldest onewill be your designated beneficiary.

[56] If you die aer your required beginning date(RBD), the remaining balance in your SRA/IRAmust be distributed over a period no longerthan the longer of an individual designatedbeneficiary’s life expectancy or your remaininglife expectancy. (մեe Single Life Table will beused for calculating your remaining lifeexpectancy and that of your designatedbeneficiary, if applicable.)

• If your spouse is the designated beneficiary,his or her life expectancy will be recalculatedeach year until death (the “recalculationmethod”), and thereaer using the “termcertain method.” See IRS Publication 590,“Individual Retirement Arrangements” formore information on the term certain methodand the recalculation method.


• մեe life expectancy of a non-spousedesignated beneficiary or your remaining lifeexpectancy will be determined under a “termcertain method.”

• If your spouse is your sole beneficiary, he orshe may elect to roll over your SRA/IRA intohis or her own SRA/IRA or elect to treat yourSRA/IRA as his or her own.

• If you do not have a designated beneficiary,distributions will be calculated based on yourremaining term certain life expectancy.

[57] If you die before your RBD:

• If you do not have a designated beneficiary,the entire balance of your SRA/IRA, must bedistributed by December 31 of the year thatcontains the fih anniversary of your death.

• If your spouse is your sole beneficiary, he orshe may choose to postpone makingwithdrawals until the date you would havereached age 70 1/2.

• If your spouse is your sole beneficiary, he orshe may elect to roll over your SRA/IRA intohis or her own SRA/IRA or elect to treat yourSRA/IRA as his or her own SRA/IRA and makethe minimum withdrawals that apply to thatSRA/IRA (see Distributions aer age 70 1/2on page 6), based on your spouse’s own ageand beneficiaries. Note that we will assume thiselection has been made if your spouse makesany contributions, rollovers or transfers to yourSRA/IRA or does not take minimum distributionsthat would be required from your SRA/IRA.

• If you have a designated beneficiary who isnot your spouse, your bene ficiary may elect tobegin taking distributions no later thanDecember 31 following the first anniversary ofyour death over his or her term certain lifeexpectancy.

BENEFICIARIES

[58] You may name one or more beneficiaries ofyour SRA/IRA, including individuals, yourestate, a charity or a trust. մեese beneficiariesmay be designated primary, contingent orsuccessor beneficiaries and may be changedat any time, but any designation or change

must be in writing. Beneficiary designationswill not be effective until received andaccepted by Merrill Lynch.

[59] All beneficiary designations and changes mustbe compatible with Merrill Lynch’s administrativeand operational requirements, which may varyover time.

[60] You should review your designation periodi-cally, particularly when there are changes inyour family status, including a marriage,divorce, birth or adoption of children, death ofa beneficiary or establishment of estateplanning trusts.

[61] մեe “Beneficiary” section of the CustodialAgreement explains:

• How beneficiaries may receive your SRA/IRAassets aer your death;

• Your ability to place restrictions ondistributions to and successor designations byyour beneficiaries;

• մեe treatment of your beneficiary designationif you are divorced or your marriage isannulled aer you designate your spouse asyour beneficiary; and

• Who will be your beneficiary or beneficiaries ifyou do not have a living/existing designatedbeneficiary.

[62] Generally, aer your death, Merrill Lynch willmake distributions to the listed beneficiary ofrecord, regardless of state communityproperty law. If, as a result of state communityproperty law, payments are to be made to thesurviving spouse rather than the named bene-ficiary, a written statement authorizing suchpayment must be submitted and signed by thespouse and the designated beneficiary.

[63] If your beneficiary is a trust or your estate,distributions will be made to the trustee(s) ofthe trust or the executor(s) of your estate.However, the trustee or executor may, subjectto any rules we establish, direct us to makedistributions to the beneficiaries of the trust orestate.


Inform

ation A

bou

t Your A

ccoun

ts

Investing Your SRA/IRA

[64] Your Merrill Lynch financial advisor or aService Representative can offer your SRA/IRAaccess to available investment alternatives. Inaddition, you may enroll (under a separateagreement) your SRA/IRA in a Merrill Lynchinvestment advisory program that offersdiscretionary management or other advisoryservices. Investment decisions are ultimatelyyours or your discretionary manager’s oradvisor’s and you or your discretionary manageror advisor must decide whether an investment isconsistent with your personal savings goals andinvestment objectives.

[65] մեe investments in your SRA/IRA will be heldby us, and may be held in our name or thename of a selected nominee. Interest, divi-dends and other distributions on shares willbe paid to us for your account. Dividends andother distributions from mutual funds will bepaid in cash and swept with other cashbalances into the applicable money marketaccounts (see Cash Balances on page 6).

INVESTMENTS

[66] Your SRA/IRA may invest in one of Merrill Lynch’s money market funds or in oneor more of the following types of investmentsobtainable through Merrill Lynch and itsaffiliates:

• Securities traded on recognized exchanges or“over the counter”

• Mutual funds in certain cases

• Government securities, such as Treasury bills

• Certain annuity contracts

• One ounce American Gold or Silver Eaglecoins issued by the United States

• Listed covered call options

• Put options against long positions

[67] մեe following investments and transactionsare generally not permitted:

• Investments acquired on margin

• Commodities transactions (including futurescontracts)

• Options strategies not described above

• Series E and EE U.S. savings bonds

• Foreign currency

• Notarial stock

• Chattel paper

• Shares of “restricted” stock

[68] մեe Tax Code prohibits your SRA/IRA frommaking the following types of investments (ortreats them as distributions):

• Life insurance contracts

• Collectibles, including works of art, rugs,antiques, certain metals, gems, stamps, mostcoins, and alcoholic beverages

[69] All investments must be compatible withMerrill Lynch’s administrative and operationalrequirements and procedures of the accountsystem through which your SRA/IRA is admin-istered, which may change from time to time.Contact your financial advisor or a ServiceRepresentative for more information onpermissible investments.

[70] In no event may the assets in your SRA/IRA becommingled with other property except in acommon trust fund or a common investmentfund.

[71] We will invest and reinvest your contributionsand earnings in your SRA/IRA only aerreceiving proper instructions from you or, as appropriate, your beneficiary, your estate’slegal representative or any other personauthorized to give such instructions.

[72] մեe investments you purchase for your SRA/IRAmay fluctuate in value and have varying rates ofreturn. մեerefore, the value of your SRA/IRA inthe future can neither be guaranteed norprojected.

[73] If we cannot locate you or your beneficiary,Merrill Lynch can, with no responsibility for theconsequences, sell any or all the assets inyour SRA/IRA. We may then, if not alreadyinvested or deposited through a sweep optionin effect for your account, invest in a moneymarket fund or deposit the proceeds in aninterest-bearing account. We will do so only


aer waiting at least two months from thedate we attempt to locate you or your benefi-ciary by sending a written notice to the lastaddress shown for you or your beneficiary inour records.

A note on foreign securities[74] Dividends and earnings on investments in

foreign securities and mutual funds may besubject to foreign tax withholding. մեese with-holdings are oen ineligible for the U.S.foreign tax credit if they are for securities heldby tax-exempt accounts including SRA/IRAs.

[75] As a result, the effective yield on foreign secu-rities and mutual funds held in your SRA/IRAmay be lower than the effective yield of iden-tical investments held in a non-retirementaccount. You may find it preferable to holdforeign investments in a taxable investmentportfolio, should you have one, instead of yourSRA/IRA.

CASH BALANCES

[76] Merrill Lynch provides a daily “sweep”feature to ensure all your assets are workingfor you full time.

[77] All uninvested cash balances (such as interestincome, dividends and contributions received)of $1 or more are automatically deposited inmoney market deposit accounts establishedthrough the Retirement Asset SavingsProgram (RASP).

[78] With RASP, a money market deposit account isestablished at FIA Card Services, N.A., Bank of America California, N.A., and any otherMerrill Lynch affiliated bank. Such invest-ments will bear a reasonable rate of interestas required under the exemption provided byERISA Section 408(b)(4) or Tax Code Section4975(d)(4).

[79] For more information, see the RetirementAsset Savings Program Fact Sheet.

[80] If you enroll your SRA/IRA in a Merrill Lynchinvestment advisory program, uninvestedcash balances will be invested in the RASP.

[81] Additional or alternative daily sweep optionsmay be available for certain clients or incertain situations. For more informationregarding your Sweep Program, please refer toyour Client Relationship Agreement.

SIPC INSURANCE AND ADDITIONALCOVERAgE

[82] մեe securities and cash we hold in youraccount are protected by the SecuritiesInvestor Protection Corporation (SIPC) for upto $500,000 (inclusive of up to a maximum of$100,000 for cash).

[83] In addition, Merrill Lynch has obtained“excess- SIPC” coverage from Lloyd’s ofLondon. մեe Lloyd’s policy provides furtherprotection for each customer (including up to$1.9 million for cash), subject to an aggregateloss limit of $1 billion for all customer claims.

[84] Neither SIPC protection nor the additional“excess-SIPC” coverage applies to depositsmade through a bank deposit program or toother assets that are not securities. Eachaccount held by a separate customer (as definedby applicable law) is treated separately forpurposes of the above protection. You mayobtain further information about SIPC,including the SIPC Brochure, via the SIPC’swebsite at http://www.sipc.org or by callingSIPC at 1.202.371.8300. Deposits madeunder RASP programs are the obligation of theMerrill Lynch Affiliated Banks and are notobligations of, or guaranteed by, Merrill Lynch,its parent company, Merrill Lynch & Co., Inc.,or any of its subsidiaries. Merrill Lynch,Pierce, Fenner & Smith Incorporated“Merrill Lynch” is not a bank and is separatefrom its FDIC-insured affiliates, whichinclude Bank of America, N.A., FIA CardServices, N.A., Bank of America California,N.A. and other depository institutions.Except where indicated, securities sold,offered or recommended by Merrill Lynchare not insured by the FDIC and are notobligations of, or endorsed or guaranteed inany way by any bank and may fluctuate invalue.


Inform

ation A

bou

t Your A

ccoun

ts

About Taxes

[85] Your SRA/IRA is designed to provide you withan opportunity to defer federal income tax oncontributions and any gains and income onthe assets in your SRA/IRA until they are with-drawn or distributed.

[86] Certain investments, however, such as limitedpartnerships, may generate unrelatedbusiness income that may be taxable in theyear earned regardless of whether with-drawals were made during that year.

[87] Withdrawals, whether of the principal balanceor of gains and income, are, generally, subjectto income tax at the regular rates when with-drawn (see Distributions, page 3). No specialcapital gains or averaging treatment isavailable.

[88] You should consult your tax advisor about yourparticular tax situation as this Disclosure appliesonly to U.S. federal taxes; certain states havesignificantly different tax rules governingdeductibility of contributions and incomeexclusion for rollovers.

LOSS OF TAX STATUS

[89] մեe Tax Code prohibits you from using yourSRA/IRA to engage in certain transactionsunder penalty of losing your SRA/IRA’s tax-deferred status. For example, you may notborrow from your account, sell property to it orbuy property from it.

[90] If your SRA/IRA loses its tax-deferred status, theentire SRA/IRA balance must be included in yourgross income for the year the tax-deferred statuswas lost.

[91] մեe balance will also be subject to the 10% (or25%) penalty tax for premature distributionsdescribed below (unless you are eligible for anexemption).

[92] If you pledge part of your SRA/IRA as security(collateral) for a loan, only the part pledgedwill be considered as having been distributedto you for the year it is pledged. մեe amountmust be included in your gross income andwill be subject to the 10% (or 25%) penalty forpremature distribution (unless you are eligiblefor an exemption).

PENALTIES

Penalty for premature distributions [93] In general, any withdrawals you make before

reaching the age of 59 1/2 will be subject to a10% penalty. մեe 10% penalty is increased to25%, unless two years have passed since youfirst became a participant in a SIMPLE main-tained by your employer. մեis penalty is inaddition to ordinary income taxes imposed onwithdrawals. (For more information, review theAdditional notes on exemptions, below.)

[94] You are exempt from the 10% (or 25%)penalty if:

• You are totally and permanently disabled;

• You take distributions in “substantially equalperiodic payments”;

• մեe distributions are received by yourbeneficiary or estate aer your death;

• You are unemployed and the distributions donot exceed amounts paid for healthinsurance;

• մեe distributions do not exceed yourdeductible medical expenses;

• մեe distributions do not exceed your “qualifiedhigher education expenses” for yourself, yourspouse, your children or grandchildren;

• մեe distribution is a “qualified first-timehomebuyer distribution”; or

• մեe distribution is on account of an IRS taxlevy.

Additional notes on exemptions[95] մեe methods for calculating “substantially

equal periodic payments” were revised in anIRS ruling in October 2002. մեe new methods


described below must be used for all series ofpayments beginning aer 2002 and you mayelect to use the old or new methods for aseries of payments beginning in 2002. մեethree new calculation methods are:

• Required Minimum Distribution Method: Yourannual payment amount is determined eachyear by dividing the account balance in thatyear by the current year’s life expectancyfactor applicable to you or to you and yourbeneficiary from the Uniform Lifetime Table,the Joint and Last Survivor Table or the SingleLife Table. (See, IRS Publication 590.) Youmust use the same Table each year.

• Fixed Amortization Method: Your annualpayment amount is determined in the firstyear and does not change thereaer. Yourannual payment amount will be calculated byamortizing your beginning account balanceusing an interest rate not exceeding 120% ofthe federal mid-term rate during either of thetwo months preceding the first payment andone of the three life expectancy Tablesdiscussed above under the RequiredMinimum Distribution Method.

• Fixed Annuitization Method: Your annualpayment amount is determined in the firstyear and does not change thereaer. Yourannual payment amount will be calculated bydividing your beginning account balance by anannuity factor that is derived from an IRSmortality table (based on your life expectancyor the joint and last survivor expectancy of youand your beneficiary) and an interest rate notexceeding 120% of the federal mid-term rateduring either of the two months preceding thefirst payment.

[96] In general, to avoid retroactive imposition ofthe 10% (or 25%) penalty and interest, youmust continue taking substantially periodicpayments under your chosen method for atleast five years or until you reach age 59 1/2,whichever is longer. However, you may make a

onetime change to the new RequiredMinimum Distribution Method from either ofthe new Fixed Methods or from one of theolder allowable methods to any one of thethree new methods. Further, you may discon-tinue taking substantially equal periodicpayments if you become disabled and yourbeneficiary may do so following your death.Rules governing the calculation of substan-tially equal periodic payments are complex;you should consult a qualified tax advisor.

[97] If your distributions are used to pay healthinsurance premiums:

• You must have received federal or stateunemployment compensation for 12consecutive weeks. Note that if the only reasonyou did not receive unemploymentcompensation was because you had been self-employed, you are still eligible for the exemption;

• You must have received the distributionsduring the tax year in which you received theunemployment compensation, or the followingyear; and

• You must have been re-employed for less than60 days.

[98] “Qualified higher education expenses”include:

• Tuition, fees, books, supplies and equipmentrequired for enrollment or attendance at an“eligible educational institution”(undergraduate or graduate courses); and

• Room and board expenses, up to theminimum allowed when calculating the cost ofattendance for federal aid programs (studentsmust attend education institution at least half-time), or the actual cost of student housingowned or operated by the school (for years2002-2010 only), if higher.

[99] You must subtract from “qualified educationexpenses” all qualified scholarships, certaineducational assistance provided to militaryveterans and reservists, and other payments foreducational expenses (not including gis andinheritances) that are excluded from thestudent’s gross income under federal laws.


Inform

ation A

bou

t Your A

ccoun

ts

[100] “Eligible educational institutions” include:

• Post-secondary educational institutionsoffering credit towards a bachelor’s,associate’s, graduate or professional degreeor another post-secondary credential; and

• Certain proprietary schools and post-secondary vocational institutions, if eligible toparticipate in U.S. Department of Educationstudent aid programs.

[101] A “qualified first-time homebuyer distribution”is a withdrawal or distri bution used to pay thecosts of acquiring, constructing orreconstructing your principal residence or theprincipal residence of you or your spouse, or achild, grandchild or ancestor of you or yourspouse. Eligible expenses include usual orreasonable settlement, financing or otherclosing costs. մեe following rules apply:

• մեe new owner must have had no ownershipinterest in a principal residence in the twoyears prior to this acquisition;

• Individuals with foreign homes or on extendedactive duty in the Armed Forces may notqualify as first-time homebuyers if the periodfor tax-free rollover of gain on the sale of aprior residence has been suspended;

• մեe amount withdrawn must be used to paysuch costs or rolled over into your SRA/IRAwithin 120 days (in which case you are notsubject to the limit of one rollover per year);and

• մեe total lifetime amount that can qualify as afirst-time homebuyer distribution from all IRAs(including your traditional and Roth IRAs andSRA/IRAs) is $10,000.

Penalty for excess contributions[102] Excess contributions—the portion of a contri-

bution that exceeds allowable limits—aresubject to a 6% penalty. մեe 6% penalty ischarged again every year that the excessremains in your account.

[103] Example: If you are under age 50 and makepre-tax deferrals of $11,000 in 2008 to yourSRA/IRA, your excess contribution for 2008 is$500 and you would owe the IRS $30 for eachyear the excess remains in your account. մեelimit on pre-tax deferrals to an SRA/IRA for2008 is$10,500 if you are under age 50.

[104] To avoid the 6% penalty, you may “correct”excess contributions by withdrawing theexcess and any related earnings prior to yourtax-filing deadline (including extensions) forthe tax year for which the excess contributionwas made.

[105] Withdrawals of those contributions (andearnings) may be taxed as premature with-drawals. For more information about excesscontributions, including taxation, penalties andalternative conversion methods, consult your taxadvisor.

[106] You are responsible for computing the earningson excess contributions and indicating theamount on a distribution form provided by MerrillLynch.

Penalty for not taking minimum distributions[107] Aer age 70 1/2, you are required to take a

minimum distribution each year. Aer yourdeath, your beneficiary or beneficiaries arerequired to take minimum distributions. If youor your beneficiary fail to take requiredminimum distributions, you or they may besubject to a penalty tax of 50% on thedifference between the required and actualwithdrawals.

[108] Example: If your minimum withdrawal is$10,000 and you only withdrew $9,000, thepenalty would be $500: ($10,000–$9,000) x50%.

[109] In certain cases, the IRS may waive appli-cation of this penalty. You should consult yourtax advisor on this subject.

[114] For purposes of calculating the tax credit, your“qualified retirement savings contributions”may be reduced by certain distributions from certain retirement plans and IRAs made in thesame tax year, the two preceding tax yearsand the period aer the tax year and beforethe due date for filing your return for the tax

year. Distributions received by your spouseare treated as distributions to you forpurposes of reducing your “qualifiedretirement contributions” if you file a jointreturn for the tax year in which your spousereceived the contribution. If you believe thatyou may be eligible for the tax credit, contactyour tax advisor.


OTHER TAX ISSUES

When to File IRS Form 5329[110] You must file IRS Form 5329 with your federal

income tax return when:

• You owe the 6% penalty tax on excesscontributions;

• You owe the 10% (or 25%) penalty tax on earlywithdrawals, but distribution code 1 is notshown in box 7 of your Form 1099-R(Distributions from Pensions, Annuities,Retirement or Profit Sharing Plans, IRAs, etc.);

• You do not owe the 10% (or 25%) penalty tax,but distribution codes 2, 3 or 4 do not appearin box 7 of your Form 1099-R, or the codeshown is incorrect; or

• You owe the 50% penalty tax for failing tomake a minimum distribution.

Estate and gi taxes[111] Generally, at your death, the total value of

assets in your SRA/IRA is included in yourgross estate for federal estate tax purposes.However, deductions are allowed if your bene-ficiary is either your spouse or a charity. Youshould consult your tax advisor concerningthis estate tax.

[112] Generally, naming a beneficiary to receivepayments from your SRA/IRA is notconsidered a gi subject to federal gi tax,even if the designation is irrevocable. մեis isbecause the account owner typically retainsthe right to direct distributions, includingrollovers and transfers.

Tax Credit[113] You may be eligible for a nonrefundable tax

credit of up to 50% of the first $2,000 of“qualified retirement savings contributions,”provided your adjusted gross income is withinspecified limits. “Qualified retirement savingscontributions” include, for example,contributions to an IRA, elective employer oremployee deferrals to a qualified retirementplan, elective deferrals under an eligibledeferred compensation plan maintained by aState or local government, and voluntaryemployee contributions to a qualifiedretirement plan. մեe amount of the tax creditis calculated by multiplying the first $2,000 of your “qualified retirement savingscontributions” by the applicable percentage,which is determined in accordance with thefollowing table:

ADJUSTED gROSS INCOME (2008 LIMITS)*

Joint Return Head of a Household All Other Cases %

Over Not Over Over Not Over Over Not Over

$0 $32,000 $0 $0 $16,000 $16,000 50

$32,000 $34,500 $24,000 $25,875 $16,000 $17,250 20

$34,500 $53,000 $25,875 $39,750 $17,250 $26,500 10

$53,000 $39,750 $26,500 0

*Periodically indexed for inflation.


Inform

ation A

bou

t Your A

ccoun

ts

Additional information available[115] For more information about taxes and your

SRA/IRA, you should obtain a copy of IRSPublication 590, Individual Retirement

Arrangements (IRAs), or a replacement publication. You can obtain a copy of IRSPublication 590 at www.irs.gov.

[116] You may also contact any district office of theIRS directly.

About Fees

ANNUAL CUSTODIAL FEES

SRA/IRA 0.25% of net assets, subject to

Single-participant SIMPLE (per account) Minimum $60 Maximum $100

Multi-participant SIMPLE (per account) Minimum $50 Maximum $100

[117] Custodial fees are calculated on a calendaryear basis and are charged in the calendarquarter containing your account openinganniversary date (“anniversary quarter”). մեenet assets of the account is the valuation ofyour account as of the month ending thecalendar quarter preceding your anniversaryquarter. For example, if you have a 1st quarteranniversary, your assets would be based onthe net asset value of your account on the lastbusiness day of the preceding year. For thefirst fee year, the custodial fee will be chargedin the quarter following the account opening,based on the net asset value on the last dayof the quarter in which the account was established. If the account has not beenfunded, we will value your account as of thelast day of the quarter in which the account isfunded to determine the custodial fee.

[118] մեe custodial fee for an SRA/IRA will bewaived for the time that your SRA/IRA isenrolled in a Merrill Lynch investment advisoryprogram.

OTHER FEES

[119] Brokerage commissions, sales charges, asset-based fees and other routine charges fortransactions in, or the investment of, theassets in your SRA/IRA will be assessed whenapplicable.

[120] Merrill Lynch also may receive compensationfrom certain providers of investment alterna-tives for your SRA/IRA. Our fees, commissionsand charges with respect to your SRA/IRA maychange from time to time.

[121] A late fee may be charged to accounts withpast due balances.

[122] For accounts with balances of $1 or less, a feeequal to the account balance may beassessed to such account resulting in thesubsequent account closure, regardless ofyour household’s aggregate account balance.

[123] If your account is closed or transferred, we willcharge a $75 account closeout fee. մեeaccount closeout fee will be charged inaddition to any pending custodial fees due onyour account. Merrill Lynch will charge theaccount closeout fee to your SRA/IRA.

[124] մեe account closeout fee for an IRA may bewaived under certain services or programsoffered by Merrill Lynch.

Fee payment methods[125] You may indicate to your financial advisor or a

Service Representative how you wish to paythe custodial fee and Merrill Lynch investmentadvisory program fees (if applicable).


[126] You may choose one of the following methods:

• By check (not available for MESD);

• By transfer from another Merrill Lynch account(not available for MESD); or

• By direct deduction from your SRA/IRA.

[127] If you pay the custodial fee before it is chargedto your SRA/IRA, the amount of the custodialfee may be tax deductible. You may not reim-burse your account for the fee once it hasbeen paid from your account.

[128] In certain circumstances, fees may not bededucted from your SRA/IRA due to legalconsiderations. We may change the availablemethods and the timing of payment ofcustodial fees from time to time.

[129] Merrill Lynch may sell assets in your SRA/IRA tocover securities purchases and other expenses.

IRS Approval

[130] մեe Internal Revenue Service has approvedthe Merrill Lynch SIMPLE Retirement AccountCustodial Agreement as set forth in thisbooklet. Approval by the IRS is a determi-nation as to the form, not the merits, of this SRA/IRA.


Inform

ation A

bou

t Your A

ccoun

ts

Custodial Agreement

[1] մեis custodial agreement, adopted in accor-dance with Merrill Lynch’s procedures foradopting an SRA/IRA, governs your SIMPLERetirement Account/Individual Retirement(“SRA/IRA”) of which Merrill Lynch is thecustodian.

[2] Your SRA/IRA is being established for, and thisagreement shall be interpreted in accordancewith, the purpose of providing you with thefunding vehicle for your benefits under youremployer’s Savings Incentive Match Plan forEmployees (SIMPLE) plan, including the Merrill Lynch SIMPLE Retirement Account Plan(SRA/IRA Plan) Program, pursuant to Section408(p) of the Tax Code.

[3] մեroughout this agreement, the words youand your refer to the person for whom yourSRA/IRA is established or maintained, andMerrill Lynch, we, us, and our refer to Merrill Lynch, Pierce, Fenner and Smith Incor-porated, a registered broker-dealer andwholly-owned subsidiary of Bank of AmericaCorporation. Merrill Lynch is the custodian ofyour SRA/IRA. By Tax Code, we refer to theInternal Revenue Code of 1986 and the regu-lations adopted under it, both as amended. BySRA/IRA, we refer to a SIMPLE retirementaccount/individual retirement account estab-lished to hold contributions made on yourbehalf under your employer’s SIMPLE plan,which is not a traditional IRA, a Roth IRA, or aCoverdell Education Savings Account (formerlycalled an Education IRA), which is either aMerrill Lynch SRA/IRA or, an SRA/IRA withanother financial institution.

[4] Your SRA/IRA is established when we acceptthe first deposit your employer makes on yourbehalf to your account. Merrill Lynch has theright to reject an account that has not beenestablished in accordance with our adminis-trative procedures.

Contributions[5] Under this Agreement, we will accept the

following contributions made by check, moneyorder, electronic funds transfer, or in-kindtransfer of investments:

• SIMPLE plan contributions (including incomedeferrals) made by your employer for yourbenefit described in Section 408(p) of the TaxCode. However, you and your employer areresponsible for determining whether thecontribution is within the limits set by the TaxCode and whether your employer’s SIMPLEplan meets the requirements of Section408(p) of the Tax Code (cash only).

• Rollovers or transfers of assets (cash,securities or other property) from anotherSRA/IRA.

• Recharacterizations of SRA/IRA conversionsfrom a Roth IRA under Section 408A(d)(6) ofthe Tax Code and the Treasury Regulationsthereunder.

[6] All non-cash assets must be compatible withour administrative and operational require-ments. Cash contributions may be by check,money order or electronic funds transferacceptable to us.

[7] We will not accept:

• Contributions made by you or on your behalfto an individual retirement account (IRA)which is a traditional IRA, Roth IRA orCoverdell Education Savings Account.

• Rollovers or transfers of assets from any IRAor retirement plan other than an SRA/IRA.

• Contributions (including income deferrals)made on your behalf under an employer’sSimplified Employee Pension (SEP) planpursuant to Section 408(k) of the Tax Code.

• Non-cash assets that are incompatible withour administrative and operationalrequirements.

[8] We will not knowingly accept SIMPLE plancontributions that exceed limits set under TaxCode Section 408(p) or from an employer’sSIMPLE plan that does not meet the require-ments of Section 408(p) of the Tax Code.

[9] If we discover an excess contribution, we willonly return the excess to you aer receivingspecific written authorization from you.

Distributions[10] Any amount you or your beneficiaries receive

from your SRA/IRA is called a “distribution.”


[11] You may withdraw all or part of the assets inyour SRA/IRA at any time to the extent yourability to do so has not been restricted byassigning assets in your SRA/IRA as securityto repay the restricted amount of a distri-bution from a retirement plan as permittedunder applicable U.S. Treasury regulations.Following your death, your beneficiarycurrently entitled to benefits can withdraw allor any part of his or her interest in yourSRA/IRA, in a single sum, installments, or inthe form of an annuity, at any time except tothe extent of your assignment discussed inthe preceding sentence or your beneficiarydesignation has restricted that beneficiaryfrom taking certain distributions exceedingrequired minimum distributions. (seeMinimum Distributions (General Rules) andMinimum Distributions Aer Your Death,below).

[12] We will make distributions from your SRA/IRAaer your proper completion of a withdrawalform, and its acceptance, according to ourestablished policies. Distributions may bemade directly to you or, subject to our rulesand procedures, to your other Merrill Lynchnon-retirement account. When you request acash distribution, you must inform us as towhich assets should be sold to make thedistribution.

[13] մեe distribution of non-cash investments, suchas stocks or mutual fund shares, from yourSRA/IRA involves the re-registration of theseassets and can frequently take several weeks. Inaddition, certain investments are not readilysaleable and/or may be transferred into anotherowner’s name only at specified times. You shouldallow extra time for processing such distribu-tions, particularly when planning requiredminimum withdrawals.

Minimum Distributions (general Rules)[14] As described further in Minimum Distributions

During Your Lifetime and Minimum Distribu-tions Aer Your Death, on next page, certain“required minimum distributions” must bepaid from your SRA/IRA to you during yourlifetime and to your beneficiaries followingyour death. Such minimum distributions willbe based on Tax Code Section 408(a)(6) andthe U.S. Treasury Regulations issued there-

under, the provisions of which are included inyour SRA/IRA by reference. Except forminimum distributions under the five-year ruleof Minimum Distributions Aer Your Death, onnext page, minimum distributions will berequired for certain distribution calendaryears. մեe amount required to be distributedfor each distribution calendar year will bedetermined by dividing the fair market valueof your SRA/IRA as of December 31stpreceding such year by distribution periodsthat are determined under U.S. Treasury Regu-lations. մեe value of your SRA/IRA as of anyDecember 31st will include the value ofrollovers, transfers and recharacterizations toyour SRA/IRA from other plans or accountsthat are outstanding as of that date.

[15] մեese minimum distributions may be paid toyou or to your beneficiary from your SRA/IRAor they may be satisfied by purchasing anannuity that satisfies the requirements of U.S.Treasury Regulation Section 1.401(a)(9)-6, asof the purchase date.

[16] For purposes of computing required minimumdistributions from your SRA/IRA, your “desig-nated beneficiary” will be the natural personwho is treated as a designated beneficiaryunder U.S. Treasury Regulation Section1.401(a)(9)-4.

Minimum Distributions During Your Lifetime[17] Your SRA/IRA must commence being

distributed no later than the first day of Aprilfollowing the calendar year in which you attainage 70 1/2. մեis is your “required beginningdate.” Although distributions need notcommence until your required beginning date,the first distribution must be for the year inwhich you attain age 70 1/2 and may bemade in that year. If your first minimum distri-bution is made in the calendar year aer youattain age 70 1/2 (by April 1st), an additionalrequired minimum distribution must be madeto you by the end of that year. For example, ifyou attain age 70 1/2 on September 1, 2004,your required beginning date will be April 1,2005 and, irrespective of whether your firstminimum distribution (for 2004) is made in2004 or between January 1 and April 1, 2005,another distribution (for 2005) must be madeby December 31, 2005.


Inform

ation A

bou

t Your A

ccoun

ts

[18] մեe distribution period for computing yourrequired minimum distribution for each yearwill be the greater of: (1) the distributionperiod for your attained age in that year fromthe Uniform Lifetime Table in Treasury Regu-lation § 1.401(a)(9)-9 Q&A-2 or (2) if yourspouse is your sole beneficiary for the full yearand your spouse is more than 10 yearsyounger than you, the distribution period fromthe Joint and Last Survivor Table of TreasuryRegulation Section 1.401(a)(9)-9 Q&A-3 basedon the attained ages of you and your spousein such year.

Minimum Distributions Aer Your Death[19] If you die aer your required beginning date,

but before your entire interest in your SRA/IRAhas been distributed, the remaining balanceof your SRA/IRA must continue to bedistributed to your beneficiary at least asrapidly as follows:

• If you have a designated beneficiary as ofSeptember 30 of the year following the year ofyour death, the distribution period will be thelonger of the period that will apply if you donot have a designated beneficiary asdescribed below, or your designatedbeneficiary’s life expectancy determinedunder (A) or (B) below:

(A) If your spouse is your sole designatedbeneficiary, your spouse beneficiary’s lifeexpectancy will be recalculated each yearthrough your spouse’s year of death and willbe determined using your spouse’s age asof his or her birthday in the year followingthe year of his or her death and reduced byone for each subsequent year.

(B) If you have a non-spouse designatedbeneficiary, his or her life expectancy will bedetermined using the beneficiary’s age asof his or her birthday in the year followingthe year of your death and reduced by onefor each subsequent year.

• If you do not have a designated beneficiary,the distribution period will be your remainingterm certain life expectancy determined in theyear of your death and reduced by one foreach subsequent year.

[20] If you die before your required beginning date,then your entire SRA/IRA must be distributed

to your beneficiary by December 31 of thecalendar year containing the fih anniversaryof your death except to the extent that anelection is made to receive distributions inaccordance with the following:

• If your interest is payable to a designatedbeneficiary, he or she may elect to receiveyour entire interest over a period not greaterthan the life expectancy of the designatedbeneficiary, determined using his or her age athis or her birthday in the year following theyear of your death, and if the designatedbeneficiary is not your surviving spouse,payments must commence no later thanDecember 31 of the calendar year followingthe year in which you died.

• If your sole designated beneficiary is yoursurviving spouse, the distri butions arerequired to commence by the later of:

(A) December 31 of the calendar yearimmediately following the calendar year inwhich you died; or

(B) December 31 of the calendar year inwhich which you would have attained 701/2. If your surviving spouse soledesignated beneficiary dies beforedistributions are required to begin, theremaining interest in your SRA/IRA must bedistributed to the successor beneficiary byDecember 31 of the calendar yearcontaining the fih anniversary of yourspouse’s death. However, if the successorbeneficiary is a designated beneficiary, heor she may elect to have the remaininginterest distributed, starting by the calendaryear following your spouse’s death, over thesuccessor designated beneficiary’sremaining life expectancy determined usingsuch beneficiary’s age as of his or herbirthday in the year following the death ofyour spouse.

[21] If your sole designated beneficiary is yoursurviving spouse and your beneficiary desig-nation has not specifically restricted yourspouse from doing so, your spouse may rollover your SRA/IRA assets into his or her ownSRA/IRA or may elect to treat your SRA/IRA ashis or her own SRA/IRA. մեis election will bedeemed to have been made if your survivingspouse has a contribution made to the


account by his or her employer under itsSIMPLE plan or makes a rollover contributionto or from the account, does not take arequired minimum distribution otherwiserequired or delivers a notice to us that he orshe is making this election. Following suchelection, or deemed election, your spousemust take distributions under Minimum Distri-butions During Your Lifetime, substituting“your spouse” for “you” and “your spouse’s”for “your.”

[22] Minimum distributions aer your death,except for the five-year rule must be madeover the applicable life expectancy computedby use of the Single Life Table in Q&A-1 of U.S.Treasury Regulation Section 1.401(a)(9)-9. Ifyour designated beneficiary is your survivingspouse, his or her life expectancy will be recal-culated annually by using the number in theSingle Life Table corresponding to yourspouse’s age in the year. For all other benefici-aries, the applicable life expectancy will be thenumber in the Single Life Table correspondingto the attained age of your beneficiary duringthe calendar year specified in (A) & (B) above,and payments for any subsequent calendaryear will be calculated based on such lifeexpectancy reduced by one for each calendaryear which has elapsed since the calendaryear a life expectancy was first calculated. Asimilar term certain calculation will be madefor your spouse beneficiary for years aer hisor her death, beginning with the year of his orher death.

Beneficiaries[23] You may name one or more beneficiaries of

your SRA/IRA, including individuals, yourestate, a charity or a trust. մեese beneficiariesmay be designated primary, contingent orsuccessor beneficiaries and may be changedat any time, but must be designated in writingand are not effective until we receive andaccept them. Unless your beneficiarydesignation provides otherwise, yourbeneficiaries may themselves designatesuccessor beneficiaries who will takeprecedence over successor beneficiariesdesignated by you.

[24] We reserve the right not to accept anybeneficiary designation that is incompatible

with our admini strative and operationalcapabilities, even if such designation isotherwise allowable. A proper writtendesignation or change of beneficiary, whichyou or your beneficiary executed prior to youror your beneficiary’s death and which wereceive following your or your beneficiary’sdeath, will govern distributions from yourSRA/IRA following, but not prior to, ouracceptance of the designation.

[25] You may restrict a beneficiary from takingdistributions in excess of specified amounts,although these distributions must at leastequal required minimum distributionsdescribed in Minimum Distributions Aer YourDeath, page 19.

[26] Aer your death, Merrill Lynch will make distri-butions to the listed beneficiary of record,regardless of state community property law. If,as a result of state community property law,payments are to be made to the survivingspouse rather than the named beneficiary, awritten statement authorizing such paymentmust be submitted and signed by the spouseand the designated beneficiary.

[27] If your beneficiary is a trust or your estate,distributions will generally be made to therelevant trustee or the executor(s) of yourestate. However, the trustee or executor may,subject to any rules we establish, providewritten directions to us to make distributionsto the beneficiaries of the trust or estate of itsinterest in your SRA/IRA.

[28] If you are divorced or your marriage isannulled aer you designate your spouse asthe beneficiary, the designation is void unless:

• մեe decree of divorce or annulmentdesignates such spouse as beneficiary;

• You designate your spouse as beneficiary; or

• Such spouse is re-designated to receiveproceeds or benefits in trust for, on behalf of,or for the benefit of your child or dependent.

[29] Unless otherwise provided in your beneficiarydesignation, if a primary beneficiary prede-ceases you, his or her share will be distributedto remaining primary beneficiaries inproportion to their payment percentages. If noprimary beneficiaries survive you, the balance


Inform

ation A

bou

t Your A

ccoun

ts

will be distributed to your contingent benefici-aries.

[30] If you have not designated a beneficiary, or ifno beneficiary survives you, your SRA/IRAbalance will be paid to your surviving spouse,or, if you are not survived by your spouse, toyour estate.

[31] If no successor beneficiary survives a benefi-ciary who had become entitled to receivebenefits, or if no successor beneficiary desig-nation is in effect at the prior beneficiary’sdeath, we will pay your SRA/IRA balance tothe prior beneficiary’s surviving spouse, or ifhe or she is not survived by a spouse to his orher estate. If we are notified that a beneficiaryis legally a minor under applicable state law,we can fulfill our responsibilities as custodianby paying either the beneficiary’s parent orlegal guardian.

Investments[32] You are responsible at all times for directing

the investment of assets in your SRA/IRA,including the direction to enroll in a MerrillLynch investment advisory program. We do notassume liability for any losses incurred in yourSRA/IRA as a consequence of the investmentsyou selected, including the direction to enroll in aMerrill Lynch investment advisory program.

[33] Your SRA/IRA may invest in one or moreinvestment alternatives we offer, subject toany rules we may reasonably establish, oryour SRA/IRA may sell any such assets andreinvest the proceeds. All investments mustbe compatible with our administrative andoperational requirements, which may changefrom time to time.

[34] Dividends and other distributions on shares of mutual funds in which your SRA/IRA isinvested will be paid in cash, where the option exists and will be deposited along withother cash balances (see Cash Balances onpage 23).

[35] In no event may the assets in your SRA/IRA becommingled with other property except in acommon trust fund or a common investmentfund.

[36] Your SRA/IRA cannot invest in collectibles(works of art, antiques, rugs, most metals,

gems, stamps, most coins and alcoholicbeverages) and life insurance contracts.

[37] You may enroll your SRA/IRA in a Merrill Lynchinvestment advisory program, as providedunder a separate agreement. Except under aseparate agreement, Merrill Lynch will nothave discretionary authority or control withrespect to the investment of your SRA/IRAassets, nor will it provide advice orrecommendations for your SRA/IRAinvestments. You may however enroll, under aseparate agreement, your SRA/IRA in a MerrillLynch investment advisory program to receivethese types of services. Moreover, on or aerJune 9, 2017, or such later date that theDepartment of Labor Fiduciary Rule becomesapplicable to Retirement Account assets (the“Applicability Date”), Merrill Lynch may make arecommendation (a “Program EnrollmentRecommendation”): (i) to enroll your SRA/IRAin a Merrill Lynch investment advisoryprogram or (ii) for certain securities andassets, to open a “Limited Purpose”Retirement Account.

[38] Except for a Program EnrollmentRecommendation made on or aer theApplicability Date, or as provided under aseparate agreement, we have no duty todetermine or advise you or any other personof the investment consequences resultingfrom your or their actions involving yourSRA/IRA and we are not liable for theinvestment consequences of your or theiractions, or of our actions following yourdirections, or of our failing to act in theabsence of your or their directions. Inaddition, we have no duty to determine oradvise you or any other person of the tax orother consequences resulting from your ortheir actions involving your SRA/IRA and weare not liable for the tax or otherconsequences of your or their actions, or ofour actions following your directions, or of ourfailing to act in the absence of your or theirdirections.

[39] Except as provided under a separateagreement, we will not make any investmentsor dispose of any investments in your SRA/IRAwithout your direction, except as otherwiseprovided in this agreement. For instance, we


may sell assets to pay amounts owed to us orif your SRA/IRA is considered abandoned, inwhich case we will pay the assets to the stateof your last known residence.

[40] Unless you are enrolled in a Merrill Lynchinvestment advisory program, or, on or aer the Applicability Date, weprovided you with a Program EnrollmentRecommendation to enroll in a Merrill Lynchinvestment advisory program, we are notresponsible for reviewing the assets in yourSRA/IRA or for making recommendations onacquiring, retaining or selling any assets. NoMerrill Lynch Research opinion, IndependentResearch opinion, the inclusion of a securityon any list, or any information provided to youeither on the Merrill Edge website or by mail orany other means constitutes arecommendation to you to purchase, hold orsell any investment nor should you viewMerrill Lynch as providing impartialinvestment advice to you by reason of makingsuch research, opinions, lists or informationavailable to you.

[41] You may appoint an investment advisor orother person to act as your representativewith authority to direct investments of anyassets in your SRA/IRA. If you do so, you agreethat the appointment is effective only if:

• We have received a signed copy of anagreement between you and such person,which is acceptable to us and which specifiesthat such person may act on your behalf anddirect us as to how to invest your assets; and

• We do not object to acting on the directions ofsuch person, which objection we may assertat any time for any reason.

[42] Note that “you” and “your” may refer to thisinvestment advisor with respect to investmentdecisions, but not with respect to accountownership and contributions.

[43] We may hold securities in your SRA/IRA in ourname or the name of any nominee we select,without qualification or description ofownership.

[44] We may make, sign and deliver any writtencontracts, waivers, releases or other documents necessary to carry out yourinstructions.

[45] We may establish sub-accounts for permittedinvestment purposes.

[46] If you do not give us investment directions, wemay hold assets uninvested until receivingproper instructions.

[47] We will provide you with all notices, prospec-tuses, financial statements, proxies and proxysolicitations we receive concerning invest-ments in your SRA/IRA. We will follow yourwritten instructions for voting shares and exer-cising other rights of ownership. Subject to,and except as permitted by any applicablerules of the Securities and ExchangeCommission and any national securitiesexchanges, in the absence of written instruc-tions from you, we will not exercise such rightsin the absence of authorization from you, andwill not be responsible for the consequencesof failing to take action.

[48] If we cannot locate you or your beneficiary,Merrill Lynch can, with no responsibility for theconsequences, sell any or all the assets inyour SRA/IRA. We may then, if not alreadyinvested or deposited through a sweep optionin effect for your account, invest in a moneymarket fund or deposit the proceeds in aninterest-bearing account. We will do so onlyaer waiting at least two months from thedate we attempt to locate you or your benefi-ciary by sending a written notice to the lastaddress shown for you or your beneficiary inour records.

Annuity contracts[49] If annuity contracts are offered as investments

for your SRA/IRA, Merrill Lynch, as custodian,must own any annuity and will exercise allrights under the annuity by following yourwritten instructions.

[50] We are not responsible for the validity of anyannuity held in your SRA/IRA or the failure ofany insurance company to make annuitypayments. Also, unless caused by gross negli-gence or willful misconduct, our failure topurchase an annuity or pay an annuitypremium when due will not give anyone aclaim against us.

[51] If your contribution toward an annuity is notsufficient to pay the premium due, we will


Inform

ation A

bou

t Your A

ccoun

ts

notify you and inquire whether you wish us tosell any assets in the SRA/IRA to pay thepremium. If we are unable to pay the premiumwhen due, depending on the terms of theannuity contract, the annuity will either beplaced on a paid up basis or the annuitybenefit amount will be reduced.

[52] Any death benefit under the annuity must bepayable to your SRA/IRA for distribution to anybeneficiary designated under your SRA/IRA.

Cash balances[53] You authorize the deposit of cash balances in

your SRA/IRA in accounts with FIA CardServices, N.A. or Bank of America California,N.A., or with affiliated or unaffiliateddepositary institutions that bear a reasonablerate of interest. If a deposit program is notavailable for your SRA/IRA, cash balances willbe invested in the option made available forcash balances.

Fees[54] You agree to pay us all applicable fees and

costs, including:

• Fees for our services as custodian of yourSRA/IRA, according to our current schedule,which may change from time to time;

• Merrill Lynch investment advisory programfees, when applicable;

• All applicable taxes, including transfer taxeson investments; and

• Any other expenses we incur as custodian orthat may otherwise be properly charged toyour account.

[55] We may deduct directly from your SRA/IRA anysuch fees, tax reimbursements or expensesowed to us. If sufficient cash is not available inyour SRA/IRA, we reserve the right to sell anyassets in your SRA/IRA to cover amounts dueus. We may also, at your direction, deduct feesand expenses of any investment advisor youappoint, to the extent not paid by you orotherwise prohibited.

Our rights and responsibilities[56] We have no duty to perform any actions other

than those specified in this agreement. Wecan accept and rely conclusively on anyinstructions or other communications wereasonably believe to have been given either

by you or some other authorized person. Wecan assume that the authority of such personcontinues in effect until we receive writtennotice to the contrary.

[57] We will keep accurate and detailed records ofall transactions concerning your SRA/IRA.

[58] We will submit such annual and other writtenreports to you and the IRS as required of us bylaw, including such information concerningrequired minimum distributions as prescribedby the Commissioner of the Internal RevenueService. All distributions from your SRA/IRA,including those resulting from account revoca-tions, are reported to you and the IRS on Form1099-R.

[59] If you do not write to us to object to a reportwithin 60 days aer we send it to you, you willbe considered to have approved it and to havereleased us from all responsibility for matterscovered by the report.

[60] You agree to provide us with any informationwe may need to comply with our legalreporting requirements. You will continue tobe responsible for filing your tax return andany other reports required of you by federallaw.

Taxes[61] If investments in your SRA/IRA generate

“unrelated business taxable income” of morethan $1,000 during the year, we may have tocalculate and pay income taxes on thatamount. If so, we reserve the right to impose afee for filing a tax return for your SRA/IRA.

Resigning as custodian[62] If we ever resign as custodian, we will notify

you in writing at your last known address atleast thirty (30) days in advance of our resig-nation. You acknowledge and agree that, uponyour receipt of notice of our resignation asyour custodian: (i) you will have the right toselect your successor custodian, provided thatyou have given us written instruction totransfer your SRA/IRA assets to anotherSRA/IRA custodian or trustee in advance ofthe effective date of our resignation; (ii) if youhave not provided us with instructionsregarding your preferred successor custodian,we may, in our sole discretion and without


further notice to you, designate a successorcustodian (including one affiliated with us) onyour behalf; and (iii) in the event no successorcustodian is designated by you (including inparticular if we appoint a successor custodianon your behalf), we may liquidate withoutfurther notice to you all of the assets in youraccount, and all proceeds from such liqui-dation will be either (a) transferred to thesuccessor custodian or (b) sent to your lastknown address in the form of a check. Pleasenote that in the event we liquidate any of yourassets, any outstanding obligations and/ordebit balance(s) you may owe in your SRA/ IRAaccount(s), including any annual and closingfees, will be deducted by Merrill Lynch prior toany checks being issued. Additionally, theliquidation of any security may incur fees,including mutual fund contingent deferredsales charges, or other applicable liquidationfees, which also will be paid with the proceedsof your liquidated assets.

[63] You are required to direct us to transfer youraccount to some other trustee or custodian inthe unlikely event that the IRS notifies us thatwe no longer qualify to act as custodian. Wewill make a transfer aer receipt of the newcustodian or trustee’s written acceptance ofthe appointment.

[64] Certain investments, such as limited partner-ships, generally can be transferred only annually,semi-annually or at some other specifiedintervals. Additionally, some investments, suchas certain certificates of deposit (CDs), cannot bedelivered and must be either liquidated or heldwith the custodian until maturity.

Nonforfeitability[65] Your right to the balance in your SRA/IRA

cannot be forfeited at any time.

Exclusive benefit and restrictions on sale or

transfer[66] Your SRA/IRA is exclusively for the benefit of

you and your beneficiaries. Aer your death,your beneficiaries, except as specificallyprovided to the contrary, will have all therights and all the obligations you had withrespect to your SRA/IRA. You cannot sell orassign any interest in your SRA/IRA. However,you may be able to transfer all or part of your

SRA/IRA to a former spouse under the termsof a divorce decree or written agreementmade in connection with your divorce.Following your death, the trustee of a trust orthe personal representative of an estatewhich is your beneficiary may be able to directus to make distributions directly to the benefi-ciaries of such trust or estate, as provided inBeneficiaries on page 8.

Indemnification[67] You agree to repay us for any liabilities or

expenses we may incur as a result of thisagreement, other than those arising out of ourfailure to perform our specified duties.

[68] Except as to controversies arising between us,we can apply to a court at any time for judicialsettlement of any matter involving yourSRA/IRA. If we do so, we must give you theopportunity to participate in the courtproceeding, but we can also involve otherpersons.

[69] Any expenses we incur in legal proceedingsinvolving your SRA/IRA, including attorney’sfees, are chargeable to your SRA/IRA andpayable by you if not paid from your SRA/IRA.

Arbitration[70] մեis Agreement contains a predispute

arbitration clause. By signing an arbitrationagreement the parties agree as follows:

• All parties to this Agreement are giving upthe right to sue each other in court,including the right to a trial by jury, exceptas provided by the rules of the arbitrationforum in which a claim is filed.

• Arbitration awards are generally final andbinding; a party’s ability to have a courtreverse or modify an arbitration award isvery limited.

• մեe ability of the parties to obtaindocuments, witness statements and otherdiscovery is generally more limited inarbitration than in court proceedings.

• մեe arbitrators do not have to explain thereason(s) for their award unless, in aneligible case, a joint request for anexplained decision has been submitted byall parties to the panel at least 20 daysprior to the first scheduled hearing date.


Inform

ation A

bou

t Your A

ccoun

ts

• մեe panel of arbitrators may include aminority of arbitrators who were or areaffiliated with the securities industry.

• մեe rules of some arbitration forums mayimpose time limits for bringing a claim inarbitration. In some cases, a claim that isineligible for arbitration may be brought incourt.

• մեe rules of the arbitration forum in whichthe claim is filed, and any amendmentsthereto, shall be incorporated into thisAgreement.

[71] You agree that all controversies that mayarise between us shall be determined byarbitration. Such controversies include, but are not limited to, those involving anytransaction in any of your accounts withMerrill Lynch, or the construction,performance or breach of any agreementbetween us, whether entered into oroccurring prior, on or subsequent to thedate hereof.

[72] Any arbitration pursuant to this provisionshall be conducted only before the FinancialIndustry Regulatory Authority, Inc. (FINRA)or an arbitration facility provided by anyother exchange of which Merrill Lynch is amember, and in accordance with therespective arbitration rules then in effect inFINRA or such other exchange.

[73] You may elect in the first instance whetherarbitration shall be conducted before FINRAor another exchange of which Merrill Lynchis a member, but if you fail to make suchelection by registered letter addressed toMerrill Lynch at the office where youmaintain your account before the expirationof five days aer receipt of a writtenrequest from Merrill Lynch to make suchelection, then Merrill Lynch may make suchelection.

[74] Judgment upon the award of the arbitratorsmay be entered in any court, state orfederal, having jurisdiction.

[75] No person shall bring a putative or certifiedclass action to arbitration, nor seek toenforce any predispute arbitration

agreement against any person who hasinitiated in court a putative class action orwho is a member of a putative class whohas not opted out of the class with respectto any claims encompassed by the putativeclass action until: (i) the class certificationis denied; or (ii) the class is decertified; or(iii) the customer is excluded from the classby the court. Such forbearance to enforcean agreement to arbitrate shall notconstitute a waiver of any rights under thisAgreement except to the extent statedherein.

[76] մեis agreement does not prohibit or restrictyou from requesting arbitration of a disputein the FINRA arbitration forum as specifiedin FINRA rules.

[77] Notwithstanding the foregoing, anyagreement or award made as a result of anarbitration proceeding shall not be inviolation of Section 408 of the Tax Code andrelated regulations. In connection with anyarbitration brought in accordance with thisagreement, for the avoidance of doubt,effective June 9, 2017, the pre-disputearbitration provision contained in thisdocument shall not be interpreted as aviolation of the US Department of Labor’sBest Interest Contract Exemption withrespect to a Program EnrollmentRecommendation provided under theRetirement Account Addendum. Inconnection with any arbitration brought inaccordance with this Agreement for theavoidance of doubt, effective theApplicability Date, the pre-disputearbitration provision contained in thisdocument shall not be interpreted as aviolation of the US Department of Labor’sBest Interest Contract Exemption withrespect to a Program EnrollmentRecommendation.

governing law[78] մեe laws of the State of New York and federal

law applicable to individual retirementaccounts (IRAs) shall govern this agreement,and its enforcement, without regard to thecommunity property laws of any state.

26 | Prototype SIMPLE Retirement Account Plan

Amendments[79] We reserve the right to amend this agreement

and will give you written notice of anyamendment. Written notice of anyamendment in a manner determined byMerrill Lynch, including electronic delivery orposting electronically to an internet address.

Binding effects on successors[80] You and we agree that this agreement will be

binding on and will inure to the benefit of thebeneficiaries, heirs, successors and personal representatives of you, your beneficiaries andMerrill Lynch.

Electronic Delivery[81] We will provide any notice (written or

otherwise) required under the SRA/IRA or theTax Code in a manner determined by us, inour sole discretion, including electronicdelivery or posting to an internet address. n

L-04-18

Prototype SIMPLE Retirement Account Plan

ARTICLE I: DEFINITIONS

As used in this Prototype SIMPLE RetirementAccount Plan and Employer’s AdoptionAgreement, each of the following terms shallhave the meaning for that term set forth inthis Article I:

“Affiliate” means any corporation orunincorporated business (other than theEmployer): (a) which is controlled by, or undercommon control with, the Employer within themeaning of section 414(b) or (c) of the Code,(b) which is a member of an “affiliated servicegroup” (as defined in section 414(m) of theCode) which includes the Employer, or (c)which is required to be aggregated with theEmployer under section 414(o) of the Codeand the regulations thereunder.

“Business” means in the case of an Employerthat is a sole proprietorship or partnership,the trade or business of the Employer with

respect to which this Plan is adopted, and inthe case of an Employer that is a corporation,each trade or business of the corporation.

“Code” means the Internal Revenue Code of1986, as now in effect or as amended fromtime to time. A reference to a provision of theCode shall be to such provision and any validregulations pertaining thereto as well as tothe corresponding provision of any legislationwhich amends, supplements or supersedesthat provision and any valid regulationspertaining thereto.

“Compensation” means:

(a) For an Employee other than a Self-Employed Individual, wages [as definedin Code section 3401(a)] included in the“Wages, Tips and Other Compensation”box on the Internal Revenue ServiceForm W-2 furnished to the Employee,which information is required to bereported by the Employer under Codesection 6051(a)(3). Compensation shallalso include any amount which iscontributed by the Employer pursuant toa salary reduction agreement and whichis not includable in the gross income ofthe Employee under Code sections402(e)(3), 402(h), 402(k), 403(b), orcompensation deferred under section457 included in the appropriate box onthe Form W-2 (Box 12 for 200 ), whichinformation is required to be reportedunder Code section 6051(a)(8).Compensation does not include anyamounts deferred by the Employeepursuant to a section 125 cafeteria plan.

(b) For a Self-Employed Individual, his or herNet Earnings for the year involved,including any Salary ReductionContributions made on his or her behalfunder this Prototype SIMPLE Plan andwithout reduction for any deductionotherwise available to such individualwith respect to any other contributionmade to the Plan on his or her behalf.

(c) In addition to other applicable limitationsset forth in the Plan, the annualCompensation of each Employee

Prototype SIMPLE Retirement Account Plan | 27

Inform

ation A

bou

t Your A

ccoun

ts

(including a Self-Employed Individual)taken into account under the Plan indetermining the amount of theEmployer’s Nonelective Contribution, ifany, shall not exceed $23,000, asadjusted by the Commissioner forincreases in the cost of living inaccordance with section 401(a)(17)(B) ofthe Code.

“Election Period” means the 60-day periodbefore the beginning of any Plan Year and a60-day period that includes either the day anEligible Employee becomes eligible to makeSalary Reduction Contributions, or the dayimmediately before such day, as determinedby the Employer.

“Eligible Employee” means any Employee ofan Employer other than an Employee in eitheror both of the following categories ofEmployees:

(a) Employees included in a unit ofEmployees covered by a collectivebargaining agreement between theEmployer or any Affiliate and “employeerepresentatives,” if retirement benefitswere the subject of good faith bargainingand 2% or less of the Employees who arecovered pursuant to that agreement areprofessionals as defined in TreasuryRegulation § 1.410(b)-9(g). For thispurpose, the term “employeerepresentatives” does not include anyorganization more than half of whosemembers are Employees who areowners, officers or executives of theEmployer or any Affiliate.

(b) Nonresident aliens within the meaning ofCode section 7701(b)(1)(B) who receiveno earned income within the meaning ofCode section 911(d)(2) from theEmployer or any Affiliate whichconstitutes income from sources withinthe United States within the meaning ofCode section 861(a)(3).

Notwithstanding the foregoing, the Employer’sAdoption Agreement may provide for inclusionof either or both categories of Employees asEligible Employees.

“Employee” means a Self-EmployedIndividual, any individual who is employed bythe Employer in the Business and anyindividual who is employed by an Affiliate.Each Leased Employee shall also be treatedas an Employee of the recipient Employer.

“Employer” means the corporation,proprietorship, partnership or otherorganization (or any successor thereto) whichadopts the Plan by execution of an Employer’sAdoption Agreement. Each Affiliate shall alsoadopt this Plan, and each of such adoptingAffiliates shall be deemed an “Employer” withrespect to the Plan; provided that theEmployer signing the Employer’s AdoptionAgreement shall (a) be the Plan sponsor withinthe meaning of ERISA section 3(16)(B), and (b)have the authority to act for all participatingEmployers with respect to Plan administrationand the execution and amendment of thePlan.

“Employer Contributions” means thecontributions made on a Participant’s behalfdescribed in Article IV.

“Employer Matching Contributions” meansthe Employer Contributions described inSubsection A of Article IV.

“Employer Nonelective Contributions” meansthe Employer Contributions described inSubsection B of Article IV.

“Employer’s Adoption Agreement” means adocument so designated with respect to thisSIMPLE Plan and executed by the Employer,as amended from time to time.

“ERISA” means the Employee RetirementIncome Security Act of 1974, as now in effector as amended from time to time. A referenceto a provision of ERISA shall be to suchprovision and any valid regulations pertainingthereto as well as to the correspondingprovision of any legislation which amends,supplements or supersedes that provisionand any valid regulations pertaining thereto.

“Leased Employee” means any individual(other than an Employee) who, pursuant to anagreement between the recipient Employer


and any other person (the “leasingorganization”), has performed services for therecipient Employer (or for the recipientEmployer and “related persons” determinedin accordance with Code section 414(n)(6)) ona substantially full-time basis for a period of atleast one year, such services are performedunder the primary direction or control of therecipient Employer and any other individualwho must be treated as a “leased employee”under regulations adopted pursuant to Codesection 414(o).

“Net Earnings” means the net earnings fromself-employment (within the meaning of Codesection 1402(a)) of a Self-Employed Individualwith respect to the Employer. “Net Earnings”shall be determined as if the term “trade orbusiness” for purposes of Code section 1402included service described in Code section1402(c)(6).

“Participant” means an Eligible Employee whosatisfies the eligibility requirements of ArticleII with respect to the Plan Year involved and(a) has elected to make Salary ReductionContributions under this Prototype SIMPLEPlan, or (b) is entitled to receive an allocationof an Employer Nonelective Contribution.

“Plan” means the simple retirement accountplan of the Employer in the form of thisPrototype SIMPLE Plan and the applicableEmployer’s Adoption Agreement executed bythe Employer.

“Plan Year” means the calendar year. If thePlan becomes effective on a date betweenJanuary 1 and October 1, the term “Plan Year”shall also include the short periodcommencing on the effective date and endingon December 31 of the calendar year in whichthe Plan first became effective; provided,however, that for all purposes of measuringCompensation under this Prototype SIMPLEPlan for such first Plan Year, Compensationshall be determined on the basis of the entirecalendar year in which the first Plan Yearbegan.

“Prototype SIMPLE Plan” means MerrillLynch’s Prototype SIMPLE Retirement AccountPlan as set forth in this document, asamended from time to time.

“Qualified Military Service” means any servicein the uniformed services (as defined inChapter 43 of Title 38, United States Code)where an Employee is entitled toreemployment rights under such Chapter withrespect to such service.

“Salary Reduction Agreement” means anagreement entered into between an Employeeand the Employer to reduce theCompensation otherwise payable directly tothe Participant in cash, as further described inArticle III of this Prototype SIMPLE Plan.

“Salary Reduction Contributions” means thecontributions made on a Participant’s behalfdescribed in Article III.

“Self-Employed Individual” means anindividual described in section 401(c)(1) ofthe Code.

“SRA/IRA” means the simple retirementaccount, as that term is defined in section408(p)(1) of the Code, established by or onbehalf of an Employee for investment ofcontributions made on behalf of the Employeeunder the Plan. մեe SRA/IRA must be eitheran Internal Revenue Service model IRA, Form5305-S or 5305-SA, or a Service-approvedprototype SIMPLE retirement account.

ARTICLE II: ELIgIBILITY TO PARTICIPATE

Each individual who is an Eligible Employeewho received at least $5,000 inCompensation from the Employer during anytwo preceding calendar years and who isreasonably expected to receive at least$5,000 in Compensation during the Plan Yearshall be eligible to participate in the Plan andto receive an allocation to his or her SRA/IRAfor the Plan Year.

Notwithstanding the foregoing, the Employer’sAdoption Agreement may permit EligibleEmployees with less than $5,000 inCompensation in any prior calendar year, andEligible Employees who are reasonablyexpected to earn less than $5,000 in the PlanYear involved, to participate.

Immediately before the Election Period, theEmployer shall notify each Eligible Employeewho satisfies the foregoing eligibility


Inform

ation A

bou

t Your A

ccoun

ts

requirements of the Employee’s eligibility toparticipate in the Plan. Such notice shallinclude a copy of the summary description asdescribed in section 408(l)(2)(B) of the Code.

ARTICLE III: SALARY REDUCTIONCONTRIBUTION

Each Participant may, pursuant to a SalaryReduction Agreement, make an electionduring the Election Period to haveCompensation that is received subsequent tothe election reduced, through continuingcontributions by an amount based on apercentage of his Compensation, not inexcess of the amount specified in Codesection 408(p)(2)(E) for the applicablecalendar year.

Notwithstanding the foregoing, a Participantwho is age 50 or over by the end of theParticipant’s tax year may make additionalSalary Reduction Contributions to the Plan inaccordance with, and subject to thelimitations of, Code section 414(v) and anyguidance issued thereunder. A Participant’stotal Salary Reduction Contributions cannotexceed his Compensation. All retirement plansmaintained by the Employer will be treated asa single plan for purposes of these additionalSalary Reduction Contributions. մեeseadditional Salary Reduction Contributions arenot subject to any other contribution limit andare not taken into account in applying othercontribution limits.

մեe Employer or an Affiliate will contributethese amounts as Salary ReductionContributions to the Participant’s SRA/IRA asan Employer Contribution for the Plan Year.մեis contribution will be made as of theearliest date on which contributions for aParticipant can be reasonably segregatedfrom the Employer’s general assets, but in noevent later than 30 days aer the last day ofthe month with respect to which the SalaryReduction Contributions are to be made.

No Salary Reduction Contributions may bemade by a Participant on the basis ofCompensation that the Participant receivedbefore the later of the Effective Date of thisPlan, as specified in the Employer’s Adoption

Agreement or the execution by the Participantof a Salary Reduction Agreement.

A Participant may increase or decrease his orher Salary Reduction Contributions for anyPlan Year during the Election Period for suchPlan Year by providing written notice of suchmodifications to the Employer.Notwithstanding the foregoing, the Employer’sAdoption Agreement may permit morefrequent modifications of a Participant’sSalary Reduction Contributions.

A Participant may elect to cease SalaryReduction Contributions at any time duringthe Plan Year; provided, however, that theParticipant may not elect to resume SalaryReduction Contributions until the beginning ofthe next Plan Year, unless the Employer’sAdoption Agreement provides otherwise.

ARTICLE IV: EMPLOYER CONTRIBUTIONS

A. Employer Matching Contribution

Subject to Subsection B, the Employer shallmake an Employer Contribution MatchingContribution for each Plan Year to the SRA/IRAof each Participant in an amount equal toeach Participant’s Salary ReductionContributions, for the Plan Year of up to 3% ofthe Participant’s Compensation for the PlanYear.

Notwithstanding the foregoing, the Employermay elect to match a percentage lower than3% of each Participant’s Compensation (butnot less than 1%) in any two Plan Years duringthe five-year period ending with such PlanYear. If any Plan Year in the foregoing five-yearperiod is a year prior to the first year anysimple retirement account as described insection 408(p) of the Code is in effect withrespect to the Employer (or any predecessor),the Employer shall be treated as if the level ofEmployer Matching Contributions was 3% forsuch prior Plan Year.

If the Employer elects to match a percentageof each Participant’s Compensation lowerthan 3% for any Plan Year, it shall notify thoseEligible Employees entitled to receive suchnotice of such lower percentage within areasonable period of time before the ElectionPeriod for such Plan Year.


B. Employer Nonelective Contribution

If the Employer so elects, in lieu of theEmployer Matching Contributions for any PlanYear, the Employer may make an EmployerNonelective Contribution for such year to theSRA/IRA of each Eligible Employee whosatisfies the eligibility requirements set forthin Article II and who has at least $5,000 ofCompensation from the Employer for the PlanYear. մեe Employer Nonelective Contributionshall be equal to 2% of each such EligibleEmployee’s Compensation.

Notwithstanding the foregoing, the Employer’sAdoption Agreement may permit EligibleEmployees to receive an EmployerNonelective Contribution even if they do nothave at least $5,000 in Compensation fromthe Employer for the Plan Year, but whootherwise satisfy the eligibility requirementsset forth in Article II.

If the Employer elects to make an EmployerNonelective Contribution for a Plan Year, itshall notify those Eligible Employees entitledto receive such notice of such election withina reasonable period of time before the 60-dayElection Period for such Plan Year.

C. Deductibility of Employer Contributions

մեe Employer may, subject to limitationscontained in the Code, deduct contributionsmade to the Plan in the taxable year of theEmployer with or within which the Plan Yearends. Employer Matching Contributions orEmployer Nonelective Contributions made fora particular taxable year of the Employer mustbe contributed by the due date of theEmployer’s income tax return (includingextensions) and are deemed made in suchtaxable year for purposes of the Employer’sdeduction.

D. Employer Tax Credit

Employers who employ 100 or feweremployees who have received at least $5,000of Compensation from the Employer in thepreceding year and employ at least oneemployee who is not a highly compensatedemployee, as defined in Code section 414(q),may claim a tax credit of 50% of theadministrative and retirement-educationexpenses incurred for the Plan. մեe credit is

limited to $500 and may be claimed by theEmployer for the first three years of the plan.

ARTICLE V: VESTINg

Each Participant shall be fully vested at alltimes in his Salary Reduction Contributions,Employer Matching Contributions andEmployer Nonelective Contributions, if any.

ARTICLE VI: MILITARY SERVICE

Notwithstanding any provision of this Plan tothe contrary, contributions, benefits andservice credit with respect to Qualified MilitaryService will be provided in accordance withsection 414(u) of the Code.

ARTICLE VII: TRANSFERS ANDWITHDRAWALS

մեe Employer may not require a Participant toretain any portion of the contributions madeto the Participant’s SRA/IRA in such SRA/IRA,or otherwise impose any withdrawalrestrictions.

In accordance with section 408 of the Code,any amount paid or withdrawn from aParticipant’s SRA/IRA may be rolled over ortransferred on a tax-free basis, at any time, toanother individual retirement account orannuity designed solely to hold funds under asimple retirement account plan. A Participantmay also roll over or transfer on a tax-freebasis any amount paid or withdrawn from theParticipant’s SRA/IRA to a traditionalindividual retirement account or annuity aera two-year period has expired since theParticipant first participated in the Plan or anyother simple retirement account maintainedby the Participant’s employer under section408(p) of the Code.

A Participant may also roll over on a tax-freebasis any amount paid or withdrawn from theSRA/IRA to a qualified retirement plan, 403(b)plan, 403(a) plan or an eligible governmental457 plan in accordance with Code section408(d)(3), aer a two-year period has expiredsince the Participant first participated in thePlan or any other simple retirement accountmaintained by the Participant’s employerunder section 408(p) of the Code.


Inform

ation A

bou

t Your A

ccoun

ts

Any amount paid or withdrawn from aParticipant’s SRA/IRA during the two-yearperiod beginning on the date that theParticipant first became a Participant in thePlan or any other simple retirement accountmaintained by the Participant’s employerunder section 408(p) of the Code, and that issubject to the additional tax on earlydistributions under section 72(t) of the Code,will be subject to a 25% (rather than 10%)additional tax for early withdrawal.

ARTICLE VIII: EMPLOYER ELIgIBILITYREQUIREMENTS

An Employer, with respect to any Plan Year,must have no more than 100 Employees whoreceived at least $5,000 of Compensationfrom the Employer for the preceding Plan Yearto be an employer eligible to maintain thisPrototype SIMPLE Plan; provided, however,that an eligible employer who establishes andmaintains this Plan for one or more years andfails to satisfy the foregoing eligibilityrequirements for any subsequent year shallbe treated as an eligible employer for the twoyears following the last year the employerqualified as an eligible employer.

In addition, an Employer (or any predecessoremployer) who maintained a “qualified plan”(which is defined as a plan, contract, pensionor trust described in section 219(g)(5)(A) or (B)of the Code) with respect to whichcontributions were made or benefits wereaccrued, for service in any calendar year inthe period beginning with the calendar yearthe Prototype SIMPLE Plan became effectiveand ending with the calendar year for whichthe determination is being made, will not beeligible to maintain this Plan and neitherSalary Reduction Contributions nor EmployerContributions may be made under this Plan.Notwithstanding the foregoing, an Employerwill be eligible to maintain this Plan, if it alsomaintains a “qualified plan(s)” (as definedabove) solely for the category of Employees

described in Section 1.6(a) of the Plan and theEmployer’s Adoption Agreement does notprovide for inclusion of such category ofEmployees as Eligible Employees.

Notwithstanding anything herein to thecontrary, if the Employer fails to satisfy any ofthe requirements described in this Article VIIIand the first paragraph of Article II hereof onaccount of an acquisition, disposition, orsimilar transaction, the Employer shall not betreated as failing to meet such requirementduring the period beginning on the date of thetransaction and ending on the last day of thesecond calendar year following the calendaryear in which such transaction occurs, if thefollowing requirements are met: (a) theEmployer satisfies requirements similar to therules under section 410(b)(6)(C)(i)(II) of theCode, and (b) the Plan would satisfy suchrequirement aer the transaction if theEmployer that maintained the Plan before thetransaction had remained a separateEmployer.

ARTICLE IX: AMENDMENT

Merrill Lynch reserves the right to amend thisPlan and will give the Employer written noticeof any amendment. մեe Employer may amendthe Plan as applied to the Employer bychanging its elections on the AdoptionAgreement and will give Merrill Lynch writtennotice of any such change in election.Notwithstanding the foregoing, anyamendment must conform to the substantiveprovisions of the Plan notice provided toParticipants for the calendar year.

ARTICLE X: ELECTRONIC DELIVERY

Merrill Lynch shall provide any notice (written or otherwise) required under the Plan or the Code in a manner determined byMerrill Lynch, in its sole discretion, includingelectronic delivery or posting to an internetaddress. n

L-11-16


Inform

ation A

bou

t Your A

ccoun

ts

Retirement Asset Savings Program | 35

Inform

ation A

bou

t Your A

ccoun

ts

Merrill Lynch RetirementAsset Savings ProgramFact Sheet

[1] մեis Fact Sheet describes the RetirementAsset Savings Program offered to certainsponsors and beneficiaries of retirement planaccounts at Merrill Lynch, Pierce, Fenner &Smith Incorporated (“Merrill Lynch”).

ABOUT THE RETIREMENT ASSET SAVINgSPROgRAM

[2] մեe Retirement Asset Savings Program(“RASP”) is a feature of retirement planaccounts for which Merrill Lynch is custodian(each a “Retirement Plan Account”). մեeseinclude Individual Retirement Accounts, RothIndividual Retirement Accounts, IndividualRetirement Rollover Accounts, SimplifiedEmployee Pension, SIMPLE IRA, Coverdell Edu -cation Savings Accounts and BASIC™ Planaccounts. (մեe Internal Revenue Code doesnot allow RASP to be used in connection withRetirement Selector® Account-403(b)(7)-custodial accounts.)

[3] մեe RASP feature makes available to you amoney market deposit account (“DepositAccount”), for each Retirement Plan Accountwhich is opened on your behalf at one or moreparticipating depository institutions, thedeposits of which are insured by the FederalDeposit Insurance Corporation, anindependent agency of the U.S. Government(“FDIC”).

[4] A minimum deposit of $1 is required to openan account through RASP. However, nodeposit relationship shall be deemed to existprior to the receipt and acceptance of yourfunds by a participating depository institution.

[5] Each deposit into a Deposit Account is a directobligation of the depository institution atwhich the Deposit Account is established andis not directly or indirectly an obligation ofMerrill Lynch. Merrill Lynch does not guaran -tee in any way the financial condition of anyinstitution at which you may establish

accounts through RASP. Upon request, you will be provided with the publicly availablesummary financial information relating topartici pating institutions. Merrill Lynch is not abank and securities offered by Merrill Lynchare not backed or guaranteed by any bank norare they insured by the FDIC.

[6] Deposits at each depository institution inwhich your funds are deposited through RASPare insured by the FDIC to a maximumamount of $250,000 (inclu d ing principal andaccrued interest) for all qualifying retirementaccount deposits held in the same legalcapacity, except for Coverdell EducationSavings Accounts, which are FDIC insured inthe irrevocable trust ownership category.Effective October 3, 2008, the StandardMaximum Deposit Insurance Amount(“SMDIA”) was temporarily increased from$100,000 to $250,000 through December31, 2009. On May 20, 2009, the temporaryincrease in the FDIC’s SMDIA was extendedthrough December 31, 2013. մեe SMDIA willreturn to $100,000 on January 1, 2014unless the temporary increase is extended byCongress. մեe FDIC insurance limit forQualified Retirement Accounts discussedbelow is not subject to reset on December 31,2013. Your federal deposit insuranceprotection takes effect as soon as adepository institution receives your deposit.Any deposits, including certificates of deposit(“CDs”), that you maintain in the same legalcapacity as your Retirement Plan Accountdirectly with a particular depository institution,through other Merrill Lynch accounts orthrough another intermediary would beaggregated with the deposits maintained in

the Deposit Accounts at that institution forpurposes of the FDIC insurance limit. Sincethere may be more than one depositoryinstitution at which you may establish aDeposit Account, you may have more than theStandard Maximum Deposit InsuranceAmount in federal deposit insuranceprotection for funds deposited through RASP.

[7] You are responsible for monitoring the totalamount of deposits that you hold with onedepository institution, in a single legal

36 | Retirement Asset Savings Program

capacity, including deposits maintainedthrough RASP, deposits (including CDs) heldthrough other Merrill Lynch accounts anddeposits held directly with the depositoryinstitution.

How the RASP feature works[8] Your money is remitted initially for deposit by

Merrill Lynch, acting as your agent, into aDeposit Account at the primary depositoryinstitution. մեe primary depository institutionis FIA Card Services, N.A. (FIA). մեe secondarydepository institution is Bank of AmericaCalifornia, N.A.(BA-CA) (and together with FIA,are the Merrill Lynch Affiliated Banks, the “Merrill Lynch Banks”) (which will acceptdeposits once you exceed $246,000 in theDeposit Account at the primary institution asdescribed below).

[9] From time to time, one or more of theparticipating depository institutions may bereplaced with a new institution, including onethat may not have been previously included.Also, new depository institutions may beadded and the depository sequence changed.You will receive notification in advance of suchmovement, inclusion or change before anyfunds you have in a Deposit Account aremoved to another institution. Notification maybe by means of a letter, an entry on yourRetirement Plan Account statement, or thedelivery to you of a new listing of availabledepository institutions.

[10] For each Retirement Plan Account, thefollowing rules apply: Funds up to $246,000are remitted to the Deposit Accountestablished for you at the primary depositoryinstitution, FIA. If the balance in your DepositAccount at FIA reaches $246,000, then yourfunds are remitted for deposit in the samemanner to a Deposit Account established foryou at BA-CA, until the balance in your DepositAccount at BA-CA reaches $246,000. If the balance in your Deposit Accounts at BA-CAreaches $246,000, subsequent funds aredeposited in your Deposit Account at FIA, evenif the amounts then deposited in your DepositAccount at FIA exceed $246,000. մեis maycause the amount deposited in FIA through

RASP to exceed the Standard MaximumDeposit Insurance Amount. All deposits at aninstitution held in the same legal capacity areprotected by federal insurance up to amaximum of the Standard Maximum DepositInsurance Amount. Amounts on deposit at FIAor BA-CA held in the same legal capacity,including deposits maintained through RASP,in excess of the Standard Maximum DepositInsurance Amount, will not be covered byfederal deposit insurance. For CoverdellEducation Savings Accounts, these remittancerules mean that, even if the account holdsyour only deposits in FIA funds in excess of the Standard Maximum Deposit InsuranceAmount when it returns to $100,000 for theseaccounts on January 1, 2014 would bedeposited to FIA before any funds aredeposited to BA-CA.

[11] It is important for you to monitor theamounts of your total deposits with eachparticipating depository institution, so thatyou will know the extent of federal depositinsurance available to you for such deposits(see Additional Information on FederalDeposit Insurance, page 39).

[12] Generally, funds will be transferred to the nextpriority depository insti tution, if any, in thepriority sequence established. However, theremay be exceptions if a depository institution isclosed for the day, or if it reaches theaggregate deposit limit it will accept fromMerrill Lynch clients. If a depository institutionin which you have a Deposit Account choosesto no longer make its accounts availablethrough RASP, funds in your Deposit Accountat that institution will be transferred, aernotification to you, to another participatingdepository institution.

[13] Available free credit balances of $1 or morewill be automatically de posited in yourDeposit Account on a daily basis, except forSaturdays, Sundays and legal holidays. Allsuch deposits will be made only in wholedollar amounts.

Transfers and withdrawals[14] Merrill Lynch, as your agent, will make

withdrawals from your Deposit Accounts asnecessary to satisfy any debits in the


Inform

ation A

bou

t Your A

ccoun

ts

Retirement Plan Account. However, asrequired by federal regulations, eachdepository institution at which DepositAccounts may be established reserves theright to require seven days prior notice beforepermitting a withdrawal out of an individualaccount.

[15] If you have funds on deposit at both FIA andBA-CA, withdrawals will be made from yourDeposit Accounts in the reverse of the order inwhich deposits are made to the DepositAccounts.

[16] Payment out of your account may be delayedwhen funds placed in an account on yourbehalf had as their original source a check, dra or similar instrument given toMerrill Lynch. Merrill Lynch may delay thedeposit of funds into a Deposit Account untilfunds submitted to your Retirement PlanAccount have cleared.

[17] մեe Deposit Accounts established at theMerrill Lynch Affiliated Banks are nottransferable.

Interest[18] մեe rate paid for the RASP program will be

established periodically as determined by theMerrill Lynch Affiliated Banks, and otherparticipating depositories. For accountsestablished through RASP, the Merrill LynchAffiliated Banks, and any other participatingdepositories, will set interest rates based oneconomic and business conditions. For RASPinterest rates will be tiered based upon yourrelationship with Merrill Lynch as determinedby the value of assets in your eligibleRetirement Plan Account(s), DepositAccount(s) and accounts linked through theMerrill Lynch Statement Link service. Forthese tiered Deposit Accounts, deposits ofclients in higher Asset Tiers (as defined below)generally will receive higher interest ratesthan deposits of clients in lower Asset Tiers.

[19] Your interest rate generally will correspondwith your Asset Tier as deter mined by thevalue of assets in your eligible RetirementPlan Account(s), Deposit Account(s) andaccounts linked through the Merrill Lynch

Statement Link service. Retirement PlanAccounts commencing on or about September17, 2004 in a Merrill Lynch investmentadvisory program will receive the interest ratethat corresponds to the highest Asset Tier. Formore information on the Merrill LynchStatement Link service, please refer to thedescription in this booklet. մեe following AssetTier levels took effect on September 30,2005:

• $10,000,000 or more

• $1,000,000 to $9,999,999

• $250,000 to $999,999

• less than $250,000

[20] In general, Merrill Lynch will determine yourAsset Tier towards the end of each month (the“Valuation Date”) for application the nextstatement month. մեe valuation proceduregenerally will work like this:

• Your Asset Tier(s) will be based on Merrill Lynch’s determination of the longmarket value of assets in your eligibleRetirement Plan Account(s), including other eligible accounts linked through theMerrill Lynch Statement Link service.

• Your Asset Tier(s) will not change until the nextValuation Date even if you open new accountsor link accounts.

• If you have accounts enrolled in the Merrill Lynch Statement Link service on theValuation Date, then the valuation will reflectthe dollar value of assets in those linkedaccounts (except excluded accounts) todetermine your Asset Tier.

• If your accounts are not linked on theValuation Date, then the assets in eachRetirement Plan Account will be valuedindividually to determine your Asset Tier forthat account.

• New Retirement Plan Accounts are not valueduntil the next applicable Valuation Date. In thefirst month, deposit balances in all newaccounts will receive the interest rate thatcorresponds to the Asset Tier that ranges from$250,000 to $999,999. մեis Asset Tier maybe adjusted, as appropriate, on the nextValuation Date.


[21] Without notice, interest rates may changedaily, the interest rate differential betweenAsset Tiers may change, and Asset Tiers mayalso change. To learn the current or newinterest rate for RASP in connection with your Retirement Plan Account, call your Merrill Lynch financial advisor, ServiceAssociate or (888) ML-RATES (657-2837).

[22] մեe rates of return paid with respect to theDeposit Accounts may be higher or lower thanthe rates of return available to otherdepositors of the participating depositoryinstitution for comparable accounts. Ofcourse, you should compare the terms, ratesof return, required account minimums,charges and other features of a DepositAccount with other accounts and alternativeinvestments before deciding to maintain aDeposit Account. Such investments indeposits of the Merrill Lynch Banks will bear areasonable rate of interest as required underthe exemption provided by ERISA Section408(b)(4) or Tax Code Section 4975(d)(4).

[23] Interest will accrue on the balances in aDeposit Account from the day funds aredeposited with a participating depositoryinstitution to (but not including) the date ofwithdrawal, and will be compounded daily and credited monthly.

Client statements[24] All of your transactions will be confirmed and

will appear in chronological sequence on yourMerrill Lynch Retirement Plan Accountstatement. մեe statement will show the totalof your opening and closing Deposit Accountbalances, along with a breakdown of yourDeposit Account balance at each individualdepository institution (if more than onedepository institution is participating in theRASP feature and your funds are deposited inmore than one depository institution). մեestatement will also show interest earned forthe statement period.

Your relationship with Merrill Lynch[25] Merrill Lynch is acting as agent and

messenger for its Retirement Plan Accountclients who establish accounts through RASP.մեe separate accounts established by

Merrill Lynch on its records on behalf of itsRetirement Plan Account clients will beevidenced by a book entry on the accountrecord of the participating depositoryinstitution. No evidence of ownership, such asa passbook or certificate, will be issued to theRetirement Plan Account clients who establishaccounts through RASP, nor will anydepository institution be given the names ofRetirement Plan Account clients. In addition,all transactions are effected through Merrill Lynch, as agent, and not directlybetween a client and the participatingdepository institution.

[26] You may obtain information about yourDeposit Accounts, including the names ofeach depository institution in which yourfunds are currently being deposited, balances,the current interest rate and the names andpriority of the other institutions at whichDeposit Accounts are currently available, bycalling your Merrill Lynch financial advisor.

[27] Each participating depository institution, in itssole discretion and without notice, maychange the conditions of or terminate aclient’s Deposit Account. If Merrill Lynch doesnot wish to continue to act as your agent orcustodian with respect to your DepositAccount(s), you may deal directly with eachdepository institution (subject to its rules ineffect at that time) with respect to maintainingsuch an account.

[28] Similarly, if you decide that you no longer wishto have Merrill Lynch act as your agent andmessenger with respect to the DepositAccount estab lished for you at a depositoryinstitution, you may establish a directdepository relationship with the depositoryinstitution (subject to its rules in effect at thattime) with respect to maintaining such anaccount.

[29] մեis may result in the severing of your DepositAccount at that depository institution accountfrom the Retirement Plan Account service.

Benefits to Merrill Lynch[30] մեe Merrill Lynch Affiliated Banks use bank

deposits to fund current and new lending,investment and other business activities. Like


Inform

ation A

bou

t Your A

ccoun

ts

many other depository institutions, theprofitability of the Merrill Lynch AffiliatedBanks is determined in large part by thedifference between the interest paid and othercosts incurred by them on bank deposits, andthe interest or other income earned on theirloans, investments and other assets. մեedeposits provide a stable source of funding forthe Merrill Lynch Affiliated Banks, andborrowing costs incurred to fund the businessactivities of the Merrill Lynch Affiliated Bankshave been reduced by the use of depositsfrom Merrill Lynch clients.

[31] Merrill Lynch receives compensation from theMerrill Lynch Affiliated Banks of up to $85 peryear for each Retire ment Plan Account that has uninvested cash balances automaticallyswept to the Merrill Lynch Affiliated Banksunder RASP. մեe amount of this fee is subjectto change from time to time, and Merrill Lynchmay waive all or part of it. Other than theRetirement Plan Account fees, no charge, feeor commission will be imposed on you withrespect to your participation in RASP inconnection with your Retirement PlanAccount. Merrill Lynch pays a fee to financialadvisors based on total client deposits sweptto the Merrill Lynch Affiliated Banks.

Additional information[32] You will always know where your money is by

referring to the information in the sectiontitled “Your relationship with Merrill Lynch”,page 38, in conjunction with your RetirementPlan Account statement. Additionally, bycalling your financial advisor or ServiceAssociate, you can confirm the name of thedepository institution that has accepted yourmost recent deposit. Upon request, you will beprovided with the publicly availableinformation that Merrill Lynch has relating tothe participating depository institutions.

ADDITIONAL INFORMATION ON FEDERALDEPOSIT INSURANCE

[33] In the event that federal deposit insurancepayments become necessary, the FDIC isrequired to pay principal plus unpaid andaccrued interest to the date of the closing ofthe relevant depository institution, asprescribed by law and applicable regulations.

Since there is no specific time period duringwhich the FDIC must make available suchinsurance payments, you should be preparedfor the possibility of an indeterminate delay inobtaining insurance payments. In addition,you may be required to provide certaindocumentation to the FDIC and to Merrill Lynch before any insurance payoutsare released to you. For example, you may berequired to furnish affidavits and indemnitiesregarding the payout. Merrill Lynch will not beobligated to you for amounts not covered bydeposit insurance and will not be obligated toyou in advance of payment from the FDIC.

[34] Since deposit insurance coverage is based ona customer’s funds on deposit in any onedepository institution, coverage can change iftwo or more institutions where you have fundson deposit merge. In this case, depositsmaintained through RASP continue to beseparately insured for six months from thedate that the merger takes effect. մեereaer,any assumed deposits will be aggregated withyour existing deposits with the acquirer heldin the same legal ownership category forpurposes of federal deposit insurance. Anydeposit opened at the acquired institutionaer the acquisition will be aggregated withdeposits established with the acquirer forpurposes of federal deposit insurance.

Special rules for Retirement Plan Accounts[35] You may have interests in various retirement

and employee benefit plans and accounts thathave deposits in a depository institution. մեeamount of deposit insurance you will beentitled to will vary depending on the type ofplan or account and on whether deposits heldby the plan or account will be treatedseparately or aggregated with deposits in thesame depository institution held by otherplans or accounts. It is therefore important tounderstand the type of plan or accountholding the deposit. մեe following sectionsentitled Pass-through deposit insurance forretirement and employee benefit plandeposits and Aggregation of Retirement andEmployee Benefit Plans and Accountsgenerally discuss the rules that apply todeposits of retirement and employee benefitsplans and accounts.


[36] On February 8, 2006, the President of theUnited States signed the Deficit Reduction Actof 2005 (the “Act”), which contains provisionsaffecting federal deposit insurance coverage.մեe principal amount of your deposits held inQualified Retirement Accounts (as definedbelow), plus accrued interest, together withany other deposits held at the issuingdepository institution through such QualifiedRetirement Accounts, are protected by federaldeposit insurance and backed by the U.S.government to a maxi mum amount of$250,000 for the total amount of all suchdeposits held by you in the same ownershipcapacity at the depository institution.Retirement accounts that qualify for thisincreased coverage are: (i) any individualretirement accounts (“IRAs”) described insection 408(a) of the Internal Revenue Codeof 1986, as amended (“Code”); (ii) any eligibledeferred compensation plan described insection 457 of the Code; (iii) any individualaccount plan described in section 3(34) of theEmployee Retirement Income Security Act of1974, as amended (“ERISA”), to the extentthe participants and beneficiaries under suchplans have the right to direct the investmentassets held in the accounts; and (iv) any plandescribed in section 401(d) of the Code, to theextent the participants and beneficiariesunder such plans have the right to direct theinvestment assets held in the accounts (each,a “Qualified Retirement Account”).

Pass-through deposit insurance for retirement

and employee benefit plan deposits[37] Subject to the limitations discussed below,

under FDIC regulations, an individual’s non-contingent interest in the deposits of onedepository institution held by certain types ofemployee benefit plans are eligible forinsurance on a “pass-through” basis up to theStandard Maximum Deposit Insuranceamount for that type of plan. մեis means that,instead of an employee benefit plan’sdeposits at one depository institution beingentitled to only the applicable StandardMaximum Deposit Insurance Amount in totalper depository institution, each participant inthe employee benefit plan is entitled toinsurance of his or her interest in the

employee benefit plan’s deposits of up to theapplicable Standard Maximum DepositInsurance Amount per institution (subject tothe aggre gation of the participant’s interestsin different plans, as discussed below). մեepass-through insurance provided to anindividual as an employee benefit planparticipant is in addition to the depositinsurance allowed on other deposits held bythe individual at the issuing institution.However, pass-through insurance isaggregated across certain types of accounts(see Aggregation of Retirement and EmployeeBenefit Plans and Accounts, page 41).

[38] A deposit held by an employee benefit planthat is eligible for pass-through insurance isnot insured for an amount equal to thenumber of plan participants multiplied by theapplicable Standard Maximum DepositInsurance Amount. For example, assume anemployee benefit plan that is a QualifiedRetirement Account (i.e., a plan that is eligiblefor deposit insurance coverage up to$250,000 per qualified beneficiary) owns$500,000 in deposits at one institution andthe plan has two participants, one with avested non-contingent interest of $350,000and one with a vested non-contingent interestof $150,000. In this case, the individual withthe $350,000 interest would be insured up tothe $250,000 limit, and the individual withthe $150,000 interest would be insured up tothe full value of such interest.

[39] Moreover, the contingent interests ofemployees in an employee benefit plan andoverfunded amounts attributed to anyemployee defined benefit plan are not insuredon a pass-through basis. Any interests of anemployee in an employee benefit plan depositwhich are not capable of evaluation inaccordance with FDIC rules (i.e., contingentinterests) will be aggregated with thecontingent interest of other participants and insured up to the applicable StandardMaximum Deposit Insurance Amount.Similarly, overfunded amounts are insured, inthe aggregate for all participants, up to theapplicable Standard Maximum DepositInsurance Amount separately from the


Inform

ation A

bou

t Your A

ccoun

ts

insurance provided for any other funds ownedby or attributable to the employer or anemployee benefit plan participant.

AggREgATION OF RETIREMENT ANDEMPLOYEE BENEFIT PLANS AND ACCOUNTS

Self-directed retirement accounts[40] մեe principal amount of deposits held in

Qualified Retirement Accounts describedabove, plus accrued but unpaid interest, ifany, are protected by FDIC insurance up to amaximum of $250,000 for all such depositsheld by you at the issuing depositoryinstitution together with other accounts heldin the same capacity. մեe FDIC sometimesgenerically refers to Qualified RetirementAccounts as “self-directed retirementaccounts.” Supplementary FDIC materialsindicate that Roth IRAs, self-directed KeoghAccounts, Simplified Employee Pension plans,and self-directed defined contribution plansare intended to be included within this group of Qualified Retirement Accounts. Accordingly,all accounts that partici pate in RASP, otherthan Coverdell Education Savings Accounts,should qualify for $250,000 of FDIC insurancein the aggregate.

Other employee benefit plans[41] Any employee benefit plan, as defined in

Section 3(3) of ERISA, described in Section401(d) of the Code, or eligible deferredcompensation plan under section 457 of theCode, that does not constitute a Qualified

Retirement Account—for example, certainemployer-sponsored profit sharing plans—canstill satisfy the requirements for pass-throughinsurance with respect to non-contingentinterest of individual plan participants,provided that FDIC requirements forrecordkeeping and account titling are met(“Non-Qualifying Benefit Plans”). For Non-Qualifying Benefit Plans, the StandardMaximum Deposit Insurance Amount(“SMDIA”) applies. Under FDIC regulations, anindividual’s interests in Non-Qualifying BenefitPlans maintained by the same employer oremployee organization (e.g., a union) whichare holding deposits at the same institutionwill be insured up to the SMDIA in theaggregate, separate from other accounts heldat the same depository institution in otherownership capacities.

[42] If you have questions about the FDICinsurance coverage of your account, pleasecontact your Merrill Lynch financial advisor orvisit the FDIC website at www.fdic.gov.

[43] FDIC regulations and interpretationsgoverning the availability of federal depositinsurance are subject to change from time totime. Neither BANA nor BA-CA or any otherdepository institution participating in RASPassumes any responsibility with respect to anysuch changes. n

L-06-17

42 | Merrill Lynch Statement Link Service

Merrill Lynch StatementLink Service

[1] You may elect to enroll in the Merrill LynchStatement Link service (“Statement Linkservice”). մեis service allows certain types ofaccounts to be “linked” for various purposes,including (1) to receive statements for alllinked accounts in a single package and (2) toestablish your Asset Tier (defined below) forthe Retirement Asset Savings Program(“RASP”).

Linking accounts for statement delivery

purposes[2] մեe Statement Link service allows a

Retirement Plan Account client (the “PrimaryAccount client”) to link other Merrill Lynchaccounts, usually in the same household orrelated to a single business, so that themonthly statements for the linked accountsare packaged together and mailed by us tothe Primary Account client’s address, togetherwith a summary page that combines accountinformation from all linked accounts. Eachclient whose account is to be linked with theservice appoints the Primary Account client asagent to receive the client’s monthlystatements and any notices or othercommunications mailed with them. մեe assetsof the linked accounts are not commingledand all of the clients retain control over theirindividual accounts. մեe individual clients alsoremain responsible for verifying the accuracyof their individual statements, for reading anynotices that are mailed with the linkedstatements and for directing the activity intheir individual accounts.

Asset Tiers[3] Interest rates in the RASP may be tiered

based upon your relationship with Merrill Lynch as determined by the value ofassets in your accounts, including DepositAccounts established for you through RASP.For tiered accounts, your interest rate willcorrespond with your Asset Tier as determined

by the value of assets in your account oraccounts linked through the Statement Linkservice. Generally, deposits of clients in higherAsset Tiers will receive higher interest ratesthan deposits of clients in lower Asset Tiers.մեe following Asset Tier levels were in effect onSeptember 30, 2005:

• $10,000,000 or more

• $1,000,000 to $9,999,999

• $250,000 to $999,999

• Less than $250,000

[4] Without notice, interest rates may changedaily, the interest rate differential betweenAsset Tiers may change and Asset Tiers mayalso change. Your Asset Tier will be based onMerrill Lynch’s determination of the longmarket value of assets in your Merrill Lynchaccount(s) and deposit balances with theMerrill Lynch Affiliated Banks. In general, yourAsset Tier will be determined by Merrill Lynchtowards the end of each month (the“Valuation Date”) for application the nextstatement month. մեe valuation proceduregenerally will work like this:

• Your Asset Tier(s) will not change until the nextValuation Date even if you open new accountsor link accounts.

• If you have accounts enrolled in the Merrill Lynch Statement Link service on theValuation Date, then the valuation will reflectthe dollar value of assets in those linkedaccounts (except accounts listed as ineligiblebelow) to determine your Asset Tier.

• If your accounts are not linked on theValuation Date, then the assets in eachRetirement Plan Account will be valuedindividually to determine the Asset Tier forthat account.

Important considerations for individual retire-

ment accounts[5] You generally may link your Individual

Retirement Account (IRA), IndividualRetirement Rollover Account (IRRA), RothIndividual Retirement Account (Roth IRA),Simplified Employee Pension (SEP), SIMPLERetirement Account (SRA), and Coverdell

Merrill Lynch Statement Link Service | 43

Inform

ation A

bou

t Your A

ccoun

ts

Education Savings Account (ESA) with yourother accounts to achieve a higher Asset Tier.Except for a SEP/IRA or a SRA/IRA, you cannotlink an IRA which accepts employercontributions.

[6] You also may link your IRA with IRAs (or otheraccounts) of immediate family members andtheir spouses to achieve a higher Asset Tier. Ifyou want to link IRAs with accounts of otherpersons to achieve a higher Asset Tier, youshould consult your legal or tax advisor.

Ineligible accounts[7] For regulatory or other reasons, certain types

of accounts that can be linked for statement

delivery purposes are not included fordetermining your Asset Tier. մեese include:Working Capital Management Accounts,Health Savings Accounts and certainretirement accounts including RetirementCash Management Accounts, BASIC accounts,401(k) ac counts (including SIMPLE 401(k)accounts), and Retirement Selector® Accounts(403(b) accounts). For more information onenrolling in this service, please call yourfinancial advisor or 1.800.MERRILL. n

L-11-16

Merrill Lynch is the marketing name for Merrill Lynch Wealth Management, and Merrill Edge®, both of which are made available throughMerrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”). Merrill Edge is available through Merrill Lynch, Pierce, Fenner & SmithIncorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing.

Merrill Lynch makes available products and services offered by MLPF&S and other subsidiaries of Bank of America Corporation (“BofA Corp”).

Banking products are provided by Bank of America, N.A., and affiliated banks, Members FDIC and wholly owned subsidiaries of BofA Corp.

Investment products:

MLPF&S is a registered broker-dealer, registered investment adviser and Member SIPC. © 2018 Bank of America Corporation. All rights reserved.

Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value

306502PM–04-18

disclosure and custodial agreement simple retirement ... · simple retirement account/individual...

Documents